Jarden trades above offer price; LCDX, cash up; RadNet pulls deal; Woodstream mulls changes

By Sara Rosenberg

New York, Aug. 8 - Jarden Corp.'s new term loan saw its first day of trading on Wednesday at levels that were higher than the discounted price offered to investors during a recent one-day syndication, and LCDX and cash were both higher as more buyers stepped in.

In other news, RadNet Inc. pulled its credit facility from market and instead will be working on some add-ons to its existing facility, and Woodstream Corp. is considering revisions to its deal that may include a downsizing, higher pricing and an original issue discount.

Jarden's new $700 million incremental term loan B (Ba3/BB-) traded around on Wednesday at levels that were better than the offer price investors were given during a quick one-day sell off, according to a market source.

The term loan was quoted at 98¼ bid, 98¾ offered, the source said, adding that "today was the first day there was a market in it."

On Tuesday, lead bank Lehman Brothers held a one-day syndication of the loan at a discount of 973/4.

The term loan is priced at Libor plus 250 basis points. It does not carry any call protection.

The loan was said to have sold very well, with orders even having to be turned down, the source added.

Last week, Jarden pulled the term loan from the primary market because of poor conditions, with the intention being that it would be funded by the lead bank, which would then try to sell some of it down at a later time - a move that was successfully completed before the deal actually funded on Wednesday.

In connection with pulling the term loan from market, the company withdrew its amendment request that would have, among other things, repriced the existing institutional term loan, currently at Libor plus 175 bps, in line with the new term loan. Lenders were going to be paid a 25 bps amendment fee.

The amendment was not necessary for the company to get the incremental term loan debt because it has room under the accordion feature in the existing credit agreement for the funding, which is what Jarden is now using.

Prior to being pulled, the incremental term loan B was being talked at Libor plus 250 bps, with 101 soft call protection for one year and an original issue discount of 993/4.

During syndication, the term loan had been upsized from $500 million after a $400 million ABL revolver that was being talked at Libor plus 125 bps, with a 25 bps unused fee, was eliminated from the capital structure, pricing had been lifted from original talk of Libor plus 200 bps and the soft call and discount had been added.

Because the ABL revolver didn't get done, the company's existing $200 million revolver is staying in place as is, instead of being taken out.

Proceeds from the new term loan B are being used to fund the acquisition of K2 Inc. and to repay about $316 million of K2 debt.

Under the terms of the agreement, Jarden is paying $10.85 in cash and 0.1086 of a share of Jarden common stock for each share of K2 common stock.

Jarden is a Rye, N.Y., provider of niche consumer products used in and around the home. K2 is a Carlsbad, Calif., designer, manufacturer and distributor of sporting equipments and recreational products.

LCDX, cash stronger

LCDX and the cash market in general were both better on Wednesday as a lot of buyers were seen coming in to the secondary, according to traders.

The index went out around 95.85 bid, 96.10 offered, up from Tuesday's levels of 95.25 bid, 95.50, traders said.

And the cash market was said to be better by at least half a point, traders continued.

For example, Tribune Co., a Chicago-based media company, saw its term loan B end the session at 93 bid, 94 offered, up from previous levels of 92 bid, 93 offered, one trader remarked.

Thomson Learning, a Stamford, Conn.-based higher education, careers and library reference company, saw its term loan B end at 96 bid, 96½ offered, up from previous levels of 95¼ bid, 96¼ offered, another trader remarked.

Coffeyville Resources LLC, a Kansas City, Kan.-based supplier of petroleum and nitrogen fertilizer products, saw its term loan and letter-of-credit facility strip rise to 95½ bid, 96½ offered from prior levels of 95 bid, 96 offered, another trader added.

On Wednesday, Standard & Poor's downgraded Coffeyville's credit facility rating to B- from B+ due to an uncertain credit market and potential operating issues.

However, because Moody's Investors Service had already downgraded the credit facility on Friday to Caa1 from B3, people were kind of expecting the S&P downgrade, the trader added.

RadNet cancels deal

RadNet decided to remove its $445 million senior secured credit facility (B2/B) from market, being that the transaction was a "best efforts" deal anyway, and will now instead get $35 million of tack-on debt through an amendment, according to a market source.

The pulled credit facility consisted of a $45 million revolver and a $400 million term loan, with both tranches talked at Libor plus 350 bps.

Proceeds were going to be used to refinance substantially all of the company's existing debt and to provide liquidity and working capital for future expansion.

"It's temporarily postponed. They'll probably do it later when the market stabilizes," the source remarked.

Meanwhile, in place of the new facility, the company has decided to seek $35 million in add-ons via an amendment to its existing credit facility, with proceeds going toward strategic initiatives, including acquisitions and/or expansions.

The incremental debt is comprised of a $25 million first-lien term loan add-on and a $10 million revolver add-on, with pricing on both tranches set at Libor plus 350 bps, in line with existing spreads, the source added.

GE Capital was acting as the lead bank on the pulled credit facility and is the lead on the add-ons.

RadNet is a Los Angeles-based provider of diagnostic imaging services through a network of fully owned and operated outpatient imaging centers.

Woodstream contemplates revisions

Woodstream is thinking about making a number of modifications to its credit facility, including downsizing the term loan, lifting pricing on all tranches and adding an original issue discount to the term loan, according to sources.

Under consideration is reducing the seven-year term loan size to $143.75 million from $200 million, sources said.

In addition, pricing guidance on the $65 million six-year revolver (size unchanged) and the term loan may move to Libor plus 350 bps to 400 bps from current guidance of Libor plus 275 bps to 300 bps, sources continued.

GE Capital is the lead bank on the deal, which may carry a new total size of $208.75 million, down from $265 million.

Proceeds will be used to refinance debt and to help fund the sale of a minority interest in the company.

If the term loan is downsized, then the amount of subordinated debt would probably increase, sources remarked.

Official word on the changes is not out as of yet, sources added.

Woodstream is a Lititz, Pa., pest control and bird feeding company.

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