Charter breaks; Lyondell, Cinemark down on repricings; Celanese falls on refi; Grant Forest tweaks deal

By Sara Rosenberg

New York, March 5 - Charter Communications Inc.'s credit facility freed for trading with both the first- and the third-lien term loans quoted atop par, Lyondell Chemical Co. and Cinemark USA Inc. both saw their term loans drop on repricing news and Celanese Corp.'s bank debt softened as a refinancing was announced.

Meanwhile, in primary happenings, Grant Forest Products Inc. revised its second-lien term loan transaction by increasing the size, lowering pricing and changing call premiums.

Charter Communications' credit facility allocated and broke for trading on Monday with the $6.5 billion first-lien term loan (B1/B+/B) quoted at par 1/8 bid, par 3/8 offered and the $350 million third-lien term loan (Caa1/NA/B) quoted at par 3/8 bid, par 5/8 offered, according to a buyside source.

The first-lien term loan is priced at Libor plus 200 basis points, and the third-lien term loan that is being obtained at CCO Holdings is priced at Libor plus 250 bps. Both tranches carry 101 soft call protection for one year.

During syndication, the first-lien term loan was upsized from $6 billion and pricing was reverse flexed from original talk of Libor plus 225 bps. Of the total first-lien term loan amount, $1.5 billion is new debt (up from $1 billion) and $5 billion is for refinancing.

In addition, the third-lien term loan was added to the capital structure after the elimination of a $550 million second-lien term loan tranche at Charter Communications Operating that was also expected to price at Libor plus 250 bps with 101 soft call protection.

Charter's $8.35 billion senior secured credit facility also includes a $1.5 billion revolver (B1/B+/B) at Libor plus 200 bps.

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

Proceeds will be used to refinance the company's $6.85 billion senior secured credit facility, to redeem up to $550 million floating-rate notes due 2010 issued by CCO Holdings, LLC and up to $187 million 8 5/8% senior notes due 2009 issued by Charter Communications Holdings, LLC, and for general corporate purposes.

The $300 million of additional term loan funds being raised through the modifications will be used for extra liquidity.

Charter is a St. Louis-based broadband communications company.

Lyondell softer on repricing

Lyondell's term loan headed lower in trading as investors reacted to the company's proposed repricing of the debt and revision to a covenant-light structure, according to a trader.

The term loan ended the session at par 1/8 bid, par 5/8 offered, down from Friday's closing levels of par ¾ bid. 101 offered, the trader said.

Under the proposal, Lyondell is looking to lower the spread on its term loan to Libor plus 150 bps from Libor plus 175 bps.

JPMorgan is the lead bank on the deal.

Lyondell is a Houston-based independent, publicly traded chemical company.

Cinemark also dips on repricing

Cinemark's term loan also weakened on Monday, with the softening attributed to a repricing as well, according to a trader.

The term loan ended the day at par 7/8 bid, 101 1/8 offered, down from 101 bid, 101¼ offered, the trader said.

Under Cinemark's repricing proposal, the term loan spread would drop to Libor plus 175 bps from Libor plus 200 bps, with a further grid to Libor plus 150 bps if corporate credit ratings rise to Ba3/B+. Currently, the company's corporate ratings are B1/B.

Lenders are being offered 101 soft call protection for one year with the repricing.

Lehman is the lead bank on the deal that launched with a conference call during market hours.

Cinemark is a Plano, Texas, motion picture exhibitor.

Celanese trades closer to par on refi

Celanese's term loan headed down toward the par area after the company announced plans to refinance its bank debt, according to a trader.

The term loan closed the day at par 1/8 bid, par ½ offered, compared to Friday's levels of par 7/8 bid, 101¼ offered, the trader said.

Celanese is planning on getting a new $3.628 billion credit facility to take out its existing bank debt, with syndication on the new deal expected to kick off with a bank meeting Thursday.

Merrill Lynch and Deutsche Bank are the joint bookrunners and joint lead arrangers on the proposed facility that consists of a $2.28 billion term loan B due 2014, a €400 million term loan B due 2014, a $600 million revolver due 2013 and a $228 million credit-linked revolver letter-of-credit facility due 2014.

In addition to refinancing the company's existing credit facility - which consists of a $1.622 billion term loan B due 2011, a $600 million revolver due 2009 and a $228 million credit-linked revolver facility due 2009 - the new credit facility would also be used to tender for all of Celanese's $796 million 9.625% senior subordinated notes, €130 million 10.375% senior subordinated notes and $430 million of 10% and 10.5% senior discount notes.

Celanese is a Dallas-based hybrid chemical company.

Grant Forest reworks loan

Moving to the primary market, Grant Forest Products made a round of changes to its second-lien term loan, including increasing the size, reverse flexing pricing and removing a year of call protection, according to a market source.

More specifically, the second-lien loan is now sized at $150 million, up from $125 million, pricing was reduced to Libor plus 650 bps from original talk of Libor plus 700 bps, and call protection is 102 in year one and 101 in year two, as opposed to 103 in year one, 102 in year two and 101 in year three, the source said.

In addition, pricing under PIK conditions was revised as well. If the company opts for PIK interest, pricing will be Libor plus 650 bps plus 150 bps, whereas originally it was going to be Libor plus 700 bps plus 200 bps, the source remarked.

The company can choose PIK interest at any time during the first two years of the loan.

TD Securities is the lead bank on the deal that will be used for general corporate purposes.

Recommitments from lenders are due on Tuesday.

Grant Forest is an Earlton, Ont.-based producer of OSB and Engineered wood products.

Key Safety downsizes, cuts spreads

Key Safety Systems, Inc. reduced the overall size of its credit facility by $5 million, lowered pricing on its first- and second-lien term loans and added soft call protection to its first-lien term loan, according to a market source.

With the changes, the first-lien term loan B is now sized at $360 million, up from $350 million, pricing was reduced to Libor plus 225 bps from original talk of Libor plus 275 bps, and the paper now carries 101 soft call protection for one year, the source said.

Meanwhile, the second-lien term loan is now sized at $85 million, down from $100 million, and pricing was reverse flexed to Libor plus 500 bps from original talk of Libor plus 550 bps, the source continued. This tranche carries call protection of 102 in year one and 101 in year two.

The company's $50 million revolver was left unchanged in terms of size and price, which will initially be set at Libor plus 275 bps, the source added.

Citigroup and Bear Stearns are the lead banks on the now $495 million (down from $500 million) deal, with Citigroup the left lead.

Proceeds will be used to fund Crestview Partners' acquisition of the company.

Key Safety Systems is a Sterling Heights, Mich., supplier of automotive safety components and systems.

Seminole closes

Seminole Hard Rock Entertainment Inc. completed its acquisition of The Rank Group plc's Hard Rock business, a rock-music based entertainment brand, for $965 million, according to a news release.

In connection with the transaction, Seminole got a new $1.235 billion credit facility (Ba1) consisting of a $540 million funded term loan priced at Libor plus 150 bps used to help fund the acquisition, a $160 million delayed-draw for six months term loan priced at Libor plus 150 bps with a 75 bps unused fee that will be used for capital expenditures, and a $535 million delayed-draw for 45 days term loan priced at Libor plus 150 bps with a 75 bps unused fee that will be available for a potential settlement with the developer.

The $535 million delayed-draw tranche was added to the capital structure during syndication.

Merrill Lynch acted as the lead bank on the deal.

Seminole Hard Rock Entertainment, Inc. is a wholly owned subsidiary of the Seminole Tribe of Florida, a Hollywood, Fla.-based operator of hotels and casinos.

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