AAT sets price talk; Boart moves funds, cuts spread; Meow Mix finalizes pricing; Mid-Western breaks

By Sara Rosenberg

New York, July 11 - AAT Communications Corp. set opening price talk on its proposed $335 million credit facility as the deal launched via a bank meeting Monday afternoon, but even before pricing guidance was released, the deal had seen a massive amount of interest as paper in the tower sector is becoming sparse and existing lenders are unwilling to give up their positions.

Meanwhile, Boart Longyear Co. shifted some funds into its first-lien term loan from its second-lien term loan and then cut pricing on the newly enlarged first-lien tranche. And, The Meow Mix Co. firmed up pricing on its credit facility now that syndication has wrapped.

In the secondary, Mid-Western Aircraft Systems freed up for trading with the term loan quoted in the low-101s immediately following the break and then moving into to the upper-101 context where it closed out the session.

AAT launched its credit facility Monday with price talk of Libor plus 225 basis points on its $50 million 6 1/2-year revolver (B1/BB+), Libor plus 200 basis points on its $200 million seven-year term loan B (B1/BB+) and price talk of Libor plus 325 basis points on its $85 million eight-year second-lien term loan (B2/BB), according to a market source.

"Even without the release of price talk, [the deal] got a tremendous amount of subscription both in the first-and the second-lien term loans," a market source told Prospect News.

And, at the price talk levels that came out at Monday's bank meeting, the first-lien term loan is "significantly oversubscribed" and the second-lien term loan is "two times oversubscribed", the source continued.

The revolver, which is "already mostly spoken for by existing banks", according to the source, contains a 50 basis points commitment fee.

"There's an increasing scarcity of tower paper because other towers are considering securitizations.

"[Also], the size of the institutional loan hasn't changed and most, if not all, term B lenders want to keep their positions," the source said.

"[And], the size of the pro rata has reduced significantly so have seen some interest from banks in the term loans as well," the source added.

About a year ago, AAT got a new $325 million credit facility (B1/B-) consisting of a $200 million seven-year term loan B with an interest rate of Libor plus 275 basis points, a $50 million seven-year revolver with an interest rate of Libor plus 275 basis points and a 50 basis points commitment fee, and a $75 million seven-year delayed-draw term loan with an interest rate of Libor plus 275 basis points.

The lack of the delayed-draw term loan piece in this newest transaction is what the source was referring to when he stated that the pro rata portion of the credit facility is being downsized when compared to the existing deal.

Both the first-and second-lien term loans are being offered to investors at par.

AAT is considering the option of moving $20 million to its first-lien term loan (making it $220 million) from its second-lien term loan (making it $65 million) based on economics and how well each tranche has already performed in terms of syndication. However, a decision on the potential shift in funds won't be made until later in the syndication process, the source explained.

Commitments are due July 22.

TD Securities and Credit Suisse First Boston are the lead banks on the deal, with TD left lead and administrative agent.

Proceeds will be used for a dividend recapitalization.

AAT is a St. Louis-based owner and operator of wireless communications towers.

Boart tweaks deal

Boart Longyear made some modifications to its credit facility, increasing the size of the first-lien term loan by $25 million, while decreasing the size of the second-lien term loan by the equivalent amount, and reducing pricing on the first-lien piece.

The first-lien term loan (B1/B+) was upsized to $325 million from $300 million and pricing was reverse flexed to Libor plus 250 basis points from original price talk of Libor plus 275 basis points, according to a market source.

At the same time, the second-lien term loan (B3/B-) was decreased to $100 million from $125 million but pricing on the tranche was left unchanged at Libor plus 700 basis points, the source added.

Boart's $500 million credit facility also contains a $75 million revolver (B1/B+) that was left unchanged in terms of size and pricing - with the interest rate set on the tranche at Libor plus 275 basis points.

UBS is the lead bank on the deal that will be used to help fund Advent International's acquisition of Boart Longyear from Anglo American plc in a transaction with an enterprise value of $545 million.

The investment in Boart Longyear is the first to be made from Advent's latest $3.3 billion global buyout fund, which closed in April.

Boart Longyear is a South Africa-based provider of drilling services and equipment.

Meow Mix sets spread

Meow Mix finalized the spread on its term loan at the high-end of initial guidance, with pricing on the firming up at Libor plus 325 basis points, compared to the Libor plus 300 to 325 basis points range that was originally given to lenders at launch, according to a market source.

However, the $190 million six-year first-lien term loan does now contain a step down to Libor plus 300 basis points at 3x leverage, the source added.

Meow Mix's $215 million credit facility also contains a $25 million five-year revolver.

UBS and Lehman are the lead banks on the deal, with UBS left lead.

Proceeds will be used for a recapitalization. Essentially, through this deal, the Secaucus, N.J., dry cat food company is moving to an all first-lien loan structure compared to the first-and second-lien loan structure that is currently in place.

Mid-Western breaks in 101s

Mid-Western Aircraft Systems allocated its credit facility on Monday, with the $700 million 61/2-year term loan opening for trading in the 101 1/8 bid, 101 3/8 offered context, but moving up to the 101 5/8 bid, 101 7/8 offered range not too long after, which is where it ended the session, according to traders.

The term loan is priced with an interest rate of Libor plus 225 basis points. Originally, the tranche was talked at Libor plus 275 basis points but pricing was reverse flexed during syndication.

Mid-Western Aircraft's $875 million credit facility (B1/BB-) also contains a $175 million revolver with an interest rate of Libor plus 275 basis points. Pricing on this tranche was left unchanged throughout syndication.

Citigroup is the sole lead bank on the deal that will be used to help fund Onex Corp.'s acquisition of the Wichita/Tulsa Division of Boeing Commercial Airplanes (now named Mid-Western Aircraft Systems).

The acquisition, which was first announced in February, is valued at $1.5 billion consisting of approximately $1.1 billion in cash and the assumption of certain liabilities.

Butler closes

The merger of The Butler Co. and Burns Veterinary Supply Inc. into a new Dublin, Ohio-based company called Butler Animal Health Supply LLC that is owned by Oak Hill Capital Partners II LP and Darby Group Cos. Inc. has been completed, according to a company news release.

To help fund the transaction, Butler Animal got a new $200 million credit facility consisting of a $30 million revolver (B2/B) with an interest rate of Libor plus 300 basis points, a $145 million first-lien term loan (B2/B) with an interest rate of Libor plus 275 basis points and a step down to Libor plus 250 basis points at 31/2x total leverage, and a $25 million second-lien term loan (Caa1/CCC+) with an interest rate of Libor plus 600 basis points and a step down to Libor plus 575 basis points at 31/2x total leverage.

The first-lien term loan was originally sized at $140 million and the second-lien term loan was originally sized at $30 million, but $5 million was shifted into the first-lien from the second-lien during syndication.

In addition, pricing on the first-lien was lowered from Libor plus 300 basis points and pricing on the second-lien was lowered from Libor plus 625 basis points during syndication, with the addition of step downs to both tranches.

Bear Stearns acted as sole lead arranger and administrative agent on the veterinary supplies company's deal, with Wells Fargo syndication agent.

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