X-Rite breaks; Secondary players' frustration continues; Cedar Fair, Rent-A-Center set spread guidance

By Sara Rosenberg

New York, June 15 - X-Rite Inc. allocated its credit facility on Thursday morning, with the first-lien term loan then breaking for trading in the par-plus context and the second-lien term loan bid in the high-par arena.

Also, in the secondary, market players continue to feel pained by the state of the market as levels felt softer once again and, on top of that, volume was basically non-existent.

In the primary, Cedar Fair LP and Rent-A-Center Inc. came out with price talk on their credit facilities as the deals were launched into syndication with bank meetings on Thursday.

X-Rite quietly freed for trading early on in this session, with the $120 million first-lien term loan (B1/B+) quoted with bids around the mid-par area and offers around the high-par area, according to a trader.

Meanwhile, the $60 million second-lien term loan (B3/B-) was seen quoted at par ¾ bid with no offers, the trader added.

The first-lien term loan is priced with an interest rate of Libor plus 225 basis points, and the second-lien term loan is priced with an interest rate of Libor plus 500 basis points, the low end of original Libor plus 500 to 550 basis points price talk that the tranche was launched with in May.

X-Rite's $220 million credit facility also contains a $40 million revolver (B1/B+) with an interest rate of Libor plus 225 basis points.

Goldman Sachs is the lead bank on the deal.

Proceeds from the facility, along with $80 million in equity and $44 million in cash on hand, will fund the acquisition of Amazys Holding AG, which is split between about $280 million in cash plus 2.11 shares of X-Rite for each share of Amazys.

X-Rite is a Grandville, Mich., provider of color measurement solutions comprised of hardware, software and services for the verification and communication of color data. Amazys is a Regensdorf, Switzerland, technological leader of color management solutions for graphic arts, photography, digital imaging, paints, plastics, apparel, textiles and automotive, among other industries.

Secondary softness persists

The secondary loan market in general felt weaker again during Thursday's session, and activity was unbelievably light, leaving many feeling bored and frustrated, according to traders.

"In terms of volume, this might as well have been a holiday," one trader remarked non-too happily.

Since the start of this week, overall levels have been engaged in this downward spiral affected by macro environmental issues, such as losses in the high-yield and equities markets.

Cedar Fair talk

Cedar Fair released price talk on its proposed $2.095 billion credit facility as the deal was officially presented to lenders during market hours, according to a source.

Both the $350 million five-year revolver and the $1.745 billion six-year term loan B were launched with opening talk of Libor plus 175 basis points, the source said - in line with where the company said it was anticipating pricing to be when the debt commitment was first announced in May.

"L+175 may be too tight given the market and the size of the deal," the source added.

Of the total revolver amount, $40 million will be in Canadian equivalent, and of the total term loan amount, $270 million will be in Canadian equivalent.

Bear Stearns is the lead bank on the transaction.

Proceeds from the credit facility will be used to help fund the $1.24 billion cash acquisition of five Paramount Parks from CBS Corp. and to refinance Cedar Fair's existing debt.

The five Paramount Parks consist of Canada's Wonderland near Toronto, King's Island near Cincinnati, King's Dominion near Richmond, Va., Carowinds near Charlotte, N.C., and Great America located in Santa Clara, Calif.

In 2005, the Paramount Parks generated revenues of about $423 million while entertaining 12.2 million guests. Cedar Fair reported $569 million in revenues and 12.7 million guest visits. On a combined basis, the two companies generated almost $1 billion in revenues and entertained about 25 million guests in 2005.

Pro forma for the acquisition, leverage will be around 5.6x.

Cedar Fair has said that it plans on repaying a portion of the proposed term loan debt using proceeds from an up to $250 million public offering of its limited partnership interests that is expected to be completed within the next six months.

The public offering, if completed, will reduce the company's overall leverage and achieve an economical total cost of capital.

Commitments on the credit facility are due June 29, and closing and funding is targeted for July 10.

Cedar Fair is a Sandusky, Ohio, owner and operator of amusement parks and water parks.

Rent-A-Center price talk

Rent-A-Center also floated price talk around the market as it launched a $725 million senior credit facility into syndication with a bank meeting during market hours, according to a source.

Both the $325 million term loan and the $400 million revolver were heard to be launched with opening talk of Libor plus 150 basis points, the source said.

JPMorgan and Lehman are the lead banks on the deal, with JPMorgan the left lead.

Proceeds will be used to repay existing senior debt, currently $388.9 million outstanding, and for general corporate purposes.

The refinancing is expected to be completed in the third quarter.

Rent-A-Center is a Plano, Texas, operator of company-owned stores in the rent-to-own industry.

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