Reliant cuts spread; ATP tweaks deal; Talecris second-lien talk; RSC shifts funds, breaks; Peach breaks

By Sara Rosenberg

New York, Nov. 21 - Reliant Energy Inc. revised spreads on its institutional debt, ATP Oil & Gas Corp. retranched its deal while trimming pricing on the second-lien loan, and Talecris Biotherapeutics Inc. came out with price talk on its second-lien term loan that was added to the credit facility structure at the start of this week.

In other news, Rental Service Corp. (RSC) moved some funds around between its asset-based tranches, while keeping the overall size of the deal unchanged, and then proceeded to free the deal for trading.

Also breaking for trading on Tuesday was Peach Holdings Inc., with its term loan B quoted atop par.

Reliant Energy lowered pricing on its $400 million institutional term loan and $300 million prefunded synthetic letter-of-credit facility, and added a step down to the two tranches, according to a market source.

The term loan and letter-of-credit facility are now priced at Libor plus 237.5 basis points, down from original price talk at launch of Libor plus 250 bps, the source said.

In addition, pricing on the two tranches can step down to Libor plus 212.5 bps if corporate credit ratings of B1/B+ are achieved, or if leverage is less than 4.0 times and corporate credit ratings are either B/B2 or B1/B+, the source added.

Reliant's $1.4 billion senior secured credit facility (NA/NA/BB-) also includes a $700 million revolver. Pricing on the revolver was heard to be left unchanged at Libor plus 250 bps.

The books on the deal were closed at 5 p.m. ET on Tuesday.

Deutsche Bank, Bank of America and JPMorgan are the lead banks on the deal, with Deutsche the left lead on the term loan and letter-of-credit facility and Bank of America the left lead on the revolver.

Proceeds will be used to refinance the company's $1.7 billion revolver, $531 million of term loan debt and $450 million receivables securitization facility.

Reliant Energy is a Houston-based provider of electricity and energy services.

ATP retranches, cuts second-lien spread

ATP Oil & Gas reworked its $550 million of new debt by increasing the first-lien term loan add-on by $200 million, decreasing the second-lien term loan tranche by the equivalent amount and lowering pricing on the second-lien paper, according to a market source.

Under the revised structure, the first-lien term loan add-on is now sized at $375 million, up from an original size of $175 million, the source said. This paper is priced in line with original talk at Libor plus 350 bps, and the existing first-lien term loan debt is being repriced at Libor plus 350 bps from Libor plus 325 bps.

Meanwhile, the second-lien term loan is now sized at $175 million, down from an original size of $375 million, and pricing on the tranche was reverse flexed to Libor plus 475 bps from original talk at launch of Libor plus 500 bps, the source added.

The second-lien term loan, which matures six months behind the first lien, contains, and has since launch, call protection of 102, stepping down by 50 bps every six months.

Credit Suisse is the lead bank on the debt that will be used to repay the company's $375 million preferred at 102.5 and for capital expenditures.

Syndication on the deal wrapped up on Tuesday and it is expected to allocate and close on Wednesday.

ATP is a Houston-based natural gas and oil company.

Talecris second-lien talk emerges

Price talk on Talecris Biotherapeutics' newly added $330 million second-lien term loan (B3/B+) surfaced, with the spread being Libor plus 650 bps, according to a market source.

As was previously reported, this second-lien tranche was added to the capital structure on Monday, in conjunction with a downsizing of the first-lien term loan B (B2/BB-) to $700 million from a most recent size of $1.2 billion and from an original size at launch of $1.05 billion.

Pricing on the term loan B is talked at Libor plus 350 bps. Earlier on in the syndication process, the price talk had been revised upwards from Libor plus 300 to 325 bps.

The company's $1.355 billion credit facility also includes a $325 million asset-based revolver that is unrated. Originally, the revolver was launched with a size of $400 million, and then it was heard to be sized at $250 million before being changed again to its current size.

Morgan Stanley and Goldman Sachs are the lead banks on the deal that will be used to fund a dividend payment, refinance existing debt and fund an acquisition.

Talecris is a Research Triangle Park, N.C., provider of lifesaving and life-enhancing plasma-derived therapeutic proteins. The company is the former Blood Plasma Business of Bayer AG.

RSC fine-tunes structure, breaks

Rental Service reworked the breakdown of its asset-based tranches, shifting $150 million in funds from the asset-based term loan and into the asset-based revolver, and then freed the deal for trading, according to a market source.

With the changes, the asset-based term loan (Ba2/BB-) is now sized at $250 million, down from an original size of $400 million, and the asset-based revolver (Ba2/BB-) is now sized at $1.45 billion, up from an original size of $1.3 billion, the source said.

Pricing on both asset-based tranches remained unchanged at Libor plus 175 bps, the source added.

Rental Service's $2.83 billion credit facility also includes a $1.13 billion second-lien term loan (B3/B-) priced at Libor plus 350 bps. This past Friday, pricing on the second-lien loan had been reverse flexed from original talk at launch of Libor plus 375 bps due to the strong market reception.

On Tuesday afternoon, the credit facility broke for trading, with the second-lien loan quoted at par ¾ bid, 101 offered, according to traders.

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

Proceeds from the credit facility, along with $620 million of senior notes and $585 million of equity, will be used to help fund the acquisition of Rental Service by Ripplewood Holdings and Oak Hill Capital Management.

The eight-year senior notes priced last Friday at par to yield 9½%. Price talk on the notes had originally been in the 9¾% area.

The sponsors are buying Rental Service from Atlas Copco for $3.4 billion, plus up to $400 million of additional consideration in the form of notes, based on the achievement of profitability targets through 2008. Atlas Copco will retain a 14.5% stake in the company.

Scottsdale, Ariz.-based Rental Service is the second-largest heavy equipment rental company in the United States.

Peach frees to trade

Also hitting the secondary during Tuesday's session was Peach Holdings' credit facility, with the $300 million term loan B quoted at par ¼ bid, par ½ offered, according to a trader.

The term loan B is priced at Libor plus 375 bps and is non-callable for one year, then at 102 in year two and 101 in year three. During syndication, pricing on the loan was flexed up from original talk at launch of Libor plus 300 to 325 bps with the addition of the call protection.

Peach's $335 million senior credit facility (B2/B) also includes a $35 million revolver with a 50 bps unused fee.

Bear Stearns acted as the lead bank on the deal that was used to fund the acquisition of Peach by Orchard Acquisition Co., an affiliate of DLJ Merchant Banking Partners. The acquisition closing was announced on Tuesday as well.

Peach is a Boynton Beach, Fla., specialty factoring company that purchases high-quality deferred payment obligations.

Secondary softer

The secondary market as a whole felt weaker on Tuesday, with names like Georgia-Pacific Corp., Idearc and Eastman Kodak Co. seen trading lower, according to a trader.

Georgia-Pacific, an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals, saw its term loan B close the day at par 3/8 bid, par 5/8 offered, down from previous levels of par ½ bid, par ¾ offered, the trader said.

Idearc, the print and internet yellow pages directories business that was spun off from Verizon Communications Inc., saw its term loan B close the day at par 3/8 bid, par 5/8 offered, down from previous levels of par ½ bid, par ¾ offered, the trader continued.

And, Kodak, a Rochester, N.Y.-based digital imaging products, services and solutions company, saw its term loan B close the day at par ¼ bid, par ½ offered, down from previous levels of par 3/8 bid, par 5/8 offered, the trader added.

NRG closes

NRG Energy Inc. closed on its new $500 million senior secured synthetic letter-of-credit facility add-on that is priced at Libor plus 200 bps, in line with current pricing on the company's existing $1 billion synthetic letter-of-credit facility.

However, a step up to Libor plus 225 bps was added to the new and existing synthetic letter-of-credit facility debt that would become effective if it's downgraded by Moody's Investors Service or Standard & Poor's.

Merrill Lynch and Morgan Stanley acted as the lead banks on the deal, with Merrill Lynch the left lead.

Proceeds from the additional synthetic letter-of-credit facility funds, along with $1.1 billion of unsecured debt and cash on hand, were used to support the company's incremental hedging activity.

The add-on is part of an amendment to the company's credit facility that also reset the restricted payments basket to $500 million and permits the incurrence of debt to fund its Hedge Reset program.

NRG is a Princeton, N.J.-based wholesale power generation company.

Winn-Dixie closes

Winn-Dixie Stores Inc. closed on its new $725 million exit financing five-year revolving credit facility that is priced at Libor plus 125 to 225 bps based on availability.

Wachovia Bank acted as the lead bank on the deal that was used to replace the company's debtor-in-possession credit facility and increase cash availability.

Winn-Dixie is a Jacksonville, Fla., food retailer.

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