AWAS breaks; Ford rises; Spectrum changes coming; Sophos sets talk; AL Gulf readies launch

By Sara Rosenberg

New York, June 2 - AWAS Aviation Capital Ltd.'s term loan freed up for trading during Wednesday's session, and Ford Motor Co.'s term loans gained some ground as the company announced monthly sales numbers that showed a significant year-over-year improvement.

Over in the primary market, Spectrum Brands Inc. is expected to come out with some investor-friendly revisions to its credit facility in the next day or so in order to attract more interest, Sophos plc released price talk on its bank debt, and AL Gulf Coast Terminals LLC announced plans for a new term loan.

Also, Trident Resources Corp.'s books have filled up at initial terms, chatter is that Styron's credit facility has been met with some pretty good demand and RCN Cable is expecting to allocate its new deal at the end of the week.

AWAS starts trading

AWAS' $530 million six-year term loan (Ba2/BBB-) hit the secondary market on Wednesday, with levels quoted at 98¼ bid, 98¾ offered on the break and then moving up to 99 bid, 99½ offered, according to a source.

Pricing on the term loan is Libor plus 575 basis points with a 2% Libor floor, and it was sold at an original issue discount of 97. The loan is non-callable for one year, then at 102 in year two and par thereafter.

During syndication, pricing on the term loan was flexed up from Libor plus 500 bps to 550 bps, the floor was increased from 1.75% Libor floor, the discount was raised from 98, and the call protection was sweetened from just 101 soft call for one year.

AWAS led by two

Goldman Sachs and Credit Agricole are the joint lead arrangers on the AWAS' term loan, which is expected to close by the end of the week.

Proceeds will be used to refinance the company's outstanding JetStream and JetBridge loan facilities.

Security for the loan is interests in a portfolio of 30 aircraft.

AWAS is a Dublin-based aircraft leasing company.

Ford revs higher

Ford's term loans were stronger in trading following the company's release of May's sales results, according to traders.

The Dearborn, Mich.-based automobile company's term loan B-1 was quoted by one trader at 93½ bid, 94 offered, up about half a point, and by a second trader at 93½ bid, 94 offered, up from 92¾ bid, 93¼ offered.

And, the term loan B-2 was quoted by the first trader at 93 bid, 93½ offered, up about half a point, and by the second trader at 92¾ bid, 93½ offered, up from 91¾ bid, 92¼ offered.

For the month of May, total Ford sales were 196,912, up 21.9% from 161,531 in the comparable period last year.

Car sales for the month were 69,208, up 8.7% from 63,697 in May 2009.

Additionally, truck sales for the month amounted to 69,786, up 48.4% from 47,018 in the prior year.

Spectrum Brands to tweak deal

Moving to the primary, Spectrum Brands will be making some modifications to its credit facility in the near future that will be investor friendly, but as to what those changes will be is still unknown, according to a market source.

The company's $1.3 billion credit facility currently consists of a $300 million ABL revolver and a $1 billion term loan (B2/B).

The term loan was launched with price talk of Libor plus 450 bps with a 1.5% Libor floor and an original issue discount of 99.

Originally, it was thought that the term loan would be sized at $750 million and that the company would be selling $750 million of senior secured notes. Prior to launch, however, the term loan was upsized by $250 million and the bond offering was reduced to $500 million. Pricing on the notes is expected to occur this week.

Credit Suisse, Bank of America and Deutsche Bank are the lead banks on the credit facility, with Credit Suisse the left lead.

Spectrum Brands funding merger

Proceeds from Spectrum Brands' credit facility and notes will be used to help fund the merger with Russell Hobbs Inc. and to refinance Spectrum Brands' existing senior debt and a portion of Russell Hobbs' existing senior debt.

At the end of the Spectrum Brands' first fiscal 2010 quarter, $1.334 billion was drawn under its senior term loans and roughly $72 million was drawn under its $242 million ABL facility.

Following the refinancing of Spectrum Brands' term loan debt and ABL facility, the new combined entity is expected to have a leverage ratio of 3.8 times forecasted adjusted EBITDA for fiscal 2010.

By comparison, Spectrum Brands' leverage ratio at the end of the first fiscal 2010 quarter was 4.7 times.

The combined company, which will operate under the Spectrum Brands name, is expected to deliver about $3 billion in annual revenues with $430 million to $440 million of adjusted EBITDA in fiscal 2010.

Spectrum Brands merger details

Under the merger agreement, current shareholders of Spectrum Brands will receive one share in the new combined company for each share they hold.

Furthermore, as part of the transaction, Harbinger has agreed to convert its existing about $158 million of Russell Hobbs' term debt and $207 million of Russell Hobbs' preferred stock into common stock of the new company at a price of $31.50 per share. Following the closing of the transaction, Harbinger is expected to own 63.7% of the combined entity.

The all-stock transaction values Spectrum Brands at an enterprise value of $2.6 billion, or $965 million net of debt, which equates to $31.50 per share net of outstanding debt, and privately held Russell Hobbs at an enterprise value of $675 million, or $661 million net of debt.

The deal is expected to close in June, subject to approval by holders of a majority of Spectrum Brands' common stock not owned by Harbinger, which will be sought at a special meeting on June 11.

Spectrum Brands is an Atlanta-based consumer products company. Russell Hobbs is a Miramar, Fla.-based marketer and distributor of a broad range of branded small household appliances.

Sophos reveals guidance

Sophos came out with price talk on its $300 million of term loan debt now that a B+ credit facility rating emerged from Standard & Poor's, according to a market source.

The term loan debt is being talked in the Libor plus 475 basis points area with a 2% Libor floor and an original issue discount in the 99 context, the source said.

Initial indications were that the debt would consist of a $90 million term loan A and a $210 million term loan B; however, those tranche sizes are preliminary and will likely be revised based on final investor demand, the source added.

Up to $100 million of the term loan debt will be denominated in euros with the remainder in dollars.

Sophos getting revolver, too

Sophos' $320 million senior secured deal, which is being led by RBC and HSBC, also includes a $20 million six-year revolver.

A bank meeting to launch the facility took place on May 25, but price talk was not disclosed as the company was waiting on ratings.

Proceeds will be used to help fund the buyout of the company by Apax Partners in a transaction valued at $830 million.

When the transaction is completed, the founders of the company will retain a significant minority shareholding. TA Associates, a minority shareholder in Sophos since 2002, will sell its full interest to Apax in this transaction.

Leverage for the Boston-based IT security and data protection firm is around 3.8 times.

AL Gulf deal emerges

News surfaced that AL Gulf Coast Terminals is getting ready to launch a proposed $305 million holdco senior secured term loan with a bank meeting on Thursday, according to a market source.

The term loan will have 5-B ratings, the source said.

Barclays is the lead bank on the deal that will be used to refinance existing holdco debt, fund a debt service reserve account and pay a dividend to the company's sponsor, ArcLight Capital Holdings LLC.

There is an existing revolver and notes at the opco level that will remain in place.

Channelview, Texas-based AL Gulf Coast owns 100% interest in the Houston Fuel Oil Terminal Co. LLC, a provider of crude and residual fuel oil storage in the Gulf of Mexico.

Trident Resources wraps syndication

Trident Resources closed the books on its $410 million four-year term loan on Wednesday, and being that the deal was fully subscribed by the deadline, the expectation is that terms will be left in line with initial talk, according to a market source.

The term loan is priced at Libor plus 950 bps with a 3% Libor floor and an original issue discount of 97.

In addition, the loan is non-callable for one year, then at 105 in year two, 104 in year three and 103 in year four.

Credit Suisse is the lead bank on the deal.

Trident funding exit

Proceeds from Trident Resources' term loan will be used to help fund its emergence from Chapter 11.

The company has already received court approval of the disclosure statement for its plan of reorganization, and the plan confirmation hearing is scheduled for June 15.

As part of the reorganization plan, the company is looking to do a $200 million equity rights offering, and holders of 2006 credit agreement claims and 2007 credit agreement claims will be entitled to purchase that stock.

Trident is a Calgary, Alta.-based natural gas production company.

Styron nets interest

Market chatter is that Styron's $1.04 billion credit facility "has decent momentum" since launching on May 24, according to a source.

The facility consists of a $240 million revolver (BB-), a $675 million first-lien term loan (BB-) and a $125 million second-lien term loan (B-).

Price talk on the first-lien term loan is Libor plus 475 bps with an original issue discount of 99, and on the second-lien term loan, it is Libor plus 775 bps with an original issue discount in the 98 to 99 area. Both tranches carry a 1.75% Libor floor.

Call protection on the second-lien term loan is 103 in year one, 102 in year two and 101 in year three.

Commitments from lenders are due on June 7.

Styron being acquired

Proceeds from Styron's credit facility will be used to help fund its buyout by Bain Capital from Dow Chemical for $1.63 billion.

Under the agreement, Dow Chemical has an option to receive up to 15% of the equity of Styron as part of the sale consideration.

The transaction is expected to close by August, subject to the completion of customary conditions and regulatory approvals.

Deutsche Bank, Barclays and HSBC are the lead banks on the credit facility, with Deutsche the left lead.

Styron is a diversified chemicals and plastics company that is expected to have $3.5 billion in revenue based on 2009.

RCN Cable allocating soon

In other news, documentation went out on RCN Cable's credit facility on Wednesday and the deal is scheduled to allocate around noon on Friday, according to a market source.

The $600 million credit facility (B1/B) consists of a $40 million five-year revolver and a $560 million six-year term loan B.

Pricing on the term loan B is Libor plus 450 bps with a 2% Libor floor and an original issue discount of 981/2. There is 101 soft call protection for one year.

During syndication, pricing on the term loan B was flexed up most recently from Libor plus 400 bps and before that from Libor plus 375 bps, the floor was increased from 1.75%, the discount widened from 99 and call protection was added.

RCN Cable lead banks

SunTrust, GE Capital and Société Générale are the bookrunners on the RCN Cable deal, with SunTrust the left lead and the administrative agent.

Proceeds from the RCN Cable facility, along with a $265 million credit facility (B2/B) at RCN Metro Fiber, will be used to fund the buyout of RCN Corp. by ABRY Partners in a transaction valued at $1.2 billion, including the assumption of debt. RCN stockholders will be receiving $15 per share.

Prior to launch, RCN Cable's term loan B had been downsized from $580 as a result of increased cash flow at RCN along with fewer shares to purchase than was originally thought in the buyout of the company.

RCN is a Herndon, Va.-based broadband services provider.

American Tire closes

American Tire Distributors Holdings Inc. closed on its new $450 million four-year ABL revolving credit facility that is initially priced at Libor plus 300 basis points, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

Pricing can range from Libor plus 275 bps to 325 bps based on excess availability.

Bank of America, Wells Fargo and GE Capital acted as the lead arrangers and bookrunners on the deal that was completed on May 28.

Proceeds were used to help fund the buyout of the company by TPG Capital from Investcorp, Berkshire Partners LLC and Greenbriar Equity Group LLC in a transaction valued at $1.3 billion.

American Tire Distributors is a Charlotte, N.C.-based distributor of replacement tires.

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