Ace, Open Text firm spreads; Intelsat pulls term loan; Transeastern fall worsens; Wesco breaks; VNU pops

By Sara Rosenberg

New York, Sept. 29 - ACE Cash Express Inc. has firmed up pricing on its term loan B at the low end of original guidance and is now getting ready to allocate the deal during the week of Oct. 2, Open Text Corp. increased pricing on its credit facility while adding a step down to the term loan B tranche, and Intelsat Corp. has found it unnecessary to close on its already launched unsecured term loan.

In trading news, Transeastern's term loan continued to take a beating on Friday as investors watched it plummet into the 60's, a far cry from the high 90 trading levels that were just seen on Sept. 22.

Also in the secondary, Wesco Aircraft Hardware Corp.'s credit facility freed for trading and VNU NV's term loan B inched its way higher on positive second-quarter results.

ACE Cash Express finalized pricing on its $125 million covenant-light seven-year term loan B (B3/B+) at Libor plus 300 basis points, the tight end of original talk of Libor plus 300 to 325 bps, according to a market source.

Furthermore, now that the spread has firmed up and the books have been closed, the syndicate is looking to allocate the deal during the week of Oct. 2, with the hope being that it will be early on in the week, the source said.

ACE's $400 million credit facility also includes a $275 million five-year asset-based revolver with an interest rate of Libor plus 150 bps.

Of the total revolver amount, $50 million is seasonal and will be available from January through March.

Bear Stearns is the bookrunner and administrative agent on the term loan. General Electric Capital Corp. is the bookrunner and administrative agent on the revolver.

Proceeds will be used to help fund the leveraged buyout of Ace by JLL Partners Fund V, LP for $30 per share in cash.

Other LBO financing will come from $175 million of 10¼% eight-year senior notes and $178.8 million of equity.

Closing and funding of the credit facility is expected to take place on Thursday.

ACE is an Irving, Texas, retailer of financial services, including check cashing, short-term consumer loans, bill payment and prepaid debit card services.

Open Text ups pricing, adds step

Open Text increased pricing on its credit facility by 25 bps but added a step down provision to the term loan B tranche, according to a market source.

Both the $390 million term loan B and the $75 million revolver are now priced with an interest rate of Libor plus 250 bps, up from original guidance that was in the Libor plus 225 bps area, the source said.

In addition, the term loan B now contains a step under which pricing can drop to Libor plus 225 bps if leverage is below 2.75 times or if Moody's Investors Service upgrades the deal - whichever comes first, the source continued.

RBC Capital Markets is the lead bank on the $465 million credit facility (Ba3/BB-) that was significantly oversubscribed at the new pricing level, the source added.

Early on in the syndication process, the company decided to downsize the term loan B to $390 million from $415 million as it decided to use $25 million more of cash on hand to help finance its approximately $489 million acquisition of Hummingbird Ltd.

Open Text is a Waterloo, Ont., provider of enterprise content management software solutions. Hummingbird is a Toronto provider of enterprise software solutions.

Intelsat pulls deal

Intelsat has decided not to enter into the $667 million eight-year senior unsecured term loan (B2/B) that was launched to investors on Sept. 7 since only $180 million of its 9% senior notes due 2014 were tendered, according to an 8-K filed with the Securities and Exchange Commission Friday.

The company was offering to purchase up to $657 million of the notes, if necessary, under a change-of-control offer that was triggered by the merger of Intelsat and PanAmSat Holding Corp. in July.

The note repurchase, which was completed Friday, was funded with cash on hand.

Citigroup was the left lead bank on the unsecured term loan that was being talked at Libor plus 375 bps and was non-callable for two years, then at 102 in year three and 101 in year four.

Intelsat is a Pembroke, Bermuda, provider of fixed satellite services.

Captive downsizes, trims first-lien spread

Captive Plastics Inc. reduced the sizes of its first- and second-lien term loan add-ons and reverse flexed pricing on the incremental first-lien debt, according to a market source.

The first-lien add-on is now sized at $75 million, down from an original size of $79 million, and pricing was reduced to Libor plus 275 bps from original talk at launch of Libor plus 300 bps, the source said.

Meanwhile, the second-lien add-on is now sized at $41 million, down from an original size of $45 million, the source added. Pricing on this tranche was left unchanged at Libor plus 725 bps.

Credit Suisse is the lead on the $116 million deal.

Proceeds will be used to fund the acquisition of Grafco PET Packaging Technologies, a supplier of polyethylene terephthalate rigid containers.

Captive Plastics is a Piscataway, N.J., manufacturer of plastic packaging for the personal care, health care, food and spirit markets.

Transeastern hits new lows

In trading, Transeastern, the joint venture between Technical Olympic USA, Inc. and Falcone Group, saw its term loan sink to new lows on Friday, still on follow through from the recent lender update on financials and the troublesome state of the Florida housing market, according to a fund manager.

The term loan closed the day quoted at 66 bid, 68 offered, down from Thursday's closing levels of 73 bid, 77 offered, the fund manager said. By comparison, on Wednesday the term loan was quoted at 79 bid, 81 offered and, prior to that, it was trading around 98 or 99.

The term loan has been diving ever since Technical Olympic publicly announced on Wednesday that because of weak demand, an over supply of new and existing inventory of homes and increased competition in the Florida housing market, Transeastern cannot support its existing capital structure.

Transeastern is exploring various options to fix the liquidity problem, including requesting waivers from its lenders regarding potential defaults and permitting future advances under the revolver, and restructuring land bank obligations.

Technical Olympic and Falcone said they do not intend to contribute further capital under the current structure.

The Transeastern debt is non-recourse to Technical Olympic "except that we have agreed to complete any property development commitments on the existing work in process at the time of closing in the event the Transeastern JV defaults and to indemnify the lenders for losses resulting from fraud, misappropriation and similar acts," according to Technical Olympic's most recent 10-K filed with the Securities and Exchange Commission.

The conference call with the lending group to discuss the Transeastern problems actually took place on Sept. 25, but no movement was seen in the bank debt until the news became public and more people were able to react.

Since the lender call and public announcement there have been no further updates from the company on the situation.

According to the fund manager, the worst case scenario for bank debt holders "would be a complete liquidation of the joint venture at a time when houses in Florida aren't selling."

On Friday, Fitch Ratings placed Technical Olympic's ratings on watch negative, joining the list of rating agencies to do so. Moody's Investors Service placed all of the company's ratings under review for possible downgrade on Wednesday and Standard & Poor's revised its outlook the ratings to negative on Sept. 25.

Technical Olympic is a Hollywood, Fla.-based builder and seller of single family homes.

Wesco frees to trade

Wesco Aircraft's credit facility hit the secondary on Friday, with the $450 million seven-year first-lien term loan B (Ba3/B+) closing the day at par ½ bid, par 5/8 offered and the $150 million 71/2-year second-lien term loan (Caa1/B-) closing the day at 101¼ bid, no offers, according to a market source.

On the break, the first-lien term loan B bid was par 1/4. It then got as high as par ¾ bid before settling in at the par ½ region, the source said.

The second-lien loan was bid at par 3/8 on the break before inching its way into the 101's, the source added.

The term loan B is priced with an interest rate of Libor plus 225 bps. During syndication, the tranche was upsized from $435 million and pricing was reduced from original talk at launch of Libor plus 250 bps.

The second-lien loan is priced with an interest rate of Libor plus 575 bps. During syndication, the tranche was downsized from $165 million when the term loan B was upsized, and pricing came down from original talk of Libor plus 650 bps.

Wesco's $675 million credit facility also contains a $75 million six-year revolver (Ba3/B+) with an interest rate of Libor plus 250 bps.

Lehman Brothers and Bank of America are the lead banks on the facility, with Lehman the left lead.

Proceeds will be used to help fund leveraged buyout of Wesco Aircraft by The Carlyle Group.

Wesco Aircraft is Valencia, Calif., distributor of aerospace hardware and provider of inventory management services.

VNU higher on earnings

VNU's term loan B "broke through par" as the company announced good second-quarter numbers, according to a trader.

The term loan B closed the day at par bid, par ¼ offered, up from Thursday's levels of 99¾ bid, par offered, the trader said.

For the second quarter, the company reported pro forma operating revenue of €943 million, an increase of 6% in constant currency over the prior year, and pro forma operating income of €114 million, up 11% in constant currency.

For the first six months of 2006, pro forma operating revenue was €1.833 billion, up 5% in constant currency from operating revenue of €1.648 billion in 2005, and pro forma operating income of €185 million, up 13% in constant currency.

VNU is a Haarlem, the Netherlands-based information and media company.

Lyondell stronger

Lyondell Chemical Co.'s $1.775 billion seven-year term loan was slightly stronger during its second day of trading as levels moved to par 3/8 bid, par 5/8 offered from prior closing levels of par ¼ bid, par ½ offered, according to a trader.

When the deal first broke on Thursday it was seen at par 3/8 bid, par 5/8 offered, but it had settled down by the close, so basically on Friday, it just regained the ground it had lost.

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

Georgia-Pacific, Cablevision trade up

Georgia-Pacific Corp. and Cablevision Systems Corp. both saw their term loans trade up by about an eighth of a point during the Friday session on no specific news, according to a trader.

Georgia-Pacific's term loan B closed the day at par ¼ bid, par ½ offered, the trader said.

Meanwhile, Cablevision's term loan B closed the day 99¾ bid, par offered and its term loan A closed the day at 99 1/8 bid, 99 3/8 offered, the trader added.

Georgia-Pacific is an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals

Cablevision is a Bethpage, N.Y., media, entertainment and telecommunications company.

IPC closes

Silver Lake Partners completed its leveraged buyout of IPC Information Systems LLC for about $800 million from GS Capital Partners, according to a company news release.

To help fund the LBO, IPC got a new $635 million credit facility consisting of a $415 million seven-year first-lien term loan (Ba3/B+) at Libor plus 250 bps, a $50 million six-year revolver (Ba3/B+) at Libor plus 250 bps and a $170 million eight-year second-lien term loan (Caa1/B-) at Libor plus 650 bps.

During syndication, pricing on the first-lien term loan and revolver was reverse flexed from the Libor plus 275 bps area and pricing on the second-lien was reverse flexed from the Libor plus 675 bps area.

Call premiums on the second-lien are 102 in year one and 101 in year two.

Goldman Sachs, JPMorgan and Morgan Stanley acted as the lead banks on the deal, with Goldman the left lead.

IPC is a New York-based provider of mission-critical communications solutions and services.

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