Warner Chilcott softens with repricing; Momentive Performance rises; Cedar Fair reworks deal

By Sara Rosenberg

New York, Jan. 20 - Warner Chilcott plc's strip of term loan B-1 and B-2 headed lower on Wednesday following the company's launch of an amendment proposal that would reprice the debt and reduce the Libor floor.

Also in trading, Momentive Performance Materials Inc.'s term loan B was stronger during market hours as the company came out with preliminary numbers for the fourth quarter and announced a debt paydown.

Moving to the primary market, Cedar Fair LP revised its financing plans for its buyout by opting to do a whole new credit facility with new documentation and new debt tranches, as opposed to doing an amend and extend with an incremental loan.

In other news, Great Point Power LLC's in-market term loan has seen strong momentum since its bank meeting late last week, with a number of orders having come in from investors well ahead of the commitment deadline.

Warner Chilcott weakens

Warner Chilcott's strip of term loan B-1 and B-2 debt lost some ground in trading after the company announced an amendment proposal that would result in lower pricing and a smaller Libor floor, according to sources.

The strip of B-1 and B-2 was quoted by one source at par bid, par ¼ offered, down from par ½ bid, 101 offered, by a second source at 99 7/8 bid, par ¼ offered, down from par ½ bid, par 7/8 offered, and by a third source at par bid, par 3/8 offered, down a quarter of a point on the day.

Under the amendment, pricing on the term loan B-1 and B-2, and additional term loans, would be reduced to Libor plus 325 basis points from Libor plus 350 bps.

Also, the Libor floor under the term loan A, term loan B-1, term loan B-2 and additional term loans would be lowered to 1.75% from 2.25%.

There would be no changes made to the revolving credit facility.

"Just a ridiculous proposal," one buyside source remarked about the amendment, adding that on top of losing spread, lenders aren't even being offered a consent fee.

Warner Chilcott needs majority OK

Majority consent is required for Warner Chilcott's amendment to pass, and lenders are being given a two-day turnaround on signatures, the buyside source said.

Existing term loan A lenders that consent to the amendment will exchange their loans for replacement term A loans on the effective date, existing B-1 lenders that consent will get replacement B-1 loans and existing B-2 lenders that consent will get replacement B-2 loan.

The replacement term loan B-1 and term loan B-2 will trade as a strip.

Loans of existing term loan lenders that do not consent to the amendment will be refinanced at par plus accrued interest with the proceeds of new money replacement term loans.

Credit Suisse is the administrative agent on the deal, but Bank of America is the left lead on the deal.

Warner Chilcott is a Rockaway, N.J.-based specialty pharmaceutical company.

Momentive Performance trades up

Momentive Performance's term loan B moved higher on Wednesday as the company released preliminary results for the fourth quarter ended Dec. 31, according to a trader.

The term loan B was quoted at 93¾ bid, 94½ offered, up from 93 bid, 94 offered on Tuesday, the trader said.

For the fourth quarter, the company expects net sales of about $600 million to $610 million, compared to net sales of about $545.3 million in the prior year.

GAAP operating income for the quarter is expected to be about $50 to $60 million, versus the 2008 fourth quarter loss of about $933.2 million, including a goodwill impairment charge of about $857.5 million,

And, adjusted EBITDA for the quarter is expected to be about $101 to $111 million, compared to about $39.2 million in the previous year.

Momentive repays debt

Momentive also said on Wednesday that on Jan. 11, it repaid $25 million of borrowings under its revolving credit facility, leaving $75 million outstanding.

However, at Dec. 31, total debt, net of cash and cash equivalents, was estimated to be between $2.825 billion and $2.850 billion, up slightly from the third quarter.

This fourth-quarter increase is primarily due to the company's semiannual interest payments on its notes made in December, the company explained.

"Demand in the fourth quarter continued to improve on a sequential basis, in line with our previous guidance, but remained well below normalized historical levels," said Jonathan Rich, president and chief executive officer, in a news release.

"Our strong year-over-year fourth-quarter comparisons reflect a modest recovery in our business from last year's depressed levels and the significant cost actions we implemented in 2009," Rich added.

Momentive is an Albany, N.Y.-based specialty materials company, providing high-technology materials products to the silicones, quartz and ceramics markets.

Cedar Fair doing new deal

Over in the primary market, Cedar Fair is now out to lenders with a new $1.25 billion senior secured credit facility (Ba3/BB) instead of an amendment, extension and increase of its existing credit facility, according to a market source.

"Market conditions are very favorable and wanted to refresh tenor," the source said in explanation of the change.

The new facility consists of a $250 million five-year revolver and a $1 billion six-year term loan B, with both tranches talked at Libor plus 375 bps with a 1.5% Libor floor.

By comparison, the company was previously asking to extend its existing $250 million revolver and non-extended term loan debt to 2014 from 2012 with pricing of Libor plus 400 bps with no Libor floor. The amended term loan would have been sized at $1 billion, including $100 million of incremental debt.

Cedar Fair OID

New lenders to Cedar Fair's term loan B are being offered the paper at an original issue discount of 991/2, the source remarked.

And, lenders who extended their term loan B commitments during the company's previous amend and extend transaction will get 50 bps for rolling over their commitments and waiving the 101 call protection.

Commitments towards the facility are due on Monday.

Bank of America, JPMorgan, Barclays Capital, UBS and KeyBanc Capital Markets are the lead banks on the deal.

Cedar Fair still amending

Despite creating a new credit facility, Cedar Fair still has to amend its existing credit facility to allow for the change of control resulting from Apollo Global Management's purchase of the company, the source continued.

Lenders are being offered a 5 bps amendment fee for the change of control, as opposed to the 12.5 bps fee that was being offered under the original deal.

Under the acquisition agreement, Cedar Fair unitholders will receive $11.50 in cash for each limited partnership unit that they hold. The transaction is valued at about $2.4 billion, including the refinancing of outstanding debt.

In addition to the new credit facility, financing for the buyout is expected to come from the sale of $700 million of high-yield bonds and up to $765 million in equity.

Closing is expected by the beginning of the second quarter of 2010, subject to approval of holders of two-thirds of Cedar Fair's outstanding units, the receipt of regulatory approvals and other conditions.

Cedar Fair levels hold steady

Following news of the revised plans, Cedar Fair's non-extended and extended term loans were basically flat on the day to maybe a touch stronger.

The non-extended term loan was quoted by one source at 99¾ bid, and the extended term loan at 99 1/8 bid, unchanged on the day.

Meanwhile, a trader was quoting the non-extended loan at 99½ bid, par ¼ offered, versus 99¼ bid, par ¼ offered on Tuesday, and the extended loan at 99½ bid, par ½ offered, unchanged from previous levels.

And, another trader was quoting the non-extended term loan at 99¼ bid, 99¾ offered and the extended term loan at 99½ bid, par ¼ offered, with both tranches up an eighth of a point on the day.

Cedar Fair is a Sandusky, Ohio-based amusement-resort operator.

Great Point sees interest

Great Point Power's $220 million seven-year term loan (Ba1/BB+) has been really well received by investors since launching last Thursday, putting the "books in very good shape," according to a market source.

The term loan is talked at Libor plus 375 bps with a 2% Libor floor and an original issue discount of 981/2.

Originally, it was anticipated that the term loan would sized at $210 million, but it was increased prior to the launch.

Barclays and Bank of America are the lead banks on the deal that will be used to fund the acquisition of four power generation plants and one transmission facility from Energy Investors Funds.

Commitments are due from lenders on Jan. 28.

Great Point Power is a newly formed portfolio company of ArcLight Capital Partners LLC.

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