Pilot Travel breaks; LyondellBasell runs up again; Windstream moves on acquisition news

By Sara Rosenberg

New York, Nov. 24 - Pilot Travel Centers LLC allocated its credit facility and freed the deal up for trading on Tuesday afternoon, with levels on the term loan B quoted above its original issue discount price.

In more trading happenings, LyondellBasell's bank debt was once again bouncing around on more buyout talk, with the latest chatter being that TPG and China Petroleum & Chemical Corp. (Sinopec) may throw in a bid for the company.

Also, Windstream Corp.'s term loan B was seen as unchanged to lower on the day after the company revealed plans to take on more debt and purchase Iowa Telecommunications Services Inc.

Pilot Travel frees up

Pilot Travel's credit facility hit the secondary market late in the day, with the term loan B quoted around the par context, according to a trader.

Specifically, the B loan was seen at 99¾ bid, par ¼ offered on the break, it then moved to par bid, par ½ offered and then settled in at 99 7/8 bid, par 3/8 offered, the trader said.

The $800 million term loan B is priced at Libor plus 325 basis points with a 2% Libor floor and the paper was sold at an original issue discount of 99.

During syndication, pricing on the term loan B was reverse flexed from initial talk of Libor plus 350 bps and the discount firmed at the tight end of the 98½ to 99 guidance.

Pilot Travel tranching details

Pilot Travel's $2.15 billion senior secured credit facility (Ba2/BBB-) also includes a $500 million revolver and a $500 million term A, both priced at Libor plus 325 bps with a 2% Libor floor, and a $350 million term loan C that was not syndicated.

The revolver and the term loan A were sold pro rata and were offered with upfront fees based on commitment size.

Bank of America and Wells Fargo are the lead banks on the credit facility that will be used to fund the acquisition of Flying J. Inc.'s travel plaza business.

Pilot Travel Centers is a Knoxville, Tenn.-based operator of travel centers.

LyondellBasell rises

LyondellBasell's pre-petition CAM saw more volatility on Tuesday on rumors of a possible joint bid for the company from TPG and Sinopec that could overtake Reliance Industries Ltd.'s offer, according to traders.

The CAM was quoted by one trader at 72 3/8 bid, 73 3/8 offered, up from 68½ bid, 69¾ offered, with the high of the day being 75 bid, 77 offered.

Meanwhile, a second trader was quoting the CAM at 73 bid, 74 offered, up from 68¾ bid, 69¼ offered, and he put the high of the day at 74 bid, 76 offered.

On Monday, the CAM was also all over the place. However, that movement was attributed to confirmation of a preliminary non-binding offer from Reliance Industries to acquire for cash a controlling interest in the company.

Monday's CAM levels were seen in the 68½ bid, 70½ offered context by the end of the day, but there was talk that the debt traded as high as 75 or 78, depending on who was asked.

The Reliance purchase would be done contemporaneously with LyondellBasell's emergence from Chapter 11.

LyondellBasell is a Netherlands-based polymers, petrochemicals and fuels companies.

Windstream bounces around

Windstream's term loan B was unchanged to lower during the trading session following news that the company entered into an agreement to acquire Iowa Telecommunications Services Inc., according to traders.

The term loan B was quoted by traders at 95½ bid, 96½ offered. One trader said that these levels were flat on the day, while a second trader had the paper down from 95¾ bid, 96¾ offered on Monday. The first trader said that at one point on Tuesday, he saw the term loan B at 95¼ bid, 96¼ offered.

Under the acquisition agreement, Windstream is purchasing Iowa Telecommunications for about $1.1 billion, with Iowa Telecommunications' shareholders receiving 0.804 shares of Windstream stock and $7.90 in cash per share.

Windsteam expects to issue roughly 26.5 million shares of stock valued at about $269 million, based on the company's closing stock price on Nov. 23, pay about $261 million in cash and repay roughly $598 million of existing Iowa Telecommunications debt.

To fund the cash payment and the debt repayment, Windstream will get either new debt financing or additional bank borrowings.

Windstream acquisition closing next year

Windstream expects that closing on the acquisition of Iowa Telecommunications will occur in mid-2010, subject to certain conditions, including necessary approvals from federal and state regulators and Iowa Telecommunications shareholders.

The transaction is expected to be accretive to free cash flow in the first year following the closing after expected annual synergies of about $35 million in operating expenses and capital expenditure savings and excluding integration charges.

On a pro forma basis for the acquisition of Sherburne Tele Systems Inc. in the 12 months ended Sept. 30, Iowa Telecommunications generated about $275 million in revenue, $130 million in operating income before depreciation and amortization and $69 million in free cash flow.

On a pro forma basis, following completion of pending transactions with Lexcom, NuVox and Iowa Telecommunications, as well as the recently completed acquisition of D&E Communications, Windstream will have roughly $4 billion in revenue and about $2 billion in operating income before depreciation and amortization.

Windstream is a Little Rock, Ark.-based provider of phone, high-speed internet and high-definition digital TV services. Iowa Telecom is a Newton, Iowa-based provider of communications services to residential and business customers.

Magnum Hunter closes

In other news, Magnum Hunter Resources Corp. closed on its new $150 million three-year senior secured revolving credit facility, according to a news release.

Pricing on the revolver can range from Libor plus 250 bps to 350 bps based on the amount drawn.

BMO acted as the lead arranger, bookrunner and administrative agent on the deal that was used to repay all borrowings under existing loans with CIT.

Borrowings will also be available for general corporate purposes, including the acquisition of crude oil and natural gas properties.

The initial borrowing base is $25 million. It is, however, expected to increase as the company grows its proved reserve base as contemplated with the pending closing on the acquisition of Triad Resources.

Magnum Hunter is a Houston-based independent exploration and production company.

JohnsonDiversey closes

JohnsonDiversey Inc. closed on its $1.25 billion senior secured credit facility (Ba2/BB-/BB-), according to a news release, comprised of a $450 million U.S. term loan B, a $250 million multi-currency revolver, a $500 million euro equivalent term loan and a $50 million Canadian equivalent term loan.

The U.S. term loan B is priced at Libor plus 350 bps with a 2% Libor floor and was sold at an original issue discount of 99.

During syndication, pricing on the loan firmed at the tight end of initial talk of Libor plus 350 bps to 375 bps, and the discount was lowered from initial guidance of 981/2.

Citigroup, GE Capital, Goldman Sachs and JPMorgan acted as the joint bookrunners on the deal that was used to help fund a recapitalization transaction.

As part of the recapitalization, Clayton Dubilier & Rice Inc. invested $477 million for a 46% equity interest in the company, while the Johnson Family of Racine, Wis., will retain 50% ownership in the company and Unilever will retain a 4% ownership interest in the company.

JohnsonDiversey is a Sturtevant, Wis.-based provider of commercial cleaning, sanitation and hygiene products.

RehabCare closes

RehabCare Group Inc. closed on its $575 million senior secured credit facility (Ba3/BB), consisting of a $125 million revolver and a $450 million term loan B, according to a news release.

The term loan B and the revolver are priced at Libor plus 400 bps. The term loan B has a 2% Libor floor and it was sold at an original issue discount of 98.

During syndication, the term loan B was downsized from $500 million as underwriters of the company's common stock offering exercised in full their option to purchase an additional 810,000 shares of common stock at the public offering price of $24 per share.

Including the 5.4 million shares of common stock that the company priced, the equity offering raised about $149 million in proceeds.

Bank of America, RBC and BNP Paribas acted as the lead banks on the credit facility that was used, along with the stock proceeds, to fund the acquisition of Triumph HealthCare for $570 million.

RehabCare is a St. Louis-based provider of physical rehabilitation services. Triumph HealthCare is a Houston-based developer and operator of long-term acute care hospitals.

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