Biomet, Jacobson set talk; Liberty Cablevision, Continental tweak deals; IPC breaks; Berry Plastics dips

By Sara Rosenberg

New York, May 30 - Biomet Inc. and Jacobson Cos. came out with price talk on their credit facilities as both deals were launched with bank meetings during Wednesday's market hours.

In other primary news, Liberty Cablevision of Puerto Rico Ltd. added a delayed-draw term loan to its credit facility structure and the Continental Group reverse flexed pricing on its term loan B as the tranche was nicely oversubscribed.

Meanwhile, in the secondary, IPC Information Systems LLC's credit facility freed up for trading, with the first-lien term loan B quoted atop par and the second-lien term loan quoted atop 101, and Berry Plastics Holding Corp.'s term loan B headed lower as the company launched a senior unsecured dividend deal.

Biomet held a bank meeting on Wednesday afternoon in New York to launch its proposed credit facility, and in connection with the launch, price talk on the transaction surfaced, according to a market source.

The $3.6 billion covenant-light 71/2-year term loan B (B3/B+) and the $400 million six-year covenant-light cash-based revolver (B1/B+) were presented to lenders with talk of Libor plus 250 to 275 basis points, the source said.

Of the total term loan B amount, $1 billion will be a euro sub-tranche.

A bank meeting for European investors will take place in London on Friday.

Biomet's $4.35 billion senior secured credit facility also includes a $350 million six-year asset-based revolver (Ba2/BB-).

Bank of America and Goldman Sachs are joint lead arrangers on the deal, Bank of America, Goldman, Bear Stearns, Lehman and Merrill Lynch are joint bookrunners, and Wachovia is co-manager. Bank of America is administrative agent, Goldman is syndication agent, and Bear, Lehman and Merrill Lynch are co-documentation agents.

Proceeds from the credit facility will be used to fund the leveraged buyout of Biomet by the Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. and TPG in a transaction with a total equity value of about $10.9 billion.

Other acquisition financing will come from $4.376 billion in equity and $2.565 billion of high-yield bonds.

Completion of the transaction is expected to occur on or before Oct. 31, subject to Biomet shareholder approval and required antitrust and customary closing conditions.

A special shareholder meeting to vote on the transaction is scheduled for June 8.

Biomet is a Warsaw, Ind., designer and manufacturer of musculoskeletal medical products.

Jacobson price talk

Jacobson also released price talk on its new deal as it too launched with a bank meeting during the session, according to a market source.

The $280 million first-lien term loan (Ba3/B) is being talked at Libor plus 250 bps, and the $150 million second-lien term loan (Caa1/CCC+) is being talked at Libor plus 575 bps.

Jacobson's $460 million credit facility also includes a $30 million revolver (Ba3/B).

Bear Stearns, CIBC and Wells Fargo are the lead banks on the deal, with Bear Stearns the left lead.

Proceeds will be used to help fund the acquisition of the company by Oak Hill Capital Partners.

Jacobson is a Des Moines, Iowa, third-party logistics and warehousing company.

Liberty Cablevision adds tranche

Liberty Cablevision of Puerto Rico added a $20 million delayed-draw term loan to its refinancing/repricing credit facility, bringing the total deal size up to $180 million from $160 million, according to a market source.

The new term loan is delayed-draw for nine months with an undrawn fee of 100 bps, the source said.

Once drawn, the delayed-draw term loan will carry the same terms as the in-market funded $150 million term loan, which is priced at Libor plus 200 bps with 101 soft call protection for one year, the source added.

Liberty Cablevision of Puerto Rico's credit facility also includes a $10 million revolver that is also priced at Libor plus 200 bps.

Essentially, the new funded term loan, which is well oversubscribed primarily from the existing bank group, and the revolver are just repricing an existing term loan and revolver from Libor plus 225 bps.

Proceeds from the newly added delayed-draw term loan will be used for general corporate purposes.

The facility has a leverage covenant of 5.0 times and an interest coverage ratio of 2.0 times, which is basically in line with current covenants; however, the existing step down under the leverage ratio is being eliminated.

TD Securities is the lead bank on the deal that is hoped to close by June 15.

Liberty Cablevision of Puerto Rico is a Puerto Rico-based provider of digital video, broadband internet and telephony service.

Continental flexes lower

Continental Group reduced pricing on its "twice oversubscribed" $140 million term loan B to Libor plus 250 bps from original talk at launch of Libor plus 275 bps to 300 bps, according to a market source.

The company's $180 million credit facility (B2/B) also includes a $40 million revolver that will carry initial pricing of Libor plus 250 bps as well.

Allocations are expected to go out by the end of this week, the source added.

RBC Capital is the lead bank on the deal, which will be used to refinance existing debt.

Continental is a Houston-based manufacturer and distributor of bar and tubular products to the oilfield service industry.

Fender cuts spread, adds delayed-draw

Fender Musical Instruments Corp. made some changes to its credit facility, including lowering pricing and adding a step down to the term loan and adding a new delayed-draw term loan tranche, according to a market source.

The $200 million covenant-light term loan (B2/B+) is now priced at Libor plus 225 bps, down from original talk of Libor plus 250 bps, and the spread can now step down to Libor plus 200 bps when leverage is less than 3.5 times, the source said.

In addition, a $100 million 12-month delayed-draw term loan was added to the capital structure with an undrawn fee of 112.5 bps for the first six months and 150 bps for the last six months, the source remarked.

Fender's now $400 million (up from $300 million) credit facility also includes a $100 million ABL revolver.

JPMorgan and Goldman Sachs are the lead banks on the deal that will be used to refinance existing debt, with JPMorgan the left lead.

Fender is a Scottsdale, Ariz., maker of musical instruments.

Aearo firms pricing

Aearo Technologies Inc. finalized the spread on its $735 million senior secured credit facility, with the first-lien term loan B and the revolver ending up at the tight end of talk, according to a market source.

More specifically, the $475 million first-lien term loan B (B1/B+) is priced at Libor plus 225 bps, the low end of original guidance of Libor plus 225 bps to 250 bps, the source said.

And, the $60 million revolver (B1/B+) is priced at Libor plus 200 bps, the tight end of original talk of Libor plus 200 bps to 225 bps, the source added.

Aearo's credit facility also includes a $200 million second-lien term loan (Caa1/CCC+) priced in line with original talk at Libor plus 550 bps that carries call protection is 102 in year one and 101 in year two.

Bank of America, Bear Stearns and Deutsche Bank are the lead banks on the deal.

Proceeds will be used for a recapitalization that will include a refinancing of the company's existing credit facility and funding a preferred stock redemption.

Aearo, a Permira portfolio company, is an Indianapolis-based manufacturer and supplier of personal protective equipment and energy-absorbing products.

IPC frees to trade

Switching to secondary news, IPC Information Systems' credit facility allocated and broke for trading, with the $840 million first-lien term loan B (B1/B) quoted at par 3/8 bid, par 5/8 offered and the $315 million second-lien term loan (Caa1/CCC+) quoted at 101¼ bid, 101½ offered, according to a market source.

The first-lien term loan B is priced at Libor plus 225 bps and the second-lien term loan is priced at Libor plus 525 bps, with call protection of 102 in year one and 101 in year two.

On Tuesday night, pricing on the second-lien term loan was reverse flexed from talk of Libor plus 550 bps and the previous step down to Libor plus 525 bps was eliminated.

IPC's $1.23 billion credit facility also includes a $75 million revolver (B1/B) priced at Libor plus 225 bps.

JPMorgan, Goldman Sachs and UBS are the joint bookrunners banks on the deal, with JPMorgan the left lead on the first lien and Goldman the left lead on the second lien.

Proceeds will be used to help fund the company's acquisition of WestCom Corp. and to refinance its existing bank debt.

IPC is a New York-based communications services provider. WestCom is a New York-based telecommunications company.

Berry Plastics lower on added debt

Berry Plastics' term loan B traded down as investors reacted to the $500 million of additional debt that the company began marketing during the session, according to a trader.

The term loan B ended the day at par 1/8 bid, par 3/8 offered, down from previous levels of par ½ bid, par ¾ offered, the trader said.

On Wednesday, Berry Plastics held a conference call to kick off syndication on a $500 million seven-year senior unsecured PIK toggle term loan (CCC+) that is being talked at Libor plus 625 bps cash pay.

If PIK is elected, pricing on the loan would increase by 75 bps.

Credit Suisse and Citigroup are the lead banks on the deal, which will be used to fund a dividend.

Berry Plastics is an Evansville, Ind., plastic packaging company.

Kinder Morgan closes

Kinder Morgan Inc.'s public-to-private buyout by management and equity investors was completed on Wednesday, under which chairman and chief executive officer Richard D. Kinder and other members of management, including co-founder Bill Morgan, current board members Fayez Sarofim and Mike Morgan, and investment partners Goldman Sachs Capital Partners, American International Group, Inc., the Carlyle Group and Riverstone Holdings LLC, acquired all of the outstanding common stock of the company for $107.50 per share in cash, according to a news release.

To help fund the transaction, Kinder Morgan got a new $7.3 billion credit facility (Ba2/BB-/BB) consisting of a $3.3 billion seven-year term loan B priced at Libor plus 150 bps, with a step down to Libor plus 137.5 bps when leverage falls below 5.5 times, a $2 billion three-year asset-sale bridge term loan C priced at Libor plus 137.5 bps, a $1 billion six-year revolver priced at Libor plus 137.5 bps and a $1 billion 61/2-year term loan A priced at Libor plus 137.5 bps.

During syndication, the term loan B was upsized from $2.3 billion, pricing firmed up at the tight end of original guidance of Libor plus 150 bps to 175 bps and the step down was added, the term loan A was downsized from $2 billion, and pricing on the term loan A and the revolver was reverse flexed from original talk at launch of Libor plus 162.5 bps.

Citigroup, Goldman Sachs, Deutsche Bank, Wachovia and Merrill Lynch acted as the lead banks on the deal.

Kinder Morgan is a Houston-based energy infrastructure provider.

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