Dean Foods looking to amend loan, adjusting baskets for more flexibility

By Sara Rosenberg

New York, Dec. 5 - Dean Foods Co. is looking to amend its existing credit agreement, according to the fund manager. Recently posted documents indicate the Dallas manufacturer and distributor of dairy products and specialty foods is hoping to adjust certain baskets in the agreement in order to allow for more room in operating decisions, such as acquisitions, the fund manager explained.

The deadline for the amendment is Dec. 10.

"They're paying 7½ basis points," the fund manager said. "It's a pretty simple thing they're asking for. They're not looking to change pricing so I think people will approve it especially [since the company has been] operating pretty well."

Wachovia and Bank One are the lead banks on Dean Foods' loan agreement.

Another company hoping to amend its credit facility in the near future is American Seafoods Group, the fund manager said. The company is hoping to obtain a $40 million add-on to its term loan B in order to help fund the acquisition of a catfish company from Alabama.

The company proposed this amendment to its lending group last week and the amendment deadline is Dec. 12, according to the fund manager.

"They'll probably close on [the $40 million add-on] by the end of the year," the fund manager said. "The day they had the meeting, they had $35 million out of the $40 million committed so I assume they have the book filled [by now]."

Bank of America is the lead bank on the company's credit facility.

American Seafoods Group is a Seattle-based company involved in the harvesting, at-sea processing, preparation and supply of seafood.

Meanwhile, O'Charley's Inc.'s new $285 million credit facility, which was just launched on Wednesday, is expected to syndicate successfully, according to one fund manager.

The loan consists of a $135 million four-year revolver with an initial interest rate of Libor plus 225 basis points (grid-based on leverage) and a $150 million six-year term loan B with an interest rate of Libor plus 350 basis points.

"It's not bad," the fund manager said. "It's just another restaurant deal. Not the most exciting thing out there. [But], it looks like a pretty decent deal. It looks like [the company] did a pretty good job operating."

The facility, which is being led by Wachovia, will be used by the Nashville restaurant chain to help fund acquisition of Ninety Nine Restaurant & Pub.

In follow-up news, syndication of the Patriot Media and Communications LLC loan is expected to wrap up shortly, according to a source close to the deal. Basically, the banks are waiting on about two more commitments, which are anticipated to come in within the next couple of business days, the source said.

The deal currently consists of a $65 million pro rata tranche with an interest rate of Libor plus 375 basis points and a $100 million term loan B with an interest rate of Libor plus 450 basis points. Initially the term loan B was priced at Libor plus 400 basis points, but it was flexed up approximately two weeks to the current pricing level.

Upfront fees are 1¼%, the source said.

The loan was launched about a month ago. At the meeting, three commitments at the agent level were received - GE, NatCity and SocGen all committed $40 million towards the deal.

Bank of New York is the lead bank on the deal that will be used to help fund the New Jersey cable company's spin off from RCN Corp. with Spectrum Equity Investors as equity sponsor.

Wackenhut Corrections Corp.'s $125 million six-year term loan B (Ba3/BB) was flexed up again, according to market sources. This time pricing was changed to Libor plus 450 basis points from Libor plus 400 basis points. Not too long ago, the loan was flexed up to Libor plus 400 basis points from Libor plus 350 basis points and a Libor floor of 2% was added to the terms of the deal.

BNP Paribas and Wachovia are leading the loan, which also contains a $50 million revolver. Proceeds will be used to refinance existing debt.

Wackenhut is a Palm Beach Gardens, Fla. operator of private correctional facilities.

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