Jack in the Box hopes to spark interest with new structure after unsuccessful try in December

By Sara Rosenberg

New York, Jan. 7 - Jack in the Box Inc. took a second stab at successfully syndicating and obtaining a new credit facility on Tuesday with the launch of a $300 million facility consisting of a $125 million 41/2-year term loan with an interest rate of Libor plus 350 basis points and a $175 million three-year revolver with an interest rate of Libor plus 250 basis points.

Originally, the company launched a $275 million three-year revolver in December, according to market sources, that was priced with an interest rate of Libor plus 150 basis points. However, the deal was not successful so a term loan was added to the structure and the revolver was reduced in size in order to "slow down risk," a source told Prospect News.

When the deal was originally launched in December, Fleet, U.S. Bank and Rabobank participated in the revolver, the source said. "My guess is they'll be tapped to do this [new] deal on the revolver," he added.

Wachovia is the lead bank on the credit facility.

Jack in the Box is a San Diego operator and franchiser of hamburger restaurants.

St. Mary Land & Exploration Co. also held a bank meeting on Tuesday for a $300 million three-year revolver. Wachovia is the sole lead arranger and administrative agent on the deal, which is expected to close by the end of the month.

St. Mary Land & Exploration is a Denver oil and gas exploration and production company.

Meanwhile, the secondary bank loan market was revived on Tuesday with activity levels finally picking up.

Sanmina-SCI Corp.'s bank debt moved up on Tuesday to trade at par and 5/8 following the company's announcement of a new contract, according to a trader.

The company revealed that it signed a three-year supply agreement to provide IBM with manufacturing services. Revenues over the term of the agreement are expected to be in excess of $3.6 billion. The transaction is expected to close in the first quarter.

"In addition to broadening our global manufacturing capabilities in key geographic regions, upon completion of this agreement, Sanmina-SCI will become a leading EMS provider in the global server manufacturing and distribution market. This market sector represents an expanded growth opportunity for us," said Jure Sola, chairman and chief executive officer of Sanmina-SCI, in a news release.

Sanmina-SCI recently obtained a $275 million five-year term loan via Goldman Sachs.

Proceeds, combined with proceeds from a note sale, were used to repay debt under the company's existing credit facility, to repay the outstanding balance under its receivables securitization facility, to refinance or restructure its other debt, and to fund further expansion of its business and working capital.

Sanmina-SCI is a San Jose, Calif. provider of customized integrated electronic manufacturing services.

AT&T Corp.'s bank debt was also said to be slightly up on Tuesday with levels quoted around the 98 to 98 3/8 range.

"It's a one-year deal. It's trading off the synthetic pricing," a trader explained. "It has continued to climb since it broke around 92."

On Monday, the company said it will report a pre-tax restructuring charge of approximately $240 million in its fourth quarter 2002 results that is primarily associated with approximately 3,500 planned employee separations. The restructuring charge is expected to have an earnings-per-share impact of approximately $0.20 in the fourth quarter of 2002, according to a news release.

Furthermore, AT&T will take an asset-impairment charge of approximately $1.1 billion in the fourth quarter associated with its past investment in AT&T Latin America. This charge is expected to have an earnings-per-share impact of approximately $1.40 in the fourth quarter of 2002.

Other news involving the company is an expected change in the local phone market by the Federal Communications Commission. According to various reports, the FCC may stop making local phone companies rent networks to competitors at cheap rates.

AT&T Corp. closed on its $4 billion 364-day syndicated bank loan in October. Before year-end, the facility will be reduced to $3 billion, according to market sources.

The loan broke in the secondary with a bid of 92 and an offer of 93 after a three-day delay. Speculation was that the company needed a little extra time to go through documentation with agents.

The Baa2 rated loan received and continues to receive attention from the leveraged market due to its below-par trading levels and enormous size.

JP Morgan, Citibank, Credit Suisse First Boston and Goldman Sachs acted as lead arrangers on the deal.

The facility is intended as a backstop for the company's commercial paper or other short-term debt maturing over the course of the next year, a news release said upon announcing the closing of the facility. It replaced AT&T's undrawn $8 billion bank loan.

AT&T is a New York, N.Y. provider of communications services.

Nextel Communications Inc.'s term loan A was active throughout the day as the bank debt moved up to trade at 91, according to a trader, although no specific reason for the move was given.

Nextel is a Reston, Va. telecommunications company.

Allied Waste Industries Inc. was also said to be active on Tuesday as the term loan B and term loan C traded at 99 5/8 and the term loan A traded at 98 5/8. Quotes on the loans, however, remained flat on the day.

Allied Waste is a Scottsdale, Ariz. solid waste management company.

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