Thomson, Affinia cut B loan pricing; General Growth breaks amid flurry of trading

By Sara Rosenberg

New York, Nov. 16 - Thomson Media and Affinia Group Inc. both reduced pricing on their term loan Bs by 50 basis points on Tuesday, while Affinia also changed the size of its institutional tranche.

On the secondary side, General Growth Properties Inc.'s credit facility took the spotlight as the deal became free to trade, and trade it certainly did with something like $500 million trading between the term loan A and the term loan B off of two desks alone.

Thomson Media reduced pricing on its recently upsized $170 million term loan B (B1) on Tuesday morning to Libor plus 225 basis points from Libor plus 275 basis points, according to a market source. Recommitments from lenders on the tranche are due at noon on Wednesday.

This price cut comes on the heels of Friday's size shifts and second-lien reverse flex, at which time the second-lien term loan C (B2) was downsized to $30 million from $40 million, while the term loan B was increased to $170 million from $160 million in an effort to reduce the company's overall cost of capital, the source explained.

In addition, the spread on the second lien was changed on Friday to Libor plus 550 basis points from Libor plus 600 basis points.

Lastly, call protection terms on the second-lien term loan were changed on Friday to only include protection of 101 in year one instead of 102 in year one and 101 in year two.

The second-lien term loan C was shut down on Monday since it was "many times oversubscribed as is the B," the source added. But, the B loan couldn't be shut down since the syndicate has to wait for lenders to recommit at the new pricing.

The $235 million credit facility also contains a $35 million revolver (B1) with an interest rate of Libor plus 275 basis points. The size and spread on this tranche was left untouched throughout syndication.

Citigroup and Barclays are the lead banks on the deal, with Citigroup the left lead.

Proceeds from the loan will be used to help fund Investcorp's acquisition of Thomson Media from The Thomson Corp. for $350 million in cash.

Thomson Media is a New York-based provider of largely print-based information products focused on the banking, financial services and related technology markets.

Affinia cuts pricing, loan size

Affinia reduced the size of its seven-year term loan B to $325 million from $400 million and reverse flexed the tranche to Libor plus 250 basis points from Libor plus 300 basis points on Tuesday, according to a market source.

The decision to decrease the B loan resulted from the company's choice to get a new $125 million accounts receivable securitization facility of which $100 million will be drawn. This accounts receivable facility was contemplated from the very start and was even presented to lenders at the bank meeting, the source explained.

Furthermore, being that $100 million will be drawn under the accounts receivable facility, the term loan B technically should have been reduced by $100 million not by $75 million as is the case. But, since there was such strong demand for the institutional paper the company opted to, in a sense, increase the term B by $25 million, the source said.

Because of this $25 million "increase" in funded debt, Affinia will not be drawing down on its $125 million six-year revolver at close as was previously contemplated, the source added. The revolver is priced with an interest rate of Libor plus 300 basis points, and both the spread and the size were left unchanged throughout syndication.

Allocations on the $450 million credit facility (B2/BB-) are expected to go out later this week.

JPMorgan, Goldman Sachs, Credit Suisse First Boston and Deutsche Bank are joint lead arrangers on the deal, with JPMorgan the left lead. UBS is acting as a documentation agent.

Proceeds from the facility, along with proceeds from a $300 million 10-year senior subordinated notes offering that priced on Friday below talk at 9%, will be used to help fund The Cypress Group's acquisition of Dana Corp.'s Automotive Aftermarket Group, which is being renamed Affinia Group, for about $1.1 billion in cash.

Affinia Group is a producer of automotive replacement products.

General Growth breaks

General Growth Properties' credit facility (Ba2/BB+) broke for trading with the $2 billion four-year term loan B opening around par ¾ bid, 101 offered, trading up a little to the 101 to 101¼ area, and then settling back down to par ¾ bid, 101 offered by day's end, according to one trader. However, a second trader placed the term B at slightly lower closing levels of par 5/8 bid, par 7/8 offered.

The $3.65 billion three-year term loan A opened right around par, with the lowest trades taking place at 99¾ and the highest trades taking place at par 1/4, before the paper finally settled at 99 7/8 bid, par 1/8 offered, according to a trader. However, a second trader placed the paper in a bit of a tighter context, quoting it at par bid, par ¼ offered by late day.

"I heard the top four dogs (meaning joint bookrunners Lehman, CSFB, Wachovia and Bank of America) retained $140 million each of the B," a market source said, explaining that the flurry of activity resulted from "market trades and banks trying to reduce their positions."

As for why the paper didn't move up to the high 101 to 102 context that many new issues have recently been trading in, "there are two big reasons," the source said. "It's only a four-year B loan and A loans have an average life of 18 to 19 months. And, it's not secured by assets of the company."

The term loan B is priced with an interest rate of Libor plus 225 basis points - after reverse flexing from Libor plus 250 basis points on Friday afternoon.

The term loan A, which was downsized from $3.9 billion during syndication, is priced with an interest rate of Libor plus 225 basis points.

General Growth's $6.15 billion ($9.75 billion with bridge loan) credit facility (Ba2/BB+) also contains a $500 million three-year revolver with an interest rate of Libor plus 225 basis points that was upsized from $250 million during syndication.

Lehman Brothers and Credit Suisse First Boston were joint lead arrangers on the Chicago-based shopping mall owner's deal, with Lehman the left lead.

Cricket delays launch

Cricket Communications Inc., a wholly owned subsidiary of Leap Wireless International Inc., pushed off the bank meeting to launch its proposed $650 million credit facility to Dec. 1 from Nov. 18, according to sources.

Banc of America Securities LLC, Goldman Sachs Credit Partners LP, and Credit Suisse First Boston LLC are the lead banks on the deal.

The facility consists of a $500 million six-year term loan and a $150 million five-year revolver. Although specific price talk isn't out yet, the term loan is expected to price somewhere in the mid-200 area, a market source previously said.

Proceeds from the term loan will be used to redeem Cricket's existing $350 million 13% senior secured notes, pay about $42 million of call premium and accrued interest on the notes, repay about $41 million in principal amount of debt and accrued interest owed to the Federal Communications Commission, and pay associated transaction fees and expenses. Furthermore, the term loan is expected to provide the company with additional proceeds of about $57 million for general corporate purposes, including working capital and potential acquisitions.

The revolver is expected to be undrawn at closing, which is targeted for December.

Leap is a San Diego, Calif., mobile wireless services company.

Level 3 subscribed?

Rumor has it that Level 3 Communications Inc.'s $450 million senior secured term loan (B3/NA/B-) "is done at Libor plus 63/4," a market source told Prospect News on Tuesday, however the syndicate declined to comment on the deal's progress and on price talk.

Merrill Lynch is the sole lead bank on the deal, which was presented to lenders through a conference call on Monday.

Level 3 Financing Inc., a subsidiary of Level 3 Communications, would be the borrower under the facility.

Proceeds from the term loan, along with proceeds from a proposed $200 million convertible senior notes offering, will be used to help fund the company's previously announced tender offers for up to $450 million of debt securities due 2008, including the 9 1/8% senior notes, the 11% senior notes, the 10½% senior discount notes and the 10¾% senior euro notes. Each tender offer is scheduled to expire on Nov. 29.

In fact, the tender offers are actually conditioned on getting borrowings of at least $400 million under the facility.

Level 3 Communications is a Broomfield, Colo., communications and information services company.

USA Mobility closes

Metrocall Inc. and Arch Wireless Operating Inc., two subsidiaries of USA Mobility Inc., closed on their new $140 million two-year senior secured term loan (Ba3), according to a company news release. UBS was the lead bank on the deal.

The term loan is priced with an interest rate of Libor plus 250 basis points.

Proceeds are being used to help fund the $150 million cash portion of the consideration that Metrocall stockholders are receiving in the merger between Metrocall Holdings Inc. and Arch Wireless Inc., which was completed Tuesday.

USA Mobility, the new holding company formed as the result of the merger, is an Alexandria, Va.-based provider of paging products and other wireless services.

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