Silgan facility launches, oversubscribed; Calpine ups rates on $600 million term B

By Sara Rosenberg

New York, April 25 - Silgan Holdings Inc. held a bank meeting Thursday for top tier agents on its new $800 million senior secured credit facility (Ba2/BB-). Deutsche Bank and Bank of America are co-lead arrangers on the deal. Salomon Smith Barney and Morgan Stanley are top tier agents in the syndicate.

Market talk is that the deal is going really well, according to a market professional.

There was "strong interest in the B, which was going at par ahead of the meeting," a syndicate source said. There have been over $1 billion in orders since the launch of the credit facility, "which isn't a big surprise in this market," he added.

The Stamford, Conn. manufacturer of metal and plastic consumer goods packaging products company's loan consists of a $400 million six-year revolver with an interest rate of Libor plus 200 basis points, a $100 million six-year term A with an interest rate of Libor plus 200 basis points and a $300 million 6 1/2-year term B with an interest rate of Libor plus 250 basis points.

Proceeds from the new loan and from the recent sale of a $200 million add-on to its 9% senior subordinates debentures due 2009 will be used to refinance in full its existing U.S. senior secured credit facility.

Calpine Corp.'s $600 million two-year term B (Ba3/BB+), which is expected to launch to smaller retail investors in early-May, was priced with an interest rate of Libor plus 375 basis points on Wednesday, up from original price talk of Libor plus 275 basis points, according to a syndicate source. Deutsche is the lead on the term B tranche. In addition, the San Jose, Calif. power company added mortgages on gas properties as extra collateral to secure the loan.

In secondary activity, prices on Adelphia's bank loan paper continue to steadily trickle away. During trading Thursday, Adelphia dropped to 93 bid from approximately 94 bid on Wednesday, according to a fund manager. The paper had seen offer levels of 97 on Monday and 95 on Tuesday and traded below 95 during Tuesday's market hours.

Adelphia's decline continues to be in response to a combination of recent company problems, including a two notch downgrade by Standard & Poor's to CCC+ from BB- due to the company's delay in filing its 10-K annual report, a Securities and Exchange Commission formal investigation into its accounting practices and the Nasdaq threat to delist Adelphia due to the late filing of its 10-K although that action has been suspended pending a hearing.

"It's been pretty quiet otherwise," the fund manager added.

Coming up in the primary, AFC Enterprises Inc. is scheduled to hold a bank meeting Friday regarding its new $275 million credit facility. JPMorgan Chase and Credit Suisse First Boston are co-lead arrangers for the deal. The new credit facility is expected to close in mid-May. The loan is anticipated to consist of a $75 million five-year term A tranche, a $125 million seven-year term B tranche and a $75 million five-year revolver, according to the spokesman.

Proceeds will be used to refinance the Atlanta, Ga. restaurant, beverage and coffee roasting franchising company's existing credit facility, which has a balance of approximately $80 million outstanding, retire its existing 10.25% senior subordinated notes and for general corporate purposes.

In other news, Isle of Capri Casinos Inc., a Biloxi, Miss. developer, owner and operator of branded gaming and related lodging and entertainment facilities, is expected to close its new $500 million credit facility (Ba3/BB-) Friday, according to a syndicate source. CIBC is the lead arranger for loan.

The credit facility consists of a $250 million five-year revolver and a $250 million six-year term B. Initially, the term B tranche was priced with an interest rate of Libor plus 275 basis points, however, the rate was flexed down to Libor plus 250 basis points. The revolver is currently priced at Libor plus 275 basis points but "it should come down to 250 (basis points) after the first reporting period," the syndicate source said. Proceeds will be used to refinance the existing bank loan.

CenturyTel Inc. expects to enter into new credit facilities in the second quarter of 2002 to help finance its pending Verizon acquisitions, the company said in its first quarter earnings report Thursday. Market talk, however, is that the Monroe, La. communications company is currently in talks with top tier agents about a new $750 million revolver. JPMorgan and Lehman Brothers are said to be co-leads on the deal. Neither the banks nor the company were immediately available to confirm this information.

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