IWCO sets talk; Chrysler, InterGen revise guidance; Syniverse tweaks deal; LCDX down again

By Sara Rosenberg

New York, July 17 - IWCO Direct came out with price talk on its credit facility as the deal was launched with a bank meeting during the Tuesday session.

In other primary news, Chrysler Corp. LLC increased price talk on its credit facility and is heard to be considering adding original issue discounts, InterGen modified price talk higher on its term loan B and Syniverse Technologies, Inc. reworked its facility, switching some funded term debt to a delayed-draw structure and adding a total leverage covenant.

Moving to the secondary market, LCDX and the cash market continued to slide lower and Lyondell Chemical Co. saw its bank debt head up to the par area on buyout news.

IWCO Direct held a bank meeting on Tuesday with a 10 a.m. ET start at the Intercontinental in New York to kick off syndication on its proposed $410 million credit facility, and in connection with the launch, price talk was announced, according to a market source.

The $25 million revolver (B1/B+), $230 million term loan B (B1/B+) and $20 million delayed-draw term loan (B1/B+) were all presented to lenders with talk of Libor plus 275 basis points, the source said.

And the $135 million second-lien term loan (Caa1/CCC+) was presented with talk of Libor plus 600 bps, the source added.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

Deutsche Bank is the lead arranger on the deal, which will be used to help fund Avista Capital Partners' acquisition of the company from Court Square Capital Partners.

IWCO is a Chanhassen, Minn., provider of integrated direct mail production services.

Chrysler flexes higher

Chrysler Corp. revised price talk higher on its $12 billion credit facility and is contemplating adding original issue discounts to the first- and second-lien loans, according to sources.

The $10 billion first-lien term loan B (B1/B+/BB+) is now being guided at Libor plus 375 bps, up from original talk at launch of Libor plus 325 bps, sources said.

And the $2 billion second-lien term loan (Caa1/B-/BB+) is now being guided at Libor plus 700 bps, up from original talk of Libor plus 600 bps, sources continued.

In addition, market speculation is that the first-lien term loan will be sold at a discount that could range from 98 to 99 and that the second-lien term loan will be sold at a discount in the 97 area.

The first-lien term loan B is non-callable for one year then at 101 in year two, and the second-lien term loan is non-callable for one year, then at 103 in year two and 101 in year three.

JPMorgan, Goldman Sachs, Citigroup, Bear Stearns and Morgan Stanley are the joint bookrunners on the deal, with JPMorgan, Goldman and Citigroup the joint lead arrangers.

The loans are based on asset coverage, not cash flow.

The producer and seller of Chrysler, Dodge and Jeep vehicles is doing this deal in connection with its buyout by Cerberus Capital Management, LP from DaimlerChrysler AG.

Proceeds will be used to put cash on the balance sheet for liquidity. Along with the equity, the company will have roughly $17.5 billion of cash at closing.

Cerberus is also buying Chrysler Financial Services LLC, a provider of financial services for vehicles in the NAFTA region, from DaimlerChrysler.

Chrysler Corp. and Chrysler Financial will both be subsidiaries of a new holding company called Chrysler Holding LLC in which Cerberus will have an 80.1% equity interest and DaimlerChrysler will have a 19.9% interest.

For buyout financing, Chrysler Financial is in market with an $8 billion credit facility consisting of a $2 billion ABL revolver (B1/BB-) talked at Libor plus 275 bps, a $4 billion first-lien term loan B (B1/BB-/BBB-) talked at Libor plus 275 bps and a $2 billion second-lien term loan (B2/CCC+/BB) talked at Libor plus 500 bps.

"Chrysler Financial may end up 25 bps wider to get it comfortably over but that deal is supposedly going well so we'll see," one source added.

The Chrysler Financial first-lien term loan B has call protection of 101 in year one, and the second-lien term loan has call protection of 102 in year one and 101 in year two.

The ABL and the first-lien term loan, which share the same collateral and the same covenants, went through a senior managing agent round, at which price talk of Libor plus 250 bps to 275 bps was being circulated on the tranches.

During the senior managing agent round, banks were offered $100 million of the revolver for "buy and hold" and $125 million of the first-lien term loan B for underwriting.

JPMorgan, Citigroup, Goldman Sachs, Bear Stearns and Morgan Stanley are the joint bookrunners on the deal, with JPMorgan, Citigroup and Goldman Sachs the joint lead arrangers.

Commitments for both the Chrysler Corp. and the Chrysler Financial credit facilities are due on Thursday. However, sources think that the commitment period will "drag on for another week or two."

InterGen ups price talk

InterGen increased price talk on its $800 million term loan B, with commitments due from lenders on Wednesday, according to a market source.

The term loan B is now being talked at Libor plus 250 bps to 275 bps, up from original guidance at launch of Libor plus 200 bps to 225 bps, the source said.

The term loan B will be split between U.S. and euro, but the breakdown is still to be determined.

InterGen's $1.55 billion credit facility (Ba3/BB-) also includes a $750 million five-year revolver that is priced at Libor plus 150 bps, in line with initial talk.

Merrill Lynch, Lehman Brothers and Barclays are the lead banks on the deal, with Merrill Lynch the left lead.

Proceeds will be used to refinance existing debt, to fund a dividend payment and for working capital needs and general corporate purposes.

InterGen is a Burlington, Mass., power generation company.

Syniverse retranches, adds covenant

Syniverse modified its credit facility structure so that some of its term loan debt will now be delayed-draw and added a consolidated total leverage ratio, according to a market source.

The $297 million U.S. term loan is now divided into a $137 million funded piece and a $160 million delayed-draw piece, as opposed to the whole thing being funded, the source said.

Meanwhile, the entire $130 million euro-denominated term loan tranche has been switched to delayed-draw from funded, the source continued.

Pricing on the U.S. and the euro term loan debt was left unchanged at Libor/Euribor plus 200 bps, with a step down to Libor/Euribor plus 175 bps based on a leverage test.

The delayed-draw U.S. and euro term loans will carry a 75 bps undrawn fee, with two 25 bps step ups over time so that the maximum fee will be 125 bps, the source remarked.

Furthermore, the delayed-draw U.S. and euro term loans are being sold to investors with an original issue discount of 993/4.

Syniverse's $489 million senior secured credit facility (Ba2/BB) also includes a $42 million revolver and a $20 million euro-denominated revolver, with both of these tranches talked at Libor/Euribor plus 200 bps. Pricing is tied to a leverage grid. Sizes and pricing on these revolvers remained in line with original terms.

With the changes to tranching on Tuesday, the company also added a consolidated total leverage covenant that will apply to the revolvers and the term loans. The covenant opens at 3.25 times, stepping up when the delayed-draw debt is funded. The revolvers already contained a leverage covenant, but it was basically revised to match the new one added to the term loans.

Commitments are due from lenders on July 24.

Lehman Brothers and Deutsche Bank are the joint lead arrangers and joint bookrunners on the deal, with Lehman the left lead.

Proceeds will be used to fund the $290 million proposed acquisition of Billing Services Group Ltd.'s wireless division, a provider of clearing, settlement, payment and financial risk management services for communications service providers, and to refinance Syniverse's existing senior secured credit facility.

The reason for the switch to delayed-draw funding is because the European Commission has initiated a Phase II review of the acquisition, a move that was announced last week.

The European Commission has 90 working days to make a final decision.

The Phase II review does not pre-judge the ultimate outcome of the investigation.

Syniverse is a Tampa, Fla., provider of mission-critical technology services to wireless telecommunications companies.

Norwood flexes up

Norwood Promotional Products Inc. flexed pricing higher on its first- and second-lien term loans, according to a market source.

The $135 million seven-year first-lien term loan (B2/B) is now priced at Libor plus 325 bps, up from original talk of Libor plus 275 bps, the source said.

In addition, the $75 million 71/2-year second-lien term loan (B3/CCC) is now priced at Libor plus 700 bps, up from original talk of Libor plus 600 bps, the source added.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

Norwood's $260 million credit facility also includes a $50 million five-year ABL revolver that is priced in line with initial talk at Libor plus 150 bps, with a 37.5 bps commitment fee.

Credit Suisse is the lead bank on the deal, which will be used to refinance existing debt.

Norwood Promotional is an Indianapolis-based supplier of promotional items.

LCDX, cash softer

LCDX and the cash loan market spent another day grinding lower for no particular reason other than market technicals, according to traders.

The index went out at 96.05 bid, 96.20 offered, down from Monday's levels of 96.60 bid, 96.80 offered, traders said.

And the cash market, generally speaking, was down by about a quarter to three-eighths of a point, traders added.

Lyondell heads to par

Also in trading, Lyondell's bank debt moved up to par after news emerged that the company is being bought by Basell, according to a trader.

The bank debt ended the day at 99¾ bid, par offered, up from 99 5/8 bid, 99 7/8 offered as investors are now awaiting a par paydown, the trader said.

Basell is buying Lyondell for $48 per common share in an all-cash transaction with a total enterprise value of approximately $19 billion, including the assumption of debt.

This transaction is expected to close within the next several months, subject to customary closing conditions, including regulatory approvals and the approval of Lyondell shareholders.

Lyondell is a Houston-based chemical company. Basell is a Hoofddorp, Netherlands-based producer of polypropylene and polyethylene.

Movie Gallery lower

Movie Gallery Inc.'s first-lien term loan was lower on Tuesday, with traders attributing the fall to the overall market weakness, rather than to any credit-specific news, according to a trader.

The Dothan, Ala.-based video rental company's first-lien term loan B ended the day at 95½ bid, 96½ offered, down from 96 bid, 97 offered, the trader said.

The bank debt has been on people's radars ever since the company announced that it is considering a number of strategic alternatives, including asset divestitures, recapitalizations, alliances with strategic partners and a sale to or merger with a third party.

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