United Industries breaks above 101, Charter rebounds as some paper clears out

By Sara Rosenberg

New York, April 22 - United Industries Corp.'s new $510 million senior credit facility (B1/B+) allocated and broke for trading on Thursday with the institutional tranche hitting plus 101 levels. Meanwhile, Charter Communications Operating LLC new paper, which felt on the heavy side when it first broke on Wednesday, rebounded in Thursday's market.

United Industries' term loan B was quoted at 101 1/8 bid, 101½ offered, according to a trader.

The facility consists of a $330 million U.S. term loan, a $55 million Canadian term loan and a $125 million revolver, all priced with an interest rate of Libor plus 250 basis points.

Bank of America and Citigroup are the lead banks on the deal.

Proceeds will be used to finance the acquisition of The Nu-Gro Corp., which was announced on March 2, 2004, and to redeem United's outstanding preferred stock and the remainder of its outstanding 9 7/8% series B subordinated notes due 2009.

United Industries is a St. Louis manufacturer and marketer of value-oriented products for the consumer lawn and garden care and insect control markets.

Charter rebounds

Charter's $3 billion term loan B was trading just under par, according to a trader. The paper went down to 99¼ bid, 99½ offered upon entering the secondary on Wednesday and then rebounded slightly to 99 5/8 bid, 99 7/8 offered by day's end, according to a different trader, who explained that the paper probably backed up since there's just so much of it out there. This institutional tranche was sold to investors at par during syndication and is priced with an interest rate of Libor plus 325 basis points.

The $2 billion term loan A, which is priced with an interest rate of Libor plus 300 basis points, moved up to trade around 99, according to a trader, compared to Wednesday's quotes of 98½ bid, 98¾ offered.

"There were a few motivated sellers in the A and that cleared out so the A and the B rallied," the trader explained.

Charter's $6.5 billion credit facility also contains a $1.5 billion revolver with an interest rate of Libor plus 300 basis points.

JPMorgan and Bank of America are the lead banks on the St. Louis cable company's deal, with JPMorgan listed on the left.

Proceeds, combined with proceeds from a $1.5 billion senior second lien notes offering, will be used to refinance the bank debt of Charter's subsidiaries, CC VI Operating Co. LLC, Falcon Cable Communications LLC, and CC VIII Operating LLC, all as one concurrent transaction.

Upon completion of this transaction, Charter Operating's outstanding debt is expected to be about equal to the outstanding credit facility debt of Charter Operating and its subsidiaries immediately prior to this transaction. One of the principal benefits of the transaction would be to extend about $8 billion of the consolidated debt maturities currently scheduled to be due prior to 2009. The company is also expected to retain more than $1 billion of availability under the amended facilities at closing, according to the release.

Adesa size shifts

Adesa Inc. restructured its credit facility (Ba2), upping the total size of the deal by $25 million through an increase in its term loan B tranche, a decrease in the size of the term loan A and a decrease in the size of the high-yield bond offering.

More specifically, the term loan B was upsized to $200 million from $150 million, the term loan A was downsized to $175 million from $200 million and the bond offering was downsized to $125 million from $150 million, according to a market source.

Pricing on the facility is unchanged, with the six-year term loan B priced at Libor plus 250 basis points, the five-year term loan A priced at Libor plus 225 basis points and the $150 million five-year revolver (size left unchanged as well) priced at Libor plus 225 basis points.

Upfront fees on the pro rata allocated amount are 62.5 basis points for a $50 million commitment, 50 basis points for a $35 million commitment and 37.5 basis points for a $25 million commitment.

In the end, there never was, nor will there be, a formal launch of the term loan B to institutional investors since there were sufficient commitments on the B loan from pro rata lenders, the source added.

UBS and Merrill Lynch are the joint lead arrangers on the deal, with UBS listed on the left.

Security for the credit facility is expected to be a lien on some of the assets.

Proceeds from the loan combined with proceeds from the senior subordinated notes offering and an initial public offering of Adesa's common stock will be used to help support Adesa's spinoff from Allete Inc.

More specifically, Adesa will replace and repay its existing credit facility, pay a $100 million dividend to Allete, repay $200.2 million of debt owed to unaffiliated third parties and repay all intercompany debt owed to Allete and its subsidiaries, which totaled $136.1 million as of Dec. 31, 2003.

The IPO is expected to be completed in the second quarter of 2004. After the IPO, Allete will own at least 80% of the equity of Adesa. The company anticipates completing the subsequent spinoff within four months of the IPO, according to an Allete news release.

Adesa is a Carmel, Ind., operator of used vehicle and auto salvage auctions.

Revlon launch next week

Revlon Consumer Products Corp., a wholly-owned subsidiary of Revlon Inc., is expected to hold a bank meeting for its proposed $680 million credit facility some time next week, according to a market source, although a specific day has not yet been established.

The facility is expected to consist of a $530 million term loan and a $150 million revolver, a company spokesperson previously revealed to Prospect News. Pricing on the tranches is still to be determined since the syndicate is waiting on ratings, however, some have heard unconfirmed price talk of Libor plus 275 basis points for the term loan floating around the market place, the source said.

JPMorgan and Citigroup are the lead banks on the deal with JPMorgan listed on the left.

Proceeds from the credit facility, combined with proceeds from a proposed $400 million senior unsecured bond offering, will be used to refinance the company's existing credit facility of approximately $312 million and fund tender offers to purchase about $555 million of its notes, consisting of any and all of the $363 million principal amount outstanding of its 12% senior secured notes due 2005, any and all of the $116.2 million principal amount outstanding of its 8 1/8% senior notes due 2006, and any and all of the $75.5 million principal amount outstanding of its 9% senior notes due 2006, according to a company news release.

Successful completion of the credit facility and the bond offering are both conditions of the tender offers.

Revlon anticipates closing on the credit facility in mid-May being that the tender offers and consent solicitation, in the case of the 12% senior secured notes, expire on May 14.

Revlon is a New York-based manufacturer and seller of cosmetics and skin care, fragrances and personal care products.

Sunny Delight early May launch

Sunny Delight Beverages Co. is now expected to come to market with its proposed $375 million credit facility in early May as opposed to toward the end of April, as was previously thought, according to a market source. In fact, as of now, a May 5 bank meeting date has been tentatively set for the U.S. launch, the source added.

UBS is the lead bank on the deal.

The deal will be split into first and second lien term loan facilities, of which about $100 million equivalent will be euro denominated and sold to European institutions.

Specific sizing on the first and second lien tranches has not yet been determined, but the second lien will be much smaller than the first since the second lien market has been becoming more difficult, a source previously told Prospect News.

Proceeds will be used to support J.W. Childs Associates LP's acquisition of the Sunny Delight and Punica juice-based drink businesses from The Procter & Gamble Co. Sunny Delight and Punica currently operate under the company name Sundor Brands Inc. However, once the acquisition is completed the businesses will operate under the name of the Sunny Delight Beverages Co., a freestanding business that will be based in Cincinnati, according to a Proctor & Gamble news release.

Pending regulatory approval, closing of the transaction is expected in the July-September quarter of 2004.

Bucyrus likely June business

Bucyrus International Inc.'s proposed $150 million senior secured credit facility is not expected to hit the bank loan market probably until June, an informed source said. Previously, anticipated timing on the deal's launch was unavailable.

Goldman Sachs Credit Partners LP and GMAC Commercial Finance LLC are the lead banks on the deal.

The facility consists of a $50 million revolver and a $100 million term loan.

Proceeds, combined with expected proceeds of $122.8 million from an initial public offering of its common stock, will be used to redeem all the company's $150 million outstanding 9¾% senior notes due 2007 and repay its existing bank debt.

The existing facility matures Jan. 8, 2005 and carries interest at Libor plus 200 to 225 basis points.

Bucyrus is a South Milwaukee, Wis., manufacturer of surface mining equipment.

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