Eddie Bauer breaks; Chiquita cuts spreads; Country Road tweaks deal; Euramax eyes size, price changes

By Sara Rosenberg

New York, June 21 - Eddie Bauer Holdings Inc.'s term loan allocated and freed up for trading on Tuesday with the paper initially quoted around 101 before steadily climbing higher into the upper-101 context by late day.

Meanwhile, in the primary market, Chiquita Brands International Inc. reduced spreads across the board by 25 basis points on its $600 million credit facility, Country Road made some adjustments to its credit facility, transferring funds and revising pricing and Euramax International Inc. is rumored to be coming out with size and pricing modifications possibly as early as Wednesday.

Eddie Bauer's $300 million six-year term loan (Ba3/B+) opened for trading Tuesday at 101 bid, no offers, but by afternoon the paper was being quoted stronger at 101½ bid, 102 offered, and by the end of the day the bid side had gotten even higher with levels moving to 101 5/8 bid, while the offer remained at 102, according to a fund manager.

As for allocations, "not sure how allocations were overall," the fund manager said. "We did OK - 48% of what we put in for. [I] was told that was a top tier allocation."

Eddie Bauer's term loan is priced with an initial interest rate of Libor plus 275 bps. It flexed up during syndication from original price talk at launch of Libor plus 250 bps.

Pricing on the term loan can step down to Libor plus 250 bps if leverage is less than or equal to 1.75x and can step up to Libor plus 300 bps is leverage is greater than 2.75x. These leverage-based steps in pricing were added at various points during syndication.

The interest rate can also increase by 25 bps if the company is unable to pledge two specific subsidiaries as collateral by Sept. 30 and is unable to name these two subsidiaries as guarantors by Aug. 5. These subsidiaries were originally included in the collateral package but because of current Delaware bankruptcy law were unable to be pledged. However, this law is expected to be changed on Aug. 1, which is why Eddie Bauer has until Aug. 5 to name the subsidiaries as guarantors. The collateral posting deadline is a bit farther off just to give the company some leeway. This potential step up was also added during syndication.

The term loan credit agreement contains 101 soft call protection for one year. This provision was added during syndication as well.

JPMorgan and GE Capital are joint lead arrangers and joint bookrunners on the deal, with JPMorgan the left lead. GE is also acting as syndication agent and Credit Suisse First Boston is acting as documentation agent.

Proceeds from the term loan will be used to support Spiegel Inc.'s plan of reorganization upon exiting from Chapter 11 bankruptcy protection. Following emergence, Spiegel will establish Eddie Bauer Holdings as the new parent company.

Eddie Bauer has already gotten a $150 million working capital asset-based revolving credit facility as part of its exit financing package. This revolver is being provided by existing debtor-in-possession lenders and is already a done deal. Essentially the company's DIP is being converted into the new revolver.

Eddie Bauer is a Redmond, Wash., provider of casual wear clothing, accessories and home furnishings.

Chiquita reverse flexes

Chiquita reduced pricing on all three of its loan tranches, bringing spreads down to Libor plus 250 bps from Libor plus 275 bps on both the $125 million seven-year term loan B (B1/B+) and $375 million seven-year term loan C (B1/BB-), and bringing the spread down to Libor plus 225 bps from Libor plus 250 bps on the $100 million five-year revolver (B1/B+), according to a market source.

Furthermore, the syndicate is planning on adding a pricing grid to the term loan B and the term loan C with more details on the grid expected to emerge Wednesday, the source added.

The revolver has a 50 basis point commitment fee.

Wachovia and Morgan Stanley are joint lead arrangers and joint bookrunners on the deal, with Wachovia the left lead and Goldman Sachs the documentation agent.

Proceeds from the credit facility and a $225 million bond offering will be used to help fund the $855 million cash acquisition of the Fresh Express unit of Performance Food Group Co.

The company had originally come to market with a $650 million credit facility a few months ago, but that deal - which contained a $125 million five-year term loan A talked at Libor plus 175 bps, a $375 million seven-year term loan B talked at Libor plus 225 bps and a $150 million five-year revolver talked at Libor plus 175 bps - was tabled in April because of legal matters.

Chiquita later revealed that an internal investigation showed that some of its employees had shared pricing and volume information over many years with competitors in Europe and may have engaged in other conduct in violation of European competition laws and company policies.

The European Commission was notified by Chiquita of these wrongdoings, and because of this voluntary notification and cooperation with the investigation, the European Commission has granted Chiquita immunity from any fines related to the conduct, conditioned on, among other things, continued cooperation.

Chiquita is a Cincinnati marketer, producer and distributor of bananas and other fresh produce.

Country Road fine-tunes loan

Country Road made some modifications to tranche sizes, shifting $4 million from its second-lien term loan into its first-lien term loan and flexed pricing on each tranche, with first-lien pricing coming down and second-lien pricing going up, according to a market source.

The first-lien term loan is now sized at $68 million, compared to an original launch size of $64 million, and pricing on the tranche went down to Libor plus 350 bps from original price talk of Libor plus 375 bps, the source said.

The second-lien term loan is now sized at $40 million, compared to an original launch size of $44 million, and pricing on the tranche went up to Libor plus 775 bps from original price talk of Libor plus 700 bps, the source added.

There is call protection of 102 in year one and 101 in year two under the second-lien term loan, which was contained in the credit agreement since launch.

The $108 million credit facility is targeted to free up for trading on Wednesday.

Royal Bank of Scotland is the lead bank on the Morristown, N.J.-based local exchange carrier's deal that will be used for a recapitalization.

Senior leverage will be in the mid-3x context and total leverage will be in the mid-5x context.

Euramax tweaks expected

Euramax is expected to shift some funds from its second-lien term loan into its U.S. first-lien term loan and talk is that a reverse flex in pricing will be announced on Wednesday as well, according to market sources.

"I had heard that they are definitely going to change the sizes of the U.S. first- and second-lien loans," a buyside source told Prospect News. "Second lien will decrease in size and first lien will increase by the amount of the second-lien decrease."

"I heard Euramax may flex down tomorrow," another source chimed in, adding that no specific details on the potential spread cuts are circulating through the marketplace as of yet.

Currently, Euramax's $720 million credit facility consists of an $80 million six-year revolver (B1/B+) talked at Libor plus 250 to 275 bps, a $255 million eight-year second-lien term loan (B3/B-) talked at Libor plus 550 to 600 bps and a $385 million seven-year term loan B (B1/B+) - of which about $255 million is U.S. denominated with price talk of Libor plus 275 bps and the remaining $130 million will be in euro or sterling equivalent with price talk of Libor plus 300 bps.

Goldman Sachs and Credit Suisse First Boston are joint bookrunners on the deal.

Proceeds will be used to help fund the leveraged buyout of Euramax by GSCP Emax Acquisition LLC - a newly formed company organized by Goldman Sachs Capital Partners and management of Euramax -for a price of $1.038 billion less net debt and company transaction expenses.

Euramax is a Norcross, Ga., producer of aluminum, steel, vinyl and fiberglass products for original equipment manufacturers, distributors, contractors and home centers.

FMC closes

FMC Corp. closed on its new $850 million five-year unsecured credit facility (BBB-) consisting of a $600 million revolver and a $250 million term loan. Citigroup, Bank of America and Wachovia acted as joint lead arrangers and joint bookrunners, with Citigroup the left lead.

The facility replaces the company's existing $600 million secured credit agreement and allows for the redemption of the company's $355 million 10¼% senior secured notes due 2009.

FMC is a Philadelphia-based diversified chemical company.

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