Western Wireless heads higher on public offering news; Itron oversubscribed on day of launch

By Sara Rosenberg

New York, Oct. 29 - Western Wireless Corp. bank debt was stronger across the board on Wednesday following the company's announcement that it priced a public offering of 12 million shares of class A common stock, raising $228 million.

Meanwhile, on the primary side, Itron Inc.'s newly launched facility is already oversubscribed and market talk is that the books may end up closing early due to the overwhelming demand.

Western Wireless' term loan A was quoted at 98 bid, 98½ offered, compared to a previous bid level of 97 5/8, and the term loan B was quoted at par bid, par ½ offered, according to a trader.

"A lot of people are looking at the term A because there's more push to it. The B is already above par. I think people are sick of paying above par," the trader said.

Proceeds from the common stock offering will be used for general corporate purposes, to fund working capital requirements, for making capital expenditures and for potential acquisitions, according to a news release.

Despite the fact that there is no mention of a possible debt paydown the bank loan market reacted positively to the news.

"If it funds any of their business plans then people are happy," the trader explained.

Western Wireless is a Bellevue, Wash. Wireless communications provider.

Itron held a bank meeting for a $240 million credit facility (BB-) consisting of a $55 million revolver talked at Libor plus 275 basis points and a $185 million term loan B talked at Libor plus 250 basis points.

Commitments for the deal are due on Nov. 13, however, market sources who attended the meeting indicated that books could shut down early.

The company is a first-time issuer, which is definitely a big plus in the current market environment where investors are itching to get their hands on some brand new paper, sources said.

Other pluses include low senior and total leverage as well as the overall simplicity in understanding the business, sources added.

Bear Stearns is the sole lead arranger, sole bookrunner and syndication agent. Wells Fargo is the administrative agent on the deal.

Proceeds will be used to help fund the acquisition of Schlumberger's Electricity Metering business for a purchase price of $255 million. This acquisition was first announced in July but in late August, the company received a second request for information from the FTC in connection with Itron and Schlumberger's filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Itron is a Spokane, Wash. technology provider for collecting and analyzing data about electric, gas and water usage to the energy and water industries.

A number of other deals were scheduled to launch Wednesday as well, including General Cable Corp., Quanta Services Inc., North American Van Lines Inc. and National Waterworks Inc.

General Cable launched a $240 million five-year asset-based revolver via UBS Securities and Merrill Lynch Capital as joint lead arrangers.

Proceeds will be used to partially repay amounts outstanding under the company's existing bank credit facility and accounts receivable securitization facility. Future borrowings will be used for working capital, capital expenditures and general corporate purposes.

The facility is expected to be partially funded at the closing.

General Cable is a Highland Heights, Ky. wire and cable manufacturer.

Quanta Services was scheduled to hold a bank meeting for a $200 million credit facility, with Bank of America leading on the deal.

The facility consists of a $50 million revolver and a $150 million synthetic term loan, sources said.

Proceeds will be used to refinance existing debt and to provide letters of credit to help back the company's workers compensation plan.

Quanta Services is a Houston provider of specialized contracting services.

North American Van Lines was scheduled to launch a $600 million credit facility via JPMorgan and Bank of America, with JPMorgan listed on the left.

The facility consists of a $425 million term loan B with an interest rate of Libor plus 250 basis points and a $175 million revolver with an interest rate of Libor plus 225 basis points.

Proceeds will be used to refinance existing debt.

North American Van Lines is a Fort Wayne, Ind. -based company that offers relocation, high value products transportation, distribution and logistics services.

And, National Waterworks Inc. launched an $80 million add-on to its term loan B priced with an interest rate of Libor plus 275 basis points via JPMorgan, Goldman Sachs and UBS.

Proceeds from the Waco, Tex. Water and wastewater company's add-on, combined with internally generated cash, will be used by the parent company, National Waterworks Holdings Inc., to pay a $110 million dividend to its stockholders.

Following up, CamelBak, which was tentatively set to hold a bank meeting on Thursday for a $100 million senior secured credit facility, is now scheduled to hold the meeting on Nov. 4, according to a fund manager. BNP Paribas and Bank of New York are the lead banks on the deal, with BNP listed on the left.

Although demand is expected to be strong, there are some investors who are still on the wall about this particular deal.

"It's a small company so it's going to be harder for us to commit to something like that," a fund manager said. "It's a fairly new company with a small EBITDA base. It's a little risky. [Also,] how many competitors are going to own this too? If it hurts you will it hurt them?

"[But], it's a pretty nice coupon," the fund manager continued. "Anything over 400 in this market is always nice."

The facility consists of a $20 million five-year revolver and an $80 million six-year term loan, both talked at Libor plus 425 basis points.

The syndicate started approaching accounts about this deal late Thursday and early Friday.

"We expect heavy demand from classic middle-market lenders as well as large institutional investors. We're finding that large institutional investors are interested in middle-market deals. Middle-market borrowers are willing to pay larger coupons," a source close to the deal previously told Prospect News.

One of the positives being stressed regarding the company is the increasing popularity of its products. "[It's got] heavy recreational use. And they actually have servicemen in Iraq requesting CamelBak," the source added.

Proceeds will be used to help support the acquisition of 100% of CamelBak's capital stock by the existing sponsor.

CamelBak is a Petaluma, Calif. producer of personal hydration systems.

The books closed on Scientific Games Corp.'s $532.825 million credit facility (Ba3/BB-) on Tuesday, but there is still some discussions going on with lenders regarding pricing and size, according to a market professional.

Currently the facility contains a $462.825 term loan C talked at Libor plus 275 basis points.

However, there are now talks to include grid pricing in the term loan C tranche that would allow for pricing to head down to Libor plus 250 basis points, the professional said.

Furthermore, there are talks regarding upsizing the revolver to $75 million. Initially the revolver was launched as a $50 million revolver with a $20 million greenshoe.

All existing lenders have agreed to stay in the credit even with the decrease in price and the upsize in size, the professional added.

The term loan C will be used to refinance the company's existing term loan B, which is currently sized at approximately $287 million and carries an interest rate of Libor plus 350 basis points, and to help fund the previously announced acquisition of IGT OnLine Entertainment Systems Inc. from International Game Technology for $143 million in cash.

The revolver will be used for general corporate purposes.

Bear Stearns is the sole lead arranger, sole bookrunner and syndication agent. Bank of New York is the administrative agent. Credit Suisse First Boston and Deutsche Bank have signed on as co-arrangers and co-documentation agents.

Closing on the facility is tentatively scheduled to take place on Nov. 4.

Scientific Games is a New York provider of services, systems and products to both the instant ticket lottery industry and the pari-mutuel wagering industry.

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