Riverwood International holds successful bank meeting; secondary paper trades at normal levels

By Sara Rosenberg

New York, April 5 - Primary activity in the bank loan market was relatively scarce on Friday, according to market professionals, making the big news of the day Riverwood International Corp.'s bank meeting, which was held via a conference call, according to a source close to the deal. The secondary market did experience some trading activity in which most paper traded at usual levels.

Riverwood International's bank meeting on Friday concerned a new $250 million senior secured term loan that is an additional tranche to the company's already existing credit facility. Deutsche Bank and JPMorgan Chase are the key banks in the deal.

According to a syndicate source, the bank meeting was a success and the new loan is expected to be, at the very least, fully subscribed.

"I would presume that they will at least fill all their orders," the source said, adding that the deal "should be highly oversubscribed. If you can find deals and get them to market, they do really well."

The new loan, which matures on March 31, 2007, has an interest rate of Libor plus 250 basis points and was priced at par, according to the syndicate source. Amortization will be in semi-annual installments of $1.25 million, with $1.25 million due in 2002 and $2.5 million due in each of 2003, 2004, 2005 and 2006. Proceeds from the new credit facility will by used in conjunction with borrowings under the current revolver to redeem $250 million 10¼% senior notes that are due in 2006 and to pay the call premium, fees and expenses associated with the transaction which Riverwood estimates at $12 million. Assets of the Riverwood Group are being used to secure the loan.

In secondary activity, paper traded at pretty consistent levels, according to a market professional. Wyndham International Inc. and Nextel Communications Inc. were trading at par during business hours on Friday, the market professional said.

Adelphia Communications Corp. "traded in the 96s", according to the professional. He went on to explain that the company's bank debt is stabilizing, however, he added, "it didn't go that low" to begin with since news of off-balance sheet accounting broke the other week.

Overall, the secondary has been relatively inactive this week, the market professional said. "Most people are repositioning their portfolios and doing their reporting this week," he concluded.

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