Plastech, Health Management break; Venetian Macau dips on repricing, Pinnacle lower on LBO news

By Sara Rosenberg

New York, Feb. 12 - Plastech Engineered Products Inc. and Health Management Associates Inc. saw their credit facilities free for trading on Monday, Venetian Macau Ltd.'s term loan softened as a repricing and upsizing amendment was launched, and Pinnacle Foods Group Inc.'s term loan fell after the company announced plans to be bought out.

As for primary happenings, IFM (Industry Funds Management) closed the books on its term loan more than a week ahead of schedule due to overwhelming investor demand.

Plastech's credit facility allocated and freed for trading on Monday morning, with the $265 million six-year first-lien term loan B (B3/B+) quoted at par ½ bid, 101 offered and the $100 million seven-year second-lien term loan (Caa2/B-) quoted at 99 bid, according to a market source.

The first-lien term loan B is priced at Libor plus 550 basis points with call protection of 102 in year one and 101 in year two. During syndication, pricing firmed up at the wide end of original guidance of Libor plus 500 to 550 bps and call premiums firmed up from being labeled as 'to be determined' at launch.

The second-lien term loan is priced at Libor plus 900 bps with a leverage-based grid, was sold to investors with an original issue discount of 98 and carries call protection of non-callable for two years, then at 103 in year three, 102 in year four and 101 in year five. During syndication, call premiums firmed up from being labeled as 'to be determined' at launch and details on the pricing grid were determined.

Under the second-lien grid, if total leverage is less than 3.0 times, pricing will be Libor plus 800 bps. If total leverage is 3.0 to 3.5 times, pricing will be Libor plus 900 bps. If total leverage is 3.5 to 4.0 times, pricing will be Libor plus 1,050 bps. If total leverage is 4.0 to 4.5 times, pricing will be Libor plus 1,050 bps plus 200 bps PIK. And, if total leverage is 4.5 to 5.0 times, pricing will be Libor plus 1,050 bps plus 450 bps PIK.

Plastech's $590 million credit facility also includes a $225 million five-year ABL revolver (B1/BB) priced at Libor plus 200 bps with a 50 bps undrawn fee.

The company originally came to market in November 2006 with a $600 million credit facility, consisting of a $200 million ABL revolver (B1/BB) talked at Libor plus 200 bps, a $250 million first-lien term loan B (B2/B+) talked at Libor plus 450 to 500 bps with 101 soft call protection for one year and a $150 million second-lien term loan (Caa2/B-) talked at Libor plus 750 to 800 bps with call protection of 102 in year one and 101 in year two.

As syndication progressed, pricing guidance on the first-lien term loan B narrowed to Libor plus 475 to 500 bps, and then expectations emerged that final pricing would end up at the high end of talk at Libor plus 500 bps, while the second-lien term loan was expected to come wider than the original guidance with additional call premiums layered in.

Then speculation started to float around that the deal might end up looking like something along the lines of a $225 million ABL revolver at Libor plus 200 bps, a $265 million first-lien term loan B at Libor plus 550 bps with call protection of 102 in year one and 101 in year two, and a $125 million second-lien term loan at Libor plus 900 bps with a grid.

By the end of 2006, the company and the syndicate simply decided to completely restructure the original deal and relaunch it with a conference call that took place in late January.

Goldman Sachs is the lead bank on the deal that is being used to refinance existing debt.

Plastech is a Dearborn, Mich., maker of blow-molded and injection-molded plastic products, primarily for the automotive industry.

Health Management frees to trade

Health Management Associates' credit facility also hit the secondary market on Monday, with its $2.75 billion seven-year term loan B quoted at par 7/8 bid, 101 1/8 offered, according to a trader.

The term loan B is priced at Libor plus 175 bps. During syndication, pricing on the tranche was lowered from original talk of Libor plus 200 bps.

Health Management's $3.25 billion senior secured credit facility (Ba2/B+/BB) also includes a $500 million six-year revolver.

Bank of America is the lead bank on the deal that is being obtained in connection with the company's recapitalization plan that will include refinancing its existing credit facility and paying an approximately $2.4 billion dividend to shareholders on March 1.

Pro forma total leverage will be 5.4 times, but the company expects to use excess free cash flow to deleverage its balance sheet.

Health Management is a Naples, Fla., owner and operator of general acute care hospitals in non-urban communities.

Venetian Macau drops on amendment launch

In other trading news, Venetian Macau's term loan gave up some ground during trading hours as the company approached lenders with a $400 million upsizing to its credit facility and a repricing of its existing bank debt, according to a trader.

The term loan ended the session at 101 bid, 101½ offered, down from previous levels of 101 3/8 bid, 101¾ offered, the trader said.

Under the repricing, the company is looking to take the spread down on its existing bank debt - which includes a $500 million revolver, a $100 million local term loan, a $1.2 billion term loan and a $700 million delayed-draw term loan - to Libor plus 225 bps from Libor plus 275 bps.

Investors are being offered 101 soft call protection for one year on the institutional bank debt.

Meanwhile, proceeds from the $400 million in incremental funds, which has already received significant market interest, will be used to make investments in Macau, a market source told Prospect News.

Goldman Sachs, Lehman and Citigroup are the lead banks on the deal, and Scotia is the administrative agent.

Venetian Macau is a subsidiary of Las Vegas Sands Corp., a Las Vegas-based hotel, gaming, resort and exhibition/convention company.

Pinnacle Foods trades down

Pinnacle Foods' term loan headed lower Monday as news of a leveraged buyout hit the market, sparking expectations of a paydown, according to a trader.

The term loan closed the day at par 3/8 bid, par 7/8 offered, down from previous levels of 101 bid, 101½ offered, the trader said.

The company is being bought by The Blackstone Group for $2.16 billion in cash from J.P. Morgan Partners, LLC, J.W. Childs Associates, LP, CDM Group and former bondholders of Aurora Foods Inc.

Lehman Brothers is providing the debt financing to support the LBO.

The transaction is subject to satisfaction of customary conditions and is expected to close in the first half of 2007.

Pinnacle Foods is a Cherry Hill, N.J., manufacturer, marketer and distributor of branded food products.

Consolidated Communications bid lower

Consolidated Communications Holdings Inc.'s term loan saw its bid come under a bit of pressure, while its offer held firm, as it too launched a repricing amendment on Monday, according to a trader.

The term loan ended the day at par 5/8 bid, 101 1/8 offered, compared to previous levels of par ¾ bid, 101 1/8 offered, the trader said.

Under the repricing proposal, the company is looking to lower the term loan spread to Libor plus 175 bps from Libor plus 200 bps, with 101 soft call protection for one year.

Citigroup is leading the deal.

Consolidated Communications is a Mattoon, Ill.-based rural local exchange company.

IFM shuts books

IFM (Industry Funds Management) closed the books on its $225 million five-year term loan B (Ba3/BBB-) on Monday - way ahead of its original Feb. 20 commitment deadline and just a few days after its Feb. 7 bank meeting - due to strong market interest, according to a source.

The term loan B is currently being talked at Libor plus 225 to 250 bps.

Merrill Lynch is the lead bank on the deal.

Proceeds will be used to fund a portion of the acquisition of the 15.8% minority interest in Colonial Pipeline held by Citgo Petroleum Corp. for $641 million. The financing also includes $426 million of equity.

ProQuest closes

ProQuest Information and Learning closed on its new $340 million credit facility consisting of a $240 million first-lien term loan priced at Libor plus 300 bps, a $60 million second-lien term loan priced at Libor plus 575 bps and a $40 million revolver priced at Libor plus 300 bps.

During syndication, pricing on the first-lien term loan and revolver firmed up at the low end of original talk of Libor plus 300 to 325 bps, and pricing on the second-lien was flexed down from original talk at launch that was in the Libor plus 650 bps area.

Morgan Stanley and Goldman Sachs acted the lead banks on the deal that was used to fund Cambridge Information Group's acquisition of ProQuest Information and Learning from ProQuest Co. for about $222 million.

ProQuest Information is an Ann Arbor, Mich., collector, organizer and publisher of information for researchers, faculty and students in libraries and schools. Cambridge Information Group is a Bethesda, Md., privately owned group of information services companies and educational institutions.

Invacare closes

Invacare Corp. closed on its new $400 million senior secured credit facility (Ba2/B+) consisting of a $250 million six-year term loan and a $150 million revolver, with both tranches priced at Libor plus 225 bps, according to a company news release.

The revolver carries a 50 bps commitment fee.

Bank of America, National City and KeyBank acted as the lead banks on the deal.

Proceeds from the credit facility were used to help refinance substantially all of the company's existing debt.

Invacare is an Elyria, Ohio, manufacturer and distributor of nonacute health care products.

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