Stiefel cuts B loan pricing; Solutia upsizes ahead of launch; CGG mulls changes; secondary stronger

By Sara Rosenberg

New York, Jan. 3 - Stiefel Laboratories Inc. reverse flexed pricing on its first-lien term loan B on Wednesday as the tranche is oversubscribed, and Solutia Inc. increased the size of its debtor-in-possession term loan add-on ahead of the deal's Thursday launch.

In other primary news, Compagnie Generale de Geophysique (CGG) is considering a possible upsizing and reduction in price for its term loan B tranche due to strong market demand.

Meanwhile, on the secondary front, the overall tone was positive with the general market trading higher, including names like Ford Motor Co., Metro-Goldwyn-Mayer Inc., Huntsman Corp. and HCA Inc.

Stiefel Laboratories lowered pricing on its $623 million seven-year first-lien term loan B (Ba3/B+) during Wednesday's market hours based on heavy investor interest, according to a market source.

The first-lien term loan B now carries a spread of Libor plus 225 basis points, down from original talk at launch of Libor plus 250 bps, the source said.

Pricing on the company's $75 million six-year revolver (Ba3/B+) was left unchanged at Libor plus 250 bps and pricing on the $150 million 71/2-year second-lien term loan (B3/B-) was left unchanged at Libor plus 500 bps, the source added.

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

Deutsche Bank is the lead bank on the $848 million senior secured deal that was used to fund the recently completed acquisition of Connetics Corp. for $17.50 per share. The transaction is valued at about $640 million.

Stiefel is a Coral Gables, Fla., independent pharmaceutical company specializing in dermatology. Connetics is a Palo Alto, Calif., specialty pharmaceutical company focused on the development and commercialization of innovative therapeutics for the dermatology market.

Solutia increases add-on size

Solutia decided to enlarge the size of its proposed DIP term loan add-on prior to the Thursday bank meeting that will launch the deal into syndication as opposed to having an accordion feature under the tranche, according to a market source.

The term loan add-on will now be presented to lenders with a size of $325 million, up from an originally proposed size of $175 million, making the previously contemplated $150 million accordion feature no longer necessary, the source said.

Pricing on the term loan add-on is talked at Libor plus 350 bps, in line with pricing on the company's existing $650 million of term loan debt, the source remarked.

In addition to the term loan add-on, the company is also going to launch a $75 million revolver add-on that is talked at Libor plus 225 bps, in line with pricing on the company's existing $175 million DIP revolver.

Proceeds from the incremental bank debt will be used to fund the acquisition of Akzo Nobel's stake in Flexsys, the joint venture between Akzo Nobel and Solutia, and provide the company with further liquidity for operations and the ability to fund mandatory pension payments that come due in 2007.

The now eliminated $150 million term loan accordion feature was always intended to help facilitate the acquisition.

At the launch, the company will also be asking lenders to extend the maturity on its entire DIP facility by one year to March 31, 2008 and allow for the acquisition.

Citigroup is the lead arranger on the deal.

This amendment requires the approval of the U.S. Bankruptcy Court for the Southern District of New York.

Solutia is a St. Louis-based manufacturer and provider of interlayers for laminated glass, aftermarket window films, specialty chemicals and an integrated family of nylon products.

CGG eyeing tweaks

CGG is considering various alternatives for its in-market $800 million seven-year term loan B being that it's more than two times oversubscribed, including possibly increasing the size of the tranche and possibly lowering pricing as well, according to a market source.

Currently, the term loan B is being talked at Libor plus 225 bps.

If changes are made, they should emerge over the next couple of days or so, the source added.

CGG's $1.1 billion credit facility (Ba2/BB-) also includes a $300 million equivalent revolver talked at Libor plus 225 bps.

Of the total revolver amount, $100 million will be in dollars and $200 million equivalent will be in euros.

Credit Suisse and RBC Capital are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds from the facility will be used to help fund the acquisition of Veritas DGC Inc. for $3.1 billion.

CGG is a Massy, France-based provider of seismic data acquisition, processing and reservoir services to clients in the oil and gas exploration and production business. Veritas is a Houston-based provider of integrated geophysical information and services to the petroleum industry.

Affirmative expected at high end

Affirmative Insurance Holdings Inc.'s $220 million credit facility is anticipated to firm up at Libor plus 325 bps, the wide end of original guidance of Libor plus 300 to 325 bps, according to a market source.

"The deal's not fully subscribed yet but it will probably get done at [that] current pricing," the source remarked.

Tranching on the deal is comprised of a $20 million revolver and a $200 million term loan.

Credit Suisse is the lead bank on the deal that will be used to finance the acquisition of USAgencies, LLC in an all-cash transaction valued at about $200 million.

Affirmative Insurance is an Addison, Texas, producer and provider of personal non-standard automobile insurance policies to individual consumers. USAgencies is a Baton Rouge, La., non-standard automobile insurance provider.

Boart to wrap at original talk

Boart Longyear Co.'s $180 million in incremental bank debt is anticipated to finalize at initial price talk, which is in line with existing loan pricing, and closing on the transaction is expected to occur early this month, according to a market source.

The debt is comprised of a $110 million first-lien term loan B add-on at Libor plus 325 bps and a $70 million senior unsecured holdco term loan add-on at Libor plus 850 bps with an original issue discount of 99.

Credit Suisse is the lead bank on the deal that will be used to finance five acquisitions.

Boart Longyear is a Salt Lake City-based drilling services provider.

Secondary trades up

Switching to the secondary, the market in general was higher on technicals, with names like Ford, Metro-Goldwyn-Mayer, Huntsman and HCA being good examples of the strengthening, according to a trader.

Ford, a Dearborn, Mich.-based automaker, saw its term loan B close the day at par 3/8 bid, par 5/8 offered, up from par ¼ bid, par ½ offered on Tuesday, the trader said.

Metro-Goldwyn-Mayer, a Los Angeles-based entertainment content company, saw its term loan B close the day at 99 5/8 bid, par offered, up from Tuesday's closing levels of 99 3/8 bid, 99¾ offered, the trader continued.

Huntsman, a Salt Lake City-based manufacturer and marketer of commodity and differentiated chemicals, saw its term loan B close the day at par ½ bid, par ¾ offered, up from previous levels of par ¼ bid, par ½ offered.

And, HCA, a Nashville, Tenn.-based health care services company, saw its term loan A close the day at par 5/8 bid, par 7/8 offered, up from par 3/8 bid, par 5/8 offered, the trader added.

Tropicana closes

Tropicana Entertainment LLC closed on its $2.15 billion credit facility that was used to fund Columbia Entertainment's acquisition of Aztar Corp. for about $54.00 per share in cash, according to a news release.

The facility consists of a $1.53 billion five-year opco senior secured term loan (Ba3/B+) priced at Libor plus 250 bps, a $180 million opco senior secured revolver (Ba3/B+) priced at Libor plus 275 bps and a $440 million 18-month senior secured loan (B2/B+) to be borrowed by LV Tropicana priced at Libor plus 250 bps.

During syndication, the opco term loan was upsized from $1.49 billion and pricing was reverse flexed from original talk at launch of Libor plus 275 bps, and pricing on the LV Tropicana 18-month loan was reverse flexed from original talk at launch of Libor plus 300 bps.

The 18-month senior secured loan borrowed by LV Tropicana, which will indirectly hold Aztar's 34-acre parcel situated on the Las Vegas "Strip," has two six-month extension options. It is expected that the loan will be refinanced with permanent financing for the redevelopment of the property.

Credit Suisse acted as the lead bank on the deal.

Columbia is a Fort Mitchell, Ky., owner, developer and operator of hotel properties and casinos. Aztar is a Phoenix-based gaming company.

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