Graceway moves with amendment, Neiman up on numbers; Bucyrus floats talk; Del Monte sets fees

By Sara Rosenberg

New York, Jan. 7 - Graceway Pharmaceuticals LLC's first-lien term loan gained a couple of points on Thursday as the company launched an amendment that would allow for the repurchase of the debt, but the second-lien term loan, which would also be covered by the amendment, was slightly lower.

In more trading happenings, Neiman Marcus Inc.'s term loan B was a little stronger after the company revealed December revenues that showed an improvement from the prior year's results.

Meanwhile, in the primary market, Bucyrus International Inc. began circulating price talk on its new billion dollar plus term loan B as a bank meeting to launch the deal has been scheduled for late next week.

Also, Del Monte Corp. released upfront fees on its credit facility, and the undrawn fee on Six Flags Theme Parks Inc.'s proposed revolving credit facility emerged as both transactions were presented to lenders on Thursday.

Graceway first-lien rises

Graceway Pharmaceuticals' first-lien term loan moved higher during the trading session after the company approached lenders with an amendment proposal that would allow for loan buybacks, according to a trader.

The first-lien term loan was quoted at 77 bid, 82 offered, up from 68 bid, 73 offered, the trader said.

However, unlike the first-lien term loan, the company's second-lien term loan inched its way lower with the news, with levels moving to 33 bid, 38 offered from 33 ½ bid, 38 ½ offered, the trader remarked.

Graceway launches amendment

Under the amendment proposal, which was launched on Thursday morning by lead bank Goldman Sachs, the company would be permitted to use up to $100 million of its cash to repurchase first- and second-lien term loans at a discount.

The first- and second-lien buybacks would be required to be done at a 3 to 1 ratio.

In addition, the amendment proposed that the company would be allowed to use $50 million of new cash from its sponsor to repurchase second-lien term loan or mezzanine debt.

The repurchases would not impact the excess cash flow sweeps or amortization.

Graceway is a Bristol, Tenn.-based pharmaceutical company.

Neiman B loan strengthens

Neiman Marcus' term loan B saw a bit of an improvement on Thursday after the company released December revenue results, according to traders.

The term loan B was quoted by one trader at 92 3/8 bid, 93 3/8 offered, up from 92¼ bid, 93¼ offered, and by a second trader at 92½ bid, 93½ offered, up from 92¼ bid, 93¼ offered.

For the month of December, total revenues were $556 million, up 6% from $525 million in December 2008.

And, comparable revenues for the month were $548 million, up 4.5% from $524 million in the prior year.

In terms of liquidity, the company's cash balance as of Jan. 2 was about $595 million, compared to $330 million in the previous year. In addition, the company had no borrowings outstanding under its $600 million asset-based revolver.

Neiman Marcus is a Dallas-based high-end specialty retailer.

Bucyrus price talk

Over on the new deal front, Bucyrus came out with price talk on its up to $1.2 billion six-year term loan B (Ba2/BB) now that a bank meeting has been scheduled for Jan. 14 to launch the deal, according to a market source.

The term loan B is being talked at Libor plus 325 basis points, with a 2% Libor floor and an original issue discount of 99, the source said.

JPMorgan, Bank of America and Macquarie are the lead banks on the deal that will be used to help fund the acquisition of Terex Corp.'s mining equipment business for $1.3 billion.

When the acquisition was announced, the company said that it expects the term loan B to be sized at $1.075 billion even though the commitment is for $1.2 billion since it plans to issue $300 million of equity to Terex to help fund the transaction.

Bucyrus plans revolver expansion

In connection with the acquisition, Bucyrus is also planning to get a $50 million revolver add-on, the company previously announced.

The company also said that it would be seeking an amendment and extension of its existing credit facility.

Closing on the acquisition is expected to take place during the first quarter of 2010, subject to regulatory approvals and other customary conditions.

Pro forma leverage would be 2.1 times.

Bucyrus is a Milwaukee, Wis.-based designer and manufacturer of high-productivity mining equipment for surface and underground mining.

Del Monte upfront fee surface

Del Monte held a bank meeting on Thursday to kick off syndication on its proposed $1.1 billion senior secured credit facility (Baa3), and in conjunction with the launch, upfront fees were announced, according to a market source.

The $500 million five-year revolver and the $600 million five-year term loan A are being sold to lenders as a strip. Commitments of $50 million get a 62.5 bps upfront fee, while commitments of $25 million get a 37.5 bps fee, the source said.

Both the revolver and the term loan are being talked at Libor plus 300 bps with no Libor floor.

Covenants include a maximum leverage ratio and a minimum fixed-charge coverage ratio.

Bank of America, BMO and Barclays are the lead banks on the deal that will be used to refinance existing debt.

Del Monte is a San Francisco-based producer, distributor and marketer of branded food and pet products.

Six Flags revolver fee

Six Flags Theme Parks revealed in connection with its Thursday bank meeting that its proposed $150 million five-year revolver has a 150 bps undrawn fee, according to an 8-K filed with the Securities and Exchange Commission.

As was previously reported, price talk on the revolver is Libor plus 425 bps with a 2% Libor floor and an original issue discount of 98.

Six Flags' $830 million credit facility (B1) also includes a $680 million six-year term loan talked at Libor plus 425 bps with a 2% Libor floor and an original issue discount of 99.

Amortization on the term loan is quarterly installments of 0.25% with the rest due at maturity.

JPMorgan, Bank of America, Barclays and Deutsche Bank are the joint bookrunners and joint lead arrangers on the deal.

Six Flags covenants

Six Flags Theme Parks' credit facility includes a maximum senior secured leverage covenant, a minimum consolidated interest coverage covenant and a maximum consolidated capital expenditures covenant.

Mandatory repayments are required from 100% of any debt incurred at Six Flags Theme Parks Inc., 25% of debt at Six Flags Operations Inc. and Six Flags Inc. when the Six Flags Theme Parks leverage ratio is above a level to be agreed and 100% of asset sale proceeds. Also, on an annual basis, commencing with the fiscal year ending Dec. 31, 2010, the company will be required to sweep 50% of its excess cash flow to prepay the term loan.

Proceeds from the facility will be used to repay $1.147 billion of pre-petition bank debt upon the company's emergence from Chapter 11. The revolver will also be available for general corporate purposes.

At close, $88 million is expected to be drawn under the revolver.

Six Flags getting Time Warner loan

Six Flags' bankruptcy plan also contemplates the entrance into a new $150 million credit facility from Time Warner Inc. that will be available for five years.

Pricing on the loan is Libor plus 525 bps - 100 bps higher than the exit facility - with a 2.5% Libor floor.

Proceeds will be used to fund puts exercised by LP unit holders above $10 million in 2010, $12.5 million in 2011 and $15 million thereafter.

The facility will be available for draw on May 14 of each year.

Following emergence, the company expects total leverage to be 3.6 times based on projected 2009 cost adjusted EBITDA of $206 million.

Six Flags is a New York-based regional theme park company.

ATI closes

BC Partners completed its buyout of ATI Holding Co. from the Riverside Co. and Primus Capital, according to a news release.

To help fund the transaction, ATI got a $200 million senior secured credit facility (B1), consisting of a $35 million revolver and a $165 million term loan.

The term loan is priced at Libor plus 500 bps with a 2.25% Libor floor and was sold at an original issue discount of 98.

During syndication, the discount firmed from initial talk in the 97 to 98 context.

Goldman Sachs acted as the lead bank on the deal.

ATI is a Dallas-based operator of career training centers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.