Horizon Lines reverse flexes; Belden adds stepdown; PlayPower and Savers break

By Sara Rosenberg

New York, July 1 - Pricing on Horizon Lines LLC's $250 million seven-year term loan was reduced to Libor plus 275 basis points from Libor plus 300 basis points on Thursday morning on overwhelming interest for the loan and a positive response to the newly priced bond offering. And, Belden & Blake Corp. firmed up pricing on its term loan with the addition of a stepdown.

Meanwhile, in the secondary, both PlayPower Inc. and Savers Inc. hit the market, but little trading took place as both issues were seen bid with no offers.

On Horizon Lines, the syndicate had been waiting see what happened with the company's $250 million bond deal before reverse flexing the "way oversubscribed" tranche, a market source said. Then on Wednesday, Horizon Lines sold the senior notes at par to yield 9%. Pricing came at the cheap end of price talk of 9% to 9¼% on good demand, the source added.

Some of the credit facility's success could be attributed to existing lenders as some had already signed up to roll over their commitments and potentially upsize their positions on the June 17 launch date.

The facility also contains a $25 million five-year revolver with an interest rate of Libor plus 250 basis points, unchanged since launch, although prior to hitting the market talk was that the revolver would be priced at Libor plus 275 basis points.

UBS and Goldman Sachs are joint lead arrangers on the credit facility, with UBS listed on the left. ABN Amro is the documentation agent.

Following the transactions, total leverage will be 5x and senior leverage will 2.5x.

Proceeds from the debt transactions will be used to help fund Castle Harlan Inc.'s previously announced acquisition of Horizon Lines from The Carlyle Group for $650 million. Castle Harlan Partners IV LP, an investment fund totaling $1.163 billion in commitments that closed last September, is the actual buyer of Horizon Lines.

Closing on the facility is expected to take place on Wednesday.

Allocations are also expected to take place next week. There is a possibility that the deal may allocate on Tuesday but that depends on whether market participants are back from their long holiday weekend. If attendance is scarce the deal may wait till Wednesday to allocate, the source explained.

Horizon Lines is a Charlotte, N.C., container shipping company.

Belden & Blake stepdown added

Pricing on Belden & Blake Corp.'s "way oversubscribed" $100 million term loan firmed up at the cheap end of guidance at Libor plus 275 basis points, according to a market source.

Furthermore, a stepdown in pricing was added to the term loan under which the interest rate reduces to Libor plus 250 basis points if first-lien leverage falls below 1.5 times, the source added. Currently, leverage on a first-lien basis is 1.5 times.

Originally, the term loan was talked at Libor plus 275 to 300 basis points, but the level at which pricing ended up is not a huge surprise being that the deal was half done before launching and incredibly oversubscribed within a few hours of the June 25 bank meeting.

In fact, due to the overwhelming demand for the deal in general, the syndicate recently moved up the commitment deadline to this past Wednesday from the original deadline of July 13.

The $170 million deal (B2/BB-) also contains a $30 million revolver with an interest rate of Libor plus 275 basis points and a $40 million letter-of-credit facility with an interest rate of Libor plus 275 basis points, both of which were left unchanged since launch.

Goldman Sachs is the sole lead bank on the deal.

Proceeds, combined with proceeds from a $192.5 million senior secured notes offering that priced Thursday, will be used to help fund Belden's merger with an affiliate of Carlyle/Riverstone Global Energy & Power Fund II LP.

Carlyle/Riverstone, through its new partnership with Capital C Energy LLC, entered into a cash merger agreement to acquire all of the outstanding stock of Belden & Blake.

As part of the merger, Belden & Blake began a tender offer and consent solicitation to buy for cash any and all of its outstanding $225 million 9 7/8% senior subordinated notes due 2007.

The tender offer, which is subject to, among other things, closing of the merger and funding, expires on July 15.

Belden & Blake is a Canton, Ohio, oil and gas producer. Capital C is a Houston-based company that seeks to accumulate a portfolio of domestic oil and gas assets.

PlayPower par ½ bid

PlayPower's amended and restated credit facility allocated and broke for trading on Thursday, with the now approximately $160 million term loan quoted at par ½ bid, with no offers, according to a fund manager.

"I didn't see much activity in it. But this is one that will probably attract some interest since it's Libor plus 450," the fund manager added.

Through the amendment and restatement the company repriced its approximately $125 million of term loan debt at Libor plus 450 basis points, up from existing pricing of Libor plus 425 basis points, and increased the term loan by $35 million, with the add-on also priced at the Libor plus 450 basis points level.

Furthermore, the company also repriced its $25 million revolver at Libor plus 400 basis points, up from Libor plus 375 basis points.

UBS Warburg and The Royal Bank of Scotland are joint lead arrangers on the deal, with UBS listed on the left.

The $35 million add-on, which was only launched to existing investors since it is relatively small, will be used to fund the acquisition of The Little Tikes Co., a Hudson, Ohio, manufacturer and marketer of children's products, from Newell Rubbermaid Inc.

PlayPower is a St. Louis commercial play and recreation equipment manufacturer.

Savers searches for sellers

Savers' $205 million credit facility also allocated and broke for trading Thursday, with both its first- and second-lien term loans receiving interest from buyers, but sellers were nowhere to be found.

The first-lien term loan, like PlayPower, was seen bid at par 1/2, according to the fund manager. The second-lien term loan was bid at 101, a trader added.

The $120 million five-year first-lien term loan is priced with an interest rate of Libor plus 425 basis points and was originally issued to investors at par.

The $60 million six-year second-lien term loan is priced with an interest rate of Libor plus 800 basis points.

CIBC and Merrill Lynch are the lead banks on the deal.

The facility also contains a $25 million five-year revolver with an interest rate of Libor plus 425 basis points.

Proceeds are being used by the Bellevue, Wash., thrift store operator to refinance bank debt and some subordinated debt and to pay a dividend to equity holders.

BofA signs on to PanAmSat

Bank of America has signed on to PanAmSat Corp.'s $2.91 billion credit facility to join Bear Stearns and Lehman Brothers as a co-documentation agent, according to a syndicate document.

Credit Suisse First Boston and Citigroup are the joint lead arrangers and joint bookrunners on the deal.

The facility launched to managing agents this past Monday. Ten institutions were asked to participate in the managing agent meeting.

The deal, which is expected to launch to retail around mid-July, consists of a $250 million five-year revolver talked at Libor plus 250 basis points with a 50 basis points commitment fee, an $800 million five-year term loan A talked at Libor plus 250 basis points and a $1.86 billion seven-year term loan B talked at Libor plus 275 basis points.

Proceeds from the credit facility, combined with proceeds from a proposed bond offering, will be used to help fund the leveraged buyout of PanAmSat by affiliates of Kohlberg Kravis Roberts & Co. from The DirecTV Group Inc. in a transaction valued at about $4.3 billion, including the assumption of about $750 million of net debt.

The deal has taken so long to materialize being that it has to go through all sorts of regulatory approvals.

PanAmSat is a Wilton, Conn., satellite operator.

Merisant price talk surfaces

Price talk on Merisant Co.'s $255 million credit facility emerged, with the $35 million five-year revolver talked at Libor plus 300 to 325 basis points with a 50 basis points commitment fee, the $50 million six-year euro term loan talked at Libor plus 300 to 325 basis points and the $170 million six-year term loan B talked at Libor plus 325 to 350 basis points, according to a syndicate document.

The deal launched this past Tuesday after the bank meeting was postponed by about a week.

Credit Suisse First Boston and RBC are the joint lead arrangers and joint bookrunners on the deal.

Proceeds will be used for recapitalization purposes.

As was previously reported, Tabletop Holdings Inc., the parent of Merisant Co., filed an S-1 registration statement in April with the Securities and Exchange Commission to offer up to $700 million of Income Deposit Securities and senior subordinated notes due 2014. Furthermore, the company revealed that it was working on putting together a new credit facility.

The Chicago low-calorie sweetener company will use proceeds to repay all the borrowings under Merisant's senior secured credit facility and to unwind interest rate hedges, tender for Tabletop's $136.0 million principal amount at maturity of 12¼% senior subordinated discount notes due 2014 and Merisant's $225.0 million principal amount of 9½% senior subordinated notes due 2013, to buy back some class B stock from existing stockholders and to make payments under existing management incentive plans.

Timing emerges on Refco

Refco Group Ltd. LLC's new credit facility is now expected to launch on July 12, according to a syndicate document. Prior to now the bank meeting date was still to be determined.

Bank of America, Credit Suisse First Boston and Deutsche Bank are joint lead arrangers on the deal, and Deutsche is also documentation agent.

Proceeds from the credit facility and a high-yield offering will be used to help fund Thomas H. Lee Partners' acquisition of a major ownership stake in the company.

No other details on the bank financing are available at this time.

Financial terms of the Thomas H. Lee acquisition were not disclosed; but, the transaction, which is subject to regulatory and other approvals, values the company at about $2.25 billion. As part of the agreement, Refco's management team will retain a significant ownership stake in the company.

Refco is a New York diversified financial services organization.

Steel Dynamics closes

Steel Dynamics Inc. closed on its new $230 million four-year senior secured revolver, according to a company news release.

The Fort Wayne, Ind., steel manufacturer used a portion of the revolver proceeds along with cash on hand to prepay some existing senior secured debt, including the company's term loan B facility of $108 million.

Proceeds from the revolver will also be available for working capital.

At June 30, with the completion of the refinancing, the company increased its credit facility liquidity to $130 million from approximately $75 million.

Itron closes

Itron Inc. finally closed on its acquisition of Schlumberger Ltd.'s electricity metering products business for $248 million, according to a company news release.

Although the company's $240 million credit facility (Ba3/BB-) has been trading since November 2003, the deal was not scheduled to fund until closing of the acquisition, which took a while as the company waited on various regulatory approvals.

The facility consists of a $55 million revolver with an interest rate of Libor plus 275 basis points and a $185 million term loan B with an interest rate of Libor plus 225 basis points. The term loan B contains a stepdown to Libor plus 200 basis points if leverage falls below 2x.

Bear Stearns was the sole lead arranger, sole bookrunner and syndication agent on the deal. Wells Fargo was administrative agent.

Itron is a Spokane, Wash., provider of technology for collecting and analyzing electric, gas and water usage data to energy and water industries.

K2 closes

K2 Inc. closed on its amended and restated $250 million five-year revolver priced at Libor plus 200 basis points with an unused commitment fee of 37.5 basis points. J.P. Morgan Chase Bank was the lead bank on the deal.

The facility has the option to be expanded to $350 million under some conditions, according to a company news release.

K2's previous facility was sized at $205 million and was set to expire on March 25, 2006.

Closing on the amendment and restatement was conditioned on the successful completion of a senior notes offering and/or common stock offering, which the company did.

K2 is a Carlsbad, Calif., sporting goods company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.