McKechnie, Las Vegas Sands, Cannery, Exide break; Crimson sets talk

By Sara Rosenberg

New York, May 15 - McKechnie Aerospace, Las Vegas Sands Corp., Cannery Casino Resorts LLC and Exide Technologies Inc. all saw their credit facilities free up for trading on Tuesday.

Meanwhile, in primary happenings, Crimson Exploration Inc. released price talk on its second-lien term loan as the deal was launched with a conference call during market hours.

McKechnie Aerospace's credit facility allocated and broke for trading on Tuesday afternoon, with the $225 million U.S. first-lien term loan B (Ba3/B+) quoted at par 3/8 bid, par 5/8 offered and the $150 million second-lien term loan (Caa1/CCC+) quoted at par ½ bid, 101½ offered, according to a trader.

During trading, the U.S. first-lien term loan B moved up by about an eighth of a point from the par 3/8 bid, par 5/8 offered breaking levels; however, by late day it had settled back down to that same context, where it closed out the session, the trader remarked.

The second-lien term loan remained at par ½ bid, 101½ offered from break until close, the trader added.

The U.S. first-lien term loan B is priced at Libor plus 200 basis points and the PIK toggle second-lien term loan is priced at Libor plus 500 bps cash pay (Libor plus 575 bps if PIK elected) with call protection of 102 in year one and 101 in year two.

The company's $540 million credit facility also includes a $40 million revolver (Ba3/B+), a $75 million equivalent euro-denominated first-lien term loan B (Ba3/B+) priced at Libor plus 200 bps and a $50 million equivalent sterling-denominated (Ba3/B+) first-lien term loan B priced at Libor plus 200 bps.

During syndication, the total first-lien term loan B size, which includes the U.S., euro and sterling sub-tranches, was increased to $350 million from $300 million and pricing was reduced from original talk at launch of Libor plus 250 bps.

Also, during syndication, the second-lien term loan was downsized from $200 million, pricing was reduced from Libor plus 550 bps and the PIK toggle feature was added.

Bear Stearns and Morgan Stanley are the joint lead arrangers on the deal, with Bear Stearns the bookrunner. General Electric Capital Corp. is the documentation agent.

Proceeds will be used to help fund JLL Partners' acquisition of the company from Melrose plc for $855.6 million, including $5.6 million of assumed debt.

McKechnie is an Alcester, England-based producer of door latches, rods and struts for aircraft interiors and a distributor of aircraft batteries.

Las Vegas Sands frees to trade

Las Vegas Sands' credit facility also hit the secondary market late in the day Tuesday, with levels on the strip of funded term loan B and delayed-draw term loan debt quoted anywhere from par 1/8 bid, par 3/8 offered to par ¼ bid, par ½ offered, depending on which trader was asked.

The $3 billion seven-year funded term loan B, the $600 million delayed-draw term loan that will be available for 12 months with a seven-year final maturity and the $400 million delayed-draw term loan that will be available for 18 months with a six-year final maturity are all priced at Libor plus 175 bps.

The 12-month delayed-draw loan has an unused fee of 75 bps, and the 18-month delayed-draw loan has an unused fee of 50 bps.

Las Vegas Sands' $5 billion domestic senior secured credit facility (Ba3/BB-) also includes a $1 billion five-year revolver priced at Libor plus 150 bps, with an unused fee of 37.5 bps.

Banks were asked to commit to the revolver for 50%, the 18-month delayed-draw loan for 20% and the term loan B for 30%, while institutional lenders were asked to commit to the remaining $2.4 billion of term loan B that the banks didn't get and the 12-month delayed-draw loan.

Goldman Sachs, Lehman Brothers and Citigroup are the joint lead arrangers and joint bookrunners on the deal, with Goldman the left lead. Scotia Capital and JPMorgan are agents.

Financial covenants include minimum ratios of EBITDA to interest expense and total debt to EBITDA.

Proceeds will be used to refinance the company's existing credit facility, to fund domestic development projects, to provide liquidity to support international development projects and for working capital and general corporate purposes.

Domestic development projects include the completion of the Palazzo Resort Hotel Casino and the Palazzo mall, the construction of the Palazzo condominium tower, the refurbishment of rooms at the Venetian Resort Hotel Casino, the construction of the Sands Expo and Convention Center II and the construction of Sands Bethworks.

Las Vegas Sands is a Las Vegas-based developer of multi-use integrated resorts.

Cannery breaks

Another deal to break for trading during market hours was Cannery Casino Resorts, with the strip of funded and delayed-draw first-lien term loan debt quoted at par ¼ bid, par ½ offered, and the second-lien term loan quoted at 101 bid, 101½ offered, according to a trader.

The $350 million six-year funded first-lien term loan B (B2/BB-) and the $285 million six-year final maturity delayed-draw term loan B (B2/BB-) are both priced at Libor plus 225 bps, and the $115 million seven-year second-lien term loan (Caa1/B-) is priced at Libor plus 450 bps.

The funded first-lien term loan B carries 101 soft call protection for one year, the delayed-draw term loan has an unused fee of Libor plus 225 bps and the second-lien term loan has call premiums of non-callable for one year, then at 102 in year two and 101 in year three.

During syndication, the soft call was added to the funded first-lien term loan B, and the delayed-draw term loan was downsized from $320 million while the unused fee was increased from 112.5 bps.

Cannery's $860 million credit facility also includes a $110 million five-year revolver (B2/BB-) priced at Libor plus 225 bps.

During syndication, the revolver was upsized from $75 million when the delayed-draw term loan was downsized.

Bank of America and Merrill Lynch are the lead banks on the deal, with Bank of America the left lead on the first-lien debt and Merrill Lynch the left lead on the second-lien debt.

Proceeds will be used to refinance existing debt, to construct a permanent casino in western Pennsylvania and to redevelop the Nevada Palace casino in Las Vegas.

Cannery Casino is a Las Vegas-based owner and operator of hotels and casinos.

Exide trades atop 101

And yet another deal to free up on Tuesday was Exide Technologies, with the $130 million five-year secured U.S. borrower term loan (B1/B) quoted at 101¼ bid, 101¾ offered, according to a trader.

The U.S. term loan is priced at Libor plus 325 bps with a step down to Libor plus 300 bps when corporate credit ratings are upgraded to B3/B- with a stable outlook.

During syndication, pricing on the U.S. term loan was lowered from Libor plus 350 bps, with the addition of the step.

Exide's $495 million credit facility also includes a $200 million asset-based revolver (B1) priced at Libor plus 175 bps with a 37.5 bps commitment fee, a $63.5 million five-year secured European borrower term loan (B1/B) priced at Libor plus 325 bps and a €75 million five-year secured term loan (B1/B) priced at Euribor plus 350 bps.

The European term loan, which was syndicated in dollars to U.S. investors, and the euro term loan, which was syndicated in euros to European investors, both have 25 bps step downs when corporate credit ratings are upgraded to B3/B- with a stable outlook.

During syndication, pricing on the European term loan was lowered from Libor plus 350 bps, and the step down was added to both the European and the euro term loans.

Deutsche Bank, Credit Suisse and Wachovia acted the lead banks on the deal, which closed on Tuesday and was used to refinance the company's existing senior credit facility.

Exide is an Alpharetta, Ga., manufacturer and supplier of lead acid batteries used in transportation, motive power, network power and military applications.

Crimson price talk

Crimson Exploration held a conference call during the session to kick off syndication on its proposed $150 million five-year second-lien term loan, at which time lenders were presented with opening price talk of Libor plus 525 bps on the loan, according to a market source.

Credit Suisse is the lead arranger on the deal, which actually funded on May 8 but is just now being syndicated.

If the company does not obtain gross proceeds of at least $25 million from the issuance of common stock and/or preferred equity within 150 days from the closing date of the second-lien loan, pricing will increase to Libor plus 575 bps, according to an 8-K filed with the Securities and Exchange Commission Tuesday.

Call premiums on the loan are 102 in year one and 101 in year two.

Proceeds from the second-lien loan were used to refinance the company's $150 million subordinated credit facility.

Financial covenants include a minimum leverage ratio of total debt to EBIDAX of 4.0 to 1.0 for the fiscal quarters ending on or before Dec. 31, 2007, 3.5 to 1.0 for the fiscal quarters ending after Dec. 31, 2007 and on or before June 30, 2008, and 3.0 to 1.0 for the fiscal quarters ending after June 30, 2008.

In addition, on May 8, the company closed on a $400 million four-year amended and restated revolving credit facility with Wells Fargo Bank and RBS Securities as co-lead arrangers and joint bookrunners, and Wells Fargo agent.

The initial borrowing base under the revolver is set at $200 million.

Pricing on the revolver can range from Libor plus 125 bps to 200 bps, depending on utilization, and the unused fee is 37.5 bps.

Borrowings under the revolver were used to help fund the acquisition of oil and gas properties in the South and Gulf Coast areas of Texas and Louisiana from Exco Resources Inc. for $285 million in cash, excluding adjustments, and 750,000 shares of Crimson common stock.

Financial covenants under the revolver include a ratio of current assets to current liabilities of at least 1.0 to 1.0, an interest coverage ratio of EBITDAX to cash interest expense of 3.0 to 1.0 and a minimum leverage ratio of total debt to EBIDAX of 3.5 to 1.0.

Crimson is a Houston-based crude oil and natural gas company.

Tribune adds term loan X

Tribune Co. added a $1.5 billion first-pay term loan X to its capital structure and downsized its funded seven-year term loan to $5.515 billion from $7.015 billion, according to a market source.

The term loan X is talked at Libor plus 250 bps to 275 bps, and of the total amount, $750 million must be repaid within 18 months of close, the source said.

This new term loan X was actually added to the deal on Monday when the company increased pricing on its funded seven-year term loan and $263 million seven-year delayed-draw term loan to Libor plus 300 bps from Libor plus 250 bps and added an original issue discount to the two tranches that is being talked at 99 to 991/4.

The funded term loan and the delayed-draw term loan are being sold to investors as a strip.

Tribune's $10.133 billion senior secured credit facility (Ba2/BB-/BB) also includes a $750 million six-year revolver with a 50 bps undrawn fee and a $2.105 billion seven-year incremental term loan.

JPMorgan, Merrill Lynch, Citigroup and Bank of America are the joint lead arrangers and joint bookrunners on the deal, with JPMorgan administrative agent, Merrill Lynch syndication agent and Citigroup and Bank of America co-documentation agents.

Proceeds from the facility, along with $2.1 billion of notes, will be used to help fund the company's public-to-private transaction.

In the first stage of the public-to-private transaction, Tribune will complete a cash tender offer for about 126 million shares at $34 per share and refinance its existing credit facilities. This stock tender offer will expire on May 24.

In the second stage, Tribune will buy all the remaining outstanding shares of the company. This part of the transaction is expected to be completed in the fourth quarter.

Tribune's existing publicly traded bonds are expected to remain outstanding.

The going-private transaction is being supported by Sam Zell with a $315 million investment.

Upon completion of the transaction, the company will be privately held, with an Employee Stock Ownership Plan holding all of Tribune's then-outstanding common stock and Zell holding a subordinated note and a warrant entitling him to acquire 40% of Tribune's common stock.

Tribune is a Chicago-based media company.

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