BWAY breaks atop par; Hertz softens in trading; Owens Corning sets spread talk

By Sara Rosenberg

New York, July 14 - BWAY Corp. freed for trading on Friday, with the U.S. term loan B seen quoted in the low-par context. Meanwhile, in other trading news, The Hertz Corp. saw its term loan B levels weaken on the bid side possibly in reaction to rumors early in the day of an upcoming initial public offering of common stock.

Moving to the primary, Owens Corning came out with price talk on its exit financing credit facility as the deal was launched to investors on Friday morning.

BWAY's credit facility hit the secondary early Friday, with the $190 million seven-year term loan B quoted at par 1/8 bid, par 3/8 offered, according to a trader.

The term loan B is priced with an interest rate of Libor plus 175 bps, the tight end of original Libor plus 175 to 200 basis point talk.

BWAY's $295 million senior secured credit facility (Ba3/B+) also contains a $50 million six-year revolver, a $5 million Canadian six-year revolver and a $50 million six-year term loan C, with all these tranches priced with an interest rate of Libor plus 200 basis points, the wide end of original Libor plus 175 to 200 basis point talk.

Deutsche Bank and JPMorgan are joint lead arrangers on the deal that will be used to help fund the acquisition of Industrial Containers Ltd.'s plastic and steel general line pail business, and refinance BWAY's existing credit facility.

BWAY is an Atlanta-based manufacturer of steel and plastic containers for the general line

Hertz levels slip

Hertz's term loan saw bids soften a touch during market hours with the rumors of a potential IPO possibly causing some investors to consider the likelihood of a pay down, although many seem to think that with so much other, more expensive debt out there, the bank debt would be the last to see any proceeds from the IPO.

On Friday morning, news reports emerged that Hertz may be planning to do an up to $1 billion IPO in the relatively near future.

There were no indications in the news stories as to what IPO proceeds would be used for by the Park Ridge, N.J, vehicle rental organization, leaving it up to anyone's imagination.

"They have some odd lot bonds out there. They just did these 10½% coupons a few months ago. There's potential for a [loan] pay down but I think there are so many other choices that are better. They have some higher rate debt out there that they'll probably take out," a trader remarked.

The term loan B closed the day quoted at par 3/8 bid, par ¾ offered, down an eighth of a point on the bid side but unchanged on the offer side, the trader added.

Around 4:30 p.m. ET Friday, the new reports were confirmed when Hertz Global Holdings Inc. filed an S-1 with the Securities and Exchange Commission announcing its IPO plans.

In the filing, the company revealed that the stock proceeds would be used to repay the $1 billion Hertz Global Holding loan that was just obtained on June 30, and if any proceeds are left over they would be used for general corporate purposes, which may include the repayment of borrowings under Hertz's senior credit facilities.

Owens Corning price talk

Switching to the primary market, Owens Corning released price talk of Libor plus 75 basis points on both tranches contained in its proposed $2.4 billion five-year exit financing credit facility (BBB-) as the transaction was presented to lenders with a Friday morning bank meeting, according to a market source.

The breakdown of the facility is a $1.4 billion term loan tranche and a $1 billion revolver tranche.

If the company is able to raise more than $400 million through a securities offering under its plan of reorganization, the term loan will be reduced by that amount.

Citigroup and Bank of America are the lead banks on the deal.

Owens Corning is a Toledo, Ohio, building materials company.

IPS closes

Fremont Partners, in partnership with management, completed its acquisition IPS Corp., according to a news release.

To help fund the LBO, IPS got a new $102 million credit facility (B1/B+) consisting of a $20 million six-year revolver and an $82 million seven-year term loan B, with both tranches priced with an interest rate of Libor plus 225 basis points.

Pricing on the term loan B has the ability to step down to Libor plus 200 basis points under certain conditions.

Morgan Stanley and Wachovia acted as the lead banks on the deal, with Morgan Stanley the left lead.

IPS is a Compton, Calif., industrial adhesives company.

Alliance Laundry closes

Alliance Laundry Systems LLC closed on its $65 million of incremental bank debt (B1/B) consisting of a $60 million add-on to its term loan at existing pricing of Libor plus 225 basis points and a $5 million add-on to its revolver at existing pricing of Libor plus 250 basis points.

Lehman acted as the lead bank on the deal.

Proceeds from the incremental term loan debt were used to fund the acquisition of the Commercial Laundry Division of Laundry Systems Group for about €59 million.

The revolver add-on will be used to provide additional liquidity.

Alliance Laundry is a Ripon, Wis.-based manufacturer of commercial laundry products and provider of services for laundromats, multi-housing laundries and on-premise laundries.

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