Coldren tweaks deal; Ozburn flexes up; Philadelphia Newspapers sets pricing; Trilogy breaks

By Sara Rosenberg

New York, June 27 - Coldren Resources LP made a round of changes to its credit facility, downsizing the overall deal, increasing pricing on all tranches and sweetening second-lien call protection premiums.

Also in the primary, Ozburn-Hessey Logistics LLC increased pricing on its term loan B add-on, as well as on its existing term loan B debt, due to recent ratings downgrades, and Philadelphia Newspapers LLC firmed up pricing on its credit facility at the high end of original guidance now that the commitment process has come to a close.

Moving to the secondary, Trilogy freed for trading on Tuesday, with the first-lien term loan quoted right around the 101-type area.

Coldren reworked its credit facility structure resulting in an overall smaller deal, higher pricing on all tranches and more enticing call protection on the second-lien term loan, according to a market source.

Under the changes, the five-year first-lien term loan B is now sized at $323 million, down from an original size of $375 million, and pricing on the paper was flexed up to Libor plus 400 basis points from original talk at launch of Libor plus 350 basis points, the source said. The 101 one-year call protection premium that the tranche was launched with was left unchanged.

Meanwhile, the 51/2-year second-lien term loan is now sized at $129 million, down from an original size of $150 million, and pricing was flexed up to Libor plus 600 basis points from original talk at launch of Libor plus 550 basis points, the source continued. In addition, call protection on this tranche was changed to 103 in year one, 102 in year two and 101 in year three from the originally proposed 102 in year one, 101 in year two premiums.

The company's $65 million synthetic facility for hedging and letters of credit was left unchanged in terms of size, but pricing on this tranche was flexed up to Libor plus 400 basis points from original talk at launch of Libor plus 350 basis points, the source remarked. Like the term loan B, the 101 one-year call protection premium that the letter-of-credit facility was launched with was left unchanged.

In addition, under the new deal terms, the accordion features were eliminated from the transaction. Originally, the deal contained a $100 million first-lien term loan B accordion feature and a $50 million second-lien term loan accordion feature; these have now been reduced to zero.

Lastly, the excess cash flow sweep was increased to 100% from 50%, with one step down to 75% once debt to proved reserves goes below $1.25 per MCFE, the source added.

Recommits from lenders are due after the July 4 holiday; however, the new deal structure has drawn a good amount of attention as a bunch of commitments have already started coming in to the deal since the changes were announced.

Proceeds from the credit facility will be used to help finance the acquisition of certain Gulf of Mexico shelf assets from Noble Energy Inc.

The reduction in the total credit size to $517 million from $590 million reflects about $60 million of free cash flow that's been generated over the past couple of months and about $36 million of preferential rights that have been exercised, all of which will reduce the purchase price, the source explained.

Credit Suisse and Bank of America are the lead banks on the credit facility.

Coldren is a New Orleans-based company that pursues low-risk drill-to-earn opportunities on the Gulf of Mexico shelf. The company is a subsidiary of Coldren Oil & Gas Co. LP, a First Reserve portfolio company. Superior Energy Inc. has acquired a 40% interest in Coldren.

Ozburn ups spread

Ozburn-Hessey increased pricing on its term loan B add-on on Tuesday morning, and, as a result, on its existing term loan B debt as well, because of recent downgrades from both Standard & Poor's and Moody's Investors Service, according to a market source.

The $140 million term loan B add-on and the existing term loan B debt are now priced with an interest rate of Libor plus 325 basis points with a step down to Libor plus 300 basis points at 31/2x senior leverage, the source said.

By comparison, when the add-on was first launched, price talk was set at Libor plus 250 to 275 basis points.

The existing term loan B carries a spread of Libor plus 250 basis points.

It was said at the time of the launch that wherever the new debt ended up in terms of spread, the existing debt would price in line.

The increase in pricing on the term loan B was attributed to S&P's decision to downgrade the company's bank debt rating to B from B+ and Moody's decision to downgrade the bank debt to B3 from B2, the source explained.

On Monday, S&P announced the downgrade, saying that "ratings reflect OHL's competitive end markets, high debt leverage, and aggressive acquisition strategy, partly offset by favorable near- to intermediate-term industry fundamentals and benefits accruing from the company's nationwide presence and good technological capabilities."

Moody's came out with its downgrade announcement last week, citing the increase in the company's debt level and decrease in EBIT/Interest coverage as the reasons behind the move.

Morgan Stanley is the lead bank on the deal.

Proceeds from the incremental term loan debt will be used to fund the acquisitions of Barthco International Inc., a Philadelphia-based logistics organization, and Turbo Logistics, a Gainesville, Ga.-based logistics management services company.

Ozburn-Hessey is a Brentwood, Tenn.-based third party logistics provider.

Philadelphia Newspapers firms spreads

Philadelphia Newspapers finalized pricing on its $325 million senior credit facility now that the Monday commitment deadline has come and gone, according to a market source.

Both the $50 million revolver and the $275 million term loan B ended up at Libor plus 275 basis points, the high end of original guidance of Libor plus 250 to 275 basis points, the source said.

RBS Securities is the lead bank on the deal.

Proceeds, along with $105 million in mezzanine debt, will be used to help fund the company's acquisition of Philadelphia Newspapers, Inc. from The McClatchy Co.

The $562 million acquisition covers the Philadelphia Inquirer and Philadelphia Daily News, both daily newspapers, and related media assets including philly.com.

The two newspapers are currently owned by Knight-Ridder, Inc., which McClatchy has agreed to acquire.

Philadelphia Newspapers was formed by a group of local investors headed by advertising executive Brian Tierney for the purpose of acquiring these assets.

DynCorp tweaks repricing

DynCorp International Inc. softened its repricing request, asking lenders to lower the spread on its $342 million term loan to Libor plus 225 basis points instead of to Libor plus 200 basis points as was previously being requested, according to a fund manager.

Furthermore, under the revised proposal, the term loan would carry a step down to Libor plus 200 basis points if leverage is less than 3.5x and has 101 call protection for one year.

Currently, the term loan carries an interest rate of Libor plus 250 basis points.

In addition to the repricing, through this amendment, the company's revolver is being upsized to $120 million from $90 million. There were no changes to the pricing grid that was announced for the revolver under the amendment, the fund manager added.

Consents were due at 5 p.m. ET on Tuesday.

Lenders will receive a 5 basis point fee.

Goldman Sachs is the lead bank on the deal.

DynCorp is an Irving, Texas, provider of outsourced technical services to civilian and military government agencies and commercial customers.

Datatel downsizes

Datatel Inc. reduced the overall size of its credit facility by $10 million to $210 million as it opted to reduce the size of the dividend being paid with proceeds from the new deal by $10 million, according to a market source.

The first-lien term loan (B1/B+) is now sized at $140 million, up from an original size of $120 million, while the second-lien term loan (B3/CCC+) is now sized at $70 million, down from an original size of $100 million, the source said.

Pricing on the first-lien term loan is set at Libor plus 250 basis points, after flexing up early last week from original talk at launch of Libor plus 225 basis points, and pricing on the second-lien loan is set at Libor plus 550 basis points, after flexing up early last week from original talk at launch of Libor plus 525 basis points.

Credit Suisse is the lead bank on the deal that will be used for a dividend recapitalization.

Basically, the company is now getting about $110 million in additional term loan debt through this transaction and refinancing about $100 million of existing first- and second-lien term loan debt.

Pricing on the existing first-lien term loan debt is currently set at Libor plus 225 basis points and pricing on the existing second-lien term loan debt is currently set at Libor plus 525 basis points, meaning that this new deal will now result in a pricing change as opposed to the original plans of keeping spreads at existing levels.

The deal is filled out at this point clearing the way for allocations to go out at the end of this week, the source added.

Datatel is a Fairfax, Va., provider of information management software for higher education institutions.

Standard Steel cuts first-lien pricing

Standard Steel LLC recently reverse flexed pricing on its first-lien bank debt, while firming up pricing on its second-lien term loan at original talk, according to a market source.

The company's $20 million revolver (B2/B+), $100 million six-year first-lien term loan (B2/B+) and $20 million six-year delayed-draw first-lien term loan (B2/B+) are now all priced at Libor plus 250 basis points, down from original talk at launch of Libor plus 275 basis points, the source said.

The delayed-draw term loan carries a ticking fee of 100 basis points.

Meanwhile, pricing on the $25 million seven-year second-lien term loan (Caa1/B-) remained at original price talk of Libor plus 600 basis points, the source added. This second-lien tranche carries call protection of 102 in year one and 101 in year two.

UBS, Jefferies and Bear Stearns are the lead banks on the $165 million credit facility, with UBS the left lead.

Proceeds from the funded term loan debt will be used to help fund the acquisition of Standard Steel by Trimaran Capital Partners from Citicorp Mezzanine Partners LP and certain members of management.

Proceeds from the delayed-draw term loan will be used to help fund a $30 million capital expansion project in Pennsylvania that the company has planned.

The revolver is expected to be undrawn at closing.

Standard Steel is a Pittsburgh-based manufacturer of steel wheels and axles for use in freight railcars, locomotives and passenger railcars.

Western Dental cuts spreads

Western Dental Services Inc. recently lowered pricing on its $250 million covenant-light term loan to Libor plus 550 basis points from original talk at launch of Libor plus 600 basis points, according to a market source.

The term loan contains, and always had, call protection of 102 in year one, 101 in year two and par thereafter.

In addition, pricing on the $25 million revolver was also reverse flexed, going to Libor plus 250 basis points from original talk at launch of Libor plus 275 basis points, the source added.

UBS and Merrill Lynch are the lead banks on the $275 million credit facility.

Proceeds will be used to help fund the purchase of Western Dental by Citigroup Venture Capital.

Western Dental is an Orange, Calif., provider of dental care.

Trilogy frees to trade

Switching to secondary news, Trilogy's credit facility started trading on Tuesday, with the $435 million first-lien term loan B (Ba3/B) quoted at par 7/8 bid, 101 1/8 offered, according to a market source.

The term loan B is priced with an interest rate of Libor plus 400 basis points. During syndication, the tranche was upsized from $400 million and pricing ended up at the high end of original guidance of Libor plus 350 to 400 basis points.

Trilogy's $590 million credit facility also contains a $30 million revolver (Ba3/B) and a $125 million second-lien term loan (B2/CCC+) with an interest rate of Libor plus 625 basis points. During syndication, the second-lien term loan was downsized from $160 million and pricing ended up at the midpoint of original guidance of Libor plus 600 to 650 basis points.

Goldman Sachs is the lead bank on the deal that will be used to help fund the merger of CTC Communications, Choice One Communications and Conversent Communications Inc., and to refinance existing debt.

The new company, named Trilogy, will be the second largest competitive communications provider in the United States.

GM trades down

General Motors Corp.'s revolver was weaker on Tuesday with the auto sector as a whole, according to a trader.

The revolver closed the day quoted at 94½ bid, 95 offered, down a half a point, the trader said.

"It's weaker with all the other auto names. The whole auto sector has been feeling really [bad]. There's no liquidity in it," the trader explained.

GM is a Detroit-based automaker.

Fairchild closes

Fairchild Semiconductor International Inc. closed on its new $475 million credit facility (Ba3/BB-), consisting of a $375 million term loan B and a $100 million revolver, with both tranches priced at Libor plus 150 basis points, according to a company news release.

During syndication, the term loan B tranche was downsized from an original size of $400 million.

The facility was used to refinance the company's existing $444.4 million term B-3 loan that was priced at Libor plus 175 basis points and $180 million revolver that was priced at Libor plus 275 basis points.

"We're pleased to complete this refinancing and $50 million pay down in debt," said Mark Frey, executive vice president and chief financial officer, in the release. "Our strong balance sheet and record of consistent cash flow enabled us to secure a very favorable interest rate. These actions exemplify Fairchild's commitment to managing our balance sheet to deliver superior shareholder value."

Fairchild is a South Portland, Maine, supplier of power analog, power discrete and nonpower semiconductor solutions.

CB Richard closes

CB Richard Ellis Group, Inc. closed on its new $600 million five-year multi-currency revolving credit facility, according to a company news release, that carries an interest rate of Libor plus 75 basis points and has a 17.5 basis point commitment fee.

During syndication, the facility was upsized from $500 million.

Credit Suisse acted as the lead arranger on the deal.

The revolver, which has a $200 million accordion feature, replaces the existing revolving and term loan credit facility and provides the company with greater financial flexibility.

CB Richard is an El Segundo, Calif., commercial real estate services company.

Texas Petrochemicals closes

Texas Petrochemicals Inc. closed on its new $395 million credit facility consisting of a $70 million 21/2-year prefunded letter-of-credit facility tranche (Ba3/B+) with an interest rate of Libor plus 250 basis points, a $210 million seven-year covenant-light term B (Ba3/B+)with an interest rate of Libor plus 250 basis points and a $115 million five-year asset-based revolver with an interest rate of Libor plus 150 basis points and a 37.5 basis point commitment fee.

Pricing on the term loan and letter-of-credit facility ended up at the high end of talk of Libor plus 225 to 250 basis points.

The prefunded letter-of-credit facility will convert into a term loan once it is drawn. This tranche was carved out of the term loan when the deal was relaunched to investors around mid-June.

Syndication had been put on hold after the initial April launch because of problems with the Huntsman Corp. assets that the company has now purchased. Huntsman experienced a fire in its Port Arthur, Texas, olefins manufacturing plant at the end of April, and although this plant is not one of the assets acquired by Texas Petrochemicals, it does provide the C4 supply to the acquired assets.

As a result, the acquisition agreement was restructured so that Texas Petrochemicals paid approximately $192 million for the Huntsman U.S. butadiene and related MTBE operations at closing and an additional payment of $70 million will be made upon the satisfaction of certain milestones related to the resumption of crude C4 supply from Huntsman's Port Arthur, Texas, unit.

The prefunded letter-of-credit facility was incorporated into the credit structure to back the $70 million conditional additional payment.

Deutsche Bank and Credit Suisse acted as joint lead arrangers on the term loan and letter-of-credit facility, with Deutsche the left lead. Deutsche and LaSalle acted as joint lead arrangers on the revolver, with Deutsche the left lead.

Texas Petrochemicals is a Houston-based chemical company.

McClatchy closes

The McClatchy Co. closed on its $3.2 billion senior unsecured credit facility (Ba1/BBB) consisting of a $1 billion revolver and a $2.2 billion term loan A, both priced at Libor plus 87.5 basis points.

Bank of America and JPMorgan acted as the lead banks on the deal.

Proceeds were used to fund the acquisition of Knight-Ridder Inc.

McClatchy is a Sacramento, Calif., newspaper and internet publisher.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.