Consolidated Communications increases term loan B by $40 million, decreases bond offering

By Sara Rosenberg

New York, April 2 - Consolidated Communications Inc., like a few other deals recently, decided to upsize its credit facility by $40 million, adding the extra funds to the institutional term loan and downsizing its bond offering by the same amount on Friday.

The 71/2-year term loan B is now sized at $315 million, compared to initial sizing of $275 million, according to an informed source. The tranche, which is priced with an interest rate of Libor plus 275 basis points, is oversubscribed, the source added.

Consolidated Communications' now $467 million credit facility (B1/B+) also contains a $30 million six-year revolver with an interest rate of Libor plus 250 basis points and a 50 basis points commitment fee, and a $122 million six-year term loan A with an interest rate of Libor plus 250 basis points.

Citigroup and Credit Suisse First Boston are joint lead arrangers and joint bookrunners on the deal, with Citigroup acting as administrative agent, CSFB acting as syndication agent and Deutsche Bank acting as documentation agent.

Proceeds from the credit facility will be used for acquisition financing.

Consolidated Communications is a Mattoon, Ill., provider of voice and data communication services.

CACI books may close Monday

CACI International Inc.'s proposed $550 million credit facility (Ba2/BB) is apparently going very well as talk has surfaced that the books on the term loan B may shut down on Monday as more than $700 million in commitments have already been received, making the tranche about two times oversubscribed, less than a week after syndication began, according to a fund manager.

"[There's] no [definitive] word on a price flex but I would guess that's coming," the fund manager said. "I can't imagine it goes below 175 but 200 sounds more likely. I was told to think of it in the Libor plus 200 kind of range."

The $350 million seven-year term loan B is currently priced with an interest rate of Libor plus 225 basis points.

A number of factors were previously cited as positive for this deal including, CACI being a good business that appears like it's worth a lot of cash, decent credit ratings, low total and senior leverage of 2.9 times, and high interest coverage of over eight times.

CACI's facility also contains a $200 million five-year revolver with an interest rate of Libor plus 225 basis points and a 50 basis points undrawn fee.

Banc of America Securities LLC is the lead bank on the deal.

Proceeds will be used to finance the $415 million cash acquisition of American Management System Inc.'s Defense and Intelligence Group.

Closing on the acquisition is expected to take place by May and is conditioned on CGI Group Inc.'s successful completion of a tender offer for all of the outstanding shares of AMS for $19.40 per share or $858 million. The transactions are also subject to regulatory and government approvals.

Assuming the transaction is consummated in May, CACI estimates the acquisition of the Defense and Intelligence Group will add about $275 to $285 million to its fiscal year 2005 revenues and incremental earnings per share of approximately $0.14 to $0.17. The EBITDA margin for DIG in fiscal year 2005 is expected to be 15% to 17%, according to a company news release.

During a conference call discussing the acquisition that took place earlier in the month, the company projected pro forma debt at June 30 of $415 million, pro forma debt/last-12-months EBITDA of 2.6 times at June 30, pro forma cash of $20 million and available borrowing capacity of $135 million under the new credit facility at June 30.

CACI is an Arlington, Va., provider of IT and network solutions. The Defense and Intelligence Group is a Fairfax, Va., provider of business management solutions to the U.S. government.

Polymer gets orders

Polymer Group Inc.'s bank meeting went very well on Friday, according to a market source, as orders have already begun to flow into the books ahead of the April 20 commitment deadline.

The $475 million credit facility consists of a $50 million revolver talked at Libor plus 300 basis points, a $225 million term loan B talked at Libor plus 325 basis points and a $200 million second lien term loan C talked at Libor plus 525 basis points.

Both term loans are being offered at par. Upfront fees on the revolver are 1.5 points for a commitment of $15 million and one point for a commitment of $10 million, the source said.

Citigroup is the lead bank on the deal that will be used to refinance existing debt.

Charter expected to get done

Charter Communications Inc.'s newly launched $6.5 billion credit facility is expected to be successful by some as trading levels in the secondary on the company's existing bank debt have remained near the par level with no activity taking place on the name whatsoever, according to a trader.

"I don't think it trades anymore," a trader said regarding Charter's existing bank debt. "It sounds like people think it will get done."

On Friday Charter Communications Operating LLC held a bank meeting for its proposed $6.5 billion credit facility consisting of a $1.5 billion revolver, a $2 billion term loan A and a $3 billion term loan B with price talk of Libor plus 325 basis points.

JPMorgan and Bank of America are the lead banks on the deal, with JPMorgan listed on the left.

Charter Operating expects to use additional borrowings under the amended credit facilities, together with anticipated proceeds from a $1.5 billion senior second lien notes offering, to refinance the bank debt of its subsidiaries, CC VI Operating Co. LLC, Falcon Cable Communications LLC, and CC VIII Operating LLC, all as one concurrent transaction.

Upon completion of this transaction, Charter Operating's outstanding debt is expected to be approximately equal to the outstanding credit facility debt of Charter Operating and its subsidiaries immediately prior to this transaction. One of the principal benefits of the transaction would be to extend about $8 billion of the consolidated debt maturities currently scheduled to be due prior to 2009. The company is also expected to retain more than $1 billion of unused availability under the amended facilities at closing, according to the release.

Once definitive details emerged on the St. Louis cable company's proposed refinancing transaction earlier in the week, its existing term loan B was quoted at 99½ bid, 99 7/8 offered and its existing term loan A was quoted at 99¼ bid, 99¾ offered.

Astoria Energy restructured

Astoria Energy LLC's project financing facility was reworked increasing the total deal size to $700 million from $690 million, decreasing the size of the first lien term loan and adding a second lien term loan, according to a syndicate document.

The deal now consists of a $500 million eight-year first lien term loan (Ba3/B+) with price talk of Libor plus 500 to 525 basis points and a $200 million second lien term loan with price talk of Libor plus 887.5 basis points.

Originally, when the deal was launched via conference call on March 26, it was structured as a $690 million eight-year term loan B. Although the syndicate never confirmed it, some sources placed price talk on the tranche at Libor plus 450 basis points.

Credit Suisse First Boston is the lead bank on the deal.

Astoria Energy is a subsidiary of SCS Energy LLC, a Concord, Mass., electric company.

Caribbean Restaurants tranches shuffle

Caribbean Restaurants Inc.'s proposed credit facility also underwent some changes, resulting in a decrease of the total size of the deal to $260 million from $262 million. Included in the changes was a $25 million increase in the size of the tem loan A, a $27 million decrease in the second lien term loan and an increase in pricing on the second lien term loan.

The facility now consists of a $150 million five-year term loan A (B2/B+) with an interest rate of Libor plus 300 basis points, an $80 million six-year second lien term loan (B3/B-) with an interest rate of Libor plus 650 basis points and a $30 million five-year revolver (B2/B+) with an interest rate of Libor plus 300 basis points and a commitment fee of 50 basis points, according to a syndicate document.

When the deal was originally launched, the term loan A was sized at $125 million, the second lien term loan was sized at $107 million and the second lien term loan was priced at Libor plus 500 basis points.

The revolver has been left unchanged throughout syndication.

Credit Suisse First Boston and Wachovia are the joint lead arrangers and bookrunners on the deal, with CSFB acting as administrative agent and Wachovia acting as syndication agent.

Proceeds are being used by the operator of Burger Kings in Puerto Rico for a dividend recapitalization.

Allied Waste closes

Allied Waste North America Inc., a wholly-owned subsidiary of Allied Waste Industries Inc., closed on its new $150 million term loan D due 2010. JPMorgan and Citigroup were the lead banks on the deal.

The tranche is priced with an interest rate of Libor plus 250 basis points, 25 basis points lower than the company's other outstanding term loans, and contains call protection of 101 in year one.

Proceeds from the new term loan will be used to help fund the cash tender offer for Allied Waste North America Inc.'s $1 billion 10% senior subordinated notes due 2009.

In addition, Allied Waste North America successfully amended its senior credit facility to allow for the issuance of up to $1.1 billion of debt, of which up to $500 million may consist of senior secured debt and the remainder of which will be senior unsecured debt, according to a company news release. Proceeds from the transactions would be used to fund the tender offer.

Furthermore, the amendment allows Allied Waste North America to use its revolver and/or cash flows from operations to redeem the remaining $50 million of its 7 7/8% senior secured notes due 2009 at the redemption price of 103.9375.

Allied Waste is a Scottsdale, Ariz., waste services company.

Renal Care closes

Renal Care Group Inc. completed its acquisition of National Nephrology Associates Inc. and as part of the transaction assumed National Nephrology's 9% senior subordinated notes due 2011, according to a company news release.

To help fund the acquisition, Renal Care got a new $475 million five-year credit facility consisting of a $325 million term loan with an interest rate of Libor plus 150 basis points and a $150 million revolver with an interest rate of Libor plus 150 basis points.

Bank of America was the lead bank on the deal by the Nashville, Tenn., specialized dialysis services company.

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