Munder trims term loan spread; TPF reworks letter-of-credit tranche; Chattem breaks; Ford trades lower

By Sara Rosenberg

New York, Dec. 15 - Munder Capital Management lowered pricing on its term loan B as the tranche was met with strong investor demand, and TPF Generation Holdings LLC carved another tranche out of its synthetic letter-of-credit facility.

Meanwhile, in the secondary market, Chattem Inc.'s credit facility freed for trading, with the term loan B quoted atop par, and Ford Motor Co.'s term loan B softened in trading.

Munder Capital Management reverse flexed pricing on its $110 million six-year term loan B by 25 basis points given that the deal was significantly oversubscribed, according to a market source.

The term loan B is now priced at Libor plus 200 bps, down from original talk at launch of Libor plus 225 bps, the source said.

Pricing on the company's $10 million five-year revolver was left unchanged at Libor plus 225 bps, the source added.

Recommitments from lenders were due on Friday, and allocations are expected to go out next week, with Tuesday being the targeted day.

Credit Suisse is the lead bank on the $120 million credit facility (Ba2/BB+).

Proceeds will be used to fund the acquisition of Munder by Crestview Partners, LP and management from Comerica Inc.

Munder is a Birmingham, Mich., provider of investment advice and asset management services.

TPF revises letter-of-credit tranche

TPF Generation has carved out a new tranche from its seven-year letter-of-credit facility, so that the $250 million of debt is now divided into a $159.5 million synthetic letter-of-credit facility (Ba3/B+), a $15.5 million commercial bank letter-of-credit facility (Ba3/B+) and a new $75 million special letter-of-credit facility (BB-).

Originally, the letter-of-credit facility was just one synthetic tranche sized at $250 million. Then, a few days ago, the tranche was divided into a $234.5 million synthetic letter-of-credit facility and a $15.5 million commercial bank letter-of-credit facility.

The latest carve out was done because of demand, the source explained.

This new $75 million special letter-of-credit facility (BB-) is priced at Libor plus 175 bps. The $159.5 million synthetic letter-of-credit facility is priced at Libor plus 200 bps, after flexing up the other day from Libor plus 175 bps, and the $15.5 million commercial bank letter-of-credit facility is priced at Libor plus 200 bps as well.

The commercial bank letter-of-credit facility could be upsized to a maximum of $75 million based on demand, with dollar-for-dollar reductions to the special letter-of-credit facility.

TPF Generation's $1.645 billion credit facility also includes a $50 million first-lien synthetic revolver due 2011 (Ba3/B+) at Libor plus 200 bps, an $850 million first-lien term loan B due 2013 (Ba3/B+) at Libor plus 200 bps and a $495 million second-lien term loan due 2014 (B3/B-) at Libor plus 425 bps with call protection of 102 in year one and 101 in year two.

Recently, pricing on the revolver and first-lien term loan B was reverse flexed from original talk at launch of Libor plus 250 bps, and pricing on the second-lien was reverse flexed from original talk at launch of Libor plus 550 bps.

Credit Suisse is the left lead bank on the deal that will be used to fund Tenaska Power Fund, LP's acquisition of six natural gas-fired generation assets from Constellation Energy.

Tenaska is buying 3,145 megawatts of gas-fired generation from Constellation for $1.635 billion in cash, subject to closing adjustments.

Herbst reverse flexes

Herbst Gaming Inc. reduced pricing on its term loan tranches to Libor plus 187.5 bps from original talk at launch of Libor plus 225 bps, according to a market source.

The term loan debt is comprised of a $375 million seven-year term loan B and a $325 million one-year, with seven-year final maturity, delayed-draw term loan.

The delayed-draw term loan has an unused fee of 50 bps. It is expected that funding of the tranche will take place at the end of the first quarter of 2007.

Herbst's $875 million senior secured credit facility (Ba3/B+) also includes a $175 million five-year revolver priced at Libor plus 200 bps, in line with original talk.

Lehman Brothers and Wachovia are the lead banks on the deal that will be used to help fund the acquisition of some MGM Mirage assets and The Sands Regent in Reno, Nev.

Herbst is buying the Sands for about $139 million and MGM Mirage's Buffalo Bill's, Primm Valley and Whiskey Pete's hotel-casinos, which are located in Primm, Nev., for $400 million.

The Sands transaction is expected to close in early January, and the Primm transaction is expected to close by the end of the first quarter of 2007 (which is what the delayed-draw loan will be used for), subject to customary closing conditions, including receipt of necessary regulatory and governmental approvals.

In addition to helping fund the acquisitions, the new credit facility will also refinance existing bank debt and be used for working capital and general corporate needs.

Herbst is a Las Vegas-based slot route operator.

Chattem frees to trade

Switching to the secondary, Chattem's credit facility broke for trading with the $300 million six-year term loan B quoted at par ¼ bid, par ½ offered pretty consistently throughout the day, according to a trader.

The term loan B is priced at Libor plus 175 bps. During syndication, pricing on the tranche was reverse flexed from original talk at launch of Libor plus 200 bps.

Chattem's $400 million credit facility also includes a $100 million four-year revolver.

Bank of America is the lead bank on the deal that will be used to help fund the acquisition of the U.S. rights to five consumer and over-the-counter brands from Johnson & Johnson for $410 million in cash.

The brands being acquired by Chattem are ACT, an anti-cavity mouthwash/mouth rinse, Unisom, an over-the-counter sleep aid, Cortizone, a hydrocortisone anti-itch product, Kaopectate, an anti-diarrhea product, and Balmex, a diaper rash product.

Chattem is a Chattanooga, Tenn., marketer and manufacturer of a broad portfolio of branded over-the-counter health care products, toiletries and dietary supplements.

Ford weakens

Ford's term loan B dropped by a quarter of a point in trading on Friday, with no particular news seen pushing the loan down, according to a trader.

The term loan B closed the day at 99¾ bid, par offered, down from Thursday's levels of par bid, par ¼ offered, the trader said.

This $7 billion seven-year term loan B is priced at Libor plus 300 bps with a step down to Libor plus 275 bps at a corporate credit rating of B2. It is non-callable for two years, then at 101 in year three and par thereafter.

On Friday, Ford announced in an 8-K filed with the Securities and Exchange Commission that it closed on the term loan B as well as on its $11.485 billion five-year revolver, which is priced at Libor plus 275 bps.

During syndication, the term loan B saw the addition of the pricing step down and the call protection was softened from non-callable for two years, then at 102 in year three, 101 in year four and par thereafter.

In addition, during syndication, the revolver was upsized from $8 billion due to overwhelming market support.

Another change made to the credit facility during syndication regarded availability of the $2 billion basket for pari passu first-lien debt from either incremental facilities and/or permitted additional notes.

The condition that was added was that Ford must meet one of the following two conditions to access any amount of the basket - it must pledge its investment in Mazda Motor Corp. as additional collateral for all of the senior secured debt, or it must decrease commitments under the revolver or repay term loan B debt by at least the amount of the additional debt.

The company can add $4 million of second-lien debt under the credit agreement.

Security for the facility is first-priority liens on principal domestic manufacturing facilities and substantially all of the company's other domestic automotive assets, certain intellectual property, certain real property, all or a portion of the stock of certain subsidiaries, certain intercompany payables and notes, and up to $4 billion of domestic cash without restriction on its use.

Proceeds from the loan, along with $4.95 billion in convertibles, were used to replace the company's existing unsecured $6.3 billion credit facility, address near- and medium-term negative operating-related cash flow, fund its restructuring and provide added liquidity to protect against a recession or other unanticipated events.

JPMorgan, Citigroup and Goldman Sachs acted as the joint lead arrangers on the $18.485 billion senior secured credit facility (Ba3/B).

Ford is a Dearborn, Mich.-based manufacturer and distributor of automobiles.

Cavalier closes

Cavalier Telephone and TV announced it completed its merger with Talk America after shareholders approved the deal Friday.

To help finance the transaction, Cavalier obtained a $435 million credit facility (B2) via Wachovia. The bank debt includes a $20 million revolver and a $415 million term B at Libor plus 475 bps. The term loan B includes a 101 soft call.

Cavalier is a Richmond, Va., local telephone company. It said the transaction creates the largest full service competitive communications providers in the United States, the company said.

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