Sensata, NPC, AGA Medical set talk; Ameristar trades down; Allied Waste repricing sees opposition

By Sara Rosenberg

New York, April 4 - Sensata Technologies, NPC International Inc. and AGA Medical Corp. came out with price talk on their new credit facilities as bank meetings were held on Tuesday by all three companies to officially kick off syndication on the new deals.

In the secondary, Ameristar Casinos Inc.'s term loan softened up a touch as investors are reflecting on the company's recent bid for Aztar Corp. and what it could mean for Ameristar's outstanding bank debt.

Another name on everyone's radar is Allied Waste Industries Inc. due to its recent repricing proposal that has been met with some resistance, and, if this resistance is strong enough, may see some tweaks before the deal is done.

Sensata Technologies launched its $1.35 billion credit facility on Tuesday afternoon through a very well attended bank meeting and, at this presentation, price talk on the new deal was announced, according to a market source.

The credit facility was presented to lenders with opening price talk of Libor plus 200 basis points on all tranches, the source said.

The facility - a portion of which may be done in euros - is broken down into a $1.2 billion term loan B and a $150 million revolver, the source added.

Morgan Stanley, Bank of America and Goldman Sachs are the lead banks on the deal that will be used to fund the leveraged buyout by Bain Capital LLC of Texas Instruments Inc.'s Sensors & Controls business for $3 billion in cash.

In addition to the credit facility, the company plans on issuing $900 million equivalent of high-yield bonds for LBO financing.

Sensata Technologies is an Attleboro, Mass., supplier of engineered sensors and controls to the appliance, climate control, industrial, automotive, lighting and aircraft markets.

NPC opening spreads

NPC International released opening price talk on its credit facility as well, with the $275 million term loan B and the $75 million revolver both launched to investors at Libor plus 225 basis points, according to a market source.

JPMorgan and Merrill Lynch are the lead banks on the $350 million credit facility, with JPMorgan the left lead.

Proceeds will be used, along with proceeds from a $200 million bond offering, to finance Merrill Lynch Global Private Equity's acquisition of the company.

NPC is a Lenexa, Kan., franchisee of Pizza Hut restaurants.

AGA sets talk

Meanwhile, AGA Medical decided to launch its credit facility Tuesday with opening price talk set at Libor plus 250 basis points on both its $215 million term loan B and its $25 million revolver, according to a market source.

Lehman and Citigroup are the lead banks on the $240 million credit facility (B2/B+), with Lehman the left lead.

Proceeds will be used to refinance existing debt and pay a $99 million shareholder dividend.

AGA Medical is a Golden Valley, Minn., developer and manufacturer of medical devices for use in cardiovascular applications.

Nutro Products talk surfaces

Spread guidance on Nutro Products Inc.'s credit facility also emerged, with the $440 million term loan B being talked at Libor plus 225 basis points and the $100 million revolver being talked at Libor plus 250 basis points, according to a market source.

JPMorgan and Lehman Brothers are joint lead arrangers on the $540 million credit facility, with JPMorgan the left lead.

Proceeds from the facility, which was launched to investors via a bank meeting this past Friday, will be used to help fund a management-led buyout by Bain Capital Partners LLC of the company.

Nutro Products is a City of Industry, Calif., manufacturer of natural dog and cat foods.

Primary takes front seat

In addition to Sensata, NPC International and AGA Medical, Lear Corp. also held a bank meeting during Tuesday's session, and with all this new deal activity, the secondary loan market appeared to be pushed somewhat to the sidelines, according to a trader.

The Lear deal, which is expected to go well, consists of a $600 million first-lien term loan B talked at Libor plus 300 basis points and a $200 million second-lien term loan talked in the range of Libor plus 450 to 475 basis points.

JPMorgan Chase Bank, Bank of America, Citibank and Deutsche Bank are the lead banks on the facility that will be used to refinance the Southfield, Mich., automotive parts supplier's $400 million term loan scheduled to mature in February 2007, to fund the retirement of the company's outstanding convertible senior notes and for general corporate purposes.

"It's been kind of a quiet day in trading," a trader remarked. "There's much more in the primary this week. Lots of bank meetings. Overall, it was pretty uneventful."

Ameristar softens

One name that did manage to catch some attention in trading was Ameristar Casinos, as investors are watching the company's recently announced bid for Aztar to see whether a definite purchase agreement may be in the works.

The Ameristar term loan traded down to 101¼ bid, 101¾ offered on Tuesday from previous levels of 101½ bid, 102 offered, according to a trader.

However, it's unclear at this time as to whether the lower trading levels are a result of people just trying to make a market in the name or if the softening is more a function of refinancing fears.

On Monday, Las Vegas-based gaming company Ameristar announced that it has received a commitment for a new credit facility from Wachovia Securities, Merrill Lynch & Co. and Wells Fargo Bank to help fund its bid to acquire Phoenix-based gaming company Aztar Corp.

Ameristar has offered to purchase Aztar for $42 per share, as compared to the acquisition agreement that was already entered into between Pinnacle Entertainment Inc. and Aztar in March under which Aztar shareholders would get $38 per share in cash.

After the close Monday, Aztar responded to the bid, saying that its board of directors has authorized the entrance into discussions with Ameristar and Colony Capital Acquisitions LLC, which made an unsolicited proposal to acquire Aztar for $41 per share in cash on March 30, to determine the right course of action.

"Some people may be thinking that if Ameristar wins, this prearranged [bank] financing could be taking out the existing bank debt, although that's pure speculation at this point," the trader said.

"There might be some reflective nature [in Ameristar's term loan trading levels] but some people could just be trying to make a market in this. It would be a late-'06 event; so people don't mind paying a slight premium now. But, I truly think that if investors were truly scared right now of a refi, it would have dropped by at least half a point," the trader added.

Allied Waste sees push back

Allied Waste's currently in-market repricing proposal has some investors fighting back, with the claim being that the proposal is not reflective of the company's current rating, according to a market source.

Last week, news emerged that the Scottsdale, Ariz., waste services company is working on a repricing amendment to its term loan B and letter-of-credit facility that would reduce the spread on the two tranches to Libor plus 150 basis points from current pricing of Libor plus 200 basis points.

"There seems to be some push back. With a B2 [rating] from Moody's, people think this may be a dangerous precedent to the market. If investors stay true to their word, we might see some changes like call protection or the spread only coming down by 25 basis points instead of 50 basis points," the source said.

Under the original schedule, lender consents on the repricing are due Wednesday, so some clarity on the deal - such as whether or not it will get done or if changes will be made to make it work - is expected to emerge soon, the source added.

Allied Waste's term loan B and institutional letter-of-credit facility, which trade as a strip, is currently being quoted at par bid, par ½ offered in trading.

Prior to the repricing being announced, the institutional loan strip was being quoted at 101¼ bid, 101½ offered.

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