Cincinnati Bell breaks around 101 levels and reverse flexes to Libor plus 250 basis points

By Sara Rosenberg

New York, Nov. 7 - Cincinnati Bell Inc.'s $525 million term loan D allocated and broke for trading on Friday, with levels moving immediately higher to par 7/8 bid, 101 1/8 offered as the paper traded actively throughout the day, according to a trader.

The paper was offered to investors at par during syndication.

The institutional tranche, which launched via a bank meeting on Oct. 31, is priced with an interest rate of Libor plus 250 basis points, 25 basis points lower than the Libor plus 275 basis points pricing that was originally expected.

Bank of America, Credit Suisse First Boston and Goldman Sachs are the lead banks on the deal.

Proceeds will be used to repay outstanding borrowings under the existing term loan facilities and to permanently reduce a portion of the revolver.

As of June 30, total availability under the existing credit facility was about $1.43 billion, consisting of $643.6 million in revolving credit (with about $207.2 million in additional borrowing capacity left at that time), $343.2 million in term loan A, $306.3 million in term loan B and $136.8 million in term loan C, according to a filing with the Securities and Exchange Commission.

The existing revolver carries an interest rate of Libor plus 425 basis points, and the existing term loans carry an interest rate of Libor plus 375 basis points.

Cincinnati Bell is a Cincinnati-based provider of data, voice and wireless communications services.

Calpine Corp.'s second-lien term loan B was quoted as pretty much unchanged at 94 bid, 94½ offered on Friday, according to a trader.

The paper had moved to higher levels of 94½ bid, 95 offered during the day on Thursday following the company's announcement of its new liquidity-enhancing initiatives that included $600 million of convertible debt and $400 million of high-yield bonds.

However the San Jose, Calif., power company's paper came back in to the lower 94 area following the late day pricing of the high-yield bonds, the trader explained. On Wednesday, Calpine was quoted at 93½ bid, 94 offered.

In the primary, details emerged on General Nutrition Cos. Inc.'s proposed credit facility as the syndicate started calling accounts on Thursday to let them know about the upcoming Wednesday bank meeting for the deal, a market source said.

So far there has been no particular market sentiment, such as early bird commitments, regarding the transaction, since financial numbers and other such details have not been released as of yet, the source said. He added that the call to accounts "was just to get it on peoples' calendars."

The $360 million facility consists of a $75 million five-year revolver with an interest rate of Libor plus 300 basis points and a $285 million six-year term loan B with an interest rate of Libor plus 325 basis points, the source said.

Lehman and JPMorgan are the lead banks on the deal that will be used by the company to help support its leveraged buyout by Apollo Management LP from Royal Numico NV for $750 million.

GNC is a Pittsburgh-based producer, marketer and seller of nutritional supplements.

DeCrane Aircraft Holdings Inc.'s proposed $80 million second-lien term loan, which launched via a conference call on Thursday, and the proposed amendment to the company's existing first-lien debt seems to be getting some positive feedback from investors at this time, according to a fund manager.

In order for the company to be able to obtain the second-lien tranche it must amend its existing facility to allow for additional second-lien debt.

Furthermore, under the amendment, the company is seeking to extend maturities of the existing first-lien debt by 12 to 18 months, depending on the tranche.

In addition, revolver commitments will be reduced to $24 million from $40 million.

"They got a lot of potential on the business front. They signed new contracts and are bidding for other new business. They have minimal capex requirements. Over the next few years capex is basically just maintenance of existing facilities. It's probably less than $5 million a year," the fund manager said.

"[Also, the proposal] gets rid of amortization payments for the next two years. That helps them liquidity-wise in that respect.

"I think people are still doing their work. They got interest from people who listened in. Now, they're just hoping to actually get at least $80 million," the fund manager concluded.

The second-lien tranche is priced with a 12% cash coupon plus a 3% pay-in-kind coupon and will mature on June 30, 2008.

Proceeds will be used to pay down some existing first-lien bank debt.

Credit Suisse First Boston is the lead bank on the deal.

As of March 31, the company had $164.1 million in outstanding borrowings under its senior credit facility, according to a filing with the Securities and Exchange Commission.

DeCrane is an El Segundo, Calif., supplier of products and services to business jet and commercial aircraft original equipment manufacturers.

Syndication on CamelBak's recently launched $100 million senior secured credit facility is said to be going well with several accounts focusing on it despite the fact that there were a number of other bank meetings this past week, according to a market source.

The facility consists of a $20 million five-year revolver with price talk of Libor plus 425 basis points and an $80 million six-year term loan with price talk of Libor plus 425 basis points.

Proceeds will be used to help support the acquisition of 100% of CamelBak's capital stock by the existing sponsor.

CamelBak is a Petaluma, Calif., producer of personal hydration systems.

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