NRG breaks at 101 7/8 bid; Reliant Resources heads into the 98s on amendment proposal

By Sara Rosenberg

New York, Dec. 19 - NRG Energy Inc.'s $1.45 billion exit financing facility (BB) broke for trading in the secondary bank loan market on Friday with the term loan B quoted at 101 7/8 bid right out of the box. And, Reliant Resource Inc.'s bank debt has moved up by about 2½ points over the last two days on the back of a proposed amendment.

NRG's term loan B did not trade a lot away from the agent, according to a trader, making it slightly difficult to pin down quotes. However, the paper seemed to have moved up from the initial 101 7/8 bid to 102 bid, 103 offered by the end of the day, the trader added.

The facility contains a $1.2 billion 61/2-year term loan B, increased from an original size of $950 million. The tranche carries an interest rate of Libor plus 400 basis points compared to initial pricing of Libor plus 450 basis points and a Libor floor of 1.50% compared to an initial Libor floor of 1.75%. Lastly, the upfront fee on the tranche was 991/2, changed from 99 during syndication.

There also is a $250 million four-year revolver with an interest rate of Libor plus 400 basis points, flexed down from initial pricing of Libor plus 425 basis points, with a commitment fee of 100 basis points. The Libor floor on this pro rata tranche was reduced to 1.50% from 1.75% as well. However, the upfront fee remained the same at 99.

Credit Suisse First Boston and Lehman Brothers are acting as joint lead arrangers on the Minneapolis energy company's deal.

NRG filed for Chapter 11 bankruptcy protection in May, and on Dec. 5 the company announced that it successfully completed its reorganization and emerged from bankruptcy.

Reliant Resources' bank debt was quoted at 98 bid, 98 5/8 offered compared to levels of 95½ bid, 96½ offered on Wednesday, according to a trader.

The movement has been attributed to a proposed amendment that was revealed to lenders during a conference call.

Under the amendment, the company is asking for an extension in the time period to purchase assets with proceeds that are currently in an escrow account. In return for the extension, the company is offering to give lenders an increase in pricing on the facility, according to the trader.

Reliant is a Houston electricity and energy company.

Following up, Kinko's Inc.'s $825 million credit facility is expected to allocate at the beginning of the Dec. 22 week with some eyeing Monday as the potential day, according to a fund manager. The syndicate is looking to close on the loan on Dec. 29.

The facility consists of a $675 million seven-year term loan B with an interest rate of Libor plus 325 basis points, increased from initial pricing of Libor plus 275 basis points during syndication, and a $150 million six-year revolver with an interest rate of Libor plus 250 basis points.

Since the deal was not moving along as smoothly as people would have liked, the syndicate added a couple of features to entice investors including the increase in pricing on the B loan, soft call protection of 101 in year one on the B loan and a 50% excess free cash flow sweep to the credit agreement.

"Commitments were due yesterday. The book filled up. I don't think they would have gotten there had they not made the changes," the fund manager said.

JPMorgan and Bank of America are the lead banks on the deal that will be used to pay a $530 million dividend to the equity partners and refinance existing debt.

Kinko's is a Dallas operator of copying and printing centers.

The acquisition of Sensus Metering Systems Inc. by The Resolute Fund LP, a private equity fund managed by The Jordan Co. and GS Capital Partners 2000 LP, from Invensys plc was completed on Friday for about $650 million cash.

In connection with the transaction, Sensus obtained a new $300 million credit facility (B2/B+) consisting of a $230 million term loan B with an interest rate of Libor plus 300 basis points and a $70 million revolver with an interest rate of Libor plus 300 basis points and a commitment fee of 50 basis points, according to a source close to the deal.

Originally the deal was launched as a $265 million term loan B (consisting of a $235 million U.S. term loan and a $30 million European borrower term loan) talked at Libor plus 300 to 325 basis points and a $75 million revolver talked at Libor plus 300 basis points. However, the company opted to upsize its bond deal, which was also used to fund the acquisition, to $275 million from $225 million.

Credit Suisse First Boston and Goldman Sachs are the joint lead arrangers on the deal.

"We have met our first target of completing the purchase of the business by the end of the year," said Jonathan F. Boucher, managing director at The Jordan Co., in a company news release. "As we said earlier, we have great confidence in the entire Sensus management team and all of their operations. We are very excited about working with them to grow the business, advance the technologies and deliver solid customer value."

Sensus is a Raleigh, N.C., manufacturer of water, gas, electric and heat meters for the utility industry.

Simmons Co. closed on its $620 million credit facility on Friday, according to a syndicate source. Goldman Sachs and UBS Securities acted as the joint lead arrangers and co-syndication agents on the bank deal, with Goldman listed on the left and acting as sole bookrunner. Deutsche Bank received an agent title. And, CIT and GECC signed on to the deal as co-documentation agents.

The facility consist of a $75 million revolver (B2/B+), a $405 million term loan B with an interest rate of Libor plus 275 basis points (B2/B+) and a $140 million senior unsecured floating-rate tranche with an interest rate of Libor plus 375 basis points (B3/B-) and call protection of 103 in year one, 102 in year two and 101 in year three.

The unsecured tranche was added during syndication when the company opted to reduce the size of its bond offering to $200 million from $340 million.

The deal received high demand almost immediately as the institutional $405 million term loan was reported as being way oversubscribed by the end of the launch day.

Proceeds are being used to help support the company's acquisition by Thomas H. Lee Partners, chairman and chief executive officer Charlie Eitel and senior management from Fenway Partners.

In addition to the bank and bond financing, the company received $330 million of equity from Thomas H. Lee and $70 million of equity from Fenway and senior management.

The transaction values the company at $1.1 billion. Fenway, which acquired Simmons in October 1998 from Investcorp for about $513 million, will retain a 10% stake in the company once the transaction closes.

Simmons is an Atlanta manufacturer and distributor of branded bedding products.

Nextel Partners, Inc. closed on its $475 million senior secured credit facility, a refinancing to reduce interest rates and extend maturities.

The new facility is a $100 million revolver due November 2009 and a $375 million term loan due November 2010. The term loan is at Libor plus 300 basis points compared to an average of Libor plus 448 basis points previously. The revolver also has an interest rate of Libor plus 300 basis points. The unused fee on the revolver is cut to 50 basis points from 200 basis points.

The transaction extends the weighted average maturity of refinanced term loans by 2½ years and the pushes out the revolver by nearly three years.

The facility is secured by a pledge of all of the assets of Nextel Partners' subsidiaries.

The Kirkland, Wash. wireless phone company will use proceeds to repay borrowings under its previous $475 million facility and for general corporate purposes.

Nextel Partners expects to save $7 million a year from the new facility.

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