Valassis trims institutional price talk; Northwest Airlines dips on repricing

By Sara Rosenberg

New York, Feb. 23 - In the primary market Friday, Valassis Communications Inc. revised price talk lower on its institutional bank debt, while in the secondary, Northwest Airlines Corp.'s term loan was a touch softer in trading after news of a repricing spread through the market.

Valassis reduced the price talk on its funded term loan B and delayed-draw term loan B tranches on Friday morning, according to a market source.

Following the change, the $540 million funded term loan B and the $160 million delayed-draw term loan B are now both being talked at Libor plus 175 to 200 basis points, down from original talk at launch of Libor plus 225 bps, the source said.

The ticking fee on the delayed-draw tranche remained at 100 bps for the 15-month delayed-draw period, the source added.

Valassis' $820 million credit facility (Ba2/BB-) also includes a $120 million revolver that is still being talked at Libor plus 225 bps.

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

Proceeds from the funded bank debt will be used to fund the acquisition of ADVO Inc. for $33 per share in cash, or about $1.2 billion, including about $125 million in existing ADVO long-term debt, which Valassis expects to refinance.

The delayed-draw debt will be used to refinance an existing note.

Other acquisition financing will come from a $590 million high-yield bond offering.

Valassis is a Livonia, Mich., marketing services company. ADVO is a Windsor, Conn., direct mail media company.

Atlantic Broadband flexes

Atlantic Broadband Finance, LLC lowered pricing on its $110 million term loan B add-on (B1/B) to Libor plus 225 bps from original talk of Libor plus 250 bps, according to a market source.

In addition, the company is now going to reprice its existing term loan debt to Libor plus 225 bps from Libor plus 275 bps, as opposed to repricing it to Libor plus 250 bps, the source said.

With the reverse flex, the company added 101 soft call protection for one year to the new and existing term debt, the source added.

Merrill Lynch and Credit Suisse are the lead banks on the deal.

Proceeds from the add-on will be used to redeem a portion of the preferred securities of Atlantic Broadband Group, LLC, to repay all term loan A borrowings and to reduce a portion of its revolver borrowings.

Atlantic Broadband is a Quincy, Mass., provider of digital video, high-speed internet and phone service.

Northwest softens in trading

Northwest Airlines' term loan fell by about a quarter of a point in trading on Friday as the company's recently launched repricing proposal became more widespread news, according to a trader.

The term loan ended the session at par ½ bid, par 7/8 offered, down from Thursday's trading levels of par ¾ bid, 101¼ offered, the trader said.

Under the repricing, the company is looking to lower the spread on its term loan, as well as on its revolver, to Libor plus 200 bps from Libor plus 250 bps.

The loans being repriced are under the company's debtor-in-possession financing credit facility, but when the DIP facility converts into an exit facility, the new pricing will carry over.

Citigroup, JPMorgan and Deutsche Bank are the lead banks on the deal.

The repricing was launched via Intralinks late Thursday. There are no plans for a conference call at this time.

Northwest is an Eagan, Minn.-based airline.

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