Mitchell, MGM set talk; Univision adds step; Seminole upsizes; Level 3, Domtar break; Ford trades lower

By Sara Rosenberg

New York, March 1 - Mitchell International Inc. and MGM Studios came out with price talk on their new deals as the transactions were launched to investors on Thursday, Univision Communications Inc. firmed up pricing on its first-lien debt and added a step down provision, and Seminole Hard Rock Entertainment Inc. added a second delayed-draw term loan tranche to its capital structure.

Over in the secondary, Level 3 Financing Inc.'s term loan freed for trading with levels closing the session in the upper par's, and Domtar Corp. also broke with its term loan quoted in the low pars.

Also in trading, Ford Motor Co.'s term loan came under some pressure after the company released February sales numbers.

Mitchell International held a bank meeting on Thursday afternoon to kick off syndication on its $330 million credit facility, and with the launch, price talk emerged, according to a market source.

The $20 million revolver and $190 million first-lien term loan B were both presented to lenders with opening price talk of Libor plus 225 basis points, and the $120 million second-lien term loan was presented with price talk of Libor plus 550 to 600 bps, the source said.

The second-lien loan carries call protection of 102 in year one and 101 in year two.

Goldman Sachs is the lead bank on the deal.

Proceeds from the debt will be used to fund the leveraged buyout of the company by an investment group led by Aurora Capital Group from Hellman & Friedman LLC.

Other buyout financing is coming from a $20 million holdco PIK mezzanine loan that will be held entirely by General Electric Pension Trust, a member of the investment group.

Leverage through the first lien is just over 4.0 times, leverage through the second lien is 7.0 times and leverage through the holdco mezzanine is 7.5 times.

Mitchell is a San Diego-based provider of information, workflow and performance management solutions to the automotive insurance claims and collision repair industries.

MGM price talk

MGM Studios announced price talk of Libor plus 325 bps on its proposed $1.1 billion term loan as the transaction was presented to lenders with a conference call during Thursday's market hours, according to a buyside source.

The price talk is in line with existing term loan B pricing, the source added.

JPMorgan is the lead bank on the deal.

Proceeds from the loan will be used to repay existing term loan A debt and borrowings under the existing revolving credit facility.

MGM Studios is a Los Angeles-based motion picture, television, home video and theatrical production and distribution company.

Univision firms spreads, adds step

Univision finalized pricing on its first-lien bank debt, added a step down to the first-lien term loans and lowered pricing on the second-lien bridge loan, according to a market source.

The $7 billion term loan B (Ba3/B/B+), the $450 million delayed-draw term loan (Ba3/B/B+) and the $750 million revolver (Ba3/B/B+) are now all priced at Libor plus 225 bps, the tight end of original guidance of Libor plus 225 to 250 bps, the source said.

In addition, the term loan B and the delayed-draw term loan now have the ability to see pricing step down to Libor plus 200 bps if the corporate credit rating is Ba3 or total leverage is less than 9.5 times, the source continued.

Lastly, pricing on the company's $500 million second-lien bridge loan (B3//B-), which will be repaid with proceeds from some expected asset sales, was reverse flexed to Libor plus 250 bps from original talk of Libor plus 275 to 300 bps, the source added.

Deutsche Bank and Bank of America are the joint lead arrangers on the deal, with Credit Suisse, Wachovia, RBS Securities and Lehman involved as well.

Deutsche and Credit Suisse are the joint leads on the bridge facility.

Proceeds from the facility, along with $1.5 billion in high-yield notes, will be used to help fund the leveraged buyout of Univision by Madison Dearborn Partners, Providence Equity Partners, Texas Pacific Group, Thomas H. Lee Partners and Saban Capital Group for $36.25 per share in cash. The transaction is valued at around $13.7 billion, including the assumption of $1.4 billion in debt.

It is anticipated that all senior notes outstanding at the time of the LBO will remain outstanding after the LBO, but borrowings under the delayed-draw term loan may be made from time to time to repay or prepay the existing senior notes.

Univision is a Los Angeles-based Spanish-language media company.

Seminole adds delayed draw

Seminole Hard Rock Entertainment revised its in-market deal on Thursday morning by adding a $535 million delayed-draw term loan tranche to its capital structure that has a delayed-draw period of 45 days, according to a market source.

The delayed-draw loan is priced at Libor plus 150 bps with a 75 bps unused fee, the source said.

Proceeds from this delayed-draw loan will be available for a potential settlement with the developer, the source added.

Seminole's now $1.235 billion (up from $700 million) deal (Ba1) also includes a $540 million funded term loan priced at Libor plus 150 bps that will be used to help fund the acquisition of The Rank Group plc's Hard Rock business, a rock music based entertainment brand, for $965 million.

In addition, the transaction also includes a $160 million delayed-draw for six months term loan priced at Libor plus 150 bps with a 75 bps unused fee that will be used for capital expenditures.

Merrill Lynch is the lead bank on the deal, which has been described as being significantly oversubscribed.

Seminole Hard Rock Entertainment, Inc. is a wholly owned subsidiary of the Seminole Tribe of Florida, a Hollywood, Fla.-based operator of hotels and casinos.

Level 3 frees to trade

In secondary news, Level 3's $1.4 billion term loan (B1) allocated and broke for trading, with levels seen at par ¾ bid, 101 offered on the open and then moving down to par ½ bid, par ¾ offered, where it closed the day, according to a market source.

The term loan is priced at Libor plus 225 bps. During syndication, the tranche was upsized from $1 billion and pricing ended up at the low end of original guidance of Libor plus 225 to 250 bps.

Merrill Lynch and Morgan Stanley are the lead banks on the deal, with Credit Suisse, Citigroup and Wachovia involved as co-leads.

Proceeds from the term loan, which is due in 2014, will be used to refinance the company's existing $730 million term loan due 2011, which is priced at Libor plus 300 bps, and purchase money debt.

The additional $400 million of proceeds being raised through the upsizing will be used to refinance more of Level 3's holdco notes per the company's announced liability management transactions.

Level 3 is a Broomfield, Colo., communications and information services company.

Domtar breaks

Domtar's credit facility also hit the secondary market on Thursday, with levels on its $800 million covenant-light term loan B quoted at par bid, par ¼ offered by one trader and par 1/16 bid, par 3/8 offered by a second trader.

The term loan B is priced at Libor plus 137.5 bps, which is why the paper is trading relatively low for new issue paper, one trader explained. During syndication, the tranche was revised to a covenant-light deal and pricing was reverse flexed from original talk of Libor plus 175 bps.

Domtar's $1.55 billion credit facility (Ba1/BB) also includes a $750 million revolver priced at Libor plus 175 bps.

JPMorgan and Morgan Stanley are the lead banks on the deal, with JPMorgan the left lead.

Proceeds will be used to help fund the combination of Weyerhaeuser Co.'s fine paper business with Domtar Inc. to form Domtar Corp.

Under the transaction, Weyerhaeuser shareholders will get a 55% ownership in the new company and former Domtar shareholders will own 45% of the new company.

The newly combined company will make a $1.35 billion cash payment to Weyerhaeuser as partial consideration for the assets being contributed.

Domtar is a Montreal-based paper company.

Ford weakens on sales

Ford's term loan traded lower during market hours after the company announced sales numbers for February - despite the fact that they were pretty much in line with where people were expecting them, according to a trader.

The Dearborn, Mich.-based automaker's term loan ended the day at par 5/8 bid, par 7/8 offered, down from previous levels of 101 bid, 101 3/8 offered, the trader said.

For February, Ford's sales totaled 211,150, down 13% compared with 244,021 a year ago. Sales to daily rental companies were down 30%, and sales to individual retail customers were down 8%.

General Motors Corp. also released February numbers on Thursday, with the results coming in better than expected, the trader said.

For February, General Motors' sales increased by 3.4% due to an 11% retail sales increase. Retail and fleet sales by GM dealers in the United States totaled 311,763 vehicles, compared with sales of 301,545 vehicles in February 2006.

Despite these positive results, the Detroit-based automaker's term loan was basically unchanged on the day with levels ending up at 101 bid, 101¼ offered, the trader added.

Fenwal closes

Texas Pacific Group and Maverick Capital, Ltd. completed the $540 million acquisition of Baxter International Inc.'s Transfusion Therapies business, which was renamed Fenwal Inc.

To help fund the transaction, Fenwal got a new $475 million credit facility consisting of a $300 million term loan B (B+) at Libor plus 225 bps, a $50 million delayed-draw term loan (B+) at Libor plus 225 bps, a $50 million revolver (B+) and a $75 million second-lien term loan (B-) at Libor plus 525 bps with call protection of 102 in year one and 101 in year two.

During syndication, pricing on the first-lien term loan B and delayed-draw term loan was reverse flexed from original talk of Libor plus 275 bps, and pricing on the second lien was reverse flexed from original talk of Libor plus 600 bps.

Morgan Stanley and Citigroup acted as the lead banks on the deal for the blood collection and processing company, with Morgan Stanley the left lead.

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