Demand fuels Hawkeye's spread reduction; American Commercial upsizes; UPC piling on orders fast

By Sara Rosenberg

New York, Feb. 10 - Some changes were made to in-market deals as Hawkeye Renewables LLC announced a pretty significant reduction in pricing on its term loan and American Commercial Lines LLC upsized its revolving credit facility and added a pricing grid to the deal.

Meanwhile, UPC Financing Partnership's term loan H, which just launched in New York on Thursday but launched to a much smaller audience in Los Angeles on Tuesday, has seen orders pouring in with the tranche something like two thirds of the way done.

Hawkeye Renewables reverse flexed its $185 million seven-year senior secured term loan (B2/B) to Libor plus 287.5 basis points from Libor plus 350 basis points as the deal was about two times oversubscribed, according to a market source.

Furthermore, call protection provisions were eased to 101 in year one, 101 in year two and par thereafter from originally proposed call protection requirements of 102 in year one, 102 in year two, 101 in year three and par thereafter, the source added.

Credit Suisse First Boston is the sole lead bank on the deal.

Proceeds will be used for project financing, which basically entails building up existing plants and new plants.

Hawkeye Renewables is an Iowa Falls, Iowa, manufacturer of alcohol-based fuel derived from corn.

American Commercial upsizes

American Commercial Lines increased the size of its in-market five-year asset-based revolver to $250 million from $225 million, according to a market source.

Furthermore, the syndicate added a pricing grid to the credit agreement but left initial pricing at original talk of Libor plus 250 basis points, the source added.

Bank of America and UBS are the lead banks on the deal, with Bank of America the left lead.

Proceeds from the revolver, along with proceeds from a $200 million senior notes offering, will be used to repay the existing $35 million asset-based revolver and refinance the recently distributed restructured bank debt that was obtained in connection with the company's exit from bankruptcy earlier this month to satisfy obligations to senior secured lenders.

The bonds priced earlier this week at par to yield 9½%. Price talk was 9 5/8% to 9 7/8%.

The restructured bank debt consists of a $225 million second-lien term loan A with an interest rate of Libor plus 400 basis points and a $139 million third-lien term loan B with an interest rate of 10% and a 3% PIK.

American Commercial Lines is a Jeffersonville, Ind.-based marine transportation and services company.

UPC filling up

UPC Financing Partnership, a subsidiary of Denver-based broadband network business UnitedGlobalCom Inc., held a very well attended bank meeting in New York on Thursday and has obviously caught the attention of many investors as about $400 million is already in the book for the $600 million term loan H, according to a market source.

"The deal is going really well. Recent [financial] numbers impressed guys," the source said.

Also working in favor of the deal is the fact that investors are familiar with the company because it has so much existing debt and the overall primary loan market is on fire.

"Guys don't find value in the secondary and I think they see value in this," the source added.

The term loan H, which is being offered to investors at par and contains soft call protection of 101 for year one, is talked at Libor plus 300 basis points with a step down to Libor plus 275 basis points when leverage falls below 4x.

The deal launched in Los Angeles on Tuesday, but the meeting was on a much smaller scale with about 10 to 15 accounts attending in person and no dial-in number for those who couldn't be there.

About two or three accounts had already put in orders prior to the Los Angeles meeting.

In addition to the term H, UPC Distribution Holdings BV, the wholly owned subsidiary of UnitedGlobalCom that holds and operates broadband network business in 11 European countries, is working on getting a new €850 million term loan G talked at Libor plus 250 basis points. The euro tranche does not contain a call protection provision but is being offered with upfront fees of 75 basis points for commitments of up to $35 million, 100 basis points for commitments of $36 million to $50 million in size, 125 basis points for commitments of $51 million to $70 million in size and 150 basis points for any commitments larger than $70 million.

Proceeds from the two term loans will be used to refinance the company's existing term loan B and the existing term loan C, which carry an interest rate of Libor plus 550 basis points.

The euro term loan G was launched in January to new and existing banks. However rollover commitments from lenders who currently hold positions in the company's euro-denominated term loan B paper that is being refinanced was expected to account for a large chunk of the deal.

"The term G is done to existing banks. It's oversubscribed," the source confirmed.

Bank of America, Royal Bank of Scotland and ABN Amro are the lead banks on both term loans.

UPC's $525 million term loan F that was recently obtained via TD Securities Inc. and BNP Paribas will remain in place and keep its current pricing of Libor plus 350 basis points, for now. However, after June, the pricing can step down to Libor plus 300 basis points if leverage gets below 4x.

Centennial Communications closes

Centennial Communications Corp. closed on its repricing amendment, under which the company got a $595 million 5.8-year term loan C at Libor plus 225 basis points compared to previous term loan pricing of Libor plus 275 basis points.

The amendment also provides the company with additional flexibility under some of the credit facility covenants.

"This amendment is another significant milestone in the steps we have taken to improve our financial flexibility and strength," said Michael J. Small, chief executive officer, in a company news release.

Credit Suisse First Boston and Lehman Brothers acted as joint lead arrangers on the deal.

Centennial is a Wall, N.J., wireless and broadband telecommunications service provider.

AMR, EmCare closes

Onex Corp. completed its acquisitions of American Medical Response Inc. and EmCare Holdings Inc. from Laidlaw International Inc. for about C$1 billion, according to a company news release.

To help fund the leveraged buyout, AMR, EmCare got a new $450 million credit facility (B2/B+) consisting of a $350 million term loan B with an interest rate of Libor plus 275 basis points and a $100 million revolver.

Bank of America and JPMorgan were the lead banks on the deal, with Bank of America the left lead.

AMR is a Denver-based provider of ambulance transport services. EmCare is a Dallas-based provider of outsourced hospital emergency department physician staffing and management services.

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