Landry's Restaurants firms term loan discount, gets ready to free to trade; LCDX slips lower

By Sara Rosenberg

New York, Feb. 13 - Landry's Restaurants Inc. finalized the original issue discount on its term loan on Friday, the same day in which the deal funded, and is now preparing to hit the secondary market after the long weekend.

In other news, LCDX 10 was a touch weaker during Friday's trading session, and the cash market was described as very quiet.

Landry's sets OID

Landry's firmed up the original issue discount on its $165 million term loan at 95, the wide end of recent guidance that was in the 95 to 96 context, according to a market source.

Pricing on the term loan remained at Libor plus 600 basis points with a 3.5% Libor floor throughout the syndication process.

However, the size of the loan did change a little during marketing. Previously, the term loan was $160 million, but it was increased a short while ago by $5 million primarily to account for the original issue discount.

Landry's $215 million amended and restated credit facility also includes a $50 million revolver that is priced at Libor plus 600 bps with a 3.5% Libor floor as well.

Landry's to break soon

Landry's term loan is expected to free for trading on Tuesday now that the original issue discount has been nailed down and closing and funding took place on Friday, the source remarked.

The source went on to say that the term loan break is anticipated to be at the 95 level, right in line with the discount price.

The term loan and revolver were syndicated through a quiet marketing period. There was never actually a formal bank meeting held to launch the transaction and there is no intention to do a follow-up bank meeting after the close being that syndication has been completed, the source added.

Proceeds from the credit facility are being used to help refinance an interim credit facility as well as the company's 9.5% senior notes and 7.5% senior notes.

The interim facility, obtained in December, consisted of a $31 million term loan and a $50 million revolver, with both tranches priced at Libor plus 600 bps with a 3.5% Libor floor, and that term loan was issued at roughly 961/2.

Landry's also gets notes

To help with the refinancing, Landry's also approached the high-yield market with a new senior secured notes offering.

On Feb. 4, the company priced $295.5 million of 14% senior secured notes at 88 to yield 20.346%. The sale generated $260.04 million of proceeds.

The coupon on the notes came on top of talk, but the issue price came at the wide end of the 88 to 89 guidance. Yield talk had been in the range of 0.25% below or above 20%.

In addition, the notes offering had originally been launched to investors with a size of $270 million.

At first, the company was planning to get $210 million of notes and a $210 million term loan, but the notes were upsized and the term loan was downsized before marketing even started.

Wells Fargo Foothill and Jefferies are the lead banks on the credit facility.

Landry's is a Houston-based restaurant company.

LCDX dips

Switching to secondary happenings, LCDX 10 was slightly softer in the early afternoon on Friday, while cash saw little trading activity, according to traders.

The index was quoted at 73.45 bid, 73.70 offered around 1 p.m. ET, down from Thursday's closing levels of around 73.75 bid, 74 offered, traders said.

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