JBS USA sets revolver talk; Landry's timing emerges; Northwest rises on amendment, pushes Delta higher

By Sara Rosenberg

New York, Sept. 11 - JBS USA revealed price talk on its ABL revolver as the tranche, along with a term loan that already saw the emergence of talk earlier this week, were launched to investors during the session.

In other news, Landry's Restaurants Inc. has come out with a bank meeting date for its proposed credit facility that was already postponed once.

Over in the secondary market, Northwest Airlines Corp.'s term loan rallied in trading on news of an amendment proposal, and Delta Air Lines Inc.'s bank debt grabbed on to Northwest's coattails to move up as well.

JBS starts syndication

JBS USA held a bank meeting on Thursday afternoon to kick off syndication on its credit facility, and in connection with the launch, price talk on the ABL revolver was announced, according to a market source.

The $750 million five-year revolver was presented to lenders with talk of Libor plus 275 basis points with a 37.5 bps commitment fee, the source said.

Early guidance on the revolver had been in the Libor plus 250 bps to 275 bps area, but official talk had been unavailable.

In addition, upfront fees on the revolver of 1 bps per million were revealed to lenders on Thursday as well, the source continued.

JBS USA's $1.25 billion credit facility also includes a $500 million six-year term loan. Price talk of Libor plus 550 bps with a 3.25% Libor floor and an original issue discount of 97 was announced on the term loan earlier this week.

Credit Suisse and GE Capital are the lead banks on the deal, with Credit Suisse the left lead on the term loan and GE the left lead on the revolver.

Proceeds will be used to help fund the acquisitions of Smithfield Beef Group Inc. and National Beef Packing Co. LLC by parent company JBS SA.

JBS SA is purchasing Smithfield Beef, a beef processing and cattle feeding operation, from Smithfield Foods Inc. for $565 million in cash.

National Beef is being bought by JBS SA from U.S. Premium Beef LLC for $465 million in cash and $95 million in common stock. In addition, JBS will assume all of National Beef's debt and other liabilities at closing.

JBS USA is a meat processing and packaging company.

Landry's sets launch

Landry's Restaurants has come out with new timing on the retail launch of its proposed $300 million senior secured credit facility as a bank meeting for Sept. 18 has been scheduled, according to a market source.

Originally, the deal was scheduled to launch on Sept. 4, but it was then delayed to an undetermined date. At the time of the postponement, it had been said by sources that the deal could come as early as the week of Sept. 8, but it could also be the week of Sept. 15 or later.

The facility consists of a $50 million five-year revolver and a $250 million five-year term loan A.

According to filings with the Securities and Exchange Commission, pricing on the revolver and the term loan A is expected to be Libor plus 400 basis points, with a 3.25% Libor floor, and the revolver has a 50 bps commitment fee.

Official price talk on the deal, however, has not yet been announced.

Amortization on the term loan is 2.5% in year one, 7.5% in year two and 10% in years three, four and five, with the rest due at maturity.

Wells Fargo Foothill and Jefferies are the co-lead arrangers, co-bookrunners and co-syndication agents on the deal, with Well Fargo the administrative agent.

Proceeds from the credit facility will be used to help fund the buyout of the company by Fertitta Holdings Inc for $21 per share in cash. The total value of the deal is about $1.3 billion, including about $885 million of debt.

Fertitta is a newly formed entity wholly owned by the company's chairman, president, chief executive officer and original founder, Tilman J. Fertitta, who beneficially owns about 39% of the company's outstanding common shares.

Landry's is a Houston-based restaurant, hospitality and entertainment company.

Northwest, Delta edge higher

Over in trading news, Northwest Airlines' term loan gained a couple of points on Thursday as the market learned about the company's amendment request, and Delta moved up in sympathy, according to a trader.

Northwest, an Eagan, Minn.-based airline company, saw its term loan quoted at 90½ bid, 91¾ offered, up from Wednesday's levels of 83½ bid, 85 offered, the trader said.

Delta, an Atlanta-based airline company, saw its first-lien term loan quoted at 85 bid, 87 offered up from 84 bid, 86 offered, and its second-lien term loan quoted at 75 bid, 77 offered, up from 73½ bid, 75 offered, the trader continued.

On Wednesday night, Northwest held an amendment call to discuss revising covenants under its credit facility because of its pending merger with Delta.

As part of the amendment, Northwest will pay down 25% of the credit facility and shorten the maturity.

In addition, lenders will get a three point fee in connection with the amendment.

Cash softens, LCDX holds steady

The cash market in general felt weaker during market hours, while LCDX 10 stayed pretty close to unchanged on a day-over-day basis, according to a trader.

"A lot of things are down. People are just bearish on the market," the trader said in explanation of the overall cash market's performance, which he described as down about a quarter of a point on the day.

The index, on the hand, was quoted at 97 bid, 97.15 offered, compared to Wednesday's levels of 97.05 bid, 97.15 offered, the trader added.

Cross Country closes

Cross Country Healthcare Inc. closed on its new $125 million five-year term loan that is priced at Libor plus 250 bps, according to an 8-K filed with the SEC.

The company left in place its existing $75 million revolver.

Wachovia and Bank of America are the lead banks on the deal that was used to fund the acquisition of MDA Holdings Inc. for $112.3 million in cash, plus additional earn-out payments based on 2008 and 2009 performance criteria.

The acquisition and the facility were completed on Sept. 9.

Cross Country is a Boca Raton, Fla., provider of nurse and allied staffing services, clinical trials services and other human capital management services. MDA is a Norcross, Ga., provider of multi-specialty locum tenens and allied staffing services to the health care industry.

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