Travelport rises with IPO talk; DynCorp moves deadline; Willbros still working; Oxford upsizes

By Sara Rosenberg

New York, June 25 - Travelport Holdings Ltd.'s bank debt was a little stronger during the quiet summer Friday trading session on chatter that the company may be planning an initial public offering in the United States.

Over in the primary market, DynCorp International Inc. moved up the commitment deadline on its proposed credit facility because of the strong amount of interest that the transaction has received since launching a little over a week ago.

Also, Willbros Group Inc. is still in the process of determining what type of call protection it should offer on its term loan, Oxford Resource Partners LP increased the size of its credit facility, and Precision Drilling Corp.'s amendment proposal was getting a good response from lenders ahead of Friday's consent deadline.

Travelport gains ground

Travelport's strip of term loan and letter-of-credit facility debt headed higher in trading as rumors circulated that the company is looking at an initial public offering of shares in the United States to replace the London offering that was canceled earlier this year, according to a trader.

The strip of bank debt was quoted at 93¾ bid, 94¾ offered, up from 93¼ bid, 94¼ offered, the trader said.

"Not new news. Just coming to the surface again, especially with them wanting to list in the States instead of in London," the trader remarked.

In the beginning of this year, the company had announced plans to raise $1.775 billion through an initial public offering of shares in the United Kingdom, but this transaction was later pulled as a result of market conditions.

Travelport expected to delever with IPO

If Travelport does go ahead with an initial public offering, people are anticipating that proceeds will be used to reduce debt - as was the plan with the pulled London offering.

Like before, some think that the company's more expensive debt would be taken out first, such as its bonds, its PIK loan and maybe its term loan C, the trader remarked.

Regarding the other bank borrowings, including the strip of term loan and letter-of-credit facility, market players are unsure as to how much, if any, of that debt would be paid down.

However, the offering would still be a positive for the bank debt since it would be a deleveraging event if other debt is repaid, the trader explained.

The trader added that it's hard to really know what to expect until the size of the initial public offering is revealed.

Travelport is a Parsippany, N.J.-based travel distribution services company.

DynCorp shutting books early

Moving to new deal happenings, the syndication of DynCorp's senior secured credit facility is coming along so well that books will now be closing at the end of business on Monday, which is ahead of the original Wednesday commitment deadline, according to a market source.

The $715 million facility consists of a $565 million term loan and a $150 million revolver.

Price talk on the term loan is Libor plus 475 basis points with a 1.75% Libor floor and an original issue discount of 97 to 98.

Bank of America, Citigroup, Barclays Bank and Deutsche Bank are the lead banks on the deal, with Bank of America the left lead.

Proceeds will be used to help fund the buyout of the company by Cerberus Capital Management LP for $17.55 in cash per share. The transaction is valued at about $1.5 billion, including the assumption of debt.

DynCorp plans notes

Other financing for the acquisition of DynCorp will come from $455 million of senior unsecured notes and $591.6 million in equity.

The roadshow for the notes, which are backed by a commitment for a $455 million senior unsecured term loan, began on June 21 and is expected to wrap up on Monday.

Closing is expected in the third or fourth quarter, but could close as early as the end of June, subject to customary conditions, including DynCorp stockholder approval and regulatory approvals.

On May 27, the company received notice that early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act was granted, and a special meeting for stockholders to vote on the transaction is set for June 29.

DynCorp is a Falls Church, Va.-based government services provider in support of U.S. national security and foreign policy objectives.

Willbros determining call premiums

Willbros Group is still working on figuring out the call protection for its $300 million four-year term loan B, according to a market source.

The term loan B is being talked at Libor plus 750 bps with a 2% Libor floor and an original issue discount in the 97 to 98 area.

When the deal was first launched in early April, the B loan was sized at $300 million and was talked at Libor plus 450 bps to 500 bps with a 2% Libor floor and an original issue discount of 98 to 981/2. Also, pricing was able to step down by 50 bps after an interim period.

The loan, however, was not getting done at those terms, so the company decided to leave price talk unchanged but downsize the term loan B to $50 million and approach the high-yield market with a $250 million six-year senior secured second-lien notes offering that was talked in the 12% area.

The notes were then discarded as a result of weakness in the high-yield market, resulting in the loan going back to its original size with pricing increased.

Willbros getting revolver, too

Willbros' $475 million senior credit facility also includes a $175 million three-year revolver that is priced in line with original talk at Libor plus 425 bps, with a step-down to Libor plus 375 bps after an interim period.

Upfront fees on the revolver were offered anywhere from 112.5 bps to 137.5 bps based on commitment size.

Ratings on the facility when it was initially sized at $475 million were B2/BB-, and when the deal was downsized and the bonds were introduced, the ratings were revised to Ba3/BB+.

Now that the deal is back to its original size, Moody's returned to its B2 rating and Standard & Poor's returned to its BB- rating.

Crédit Agricole Corporate and Investment Bank and UBS Securities are the joint bookrunners on the company's term loan B, and they are asking for commitments by the end of the week. Crédit Agricole is the bookrunner on the revolver.

Willbros buying InfrastruX

Proceeds from Willbros' credit facility will be used to help fund the acquisition of InfrastruX Group Inc., a Seattle, Wash.-based provider of electric power and natural gas transmission and distribution infrastructure services.

Wilbros will be paying stockholders of InfrastruX cash of $360 million and 7.9 million of new Willbros shares.

In addition, InfrastruX stockholders will be eligible for contingent earn-out payments of up to $125 million.

The company is targeting to close on the acquisition by the end of this month.

Willbros is a Houston-based independent contractor for the oil, gas, power, refining and petrochemical industries.

Oxford tweaks deal

Oxford Resource Partners upsized its credit facility to $175 million from $150 million, while leaving pricing unchanged at Libor plus 425 bps with a 1% Libor floor, according to a market source.

Under the changes, the facility now consists of a $115 million three-year revolver, up from $100 million, and a $60 million four-year term loan A, up from $50 million, the source said.

The term loan A was offered to investors with an original issue discount of 983/4.

Citigroup and Barclays are the lead banks on the deal that will be used to refinance existing debt, for working capital and other general partnership purposes and for capital expenditures

The credit facility is in connection with the company's initial public offering of 8.75 million common units.

Oxford Resource Partners is a Columbus, Ohio-based producer of coal.

Precision Drilling going forward

Precision Drilling's proposed amendment was "going very well" ahead of Friday's consent deadline and the transaction is expected to "go forward as launched," according to a market source.

Under the proposal, the company asked to lower pricing on its term loan B-1 and term loan B-2 to Libor plus 500 bps with a 1.75% Libor floor.

By comparison, the term loan B-1 is now priced at Libor plus 600 bps and the term loan B-2 is priced at Libor plus 800 bps, and both tranches include a 3.25% Libor floor.

Consenting lenders will get a 50 bps fee.

RBC is the administrative agent on the deal.

Precision Drilling is a Calgary, Alberta-based provider of energy services to the oil and gas industry.

Citgo closes

Citgo Petroleum Corp. closed on its $1.8 billion senior secured credit facility (Ba2/BB+/BB+), consisting of a $750 million three-year revolver, a $350 million five-year term loan B and a $700 million seven-year term loan C, according to a news release.

Pricing on the revolver is Libor plus 450 bps with a 62.5 bps unused fee, pricing on the term loan B is Libor plus 600 bps and pricing on the term loan C is Libor plus 700 bps. Both term loans carry a 2% Libor floor and were sold at an original issue discount of 98.

The term loan B has call protection of 102 in years one and two, and 101 in year three, and the term loan C is non-callable for two years, then at 102 in year three and 101 in year four.

BNP Paribas, RBS and UBS acted as the lead banks on the deal that was used to help refinance an existing revolver, term loans and variable industrial revenues bonds and to provide liquidity.

Citgo is a Houston-based refiner and marketer of transportation fuels, lubricants, petrochemicals and other industrial products.

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