Berkline/BenchCraft catching investor interest; Bally Total Fitness slow start could force price increase

By Sara Rosenberg

New York, Oct. 4 - Berkline/BenchCraft Holdings LLC has started to get some orders in on its recently launched $215 million credit facility, while Bally Total Fitness Holding Corp. is rumored to have a possible pricing increase in its future as syndication is on the slow side.

Meanwhile, in the secondary market - which has an overall good tone - Jostens IH Corp. continued to be very active and Charter Communications Inc. felt a touch stronger on the coattails of the company's recent positive bond performance.

Berkline/BenchCraft's facility consists of a $35 million revolver (B1/B+), a $110 million first-lien term loan (B1/B+) talked at Libor plus 275 to 300 basis points and a $70 million second-lien term loan (B2/B-) talked at Libor plus 650 to 700 basis points.

"The first lien is moving pretty well. The second lien is getting a few tickets in but will probably take a little more work to get done," a fund manager said.

"I'm not surprised it's going well," another source said. "It seemed like a nice little deal."

Goldman Sachs is the lead bank on the refinancing deal for the Morristown, Tenn., manufacturer of residential stationary and motion upholstery furniture.

Bally flex up anticipated

Market talk is that syndication of Bally's $175 million five-year term loan (B2/B) has been progressing slowly since the Sept. 23 launch and that there may be a flex up in pricing soon in hopes of increasing momentum on the book building process.

Currently, the term loan is priced with an interest rate of Libor plus 450 basis points.

"I anticipate a price change later on this week," a fund manager told Prospect News. "I can't imagine them doing more then 50 basis points. I would imagine they'd start out at 25 basis points though. At first glance the 450 kind of spread for a B2 rating seems pretty reasonable especially in this market. I have to look deeper into it to see what's holding people back."

J.P. Morgan Securities Inc. is the lead arranger on the deal that will be used to refinance existing debt including the existing $100 million securitization facility.

The term loan will increase the company's liquidity by $75 million, which will be used for general corporate purposes.

Bally Total Fitness is a Chicago-based commercial operator of fitness centers.

United Subcontractors awaits commitments

Although the Sept. 28 bank meeting was well attended, investors are taking some time to commit to United Subcontractors Inc.'s $211 million credit facility. In fact, as of Monday, it appeared as if no commitments had come in as of yet, according to a market source.

"It's small and it just launched a couple of days ago. There's mixed feedback," the source explained, adding that it's too early to tell how the syndication process will play out.

The facility consists of a $30 million revolver talked at Libor plus 325 basis points, a $155 million first-lien term loan talked at Libor plus 325 basis points and a $26 million second-lien term loan talked at Libor plus 700 basis points.

Royal Bank of Scotland and Citigroup are the lead banks on the deal, with Royal Bank of Scotland listed on the left.

Proceeds from the credit facility, along with $34 million of mezzanine debt, will be used to help fund Wind Point Partners' leveraged buyout of United Subcontractors.

United Subcontractors is a Salt Lake City-based installer of residential and commercial insulation systems and provider of complementary products and services related to the industry.

Kerasotes gets good response

Kerasotes Showplace Theatres Holdings LLC's $300 million credit facility (B1/B) is off to a good start since launching this past Friday, with a few commitments already in and an overall favorable response from investors so far, according to a market source.

The facility consists of a $100 million revolver and a $200 million term loan, both talked at Libor plus 275 basis points.

Deutsche is the sole lead bank on the deal that will be used to fund a dividend payment, repay some bank debt and for general corporate purposes.

Kerasotes is an Illinois-based movie chain with corporate offices in Chicago and Springfield.

Jostens active

Jostens IH's $870 million seven-year term loan B (B1/B+) continued to trade actively on Monday in the 101¼ bid, 101¾ offered context, according to a trader.

The paper has been active since breaking last Thursday, and one trading desk has even traded more than $200 million of the paper since the break, the trader added.

The term loan is priced at Libor plus 250 basis points.

Jostens IH will be one large company consisting of Jostens, a Minneapolis provider of yearbooks, class rings and graduation products, Von Hoffmann, a St. Louis printer of educational textbooks and supplemental materials and direct marketing print services, and Arcade, a New York printer and manufacturer of sampling products for the fragrance, cosmetics, consumer products, and food and beverage industries.

Charter stronger

Charter's term loan B felt a bit stronger in Monday's market with the paper quoted at 99¼ bid, 99 5/8 offered, although the strengthening was not of a significant amount, a trader said.

The trader went on to explain that the better tone could be follow through from the recent improvement in the company's bonds, since there has been no particular news released that would have sparked an up tick.

Charter is a St. Louis communications company.

Amsted tweaks repricing

Amsted Industries Inc. changed its repricing amendment on Friday and is now asking lenders to lower the interest rate on its approximately $420 million term loan B to Libor plus 275 basis points from Libor plus 400 basis points instead of Libor plus 250 basis points as was originally proposed, according to a market source.

Citigroup is the lead bank on the deal.

Under the amendment, lenders get soft call protection of 101 for one year against a refinancing of this tranche. Plus, lenders are being paid at 101 since the term loan B currently contains call protection at that rate.

Amsted is a Chicago-based diversified manufacturer of industrial components serving primarily the railroad, vehicular, and construction and building markets.

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