Lee Enterprises loans fall; Frac Tech brings $1.5 billion; Owens-Illinois launches $2 billion

By Paul A. Harris

Portland, Ore., April 19 - Lee Enterprises, Inc.'s term loan and revolver fell by 6 points on Tuesday before bouncing off their lows late in the afternoon, according to market sources.

The term loan was 93 bid, 94 offered after the close, according to an asset manager whose portfolio includes both loans and bonds. The revolver was 92¼ bid, 93¼ offered.

The term loan started the day at 96½ offered. The revolver was 95¾ bid, 96¾ offered at the Tuesday start, the asset manager added.

A bank loan trader saw the term loan as low as 92 bid, 93 offered before the close but added that it was 93 bid, 94 offered at the close.

The bond deal

The Davenport, Iowa-based newspaper publisher is presently in the market with a $1.05 billion two-part offering of senior secured notes.

Lee plans to sell $675 million of six-year first-lien notes and $375 million seven-year second-lien notes via Credit Suisse Securities and Deutsche Bank Securities Inc.

Proceeds will be used to refinance existing notes issued by subsidiary St. Louis Post-Dispatch LLC as well as the subsidiary's revolving credit facility and term loan A.

The bond deal ran an investor roadshow and was expected to price as early as Monday.

No official price talk has been heard.

The second-lien tranche was the subject of reverse inquiry and is largely spoken for, market sources said.

The structure and pricing of the first-lien tranche have been in play, according to the asset manager, who was watching the bond deal but does not plan to get involved.

Neither the asset manager nor the trader would either make or rule out a connection between the fortunes of the bond deal and the Tuesday price movements seen in the term loan and the revolver.

Frac Tech brings $1.5 billion

Loan prices were slightly softer in an illiquid market on Tuesday, sources said.

Players were out due to Passover celebrations and pre-Easter vacations.

Frac Tech Services, LLC is planning a Wednesday lender meeting for its $1.5 billion five-year term loan B (B1//).

The talk is Libor plus 500 basis points at a discount of 1 to 2 points. The deal features a 150 bps Libor floor and a 101 soft call.

The deal is part of a $1.75 billion financing led by Merrill Lynch.

Proceeds will be used to fund the acquisition of a controlling stake in the company by Frac Tech International LLC from the Wilks family and to fund a dividend payment to Chesapeake Energy Corp., which owns 30% of Frac Tech, a Cisco, Texas-based oilfield service company.

Owens-Illinois launches

Owens-Illinois Group, Inc. launched $2 billion of pro rata loans on Tuesday, according to an informed source.

The deal includes a $900 million multi-currency revolver and a $1.1 billion multi-currency term loan A. The pricing on both is Libor plus 175 bps.

The term loan A tranche breakdown includes $600 million, €200 million, C$120 million and A$180 million.

Deutsche Bank is the left lead bank.

The Perrysburg, Ohio-based glass container maker plans to use the proceeds to refinance debt.

iPayment sets Thursday meeting

iPayment Holdings Inc. plans to hold a Thursday lender meeting for its $375 million six-year term loan B.

J.P. Morgan Securities LLC is the lead arranger.

Proceeds will be used to refinance debt and to redeem an equity stake.

The borrower is a Nashville-based provider of credit and debit card-based payment processing services.

Paetec ups pricing

Paetec Holding Corp. increased the pricing on its $100 million term loan B to 99.75 from 99.50.

Talk on the Libor spread remains unchanged at 350 bps. The projected Libor floor also remains unchanged at 1.5%.

The loan includes 101 soft call protection for one year.

The company's $225 million credit facility (B) also includes a $125 million revolver.

Merrill Lynch is the left lead bank on the deal.

Proceeds will be used for acquisition financing and to pay down revolver borrowings.

America Rock Salt allocates

American Rock Salt priced and allocated its upsized $300 million Libor plus 425 bps covenant-light term loan B (B2/BB) on Tuesday.

The deal, which was upsized from $250 million, priced at 99.50.

The reoffer price tightened from 99 during marketing.

The Libor spread came at the tight end of the initial Libor plus 425 bps to 450 bps price talk.

The term loan includes a pricing step-down to Libor plus 400 bps when total leverage is less than 5 times.

The 1.25% Libor floor was left unchanged.

The company's $340 million credit facility, up from $290 million, also includes a $40 million revolver.

RBS Securities Inc. is the lead bank on the deal.

Proceeds from the facility will be used to repay debt at the holding company and to fund a dividend.

Other funds for the dividend recapitalization will come from $175 million of second-lien notes, which were downsized from $200 million in connection with the term loan upsizing.

The extra $25 million that the company raised through the debt size changes will be used to increase the amount of the dividend payment.

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