Wyndham met with early investor demand, sets price talk; IAP term B breaks in upper pars

By Sara Rosenberg

New York, March 31 - Wyndham International Inc. set price talk on its $895 million credit facility as the deal launched via a very well attended bank meeting, and the institutional portion of the loan already attracted some orders by the afternoon.

In the secondary, IAP Worldwide Services allocated its credit facility on Thursday, with the term loan B freeing up for trading in the upper par region and the second-lien term loan opening in the low par context before falling below par by day's end.

Wyndham came out with price talk of Libor plus 325 basis points on its $175 million six-year revolver (B3/expected B), $50 million six-year institutional letter-of-credit facility (B3/expected B) and $530 million six-year term loan B (B3/expected B) as it launched to lenders Thursday, according to a market source.

Furthermore, price talk on the $140 million 61/2-year second-lien term loan (Caa1/expected CCC+) came out Libor plus 650 basis points, the source said.

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

Both the first-lien term loan B and the second-lien term loan are being offered to investors at par. The revolver is being offered to investors with an upfront fee of 100 basis points and $10 million to $15 million sized tickets are being sought after.

"A couple of commitments have come in. A lot of people know this name. They've been around for a long time. They got a pretty good record. Expecting a lot of rollover," the market source said.

"The amount of loan is going down big time and value is going up. Loan to value is going from like 100% to around 60%. Before loan to value for CMBS was very low and loan to value for [the credit facility] was very high. Now the loan to values will be very close to each other for the loan and the two CMBS deals - they're doing one now and one this summer. That's the big story," the source added.

Proceeds from the credit facility will be used in combination with proceeds from about $944 million of new CMBS debt to refinance about $1.65 billion of the company's outstanding debt, which would include refinancing its corporate credit facility and the majority of its outstanding mortgage debt.

In addition, through the refinancing the company will have access to $100 million in pre-funded capital expenditures to invest in owned properties.

As of Dec. 31, Wyndham had about $68.6 million outstanding under its revolver, $870.8 million outstanding on its term loan I, $284.2 million outstanding on its term loan II, outstanding letters of credit totaling $65.5 million and $932.8 million of mortgage debt outstanding that encumbered 30 hotels and capital leases.

JPMorgan and Bear Stearns are the lead banks on the deal, with JPMorgan the left lead.

Commitments are due from investors on April 14.

Wyndham is a Dallas-based provider of upscale and luxury hotel and resort accommodations.

IAP breaks

IAP's credit facility freed up for trading late in the day Thursday, with the $240 million term loan B opening at par ½ bid for $2 million, par ¾ offered for $1 million, according to a fund manager. And bid/offer levels stayed in the context throughout the remainder of the session, a trader added.

The $120 million second-lien term loan freed up for trading at par bid for $2 million. Par ½ offered for $4 million, according to the fund manager. However, levels slipped off to 99 bid, par offered by the end of the day.

"A couple of guys got over-allocated so it weakened up a little bit," the trader said in explanation of the second lien's drop.

As for allocations on the deal, "I'm not sure how allocations were for everyone, [but] ours was very good; 90% of our first-lien order," the fund manager added.

Pricing on the term loan B ended up coming in at the low end of talk at Libor plus 275 basis points. Original guidance on the tranche had been Libor plus 275 to 300 basis points.

Meanwhile, pricing on the second-lien term loan ended up at the high end of talk at Libor plus 575 basis points. Original guidance on the tranche had been Libor plus 550 to 575 basis points.

IAP's $435 million credit facility also contains a $75 million revolver.

Proceeds from the new deal will be used to help fund Cerberus' leveraged buyout of the company.

Deutsche Bank and Goldman Sachs are the lead banks on the deal, with Deutsche the left lead.

IAP Worldwide Services is an Imco, S.C.-based company that provides products and services to public and private sector companies and government agencies.

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