Entravision breaks; Calpine bounces around; PBI cuts spreads; Martin Midstream may push back launch

By Sara Rosenberg

New York, Sept. 22 - Entravision Communications Corp. allocated its new credit facility on Thursday, with the term loan B breaking for trading in the lower-101 context. And, Calpine Corp. saw its second-lien bank debt levels jump all over the place, starting the day down considerably and then clawing its way back up.

In primary doings, PBI Media Holdings LLC cut spreads on all of its credit facility tranches and even increased the overall deal size by $10 million on overwhelmingly strong demand.

Meanwhile, timing on Martin Midstream Partners LP's proposed credit facility is very much in flux right now, with the launch potentially being pushed off into next month depending on Hurricane Rita.

Also, LSP-Kendall Energy LLC's credit facility saw a successful launch on Thursday as some early commitments had already been placed before day's end.

Entravision freed up for trading Thursday, with the $500 million 71/2-year institutional term loan quoted at 101 1/8 bid, 101 3/8 offered pretty steadily from the break till the close, according to a trader.

"It hasn't been too active - a couple trades here, a couple of trades there. I think it pretty much found its context," the trader added.

The term loan is priced with an interest rate of Libor plus 150 basis points. Original price talk had been Libor plus 175 to 200 basis points, but the reverse flex had been expected ever since last week when the decision to shut the book down early was made due to overwhelming demand.

Entravision's $650 million credit facility (Ba3/B+) also contains a $150 million 61/2-year revolver.

Goldman Sachs and Citigroup are the lead banks on the deal, with Goldman the left lead.

Proceeds will be used to help fund the tender offer and consent solicitation for the company's $225 million outstanding principal amount 8.125% senior subordinated notes due 2009 and to replace the company's existing credit facility.

Entravision is a Santa Monica, Calif., diversified Spanish-language media company.

Calpine sees another volatile day

Calpine Corp.'s second-lien bank debt had another rollercoaster day as levels dropped off by a couple of points early in the session but then bounced back as some investors saw it as a buying opportunity.

At the open, Calpine's second lien was quoted at 74 bid, 76 offered, according to a trader. However, by close the bank debt was being quoted at 78¼ bid, 79¼ offered because "people came in to buy it once it got so low," the trader added. On Wednesday, the paper dropped 2 to 77½ bid, 79½ offered.

Calpine's bank debt has been all over the place since Tuesday when rumors emerged that the Bank of New York, the collateral trustee for senior secured note holders, has been asking questions about the reinvestment of proceeds from the July sale of domestic gas assets.

On Wednesday these rumors were confirmed by the San Jose, Calif.-based power company, and on Thursday Calpine put out an official release in response to the Bank of New York inquiry.

As a result of the questions, Bank of New York has informed Calpine that it will be withholding withdrawals from the gas sale proceeds account until these disagreements can be resolved.

Calpine is evaluating its options in response to Bank of New York's letter and "intends to pursue all of its legal rights and remedies to resolve the dispute as soon as possible," the news release said.

The company went on to say that the proceeds from the sale were offered to first-lien noteholders, and that of the $785 million of outstanding notes, approximately $139 million were tendered in response to the offer.

"As previously reported in its quarterly report on form 10-Q for the three months ended June 30, 2005 and as allowed under the company's indentures, Calpine is permitted to use the proceeds from the sale of its gas assets to acquire eligible natural gas and/or geothermal energy assets. Calpine has utilized approximately $360 million of the proceeds to acquire eligible natural gas assets. Following these acquisitions, approximately $400 million remains in the gas sale proceeds account with the Trustee," the news release added.

PBI Media reverse flexes

PBI Media lowered spreads across the board and upsized its term loan B by $10 million as the deal was well oversubscribed.

The now $195 million seven-year term loan B (B2/B), increased from $185 million, saw pricing reverse flex to Libor plus 225 basis points from Libor plus 250 basis points, according to a syndicate document. Originally, the term loan B was expected to be sized at $245 million, but the tranche was downsized prior to launch.

Pricing on the $60 million six-year revolver (B2/B) was reverse flexed to Libor plus 225 basis points from Libor plus 250 basis points as well.

Lastly, pricing on the $78 million eight-year second-lien term loan (B3/CCC+) was reverse flexed to Libor plus 600 basis points from Libor plus 650 basis points, the document added.

The second-lien term loan contains call protection of 102 in year one and 101 in year two.

The revolver has a 50 basis point commitment fee.

Both the first- and second-lien term loans are being offered to investors at par.

Proceeds from the upsized $333 million credit facility will be used to help fund Wasserstein & Co. LP's purchase of Primedia Inc.'s business information segment for $385 million in cash. The business information segment consists of business-to-business targeted publications.

Credit Suisse First Boston and UBS are joint lead arrangers and joint bookrunners on the deal, with CSFB the left lead.

Martin Midstream launch

Martin Midstream may end up pushing its bank meeting into October from previous expectations that it would be a late-September event, depending on the impact of Hurricane Rita in the Houston area, a market source told Prospect News on Thursday.

"We'll see what happens this weekend," the source said, adding that hopefully more clarity on the launch will emerge early next week.

Martin Midstream's $225 million credit facility consists of a $95 million working capital revolver and an up to $130 million term loan with an optional $100 million accordion feature.

Royal Bank of Canada is the lead bank on the deal.

Proceeds will be used to help fund the approximately $100 million acquisition of Prism Gas Systems I LP and refinance existing bank debt.

Subsequent to closing, the partnership expects to refinance a portion of the new facility with new equity capital.

Martin Midstream Partners is a Kilgore, Texas-based provider of marine transportation, terminalling, distribution and midstream logistical services for producers and suppliers of hydrocarbon products and by-products, lubricants and other liquids. Prism is a natural gas gathering and processing company.

LSP-Kendall sees interest

LSP-Kendall Energy sparked some interest in investors pretty quickly as some early commitments had already been in the book before the day was through, even though the deal just launched during Thursday's session.

"There were some good questions," the source said about the call. "There are some existing guys who committed to it already."

Although, there was only a conference call to launch the deal, it was presented to a broad group of investors, not just to existing lenders, the source added.

The $422 million credit facility consists of a $412 million eight-year term loan talked at Libor plus 275 basis points and a $10 million six-year revolver talked at Libor plus 275 basis points.

The term loan, which is being offered at par, contains call protection of 102 in year one and 101 in year two.

Credit Suisse First Boston and Lehman Brothers are joint lead arrangers on the deal that will be used to refinance existing debt, with CSFB the left lead.

LSP-Kendall is the owner of an energy generation facility located in Kendall County, Ill.

U.S. Investigations gets good audience

U.S. Investigations Services Inc.'s Thursday bank meeting was said to have gone pretty well as there was reasonably good attendance both in person and on the phone, and "pretty full Q&A," according to a market source.

The proposed $430 million credit facility (B2/B+) consists of a $30 million revolver and a $400 million term loan, with both tranches talked at Libor plus 300 basis points.

The term loan is being offered to investors at par.

Lehman is the lead bank on the deal that will be used to refinance existing debt and to pay a $185 million dividend.

U.S. Investigations is an Annandale, Pa., provider of security-related services to corporate and government clients.

© 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.