NewPage on hold; Precision Partners reworks deal; U.S. Shipping, Kranson set talk; Cedar Fair breaks

By Sara Rosenberg

New York, July 21 - NewPage Holding Corp. has put its credit facility on hold as the concurrent initial public offering of common stock was postponed; however, the decision on whether the loan is going to be pulled from market altogether has not yet been made.

In other primary news, Precision Partners Holding Co. made a round of changes to its deal, including increasing pricing and adding original issue discounts, U.S. Shipping Partners LP came out with price talk on its credit facility as the deal was launched with a Friday bank meeting and Kranson Industries Inc. started to float price talk around ahead of its launch.

Switching to trading, Cedar Fair LP's credit facility hit the secondary, with the U.S. term loan B bouncing around throughout the low-par to low-101 context with lots of activity seen.

NewPage has put syndication on its $1.025 billion credit facility on hold after postponing its common stock IPO, but the facility has not technically been pulled from market, according to a source, who said that an update on the loan transaction is expected to be announced on Tuesday.

"It was to be done in conjunction with the IPO. They have an existing facility out there. This was a deleveraging for them so how are they going to do the new deal. If you do it without the IPO then you're increasing leverage," the source added.

In a press release on Friday, NewPage said that it was putting off the IPO "due to market conditions."

The credit facility consists of a $750 million term loan due Feb. 1, 2012 (Ba3/B+) with an interest rate of Libor plus 225 basis points and a $275 million ABL revolver due May 1, 2011 with an interest rate of Libor plus 175 basis points.

Just recently, pricing on the term loan was flexed up from original talk at launch of Libor plus 200 basis points and pricing on the revolver was flexed up from original talk at launch of Libor plus 150 basis points.

Goldman Sachs is the lead bank on the deal that will be used to refinance existing debt.

NewPage is a Dayton, Ohio, operator of pulp and paper mills.

Precision Partners tweaks terms

Precision Partners reworked its credit facility, increasing pricing on all tranches, adding original issue discounts to all term loans and sweetening second-lien call premiums, according to a market source.

The $25 million six-year revolver, $140 million seven-year first-lien term loan, $55 million seven-year delayed-draw first-lien term and C$30 million six-year first-lien term loan are now all priced at Libor plus 300 basis points, up from original talk at launch of Libor plus 275 basis points, the source said.

Meanwhile, the $80 million 71/2-year second-lien term loan is now priced at Libor plus 725 basis points, up from original talk at launch of Libor plus 625 basis points, the source continued.

In addition, the $140 million first-lien funded term loan and the C$30 million first-lien funded term loan are now being issued with an original issue discount of 99.

And, the $55 million delayed-draw first-lien term loan and the $80 million second-lien term loan are now being issued with an original issue discount of 981/2, the source remarked.

Lastly, call protection on the second-lien term loan was changed to 103 in year one, 102 in year two and 101 in year three, from the previously proposed premiums of 102 in year one and 101 in year two.

The delayed-draw term loan is delayed draw for one year and carries a 100 basis point ticking fee.

Lehman is the lead bank on the deal that will be used to refinance existing debt, and CIT and Jefferies have joined on as bookrunners.

Precision Partners is a Hazlet, N.J., manufacturing and engineering services company.

U.S. Shipping spread guidance

U.S. Shipping released guidance on its proposed $310 million amended and restated credit facility as the deal was presented to lenders with a bank meeting during the Friday session, according to a market source.

The $210 million term loan, $50 million delayed-draw term loan and $50 million revolver were all launched with opening talk in the Libor plus 300 to 325 basis points area, the source said, explaining that currently this talk is just guidance since the deal is still waiting on ratings.

The delayed-draw fee will be half the funded spread, the source added.

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

Proceeds from the credit facility, a proposed $200 million notes offering and a $75 million class B common units issuance will be used to fund $245.9 million into an escrow account available solely for the construction of four new articulated tug-barges, to fund up to $70 million of equity contributions to a joint venture, to refinance $152.1 million of existing indebtedness and for general corporate purposes.

Each of the financing transactions is dependent on completion of the others and the joint venture.

The joint venture being formed is USS Product Investors LLC, and this new subsidiary has entered into an agreement with National Steel and Shipbuilding Co. for the construction of nine double-hulled tankers and the option to construct five additional tankers.

U.S. Shipping will own a 40% equity interest in the joint venture, with affiliates of The Blackstone Group, Lehman Brothers and certain other investors owning in total a 60% equity interest.

U.S. Shipping is an Edison, N.J., provider of long-haul marine transportation services, primarily for refined petroleum products.

Kranson floats talk

Kranson came out with price talk of Libor plus 275 basis points on its proposed $290 million credit facility as the deal is gearing up to launch with a Monday bank meeting, according to a market source.

Tranching on the deal consists of a $75 million revolver and a $215 million term loan B.

General Electric Capital Corp. is the lead bank on the facility that will be used to help fund Code Hennessy & Simmons' leveraged buyout of the company from AEA Investors LLC.

Kranson is a St. Louis-based provider of rigid packaging containers and related components.

Triumph downsizes

Triumph HealthCare LLC reduced the size of its credit facility after it decided to cut the dividend being paid with proceeds from the deal by $50 million, according to a market source.

The first-lien term loan is now sized at $225 million, down from an original size of $250 million, the source said. Pricing on this tranche remained at Libor plus 300 basis points.

As for the second-lien term loan, sizing was reduced to $85 million from an original size at launch of $110 million, the source added. Pricing and call protection were left unchanged at Libor plus 800 basis points and 102 in year one, 101 in year two.

The company's $35 million revolver was left alone in terms of size and pricing, which is set at Libor plus 300 basis points.

BNP Paribas and Bear Stearns are the lead banks on the now $345 million dividend recapitalization deal, with BNP the left lead.

Allocations on the facility are expected to go out during the week of July 24, with closing targeted for the end of that week.

Triumph HealthCare is a Houston-based privately owned hospital company.

Cedar Fair frees to trade

Moving to the secondary, Cedar Fair broke for trading, with the $1.475 billion U.S. term loan B opening up at par ¼ bid, par ½ offered, heading as high as par ¾ bid, 101 1/8 offered and then settling back down to par 3/8 bid, par 5/8 offered, where it closed the session, according to a trader.

The term loan B is priced with an interest rate of Libor plus 250 basis points. During syndication, pricing on the tranche was flexed up from original talk of Libor plus 175 to 200 basis points.

Cedar Fair's $2.095 billion credit facility (Ba3/BB-) also contains a $270 million Canadian equivalent term loan B, a $40 million Canadian equivalent revolver and a $310 million U.S. revolver, with all of these tranches priced at Libor plus 250 basis points as well, after flexing up from original talk of Libor plus 175 to 200 basis points during syndication.

Bear Stearns acted the lead bank on the deal that was 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.

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

NES Rentals closes

Diamond Castle Holdings, LLC completed its leveraged buyout of NES Rentals Holdings, Inc. for about $850 million, according to a company news release.

To help fund the LBO, NES got a new $880 million credit facility consisting of a $480 million five-year ABL revolver at Libor plus 175 basis points with a 25 basis point undrawn fee, a $325 million seven-year second-lien term loan (Caa1/B-) at Libor plus 675 basis points and a $75 million asset-sale loan at Libor plus 575 basis points for 12 months, stepping up to Libor plus 625 basis points for months 13 to 18 and Libor plus 675 basis points thereafter.

The second-lien loan contains call protection of 103 in year one, 102 in year two and 101 in year three.

During syndication, the second-lien tranche was downsized from $430 million, pricing was flexed up twice - first from Libor plus 550 basis points then from Libor plus 600 basis points - and call premiums were sweetened from just 102 in year one and 101 in year two.

Also during syndication, the revolver was upsized from $450 million to help compensate for the second-lien loan downsizing, the asset-sale loan was added to the capital structure, and the ABL revolver $100 million accordion feature was eliminated from the transaction.

Deutsche Bank and Bank of America acted as joint leads on the revolver, with Deutsche on the left.

Deutsche Bank, Bank of America and Bear Stearns acted as joint leads on the second-lien term loan, with Deutsche on the left.

NES is a Chicago-based aerial and general equipment rental and traffic safety services provider.

Herbalife closes

Herbalife Ltd. closed on its new $300 million senior secured credit facility (Ba1) consisting of a $200 million seven-year term loan B and a $100 million six-year revolver, according to a company news release.

The term loan B is priced with an interest rate of Libor plus 150 basis points, and the revolver is priced with an interest rate of Libor plus 125 basis points.

Merrill Lynch, JPMorgan and Morgan Stanley acted as joint lead arrangers and joint bookrunners on the deal, with Merrill the left lead.

At close, about $15 million was drawn under the revolver, and with about $65 million of available cash, the company repaid outstanding borrowings under its previous senior credit facility.

Proceeds from the term loan will be used to redeem the company's $165 million 9½% notes due 2011 on Aug. 23.

"We continue to proactively deleverage the company reflecting the strong cash flow generation of our business coupled with the creation of a more flexible and efficient capital structure," said Rich Goudis, chief financial officer, in the release.

"The result has been a reduction of debt, a lower effective interest rate and improved coverage ratios which led to the recent corporate family credit rating upgrades from both Moody's and S&P to Ba1 and BB+, respectively. The benefits from this recapitalization will allow us to invest further in the needs of our distributors, our business and our shareholders," Goudis added in the release.

Herbalife is a George Town, Cayman Islands, network marketing company that sells weight-management, nutritional supplements and personal care products.

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