King resets launch; Chanticleer commitment expires; Pipeline Data fades away; Cash, LCDX fall

By Sara Rosenberg

New York, Nov. 17 - In the primary loan market, King Pharmaceuticals Inc. pushed out the launch of its new deal by two days, Chanticleer Holdings Inc.'s proposed facility may not happen as the commitment has expired, and Pipeline Data Inc. terminated its purchase agreement with Cocard, making its proposed credit facility unnecessary.

Meanwhile, over in the secondary, the cash market was weaker, pushing names like General Motors Corp. and Ford Motor Co. down, and LCDX 10 softened as well.

King Pharmaceuticals revises timing

King Pharmaceuticals has modified the launch date for its proposed $1 billion senior secured credit facility (Ba2/BBB-), scheduling a bank meeting for Thursday and canceling the previously scheduled Tuesday bank meeting, according to a market source.

The facility consists of a $150 million revolver talked at Libor plus 500 basis points with an original issue discount of 96, a $350 million term loan A talked at Libor plus 500 bps with an original issue discount of 96 and a $500 million term loan B talked at Libor plus 550 bps with an original issue discount of 95 - and, all tranches have a 3% Libor floor.

Credit Suisse and Wachovia are the joint lead arrangers and bookrunners on the deal, with Credit Suisse the administrative agent.

King deal funding Alpharma bid

Proceeds from the King Pharmaceuticals' credit facility will be used to help fund the hostile takeover attempt of Alpharma Inc. through a tender offer of $37 per share for all of Alpharma's outstanding shares of class A common stock. The $1.6 billion offer was taken directly to Alpharma shareholders.

The tender offer expires on Nov. 21, after being extended from an original Oct. 10 deadline. As of Oct. 10, 18.8 million shares, or 45%, of the class A common stock of Alpharma were tendered.

King Pharmaceuticals is a Bristol, Tenn.-based integrated branded pharmaceutical company. Alpharma is a Bridgewater, N.J.-based specialty pharmaceutical and animal health company.

Chanticleer drops off calendar

Chanticleer's proposed $85 million senior secured credit facility was removed from the forward calendar as the company revealed that the commitment letter has expired and that a new commitment has not been received.

The company said in a 10-Q filed late Friday with the Securities and Exchange Commission that timing for the loan commitment ran out, primarily due to its inability to raise the necessary equity portion of the financing at acceptable terms in the current financial environment.

Chanticleer went on to say that it continues to communicate with the financial institutions that agreed to provide the credit facility; however, there can be no assurance that any financing will be obtained or that the terms of any credit facility in the future will be acceptable.

Chanticleer credit facility details

Chanticleer's $85 million credit facility was going to consist of a $13 million revolver and a $72 million term loan.

Security was expected to be a first-priority perfected interest on substantially all of the real and personal property of the borrower and its subsidiaries.

Proceeds would have been used to fund the acquisitions of Hooter's Inc. and Texas Wings Inc., and for working capital, new unit capital expenditures and general corporate purposes.

The termination date for the pending acquisitions has passed.

"Although the sellers have not, to date, exercised their rights to terminate the agreements and the company continues to seek to consummate these transactions, there is no assurance that the company will be able to close the pending acquisitions," the company added in the 10-Q filing.

Chanticleer is a Charlotte, N.C., business development company, specializing in investing in undervalued small/micro-cap companies.

Pipeline Data drops acquisition plans

Pipeline Data has terminated its agreement to purchase Cocard for $79.5 million in cash and notes, which was going to be financed, in part, with a $90 million senior secured credit facility led by GE Commercial Finance and Dymas Capital Management Co. LLC.

The company said in a 10-Q filed late Friday with the SEC that part of the purchase agreement was that Pipeline had to receive an investment of at least $50 million from Comvest Investment Partners.

Since this investment was not completed, Pipeline believes the obligation to close has not been triggered, and, therefore, has notified Cocard that it has canceled the acquisition agreement.

Of the total debt facility, about $70 million would have been available to support the purchase.

Pipeline Data is a Quincy, Mass.-based provider of value-added credit card transaction processing services. Cocard is a Nashville, Tenn.-based merchant services provider.

Earthbound Farm trims size

Earthbound Farm reduced the size of its credit facility to $135 million from $185 million through a reduction to the term loan A tranche, according to a market source.

The deal now consists of a $100 million term loan, down from $150 million, and a $35 million revolver, the source said.

RBC Capital Markets is the lead bank on the deal that will be used to fund the leveraged buyout of the company by Lindsey Goldberg.

The term loan A downsizing was a result of a decrease in the purchase price and an increase in the amount of mezzanine debt being used for the transaction, the source added.

Earthbound Farm is a San Juan Bautista, Calif.-based organic produce company.

Cash, LCDX head lower

Moving to trading happenings, the cash market fell on Monday, which resulted in General Motors and Ford dropping as well, and LCDX 10 also took a hit, according to a trader.

Cash in general was down about one to two points on the day, the trader said, remarking that there was extremely light volume during the session.

As a result of the overall softness, General Motors, a Detroit-based automaker, saw its term loan fall three quarters of a point to 43 bid, 46 offered, and Ford, a Dearborn, Mich.-based automaker, saw its term loan fall three points to 41 bid, 44 offered, the trader continued.

"At this point, it's just whether they're going to file or whether the government will bail them out. That's the only news that would make [them] move. Just down with the rest of the market," the trader explained.

As for LCDX 10, that was quoted around 83.45 bid, 83.95 offered, down from 84.50 bid, 85 offered.

Nasdaq closed down 34.80 points, or 2.29%, Dow Jones Industrial Average closed down 223.73 points, or 2.63%, S&P 500 closed down 22.54 points, or 2.58%, and NYSE closed down 129.27 points, or 2.37%.

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