Price talk on Rent-A-Center has B loan at 250 to 275 basis points, revolver at 225

By Sara Rosenberg

New York, May 2 - Price talk on emerged on Rent-A-Center Inc.'s resized $600 million credit facility, which is scheduled to launch on Tuesday, according to a syndicate source. The $400 million term loan B is talked at Libor plus 250 to 275 basis points and the $120 million revolver is talked at Libor plus 225 basis points, the source said. The deal also includes an $80 million synthetic term loan.

Late Thursday, Rent-A-Center announced a reduction in the size of the deal from $650 million previously announced by taking $50 million off the term loan. In a statement it said the change was a result of the $50 million increase in the size of its bond offering, priced earlier in the day.

Lehman Brothers and JPMorgan are the lead banks on the deal, which will be used to refinance the company's existing senior debt.

Rent-A-Center is a Plano, Tex. operator of company-owned stores in the rent-to-own industry.

Also coming up next week are deals for Interline Brands Inc., Hayes Lemmerz International Inc. and Owens-Illinois Inc.

Interline Brands is scheduled to launch a $205 million credit facility (B+/B2) on Monday, consisting a $65 million five-year revolver and a $140 million 61/2-year term loan B with an interest rate of Libor plus 450 basis points.

JPMorgan and Credit Suisse First Boston are the lead banks on the Jacksonville, Fla. building materials company's deal that will be used to refinance existing bank debt and mezzanine debt.

Hayes Lemmerz is scheduled to launch its $575 million exit financing credit facility on Monday, according to a syndicate source. Citibank and Lehman Brothers are the lead banks on the deal.

The loan consists of a $450 million six-year term loan B and a $125 million five-year revolver. Price talk on the tranches is not out yet, according to the source.

The Northville, Mich. auto parts maker and its U.S. subsidiaries along with one subsidiary in Mexico filed voluntary petitions for reorganization under Chapter 11 on Dec. 5, 2001.

Owens-Illinois is scheduled to launch a new credit facility approximately sized at $2 billion on Wednesday, according to a syndicate source. Deutsche Bank and Bank of America are the lead banks on the deal.

The loan is expected to contain about $1.3 billion to $1.4 billion of pro rata paper comprised of a term loan A and a revolver with price talk of Libor plus 325 basis points. In addition, there will be a term loan B that is expected to be sized anywhere from $600 million to $700 million with price talk of Libor plus 350 to 375 basis points, the source said.

Proceeds will be used to refinance the company's existing debt.

Owens-Illinois is a Toledo, Ohio manufacturer of packaging products.

In the secondary, Dynegy Inc.'s bank debt continue to be quoted with a 97½ bid, 98 offered, according to a trader, who remarked that the loan was either sideways from Thursday's levels to down a quarter.

On Thursday, market talk was that a $50 million block of Dynegy was sold in the secondary bank loan market. Asked about this, the trader admitted to have heard about the trade as well and said: "It sounded like one of the original lenders came in and just dumped the block."

The Houston energy company's bank debt has been performing well for quite some time now as market participants have shown more enthusiasm towards the energy/utility sector.

To further help matters, on Tuesday, Dynegy reported net income of $147 million, or $0.17 per diluted share, for the first quarter 2003, compared to a net loss of $247 million, or $0.91 per share, for the first quarter 2002. Operating cash flow, including working capital changes, was approximately $400 million for the first quarter 2003.

Management at also raised the 2003 guidance estimate to $0.10 to $0.18 per share from the previous guidance estimate given on Jan. 7 of $0.08 to $0.15 per share.

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