Fleming holds bank meeting; Hilb, Rogal and Hamilton bank meeting Thursday

By Sara Rosenberg

New York, May 22 - Fleming Cos. Inc. held a bank meeting Wednesday for its new $950 million credit facility, according to a syndicate source. Deutsche is lead bank on the deal.

The loan consists of a $600 million revolver and a $350 million term. The interest rate on the revolver is based on a usage grid and can range from Libor plus 175 basis points to Libor plus 200 basis points. The term has an interest rate of Libor plus 225 basis points, the syndicate source said.

The Lewisville, Tex. supplier of consumer packaged goods will use proceeds to refinancing existing debt and for the acquisition of Core-Mark and Head Distributing.

Coming up in the primary, Hilb, Rogal and Hamilton Co. is scheduled to hold a bank meeting Thursday regarding its new $260 million credit facility. Wachovia is the lead bank on the deal.

The Glen Allen, Va. insurance intermediary's loan consists of a $130 million pro rata portion with an interest rate of Libor plus 200 basis points and a $130 million term B with an interest rate of Libor plus 300 basis points, according to market sources.

Proceeds will be used to help fund the acquisition of Hobbs group LLC Atlanta, Ga. insurance broker.

In secondary activity, Adelphia Communications Corp., a Coudersport, Pa. telecommunications company, was slightly stronger Wednesday. The bid on the Adelphia Olympus loan was around 90, a trader said. A couple of trades took place on the Adelphia Century loan right up around 90, the trade added. There were also a couple of trades on Adelphia's new loan at around 88 with a follow-up bid on these trades of 89.

Wyndham International Inc. has been better bid since the announcement of its upcoming $750 million bond deal, a market professional said. He explained that people are looking forward to proceeds from the note sale being used towards the repayment of certain outstanding debt under the bank credit facilities. The bank loan paper was trading in the mid-90s Wednesday, a trader said.

On Friday, the Dallas, Tex. hotel enterprise announced plans to offer $750 million senior secured notes due 2008. The note offering is expected to be completed in early June, a company press release said. JP Morgan and Bear Stearns & Co. are joint bookrunners for the deal.

This week, Appleton Papers Inc. went out to market with a new pricing on a term loan C, which will refinance the company's existing term loan B, according to market sources. Basically, the Appleton, Wis. paper company is looking to reduce the pricing on its term loan by replacing it with a new loan. The term C will have the same terms and conditions as the term B, but it is priced 100 basis points cheaper at Libor plus 325 basis points, a market professional said.

Originally, Appleton entered into its credit facility on Nov. 9, 2001 as part of a leveraged buyout. The existing facility consists of a $75 million four-year revolver with an interest rate of Libor plus 350 basis points, a $115 million term A with an interest rate of Libor plus 350 basis points and a $150 million term B with an interest rate of Libor plus 425 basis points. Currently commitments are being sought.

Bear Stearns is sole lead arranger for the credit facility.

Some people are skeptical as to whether Appleton will be able to pull this tranche "redo" off. When the loan first came to market last fall, "it took forever to get it done," a professional said. The reason behind the tough syndication is that Appleton is a carbon paper company, and that sector is "falling away".

However, according to another market professional, there is a bid for the paper in the secondary, and with the lack of supply, most bank loan holders will not want to lose the asset. For these reasons, the deal will probably get done, he added.

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