Western Wireless breaks at below par bid, Freedom Communications breaks around par ½ bid

By Sara Rosenberg

New York, May 13 - Western Wireless Corp.'s $1.5 billion credit facility (B2/B-) allocated and broke for trading on Thursday, with the giant institutional term loan just wrapping around par due to a somewhat weaker wireless sector and a somewhat weaker secondary in general. Also allocating and breaking was Freedom Communications Inc.'s $1.1 billion credit facility, with the term loan B ending the day at around mid-par levels.

Western Wireless' $1 billion seven-year term loan B was quoted at 99 7/8 bid, par 1/8 offered, according to a trader.

"All the wireless credits have been taking it on the chin lately," the trader said. "People are saying that people are worried about roaming revenues declining, which they are. But they knew this three years ago when they signed up so it doesn't make any sense to me."

The term loan is priced with an interest rate of Libor plus 300 basis points, flexed up during syndication from Libor plus 275 basis points.

Western Wireless' $1.5 billion credit facility also contains a $300 million six-year revolver with an interest rate of Libor plus 225 basis points and a $200 million six-year term loan A with an interest rate of Libor plus 225 basis points.

Wachovia and JPMorgan are the lead banks on the deal.

Proceeds will be used to refinance the company's existing senior secured credit facility. The company opted to come to market with new deal due to the current attractive market conditions, a company news release previously explained.

Western Wireless is a Bellevue, Wash., provider of wireless communications services.

Freedom breaks

Freedom Communications' $650 million eight-year term loan B was quoted at par ½ bid, par ¾ offered by evening after reaching levels near 101 when it first entered the secondary, according to a trader.

The bank debt's non-ability to maintain the 101 type levels was attributed by the trader to the low 200 basis points coupon of the paper.

The credit facility (Ba3/BB) also contains a $200 million six-year revolver and a $250 million six-year term loan A, with both pro rata tranches also priced with an interest rate of Libor plus 200 basis points.

Originally, the deal was structured as a $750 million term loan B, $250 million term loan A and a $100 million revolver, but some size shifting took place during syndication.

JPMorgan, Morgan Stanley, Wachovia, Deutsche Bank and UBS are the lead banks on this deal.

Proceeds will be used to help support the company's previously announced recapitalization. In October, the company said that it signed a definitive agreement with Blackstone Communications Partners and Providence Equity Partners to form a new partnership. Under the terms of the agreement, Blackstone and Providence will make a significant investment in the firm and enable continued control by descendents of founder R. C. Hoiles.

Freedom Communications is an Irvine, Calif., diversified media company.

Appleton gets commitments

Appleton Papers Inc.'s proposed $375 million credit facility, which launched via a "well attended" bank meeting on Thursday, saw good market reception with Associated Bank, LaSalle and US Bank committing to the deal at the agent level, a market source said.

The facility consists of a $125 million five-year revolver talked at Libor plus 250 basis points and a $250 million six-year term loan B talked at Libor plus 250 basis points.

On the revolver, for a commitment of $15 million investors get an upfront fee of 62.5 bass points and for a commitment of $10 million investors get an upfront fee of 50 basis points, according to the source.

The commitment deadline is May 27.

Bear Stearns and UBS are the lead banks on the deal, with Bear listed on the left.

The term loan amortizes at a rate of 1% each year with the balance due at maturity.

Total leverage is 3.6x, and senior leverage is 2.5x. The deal is expected to generate low four B ratings.

Proceeds from the credit facility, combined with proceeds from a proposed $150 million senior notes offering and a proposed $200 million senior subordinated notes offering, will be used to repay debt.

On Wednesday, the company announced that it commenced a cash tender offer for its $199.958 million of outstanding 12½% senior subordinated notes due 2008. The tender offer expires on June 9.

Appleton is an Appleton, Wis., manufacturer and distributor of paper and paperboard products.

Nextel Partners increase

Nextel Partners Inc. is considering increasing its term loan to $700 million from $575 million and not coming to market with a high-yield bond offering, according to an informed source.

The term loan is priced with an interest rate of Libor plus 250 basis points.

JPMorgan and Morgan Stanley are the lead banks on the deal, with JPMorgan listed on the left.

Proceeds will be used to fund a tender offer announced for $356.95 million of the company's 11% senior notes due 2010. The tender offer expires May 25.

Nextel Partners is a Kirkland, Wash.-based wireless communications company.

Tower books close

Tower Automotive Inc. closed the books on its incredibly well received proposed $565 million credit facility on Thursday afternoon, with the syndicate said to be still fielding calls from interested parties on the deal throughout the day, according to a market source.

By Thursday morning, the second lien term loan was reported as being "an absolute blowout" with the tranche "multiple times oversubscribed" and the first lien term loan was "amply oversubscribed," the market source said.

The fact that the deal went so well is really no surprise being that the second lien term loan was already significantly oversubscribed prior to the May 6 bank meeting that was meant to officially launch the credit facility to retail investors and the first lien was once covered prior to the meeting as well.

Previously the company has really only tapped commercial lenders for its credit facilities. This time around, however, they opted to approach institutional investors, which was obviously a good choice based on the amount of support that the deal has received.

In fact, demand was so strong for the $140 million 51/2-year second lien synthetic letter-of-credit facility (B2/B-) that the syndicate was able to reverse flex pricing to Libor plus 700 basis points from Libor plus 750 basis points this past Tuesday, the source added.

The $375 million five-year first lien term loan B (B1/B+) is still priced with an interest rate of Libor plus 425 basis points that the syndicate went out with at launch.

Tower Automotive's credit facility also contains a $50 million five-year revolver (B1/B+) with an interest rate of Libor plus 425 basis points.

Morgan Stanley and JPMorgan are the lead banks on the deal, with Morgan Stanley listed on the left.

Leverage through the first lien is 1.8x, and leverage through the first and second lien is 2.3x.

Proceeds, combined with proceeds from a proposed $110 million principal amount of convertible senior debentures offering, will be used to refinance the existing credit facility eliminating near-term amortization pressure and refinance the 5% convertible subordinated notes due Aug. 1.

Tower Automotive is a Novi, Mich., designer and producer of structural components and assemblies used by automotive original equipment manufacturers.

Pegasus up on dismissed claim

Pegasus Media & Communications Inc.'s term loan D headed higher on news regarding a court decision on the DirecTV case that was viewed by the market as favorable to Pegasus, according to a trader.

The term loan D was quoted at 102 bid, 103 offered, up about half a point on the day, the trader said. Pegasus Satellite Communications Inc.'s bank debt, however, was unchanged at 98½ bid, 99½ offered, the trader added.

On Thursday, parent company Pegasus Communications Corp. announced that the web site of the U.S. District Court, Central District of California, reported that Judge Lourdes Baird has dismissed DirecTV's claim against Pegasus Satellite that Pegasus' right to exclusive distribution of DirecTV services will expire when DirecTV's first satellite, DBS-1, is removed from service. Pegasus believes that the term of its right to exclusive distribution is tied to satellites expected to continue in service until 2016 or beyond, the release explained.

Furthermore, the web site also reported that Judge Baird has dismissed Pegasus' claims against DirecTV, terminating further proceedings between the two parties, the release added.

Pegasus is a Bala Cynwyd, Pa., diversified media and communications company.

Energy weakness remains

There was continued weakness in the energy sector on Thursday with all energy names said to be "off a touch" in the secondary bank market, according to a trader.

For example, Calpine Generating Co. LLC's second lien term loan was quoted down about a point at 89½ bid, 90½ offered, the trader said.

CalGen is a wholly owned subsidiary of Calpine Corp., a San Jose, Calif., power company.

Another example is Reliant Energy Inc., whose bank debt was down just a touch with the term loan quoted at 97 3/8 bid, 97 7/8 offered, compared to Wednesday's trading level of 973/4, according to a different trader.

Reliant is a Houston electricity and energy services company.

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