Pricing drops by 50 basis points on Centennial term B; Carmike Cinemas trades around 102

By Sara Rosenberg

New York, Jan. 29 - Centennial Communications Corp.'s $600 million seven-year term loan B was flexed down by 50 basis points on Thursday morning to Libor plus 275 basis points from Libor plus 325 basis points, according to a source close to the deal.

As for new doings in the secondary, Carmike Cinemas Inc. allocated and broke for trading late in the day with the bid on the term loan ending up slightly below 102 and the offer slightly above 102.

When the Centennial deal launched on Jan. 20, it was anticipated to be somewhat of a blow out type of deal based on the amount of early interest and commitments received prior to the actual meeting and on what was viewed as a positive bank meeting as well.

The deal was said to be receiving a lot of interest particularly among the institutional guys. Furthermore, since there was a large existing lender group there were a couple of hundred million dollars in orders before the meeting from existing guys and from some new guys, according to market sources. And, the company was said to present well at the meeting.

The facility also contains a $150 million six-year revolver with an interest rate of Libor plus 325 basis points and a commitment fee of 50 basis points.

Investors get a point-and-a-half upfront fee for a $10 million revolver commitment, while the term loan is being offered at par.

Commitments are due on Feb. 3, and closing is expected to take place on Feb. 9.

Credit Suisse First Boston is the joint lead arranger, joint bookrunner and administrative agent. Lehman Brothers is the joint lead arranger, joint bookrunner and syndication agent on the deal.

Term loan borrowings, together with proceeds from a senior notes offering, will be used to refinance and replace the existing secured credit facilities, which had an outstanding principal balance of about $628 million as of Nov. 30, fund the repurchase of all outstanding unsecured subordinated notes due 2009, which are accruing paid-in-kind interest at a rate of 13% and had an outstanding balance of about $194 million at Nov. 30, and pay related fees and expenses.

The company priced the bonds at par to yield 8 1/8% earlier in the month and in fact opted to upsize the offering by $75 million to $325 million. However, despite this change in the high-yield sale, the bank deal remained unchanged, according to a source. The extra $75 million received through the bond sale will be used to purchase additional notes, the source added.

Moody's Investors Service assigned a B2 rating to the credit facility with a stable outlook. While, Standard & Poor's assigned a B- rating to the deal and a recovery rating of 2, indicating expectations of a substantial recovery of principal, 80% to 100%, in the event of a default.

Centennial is a Wall, N.J., wireless telecommunications service provider.

Carmike breaks

Carmike Cinemas Inc.'s new deal hit the secondary with the $100 million second lien term loan due 2009 (B2/B) trading "a little bit above 102 and ended the day wrapped around 102," a trader said.

The tranche is priced with an interest rate of Libor plus 325 basis points.

The $150 million credit facility also contains a $50 million first lien revolver due 2008 with an interest rate of Libor plus 325 basis points (B1/B+).

Goldman Sachs is the sole lead bank on the deal.

Proceeds from the new credit facility, new senior subordinated notes and excess cash will be used to refinance the existing term loan, tender the existing 10 3/8% senior subordinated notes, repay a portion of long-term trade payables and pay related transaction fees and expenses.

Proceeds from a common stock offering, which are estimated at $95.8 million, will be used to repay term loan debt as well.

Carmike is a Columbus, Ga., motion picture exhibitor.

Susquehanna loan oversubscribed

Susquehanna Media Co.'s $150 million term loan B, which just launched this past Tuesday and is priced with an interest rate of Libor plus 200 basis points, is already oversubscribed, according to a source close to the deal.

"[They] went to existing lenders only. That's how strong the lender base is," the source said.

The $450 million credit facility (Ba1/BB-) also contains a $200 million revolver with an interest rate of Libor plus 150 basis points and a $100 million term loan A with an interest rate of Libor plus 150 basis points. These tranches only went out to existing lenders as well.

"[There should] be no problems subscribing up the pro rata. The existing pro rata is bigger. It's already got commitments in. They have a nice pro rata group to work with," the source said.

Wachovia is the sole left lead on the deal that will be used to refinance the company's existing credit facility and help fund the previously announced acquisition of RCN Corp.'s Carmel, N.Y., cable system.

Susquehanna is a York, Pa., communications holding company for radio broadcasting and cable television entities.

Tucson Electric launches

Tucson Electric Power Co. held a bank meeting on Thursday for its $340 million synthetic letter-of-credit facility after launching the $60 million revolver via a bank meeting on Wednesday, according to a syndicate document.

The letter-of-credit facility has a term of five years and is priced with an interest rate of Libor plus 250 basis points.

The revolver has a term of five years, an interest rate of Libor plus 250 basis points and a commitment fee of 50 basis points.

JPMorgan, Credit Suisse First Boston and Lehman Brothers are the joint lead arrangers on the deal, according to the document.

Proceeds will be used to refinance existing debt.

Tucson Electric is a Tucson, Ariz., electric company.

Ply Gem Industries Inc. also launched a deal on Thursday, which was said to be pretty well received, according to a market source.

The $300 million senior secured credit facility (B1/B+) consists of a $65 million five-year revolver with an interest rate of Libor plus 250 basis points and a $235 million seven-year term loan B with an interest rate of Libor plus 275 basis points.

UBS and Deutsche Bank are joint bookrunners, and CIBC and Merrill Lynch are co-arrangers and documentation agents on the facility.

Proceeds from the credit facility will be used to help support the company's acquisition by Caxton-Iseman Capital Inc. from Nortek Inc. in a transaction valued at about $570 million.

Ply Gem is a Kearney, Mo., manufacturer and distributor of products for use in the residential new construction, do-it-yourself and professional renovation markets.

Secondary heavier

Overall, the secondary bank loan market was characterized as heavier on Thursday in reaction to the bond market experiencing a bit of a sell-off, according to a trader.

For example, Calpine Corp.'s bank debt was seen at 98¼ bid, 98¾ offered, down about a quarter of a point from previous levels, the trader said.

"It's off with the rest of the market," the trader explained regarding Calpine.

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

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