PQ, Valor term B's soar to high 101s after breaking; Builders FirstSource cuts B loan pricing

By Sara Rosenberg

New York, Feb. 9 - PQ Corp.'s new deal freed up for trading, with the term loan B ticking its way up to the high 101s by day's end. Also breaking Wednesday was Valor Communications Group Inc., and although trading didn't start until really late in the day, that didn't stop the term loan from creeping up to high 101 levels by evening.

On the primary side, Builders FirstSource Inc. revised pricing on its term loan B and made the reduction in size official on Wednesday morning.

PQ's $335 million term loan B saw good momentum during its first day of trading as the paper inched its way up to 101¾ bid, 102 offered by late day from opening levels that were around 101½ bid, 101¾ offered, according to a trader.

"It seems to have been very active. If you got L+200 up in the high 101s, I would think you got some people punting," the trader said.

The term loan B was upsized from $310 million after the company priced a bond deal that was downsized to $275 million from $300 late last week.

Furthermore, at the time of the upsizing, the pricing on the B loan came down to Libor plus 200 basis points from original price talk of Libor plus 250 basis points.

The $410 million credit facility (B1/B+) also contains a $100 million revolver with an interest rate of Libor plus 250 basis points. This tranche was left unchanged during the syndication process in terms of size and pricing.

JPMorgan and UBS are the lead banks on the credit facility, with JPMorgan the left lead.

Proceeds from the loan and the bonds will be used to help fund JPMorgan Partners' leveraged buyout of PQ, a Berwyn, Pa.-based chemicals and engineered glass materials company.

Valor heads up to high 101s

Valor's $800 million term loan freed up for trading sometime around 4 p.m. ET on Wednesday with opening levels of 101½ bid, 101¾ offered, but with a "ton of activity" the paper walked its way up to 101¾ bid, 102 offered by evening, according to a trader.

The term loan, which was downsized from $890 million after the company opted to upsize its bond offering to $400 million from $280 million, is priced with an interest rate of Libor plus 200 basis points and includes a step down to Libor plus 175 basis points under certain conditions. The tranche was originally launched with price talk of Libor plus 225 basis points.

Bank of America and Merrill Lynch are the lead banks on the deal, with Bank of America the left lead.

Valor's $900 million credit facility (BB-) also contains a $100 million revolver.

The Irving, Texas-based provider of telecommunications services is getting the new credit facility in connection with its proposed initial public offering of common stock.

Proceeds from the new credit facility, along with some IPO and bond proceeds, will be used to refinance existing bank debt, including repaying in full the $265 million seven-year senior secured second-lien term loan and $135 million 71/2-year senior subordinated term loan. As of Nov. 30, amounts outstanding under the second-lien loan bore interest at a weighted average annual rate of 9.93% and amounts outstanding under the senior subordinated loan bore interest at an annual rate of 12.88%.

Charter active at higher levels

Charter Communications Inc.'s bank debt - primarily the term loan A - was really active throughout Tuesday and Wednesday's sessions at stronger levels as demand for discount paper continues to be robust, according to traders.

The St. Louis cable company's term loan A was quoted at 99 5/8 bid, 99 7/8 offered, up about 3/8 of a point on the day and the term loan B was quoted at par 1/8 bid, par 3/8 offered, up about an 1/8 to a ¼ on the day, one trader said.

"About $50 million of the A traded over the past two days. Not as much of the B traded," the trader added.

Builders FirstSource cuts pricing

Builders FirstSource reverse flexed its six-year first-lien term loan B to Libor plus 250 basis points from Libor plus 275 basis points and officially downsized the tranche by $25 million to $225 million on Wednesday, according to a market source.

The market had already factored in the downsizing of the B loan on Tuesday after the company priced a bond deal that was upsized by $25 million, so that move came as no surprise, but the pricing cut was not previously talked about.

The upsized $275 million seven-year floating-rate note offering priced on Tuesday at par to yield Libor plus 425 basis points. Price talk was Libor plus 425 to 450 basis points.

The now $350 million credit facility (B1/B+) also contains a $110 million five-year revolver with an interest rate of Libor plus 250 basis points and a $15 million six-year prefunded letter-of-credit facility.

UBS and Deutsche Bank are the lead banks on the deal, with UBS the left lead.

Proceeds from the credit facility and the bonds will be used to pay a $237 million dividend and repay existing debt.

Builders FirstSource is a Dallas supplier of building products to professional, large-scale homebuilders.

Bear Creek nets orders

Bear Creek Corp. got "a bunch" of early commitments in on its $125 million revolving credit facility that just launched via a bank meeting on Wednesday afternoon, according to a market source.

And, the revolver is being offered to investors with no upfront fees and opening pricing of Libor plus 225 basis points.

UBS is the sole lead bank on the deal.

Proceeds from the revolver, along with proceeds from a $245 million offering of notes, will be used to help fund an approximately $83 million dividend to sponsor Wasserstein & Co., which acquired the company in 2004 for about $260 million, and repay debt.

Bear Creek is a Medford, Ore.-based operator of gift catalogs and web sites.

SI closes

SI International Inc. closed on its $160 million credit facility (B1/B+) consisting of a $100 million six-year term loan B with an interest rate of Libor plus 250 basis points and a step down to Libor plus 225 basis points if leverage falls below 21/4x, and a $60 million five-year revolver with an interest rate of Libor plus 250 basis points.

Originally, the term loan was launched with pricing of Libor plus 275 basis points but was reverse flexed with the addition of the step down last week. Also, the revolver was upsized from $50 million during syndication.

Wachovia was the lead bank on the deal.

Proceeds from the credit facility were used to help fund the now completed acquisition of Shenandoah Electronic Intelligence Inc. for $75 million in cash and to refinance existing debt.

SI is a Reston, Va., provider of information technology and network solutions primarily to the federal government.

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