Hawker, Dean Foods slide; Fairmount tweaks deal; Warner reveals structure; Griffon sets talk

By Sara Rosenberg

New York, Aug. 3 - Hawker Beechcraft Acquisition Co. LLC's term loan was softer during Tuesday's trading session following the release of earnings, and Dean Foods Co.'s bank debt fell with numbers as well.

Over in the primary market, Fairmount Minerals Ltd. came out with changes to its term loan B, including reducing pricing, adding a step-down and call protection, and firming the original issue discount at the low end of talk.

Also, details emerged on Warner Chilcott plc's proposed loans, Griffon Corp. announced pricing guidance on its term loan, and Genco Distribution Systems Inc. came out with timing on the retail launch of its proposed credit facility.

Hawker Beechcraft weakens

Hawker Beechcraft's term loan headed lower in trading after the company announced second-quarter numbers that showed a year-over-year decline in earnings and sales, according to a trader.

The term loan was quoted at 80 bid, 81 offered, down from 81 bid, 81 3/8 offered, the trader said.

For the second quarter, the company reported a net loss of $56.8 million, compared to net income of $172.2 million in the previous year.

Net sales for the quarter were $639.3 million, compared to $816.3 million in the second quarter of 2009.

And, adjusted EBITDA for the quarter was $31.4 million.

Hawker Beechcraft is a Wichita, Kan.-based manufacturer of business, special-mission and trainer aircraft.

Dean Foods dips

Also coming out with disappointing numbers on Tuesday was Dean Foods, and, as a result, some of its term loan debt gave up ground in the secondary market, according to a trader.

The 2014 tranche was quoted at 94¼ bid, 95¼ offered, down from 94½ bid, 95½ offered, and the 2017 tranche was quoted at 96¼ bid, 97¼ offered, down from 97½ bid, 98½ offered, the trader said. The 2016 tranche, however, was unchanged at 95½ bid, 96½ offered.

For the quarter, the company reported net income of $44.8 million, or $0.25 per diluted share, compared to net income of $64.1 million, or $0.38 per diluted share, last year.

And, net sales for the quarter totaled $3 billion, an increase of 11% from net sales of $2.7 billion in the second quarter of 2009.

Dean Foods is a Dallas-based food and beverage company.

Fairmount revises B loan

Moving to the primary market, Fairmount Minerals announced modifications to its well oversubscribed $550 million term loan B early Tuesday morning that involved spread, discount and call protection, according to a source.

Under the changes, the term loan B is now priced at Libor plus 450 basis points, down from initial talk of Libor plus 475 bps to 500 bps, and pricing can now drop to Libor plus 425 bps when leverage is less than 2.75 times and after receipt of June 30, 2011 financials, the source said.

Also, the original issue discount on the term loan B finalized at 981/2, the tight end of the initial 98 to 98½ guidance, the source continued.

Furthermore, the B loan now includes 101 soft call protection for one year.

The 1.75% Libor floor on the tranche was left unchanged.

Fairmount getting pro rata

Fairmount Minerals' $775 million senior secured credit facility (B1/BB) also includes a $75 million revolver and $150 million term loan A.

Pricing on the revolver and term loan A was left unchanged at Libor plus 450 bps and the original issue discount on these tranches remained at 981/2, the source remarked.

The revolver and the term loan include the same step-down to Libor plus 425 bps as the term loan B, effective at less than 2.75 times leverage and after receipt of June 30, 2011 financials.

And, the term loan A still carries a 1.75% Libor floor, while the revolver still has no floor.

Amortization on the term loan A is 10% for the first three years and 15% in years four and five.

Fairmount readies allocations

Fairmount Minerals is hoping to allocate its credit facility on Wednesday and, if not then, on Thursday morning, the source added.

Recommitments to the revised deal were due at 5 p.m. ET on Tuesday.

Barclays, KeyBank, Bank of America and PNC are the lead banks on the credit facility, with Barclays the left lead.

Proceeds will be used to help fund the acquisition of the company by American Securities.

Fairmount Minerals is a Chardon, Ohio-based producer of industrial sand.

Warner Chilcott releases details

Warner Chilcott came out with the structure on its proposed term loan debt as well as price talk in connection with the deal's launch through a 1:30 p.m. ET conference call on Tuesday, according to sources.

The deal consists of a $500 million four-year term loan A and a $1 billion 51/2-year term loan B, with both tranches talked at Libor plus 425 bps, sources said.

The term loan B has a 2.25% Libor floor and 101 soft call protection for one year, and is being offered at an original issue discount of 981/2.

JPMorgan, Bank of America and Goldman Sachs are the lead banks on the deal that will be used, along with $750 million of senior unsecured notes, to fund a special dividend to the company's ordinary shareholders of $8.50 per share, or about $2.15 billion.

Warner Chilcott amendment

Also on Tuesday's call, Warner Chilcott launched an amendment to its existing credit facility to allow for the new financing and the dividend payment.

As part of the amendment, existing lenders are being offered a 50 bps increase in spread and 101 soft call protection on the term loan B, sources remarked.

Lenders are also being offered a 37.5 bps consent fee.

Payment of the dividend is expected to take place before the end of the third quarter.

Warner Chilcott is an Ireland-based specialty pharmaceutical company.

Griffon details talk

Another deal to launch on Tuesday was Griffon, and at the 10 a.m. ET bank meeting, investors were given price talk on the company's $500 million six-year term loan (B2) that is being led by Goldman Sachs, according to a market source.

The term loan is being guided at Libor plus 450 bps to 500 bps with a 1.75% Libor floor and an original issue discount of 98, the source said.

The company's $650 million credit facility also includes a $150 million four-year ABL revolver (Ba2) that is being done via lead arranger JPMorgan.

Griffon buying Ames True Temper

Proceeds from Griffon's credit facility will be used to fund the $542 million acquisition of Ames True Temper Inc. from Castle Harlan Inc.

Other funding for the transaction will come from about $75 million of cash on hand.

Closing is expected to take place by Sept. 30.

Griffon is a New York-based manufacturing company. Ames True Temper is a Camp Hill, Pa.-based manufacturer and marketer of non-powered lawn and garden tools, wheelbarrows and other outdoor work products.

Genco timing surfaces

Genco Distribution Systems has scheduled a retail bank meeting for its $450 million credit facility for Thursday, although the deal is already pretty well syndicated ahead of the launch, according to a market source.

Previously the deal was being labeled as early August business with a specific date unavailable.

Structure on the facility is not currently being disclosed. However, it is known that it will be largely revolver.

PNC Bank and Wells Fargo are the lead banks on the deal that will be used to help fund the acquisition of ATC Technology Corp. for $25 per share in cash. The transaction is valued at $512.6 million.

Genco issuing shares

Other funding for Genco Distribution's purchase of ATC will come from the sale of roughly $125 million of Genco shares to affiliates of Greenbriar Equity Group LLC.

Closing is expected during the fourth quarter, subject to stockholder approval, financing and regulatory approvals.

There is a go-shop period until Aug. 17.

Genco Distribution is a Pittsburgh-based third-party provider of logistics services for retailers, manufacturers and U.S. government agencies. ATC is a Downers Grove, Ill.-based provider of comprehensive engineered services for logistics and refurbishment services.

Altegrity closes

In other news, Altegrity Inc. completed its acquisition of Kroll Inc. from Marsh & McLennan Cos. Inc. in an all-cash transaction valued at $1.13 billion, according to a news release.

To help fund the transaction, Altegrity got a new $550 million term loan add-on (B1/B+) due in 2015 that is priced at Libor plus 600 bps with a 1.75% Libor floor and was sold at an original issue discount of 98.

The term loan includes 101 soft call protection for one year.

Goldman Sachs acted as the lead bank on the deal.

Altegrity, a Providence Equity Partners portfolio company, is a Falls Church, Va.-based screening and security services company. Kroll is a New York-based risk consulting company.

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