Nextel Communications softens; Berry Plastics starts trading above par

By Sara Rosenberg

New York, July 18 - In secondary activity Thursday, Nextel Communications Inc. continued to soften up slightly as Sprint PCS Group released results for the second quarter. Also, Berry Plastics Corp. broke in the secondary at levels over par. Overall, secondary activity was fairly slow as most eyes were focused on the seven bank meetings that took place throughout the day.

Nextel Communications Inc.'s bank loan paper dipped lower on Sprint PCS Group's second quarter results announcement with a bid of 82 and an offer of 83, a trader said. On Wednesday, the Reston, Va. mobile communications provider's bank loan paper was bid at 82½ and offered at 83.

Sprint PCS reported a loss per share of $0.17, compared to the mean analyst estimate of an eight cents loss for the quarter and a loss of 26 cents a year ago, a company press release said. Consolidated revenues were $6.83 billion, an increase of 6% from $6.45 billion a year ago. The company said that it is holding to its previous growth outlook.

Berry Plastics Corp.'s new bank loan started trading in the secondary on Thursday. The loan was bid at par and 5/8 and offered at par and 3/4, a trader said.

"Trading over par is kind of standard for a lot of new issues recently," the trader added.

Primary activity in the bank loan market grabbed the attention of most market participants as seven new deals launched - NCI Building Systems Inc., IASIS Healthcare Corp., Agrilink Foods Inc., New World Pasta Co., Greif Bros., Horizon Natural Resources Co. and Constar International Inc.

NCI Building Systems, a Houston, Texas manufacturer of metal building products, launched a new $225 million senior secured credit facility with Bank of America and Wachovia leading the deal. The loan consists of a $125 million six-year term loan B with an interest rate of Libor plus 275 basis points and a $100 million five-year revolver with an interest rate of Libor plus 250 basis points, a syndicate source said.

Proceeds, combined with proceeds from a $50 million note sale, will be used to refinance existing bank debt. The refinancing is expected to be completed in August, according to a company press release.

IASIS Healthcare launched a refinancing $463 million credit facility, according to market sources. The loan consists of a $125 million five-year revolver with an interest rate of Libor plus 350 basis points and a $338 million six-year term B with an interest rate of Libor plus 350 basis points, market sources said. Bank of America and BNP Paribas are leading the deal.

IASIS is a Franklin, Tenn. acute care hospital company that is a portfolio company of Joseph Littlejohn & Levy.

Agrilink Foods launched a new $470 million credit facility to support the leveraged buyout by Vestar Capital Partners, according to market sources. The loan consists of a $200 million five-year revolver with an interest rate ranging between Libor plus 250 basis points and Libor plus 275 basis points and a $270 million seven-year term loan B with an interest rate of Libor plus 300 basis points, according to market sources. JPMorgan Chase, Bank of America and Bank of Montreal are the lead banks on the deal.

Agrilink is a Rochester, N.Y. frozen vegetable company. The company is levered 3.5 times on a senior debt basis and 5.25 times on a total basis, according to the investment banker.

New World Pasta launched a new $230 million credit facility consisting of a $200 million seven-year term loan B with an interest rate of Libor plus 325 basis points and a $30 million five-year revolver with an interest rate of Libor plus 325 basis points, according to a syndicate source. Morgan Stanley is the lead bank on the deal.

The Harrisburg, Pa. dry pasta maker is using proceeds to refinance existing debt including the repayment of a term C bridge loan that was provided by Joseph Littlejohn & Levy.

Greif Bros. launched a $500 million credit facility (BA3/BB) consisting of a $250 million revolver and a $250 million term loan to repay existing debt. Salomon Smith Barney and Deutsche Bank are the lead banks on the deal.

Greif is a Delaware, Ohio manufacturer of industrial shipping containers, containerboard and corrugated products.

Horizon Natural Resources, previously AEI Resources Holding Inc., launched a new $250 million revolving exit financing facility with an interest rate of Libor plus 350 basis points, according to a syndicate source. Deutsche Bank is the sole lead arranger on the deal.

Horizon Natural Resources is an Ashland, Ky. producer of steam coal.

Constar launched a new $250 million credit facility. The loan consists of a $150 million seven-year term and a $100 million five-year revolver, according to a filing with the Securities and Exchange Commission. The term loan will require annual payments of $1.5 million with the rest due at maturity, the filing said.

Proceeds from the term loan will be used to repay outstanding debt. Constar's initial public offering, headed by Salomon Smith Barney, is dependant upon the successful completion of this credit facility and a $200 million senior subordinated note sale.

Constar is a Philadelphia-based producer of PET plastic containers for food and beverages.

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