Cinram, Seminis may awaken sleepy primary with new deal launches slated for coming week

By Sara Rosenberg

New York, Aug. 29 - Primary activity appears to be picking up this coming week, as a few bank meetings are scheduled to take place including Cinram International Inc. and Seminis Inc., which may be a relief to some following the non-eventful pre holiday week during which new deal activity essentially came to a screeching halt.

On Wednesday, Cinram is scheduled to launch its $1.2 billion credit facility to retail investors. Citigroup and Merrill Lynch are joint lead arrangers on the deal, with Citigroup also acting as administrative agent and Merrill also acting as syndication agent.

The facility consists of a $900 million six-year term loan B talked at Libor plus 350 basis points, a $150 million term loan A talked at Libor plus 300 basis points and a $150 million revolver talked at Libor plus 300 basis points.

On Aug. 14, the company held a documentation agent and managing agent bank meeting in Canada for the pro rata portion of the deal. The meeting went very well with potential investors showing very strong interest, a source previously told Prospect News.

Proceeds will be used to fund the acquisition of AOL Time Warner Inc.'s DVD and CD manufacturing and physical distribution businesses for a purchase price of approximately $1.05 billion in cash. The acquisition is expected to close during the fall.

On a stand-alone basis, the acquired businesses would be expected to generate approximately $1.1 billion of revenues and $230 million of EBITDA for the fiscal year ended Nov. 30, 2003, after giving effect, on a pro forma basis, to the pricing in the new supply and physical distribution agreements, according to a news release.

Cinram is a Toronto-based provider of pre-recorded multimedia products and logistic services.

Also, Seminis is expected to launch a $250 million credit facility on Thursday with Citigroup acting as lead arranger on the deal.

The facility consists of a $60 million revolver and a $190 million term loan, with proceeds earmarked to help fund the acquisition by Savia, SA de CV.

Seminis is an Oxnard, Calif.-based vegetable and fruit seed company.

In the secondary, Calpine Corp.'s second lien bank debt remained strong on Friday although quotes were wider as many people started the holiday weekend early, leaving those who were around hesitant to attempt trading the paper

The tranche was quoted at 95½ bid, 97 offered, as compared to Thursday's quotes of 95½ bid, 96½ offered, according to a trader.

"It's pretty dead. No one is really around. Clients are away. No one wants to step in front to do anything. Everyone will come back after the long weekend and reload," the trader said.

On Thursday, Calpine's second lien paper headed higher by about a point and a half, with one trader speculating that the movement may be attributed to the company's establishment of a new Canadian trust.

The San Jose, Calif. energy company announced this week it intends to establish a Canadian trust called Calpine Natural Gas Trust to acquire select Calpine-owned natural gas and crude oil properties in several major natural gas and oil fields throughout Alberta, Canada, including interests in the Markerville, Sylvan Lake and Innisfail areas.

Calpine intends to hold 25% of the outstanding trust units of CNG Trust and will participate, by way of investment, in the business strategy of the CNG Trust. Calpine will also have the option to purchase up to100% of the CNG Trust's ongoing production at market prices for use in its North America power generation assets.

Participation in the CNG Trust will allow Calpine to increase its competitiveness in the acquisition and development of additional natural gas reserves in Canada to fuel its power generation portfolio in North America, according to a news release.

Other recent positive news regarding Calpine includes the announcement early in the week that the company is receiving $230 million of non-recourse financing from a group of banks, including Credit Lyonnais, Co-Bank, Bayerische Landesbank, HypoVereinsbank and NordLB for its 600-megawatt Riverside Energy Center. This financing will eventually turn into a term loan once the energy center is operational.

The non-recourse financing carries an interest rate of Libor plus 250 basis points.

Upon commercial operation of the Riverside Energy Center, the banks will provide Calpine with a three-year term-loan facility, which will initially be priced at Libor plus 275 basis points.

In follow-up news, Associated Materials closed on its amendment and restatement of its credit facility, adding an additional $113.5 million in term loans and expanding the revolver to $70 million from $40 million including a new US$15 million Canadian subfacility.

The $260 million senior secured credit facility (Ba3/B+) now consists of a $70 million revolver and a $190 million term loan facility. Pricing on the revolver remained in line with existing pricing, while the term loan is priced at Libor plus 275 basis points, following a reverse flex by 25 basis points during syndication, 75 basis points lower than pricing on the company's existing deal.

UBS Securities and CSFB are the joint lead arrangers and CIBC is documentation agent on the deal.

Proceeds were used to help fund the Cuyahoga Falls, Ohio exterior residential building products company's acquisition of Gentek Holdings, Inc. and the repayment of Gentek's debt.

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