SunCal ups pricing on first-, second-lien tranches; Meridian nails down timing on DIP launch

By Sara Rosenberg

New York, May 9 - SunCal Cos. (Ritter Ranch) increased pricing on all tranches contained in its credit facility, with pricing on the first-lien piece going up by 25 basis points and pricing on the second-lien piece going up by 100 basis points.

Meanwhile, Meridian Automotive Systems Inc. has firmed up timing for the launch of its debtor-in-possession financing facility, picking a specific day rather than calling it this week's business.

SunCal flexed pricing higher on its $200 million five-year term loan B, changing the spread to Libor plus 300 basis points from Libor plus 275 basis points, according to a market source.

Furthermore, the company flexed pricing higher on its $75 million six-year second-lien term loan as well, changing the spread to Libor plus 700 basis points from Libor plus 600 basis points, the source added.

Call protection on the second-lien loan remained at 103 in year one, 102 in year two and 101 in year three.

Credit Suisse First Boston is the sole lead arranger and bookrunner on the $275 million credit facility.

Proceeds will be used to refinance existing debt.

SunCal is an Irvine, Calif., developer of master-planned communities.

Meridian sets launch

Meridian Automotive Systems has come out with specific timing on the launch of its proposed $375 million debtor-in-possession financing facility, as a bank meeting has now been scheduled to take place this Tuesday, according to a market source.

Previously it was anticipated that the deal would launch this week, but just what day the launch would actually take place on was unavailable.

The DIP consists of a $175 million revolving tranche A with an interest rate of Libor plus 250 basis points and a $200 million term loan B with an interest rate of Libor plus 350 basis points.

Maturity will be the earliest of 18 months from the date of filing, 45 days after the entry of the interim DIP if the final DIP order has not been made, confirmation of a plan of reorganization or the acceleration of the loans in accordance with the DIP agreement.

The revolver will be repaid first, followed by the term loan.

JPMorgan is the lead bank on the deal that will be used to repay the company's first-lien debt.

Meridian is a Dearborn, Mich., supplier of front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers.

Insurance Auto cuts spread

Insurance Auto Auctions Inc. reverse flexed pricing on its $115 million term loan B to Libor plus 275 basis points from Libor plus 300 basis points and added a step down to Libor plus 250 basis points when leverage falls below 33/4x, according to a market source. The term loan was offered to investors at par.

Pricing on the $50 million revolver remained at Libor plus 275 basis points.

Allocations on the recently revised $165 million credit facility (B2/B) are hoped to go out some time this week, the source added.

Bear Stearns and Deutsche Bank are the lead banks on the deal that will be used to help fund Kelso & Co.'s leveraged buyout of the company.

The company sold $150 million of 11% eight-year senior unsecured notes in late-March to help fund the LBO as well. Price talk on the notes was 10½% to 10¾%.

In addition, Kelso has committed to provide $148.7 million in equity financing.

Under the terms of the agreement, Insurance Auto stockholders will receive $28.25 per share in cash upon the closing of the merger. The total value of the merger transaction is about $385 million.

Insurance Auto is a Westchester, Ill., provider of automotive total loss and specialty salvage services.

Dynegy holds steady

Dynegy Inc.'s bank debt held around trading levels of 101 despite speculation that there could be a refinancing in the future, and announcements that the company is evaluating strategic opportunities for its Midstream natural gas business and first-quarter numbers were released, according to a trader.

On Monday, Dynegy announced that it has launched a process to consider alternatives for its Midstream natural gas business and that it has retained Credit Suisse First Boston in connection with the review of strategic alternatives for the business.

The Houston-based energy company announced first-quarter numbers on Monday, including a net loss of $267 million, or $0.70 per diluted share, compared to net income of $65 million and diluted earnings per share of $0.14 for the first quarter of 2004.

The year-over-year decrease in net income primarily resulted from a $156 million settlement of the company's shareholder class action litigation and a $109 million charge associated with the restructuring of the Independence power tolling arrangement.

As of March 31, Dynegy's liquidity was $968 million consisting of $371 million in cash on hand and $597 million in unused availability under its $700 million revolving credit facility.

Management also revised 2005 earnings and cash flow guidance estimates, expecting a net loss from its core businesses in a range of $145 million to $130 million, compared to the previously announced estimated loss of $199 million to $183 million, expecting a GAAP net loss of $410 million to $395 million, compared to the previously announced estimated net loss of $335 million to $319 million, and expecting core business operating cash flow in a range of $315 million to $330 million, compared to the previous range of $200 million to $215 million.

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