True Temper breaks for trading with term loan B reaching par ¾ bid, 101 offered

By Sara Rosenberg

New York, March 12 - True Temper allocated and broke for trading on Friday, with some activity taking place in the name as investors were trying to either bulk up their positions or clear out of the paper altogether for a quick profit.

The $110 million seven-year term loan B was quoted at par ¾ bid, 101 offered, with some trades taking place at par 3/4, according to a market participant. During syndication, the paper was originally offered to investors at par.

"Everybody got small allocations," the participant said. "There will probably be quite a few trades on it. Some people are trying to get rid of it and some are trying to get more. With a 250 basis points spread, leverage three times senior, 6½ times total, it may not be worth holding on to it for the 250 coupon."

Allocations on the institutional tranche were expected to be small since talk was that the book was from 2½ to three times oversubscribed. In fact, as a result of the strong demand, the syndicate was able to reverse flex pricing on the term loan B earlier this week to Libor plus 250 basis points from Libor plus 275 basis points.

The $130 million credit facility (B1/B+) also contains a $20 million five-year revolver with an interest rate of Libor plus 250 basis points and a 50 basis points commitment fee.

Credit Suisse First Boston and Anteres are joint lead arrangers and joint bookrunners on the deal.

Proceeds will be used to help support the company's leveraged buyout by management and Gilbert Global Equity Partners from Cornerstone Equity Investors.

True Temper is a Memphis, Tenn., manufacturer of golf shafts and performance sports products for the bicycle, hockey and sporting goods industry.

CalGen gets mixed reactions

Calpine Generating Co. LLC (CalGen), a subsidiary of Calpine Corp., priced its latest offering of a term loan and senior notes on Friday, according to a number of market sources, and as has become par for the course for this refinancing, a number of different rumors and opinions were flying around the marketplace about the deals and how they faired with investors.

"I heard it's a bought deal. Morgan Stanley buys the whole deal and then syndicates it. There's big risk with it being a bought deal. If you get stuck with a lot of it, it's not going to trade up if you keep trying to sell a ton of paper, especially if you couldn't sell it in the first place. So you'll be losing money on this everyday," a trader said. "But, I also heard it's a best efforts deal. I would tend to think it's bought because Calpine needs a specific amount and if they only sell like $800 million then what will Calpine do.

"There are two floaters at ridiculous pricing. I would think the super secured went alright. It's a shady deal," the trader added.

"I heard it's totally done. Totally committed," a second trader said. "It will be distributed on Monday. The term loans are really floating-rate notes. They're public securities so they will be more liquid. It will probably trade in both bank and high-yield markets because you have players from both.

"It was a bought deal. It was a huge chance but it was pretty well pre-sold and they did a fantastic job. Two of the four tranches were oversubscribed and they juggled the other two a little to get it done. I think they switched the sizes a little bit."

The deal contains an $835 million super secured term loan (floating-rate note) due 2009 with an interest rate of Libor plus 375 basis points, a $740 million secured term loan (floating-rate note) due 2010 with an interest rate of Libor plus 575 basis points and a discount of 981/2, a $680 million secured floating-rate note due 2011 with an interest rate of Libor plus 900 basis points and a $150 million third lien fixed-rate note due 2011 priced at 11½%.

On Thursday, the deal was expected to be structured as an $800 million super secured floating-rate loan talked at Libor plus 350 to 375 basis points, an $855 million senior secured floating-rate loan talked at Libor plus 550 to575 basis points, a $550 million secured floating-rate note talked at Libor plus 875 to 900 basis points and a $200 million secured fixed-rate note talked at 11¼% to 11½%, according to sources.

Morgan Stanley is the lead bank on the transactions.

Meanwhile, the Calpine Construction Finance Co. II LLC revolver, which will be refinanced with proceeds from the four tranche transaction, was quoted at 99 bid, basically unchanged from Thursday's closing levels, according to traders.

One trader reported seeing a trade take place at 991/2, although another trader said that there was no activity in the paper since people are just waiting on completion of the refinancing.

Calpine is a San Jose, Calif.-based power company.

Charter up on refi rumors

Charter Communications Inc.'s term loan bank debt was quoted at 99 bid, 99½ offered on Friday, up about a quarter of a point on the day and about a point and a half over the past week, according to a trader.

"There's talk of a refi deal," the trader explained. "I don't know if it's true or not."

Charter is a St. Louis cable company.

The Pantry up since break

The Pantry Inc.'s recently allocated term loan B has moved higher since breaking into the secondary bank loan market this past Wednesday, with levels now seen at 101¼ bid, 101 5/8 offered, compared to a quote of 101¼ offered right after allocations, according to a market source.

The $345 million seven-year term loan is priced with an interest rate of Libor plus 275 basis points. This tranche was reverse flexed by 25 basis points from initial pricing of Libor plus 300 basis points during syndication.

The $415 million senior credit facility (B1/B+), which launched via a bank meeting in mid-February, also contains a $70 million six-year revolver with an interest rate of Libor plus 275 basis points.

Originally, the company anticipated the deal to be sized at $440 million consisting of a $370 million term loan B and a $70 million revolver. But it was later downsized following the pricing of an upsized $250 million offering, from $225 million, of 10-year senior subordinated notes.

Wachovia and Credit Suisse First Boston are the joint lead arrangers on the deal.

Proceeds from the credit facility will be used to refinance the company's existing senior credit facility. The existing deal has a first lien term loan carrying an interest rate of Libor plus 425 basis points with a 1.75% Libor floor and a second lien term loan carrying an interest rate of Libor plus 650 basis points with a 1.5% Libor floor, so this new transaction will result in significantly lower spreads and the removal of Libor floor protection.

The Pantry is a Sanford, N.C., convenience store chain.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.