Hilb, Rogal and Hamilton; Senior Housing Properties Trust hold bank meetings

By Sara Rosenberg

New York, May 23 - In primary activity Thursday, Hilb, Rogal and Hamilton held a bank meeting for its $260 million credit facility and Senior Housing Properties Trust held a bank meeting for its $250 million revolver. Both deals should go fine, according to a market professional but he added that it's too early to tell for sure.

Hilb, Rogal and Hamilton Co.'s new loan consists of a $130 million pro rata portion with an interest rate of Libor plus 200 basis points and a $130 million term B with an interest rate of Libor plus 300 basis points, according to market sources.

Wachovia is the lead bank on the Glen Allen, Va. insurance intermediary's deal.

Proceeds will be used to help fund the acquisition of Hobbs group LLC, an Atlanta, Ga. insurance broker.

This is the first time that Hilb, Rogal and Hamilton has obtained a term B tranche, according to market sources.

Senior Housing Properties Trust's unsecured revolver expires in November 2005. Interest rates are determined through a grid based on the company's leverage ratios and can range from Libor plus 135 to 165 basis points. The initial interest rate is anticipated to be Libor plus 135 basis points, a company spokesman said. If the company achieves investment grade status, the pricing grid will be based on ratings as opposed to leverage ratios, he added.

Wachovia and Dresdner are joint lead arrangers on the deal. The loan is expected to close before the end of June.

Proceeds from the Newton, Mass. real estate investment trust's loan will be used for acquisitions, working capital and general corporate purposes.

In follow-up news, Fleming Companies Inc.'s, $950 million credit facility is "blowing out the door," according to a syndicate source. Deutsche Bank is lead bank on the deal.

The Lewisville, Tex. supplier of consumer packaged goods loan consists of a $600 million revolver and a $350 million term. The interest rate on the revolver is based on a usage grid and can range from Libor plus 175 basis points to Libor plus 225 basis points. The term has an interest rate of Libor plus 225 basis points, the syndicate source said.

On the revolver, a $25 million commitment gets a discount of 7/8 of a point and a $15 million commitment gets a discount of 5/8 of a point, the syndicate source said. The term B is being sold at par.

Proceeds will be used towards refinancing existing debt and the acquisition of Core-Mark and Head Distributing.

In secondary activity, both WorldCom Inc. and Adelphia Communications Corp. saw some strengthening in their bank loan paper due to the release of favorable company news.

WorldCom's loan that matures in June was bid at 95 and offered at 97 and the company's other loan paper "benchmarked off the bonds," according to a market professional. Prices were slightly higher on WorldCom's debt due to the announcement of a new $1.5 billion accounts receivable securitization program that does not contain any ratings triggers was secured by the company. Citigroup and JPMorgan Chase were the lead banks on the deal.

Adelphia's Century loan traded at around 92, compared to Wednesday's trading level around 90. The Olympus loan traded around 93, the market professional said. On Wednesday the Olympus paper was bid around 90.

Nasdaq trading on Adelphia resumed Thursday at 12.30 p.m. ET. However, "the fact that the stock got crushed today isn't helping," the professional said. At market close, Adelphia's stock was down 3.08 or 54.04%.

Overall though, Adelphia's paper moved up based on news of the Rigas family's relinquishment of control and transfer of assets valued at more than $1 billion.

As part of the agreement, John Rigas, Timothy Rigas, Michael Rigas and James Rigas resigned as directors of the Company. The Board and Special Committee also passed resolutions calling upon Peter Venetis, a son-in-law of John Rigas, to resign his seat on the Board of Directors. Two non-family directors, to be designated by the Rigas family, will be added to the Board, a company press release said.

In addition Michael Rigas resigned as executive vice president, operations and secretary and James Rigas resigned as executive vice president strategic planning.

"Cash flow from cable properties owned by Rigas family entities will be used to support the family's obligations under the co-borrowing agreements and Company debt held by the Rigas family group, amounting to approximately $567 million, will be transferred to the Company in exchange for satisfaction of the Rigas family obligations under a $202 million stock purchase agreement and a transfer to the Company of primary liability for approximately $365 million under the co-borrowing agreements. Additionally, those cable properties owned by the Rigas family that the Company chooses to have transferred to the Company will be transferred to the Company at their appraised value," the release said.

All Adelphia stock owned by the Rigas family will be placed in a voting trust until all obligations for loans, advances or borrowings are satisfied. Common and preferred stock held by the family will be pledged to the company as security.

Also, as a result of discussion with the Securities and Exchange Commission, the company will increase the amount of its indebtedness to about $2.5 billion at Dec. 31, 2001, compared to the originally stated $1.6 billion, and it is believed that at April 30, the total amount of co-borrowings was about $3.1 billion, the release said.

The Coudersport, Pa. cable company is currently in negotiations with its bank loan lenders to obtain additional capital while continuing the previously announced plan to sell certain assets.

In other news, Barnes & Noble Inc. closed on a new $500 million revolving credit facility (Ba2/BB), which will be used to refinance existing debt. Fleet National Bank acted administrative agent and bookrunner. Fleet and Wachovia Securities were co-lead arrangers, according to a syndicate source.

The New York, N.Y. bookseller's revolver matures in May 2005. The initial interest rate on the loan is Libor plus 137.5 basis points. If greater than 33% of the facility is used, the interest rate increases to Libor plus 150 basis points. If greater that 66% of the facility is used, the interest rate increases to Libor plus 162.5 basis points, the syndicate source said. There is an undrawn commitment fee of 25 basis points.

RailAmerica Inc. closed on its new $475 million credit facility (Ba3/BB) Thursday, according to a syndicate source. UBS PaineWebber and Morgan Stanley Dean Witter are joint lead-arrangers for the deal.

The loan consists of a $100 million six-year revolver with an interest rate of Libor plus 200 basis points and a $375 million seven-year term B tranche with an interest rate of Libor plus 250 basis points, the syndicate source said. There is a commitment fee of 50 basis points on the revolver. All company assets secure the loan. Proceeds are being used to refinance existing debt.

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