Celanese, BioReliance set talk; Building Materials, NSG tweak deals; Key Safety breaks

By Sara Rosenberg

New York, March 8 - Celanese Corp. and BioReliance Corp. came out with price talk on their credit facilities as the deals were launched with bank meetings on Thursday.

In other primary news, Building Materials Corp. of America revised its credit facility by adding a new second-lien term loan and increasing price talk on the first-lien term loan B, and NSG Holdings LLC lowered pricing on its credit facility.

Meanwhile, in the secondary, Key Safety Systems, Inc.'s credit facility freed for trading, with the first-lien term loan quoted in the upper par's to low 101's and the second-lien loan quoted atop 101.

Celanese held a bank meeting on Thursday to launch its proposed $3.628 billion credit facility (Ba3/BB-), at which time, price talk on the transaction surfaced, according to a market source.

The $600 million revolver due 2013 was launched with price talk of Libor plus 150 basis points, the €400 million term loan B due 2014 was launched with price talk of Euribor plus 175 bps, and both the $2.28 billion term loan B due 2014 and the $228 million credit-linked revolver letter-of-credit facility due 2014 were launched with price talk of Libor plus 175 bps, the source said.

Merrill Lynch and Deutsche Bank are the joint bookrunners and joint lead arrangers on the deal.

Proceeds will be used to refinance the company's existing facility, which consists of a $1.622 billion term loan B due 2011, a $600 million revolver due 2009 and a $228 million credit-linked revolver facility due 2009, and to tender for all of its $796 million 9 5/8% senior subordinated notes, €130 million 10 3/8% senior subordinated notes, and $430 million of 10% and 10½% senior discount notes.

Upon completion, the proposed refinancing plan will reduce the company's debt by more than $200 million, lower net interest expense, extend debt maturities, improve flexibility and modify and simplify its global corporate and capital structure.

Celanese is a Dallas-based hybrid chemical company.

BioReliance guidance

BioReliance also released price talk on its new deal as the company held a bank meeting in New York to formally begin the syndication process, according to a market source.

The $55 million U.S. term loan and $40 million U.K. term loan were presented with talk of Libor plus 275 bps, and the $40 million second-lien term loan was presented with talk of Libor plus 600 bps, the source said.

The $155 million senior secured credit facility also includes a $15 million U.S. revolver and a $5 million U.K. revolver.

UBS is the lead bank on the deal.

Proceeds will be used to help fund Avista Capital Partners' acquisition of BioReliance from Invitrogen Corp. for about $210 million.

BioReliance is a Rockville, Md., contract service organization providing biological safety testing, toxicology, viral manufacturing and laboratory animal diagnostic services to the pharmaceutical and biopharmaceutical industries.

Building Materials reworks structure

Building Materials made some changes to its in-market deal, including adding a new second-lien term loan tranche to replace the company's previously proposed bond offering and raising price talk on the first-lien term loan B, according to a market source.

The new 71/2-year second-lien loan is sized at $325 million, is being talked at Libor plus 600 bps and carries call protection of non-callable for one year then at 101 in year two, the source said.

This second-lien term loan replaces the company's $325 million senior secured notes offering, which had been restructured last week to eliminate a proposed fixed-rate tranche, and was being talked at Libor plus 475 to 500 bps. These bonds were expected to be non-callable for two years.

As for the $975 million seven-year term loan B (B2/BB-), that is now being talked at Libor plus 275 bps, up from original talk at launch of Libor plus 250 bps, the source continued.

Price talk on the $600 million five-year ABL revolver was left unchanged at Libor plus 150 bps, the source added.

Prior to the deal's launch, the company had said in various filings with the Securities and Exchange Commission that it expected the first-lien term loan B to price at Libor plus 275 and the ABL revolver to price at Libor plus 150 bps. It wasn't until the actual bank meeting that price talk on the first-lien term loan B came out at Libor plus 250 bps.

Deutsche Bank, Bear Stearns and JPMorgan are the lead banks on the $1.575 billion senior secured deal.

Proceeds from the facility will be used to help fund the acquisition of ElkCorp for $43.50 per share.

Building Materials is a Wayne, N.J.-based building products company. ElkCorp is a Dallas-based manufacturer of roofing and building products.

NSG reverse flexes

NSG Holdings reduced pricing on its $286 million term loan and $32.5 million synthetic letter-of-credit facility to Libor plus 150 bps from original talk at launch of Libor plus 175 to 200 bps, according to a market source.

Recommitments are due from lenders on Friday at 1 p.m. ET, the source added.

Lehman Brothers and BNP Paribas are the lead banks on the $318.5 million senior secured credit facility (Ba2/BB), with Lehman the left lead.

Proceeds will be used to refinance existing debt and fund a sponsor equity distribution.

NSG is a subsidiary of Northern Star Generation LLC, a Houston-based power generation company that is jointly owned by AIG Highstar Capital II LP and The Ontario Teachers Pension Plan Board.

Key Safety frees to trade

Moving to the secondary market, Key Safety Systems' credit facility broke for trading, with the $360 million first-lien term loan B quoted at par 5/8 bid, 101 1/8 offered and the $85 million second-lien term loan C quoted at 101 1/8 bid, 101 5/8 offered, according to a trader.

The first-lien term loan B is priced at Libor plus 225 bps with 101 soft call protection for one year. During syndication, this tranche was upsized from $350 million, pricing was reduced from original talk of Libor plus 275 bps and the soft call was added.

The second-lien term loan C is priced at Libor plus 500 bps with call protection of 102 in year one and 101 in year two. During syndication, this tranche was downsized from $100 million and pricing was reverse flexed from original talk of Libor plus 550 bps.

Key Safety Systems' $495 million credit facility also includes a $50 million revolver that is priced at Libor plus 275 bps.

Citigroup and Bear Stearns acted the lead banks on the deal, with Citigroup the left lead.

Proceeds were used to fund Crestview Partners' acquisition of the company, the completion of which was announced on Thursday.

Key Safety Systems is a Sterling Heights, Mich., supplier of automotive safety components and systems.

Encore Acquisition closes

Encore Acquisition Co. closed on its new $1.25 billion five-year senior secured revolving credit facility that matures on March 7, 2012, according to a company news release.

Bank of America acted as the lead bank on the deal.

The revolver has an initial borrowing base of $650 million that will increase to $950 million upon completion of the Williston Basin acquisition, which is scheduled to close in April.

Encore is buying oil and natural gas properties in the Williston Basin in Montana and North Dakota from Anadarko Petroleum Corp. for $410 million in cash.

In addition, the company bought oil and natural gas properties in the Big Horn Basin in Wyoming from Anadarko for about $400 million in cash in a transaction that was announced to be completed on Thursday.

Furthermore, Encore's subsidiary closed on a new $300 million five-year revolver with a $115 million borrowing base and a $10 million overadvance feature, which will be non-recourse to the company. This revolver also matures on March 7, 2012 and was also led by Bank of America.

Encore is a Fort Worth, Texas, developer of onshore North American oil and natural gas reserves.

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