Qwest considering even larger credit facility as newly launched deal sees overwhelming demand

By Sara Rosenberg

New York, June 4 - Qwest Communications International Inc.'s credit facility may be upsized for the second time as the company is now considering a $1.75 billion loan due to strong demand - evident in the more than $3 billion in commitments received at the start of the week. There has been no final decision as to which tranche the additional $250 million would go, but it most likely will be tacked on to the $1 billion four-year senior term loan, a syndicate source told Prospect News.

On Monday, the Denver telecommunications company announced that it was considering increasing the initially proposed $1 billion credit facility to $1.5 billion. This increase was accomplished by adding a $500 million fixed-rate incremental term loan due 2010.

The $1 billion four-year unsecured, non-amortizing term loan (Ba3/B-/B) is indicated at Libor plus 475 basis points, is being offered at 99 and has a Libor floor of 175 basis points.

The $500 million incremental term loan is being talked at 7% to 7 ¼%.

Merrill Lynch & Co., Credit Suisse First Boston and Deutsche Bank are leading the deal, which will be used to refinance debt due in 2003 and fund business needs.

Pricing on Riverwood Holdings Inc.s' $1.6 billion credit facility, which is scheduled to launch on Thursday, was revealed, with the $400 million six-year revolver expected at Libor plus 300 basis points, the $350 million six-year term loan A expected at Libor plus 275 basis points and the $850 million seven-year term loan B expected at Libor plus 300 basis points, according to a syndicate source.

JPMorgan, Deutsche Bank, Goldman Sachs and Morgan Stanley are the lead banks on the deal.

Proceeds will be used to help fund the merger between Riverwood and Graphic Packaging International Corp.

Riverwood is an Atlanta provider of paperboard packaging solutions to multinational beverage and consumer products companies. Graphic Packaging is a Golden, Colo. folding carton packaging supplier to the food, beverage and other consumable products markets.

In follow-up news, Werner Holding Co. Inc.'s $170 million six-year term loan B was flexed down by 50 basis points to Libor plus 275 basis points, according to market sources.

The $230 million senior secured credit facility (Ba3/B+) also contains a $60 million five-year revolver.

JPMorgan and Citigroup are the lead banks on the deal that will be used to redeem $150 million of common stock and options from existing holders.

Werner is a Greenville, Pa., operator in the climbing products and extruded products business segments.

Cross Country Healthcare Inc.'s $125 million six-year term loan B also got flexed down, and is now priced at Libor plus 325 basis points compared to initial pricing of Libor plus 350 basis points, market sources said.

The $200 million credit facility (Ba1/BB-) also contains a $75 million five-year revolver.

Citigroup is leading the Boca Raton, Fla. healthcare staffing service's deal, which will be used to help fund the acquisition of Med-Staff Inc., refinance existing debt and provide working capital.

In the secondary, Charter Communications Inc.'s term loan B fell off a bit during morning activity and then pulled itself back up by the end of the day. The loan traded at 93 7/8 early in the session, down from a trading level around 94 on Tuesday, according to one trader.

"We saw the paper offered below 94 all day and then it came back up a bit. Now it's better bid around 94," a second trader remarked.

The St. Louis cable company's bank debt started rallying last week due to an amendment of the credit agreement, which included a 50 basis points increase in the spread. The amendment also regarded a $300 million loan from Paul Allen.

WestPoint Stevens Inc.'s bank debt traded higher at levels between 95 and 96 on Wednesday, according to traders. "Since bankruptcy it has traded from 90 to 95, 96. And, a lot has traded," a trader said.

The West Point, Ga.-based home fashions manufacturer filed for Chapter 11 bankruptcy protection on Monday, listing $1.3 billion in assets and $2.1 billion in liabilities as of March 31. The company retained Rothschild Inc. as financial advisors and Weil, Gotshal & Manges LLP as restructuring counsel.

As part of its restructuring, the company entered into an agreement with lenders for a $300 million revolving debtor-in-possession financing facility. Bank of America is the administrative agent, Wachovia Bank is the syndication agent and Banc of America Securities LLC is the book manager and sole lead arrangers.

The revolver, which has a term of one-year with provisions for two extensions of six months each, provides for a $75 million sub-limit for standby and documentary letters of credit. Interest on the DIP is Libor plus 275 basis points.

No bank meeting has been scheduled so far.

Interim approval was granted by the court on Tuesday for the company to access $175 million of the DIP.

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