Bolthouse Farms breaks; Freescale softens; MGM Mirage dips; Smurfit-Stone tweaks deal

By Sara Rosenberg

New York, Feb. 8 - Wm. Bolthouse Farms Inc.'s credit facility allocated and freed up for trading during Monday's session, with both the first- and second-lien term loans quoted above their original issue discount price.

Also in the secondary market, Freescale Semiconductor Inc.'s term loan debt appeared to be a little heavier after the company announced that it may not be able to move forward with its amend and extend proposal due to an ongoing legal battle with some lenders.

In more trading news, MGM Mirage, which officially revealed plans to amend and extend its credit facility, saw its term loan move a little lower probably on market technicals, and FairPoint Communications Inc.'s term loan was better as the company filed its reorganization plan.

Over in the primary market, Smurfit Stone Container Corp. came out with some changes to its oversubscribed term loan, including reducing pricing and the original issue discount.

Bolthouse Farms frees to trade

Bolthouse Farms' credit facility hit the secondary market on Monday, with the first- and second-lien term loans both seen quoted above par, according to a trader.

Specifically, the $550 million six-year first-lien term loan (B1/B) was quoted at par 3/8 bid, par 5/8 offered and the $175 million 61/2-year second-lien term loan (Caa1/CCC+) was quoted at par ½ bid, 101 offered, the trader said.

The first-lien term loan is priced at Libor plus 350 basis points with a 2% Libor floor and it was sold at an original issue discount price of 99.

And, the second-lien term loan is priced at Libor plus 750 bps with a 2% Libor floor and call protection of 102 in year one and 101 in year two. It, too, was sold at an original issue discount price of 99.

During syndication, the first-lien term loan was upsized from $500 million while the second-lien loan was downsized from $225 million, pricing on the first-lien term loan was reduced from Libor plus 400 bps, pricing on the second-lien was reduced from Libor plus 800 bps, the discount on the second-lien was tightened from 98 and call protection on the second-lien was changed from 103, 102, 101.

Bolthouse also getting revolver

Bolthouse Farms' $780 million credit facility also includes a $55 million five-year revolver (B1/B) priced at Libor plus 350 bps with a 2% Libor floor. This tranche was sold at an original issue discount of 983/4.

During syndication, the revolver was downsized from $65 million and pricing was lowered from Libor plus 400 bps.

Also during syndication, the company added a $50 million accordion feature under the revolver and/or first-lien term loan, subject to 50 bps of MFN.

Credit Suisse, Goldman Sachs and Bank of America are the lead banks on the deal that will be used to repay the company's existing senior credit facility and holdco payment-in-kind perpetual preferred stock.

Bolthouse Farms is a Bakersfield, Calif.-based farmer and distributor of fresh produce, beverages and salad dressings.

Freescale slides

Freescale's term loan debt was basically weaker in trading as the company disclosed that there is a possibility that its recently launched amend and extend proposal may have to be delayed or withdrawn, according to traders.

The old term loan was quoted by one trader at 93 bid, 94 offered, down a half a point. Two other traders, however, had the debt unchanged on the day at 93¼ bid, 93¾ offered.

As for the new term loan, that was quoted by one trader at 102½ bid, 103½ offered, down from 103 bid, 104 offered, and by second trader at 102 ¼ bid, 103 ¼ offered, down a quarter of a point on the day.

Freescale dealing with litigation

The drama surrounding Freescale's amendment proposal is a result of a complaint issued by a group of lenders under the company's senior secured credit facility on March 25, 2009 challenging the issuance of incremental term loans.

In response to that complaint, the New York state appellate court ordered the trial court proceedings stayed pending the disposition of Freescale's appeal from the denial of its motion to dismiss the case. This stay, however, can be vacated if the company issues new debt.

As a result, on Feb. 5, the complaining lenders filed a motion to vacate the stay and to stop the company from continuing with the amend and extend until a ruling on a temporary restraining order is obtained.

Freescale expediting briefing

Freescale said on Monday that it has agreed to an expedited briefing process on the plaintiffs' motion, with all briefings to be completed by Tuesday.

It is unclear when the appellate court will rule on the complaining lenders' motion or, if the stay is lifted, when the trial court might rule on a temporary restraining order.

If a court stops the company from going forward with the amend and extend, the transaction will have to be delayed or withdrawn, and so will the related offering of senior secured notes.

Freescale added that it believes that all claims made by the lenders are without merit and is vigorously defending this action.

Freescale amendment details

As was previously reported, Freescale wants to extend the maturity on its term loan to Dec. 1, 2016 from Dec. 1, 2013, and increase pricing to Libor plus 425 bps, compared to Libor plus 175 bps on the non-extended loan.

In addition, the amendment would allow for the issuance of $750 million senior secured notes that would be used to repay bank debt, and would permit the company to sell additional senior secured notes, so long as the net cash proceeds from any such issuance are used to prepay bank debt at par.

JPMorgan is the left lead bank on the amendment.

Lenders are being offered a 25 bps amendment fee.

Late last year, the company had attempted to amend its facility to allow for the issuance of secured and unsecured debt to reduce term loan debt dollar-for-dollar, and to gain the ability to amend and extend its credit facility at a later date. That amendment did not get enough approvals to pass, though.

Freescale is an Austin, Texas-based designer and manufacturer of embedded semiconductors for the automotive, consumer, industrial and networking markets.

MGM Mirage loses ground

MGM Mirage's term loan was also weaker on the day, with traders pointing more towards soft market technicals for the downturn than the amend and extend proposal that was officially announced in the morning.

The term loan was quoted by one trader at 95½ bid, 96½ offered, down from 95¾ bid, 96¾ offered, and by a second trader at 95¾ bid, 96¾ offered, down from 96 bid, 97 offered.

One trader remarked that although the company first announced the amendment request on Monday, talk of the proposal had already hit the market mid-last week, at which point levels in the term loan had jumped up to 96½ bid, 97½ offered.

Shortly after the spike, levels started coming back in since there aren't a lot of buyers or sellers for the name in general, the trader explained.

MGM Mirage extending maturities

Under the amendment request, MGM Mirage is looking to extend the maturity of a substantial portion of its credit facility debt to Feb. 21, 2014 from Oct. 3, 2011, and pricing on the extended debt will be 100 bps higher than pricing on the non-extended debt.

Lenders are also being offered a total of 75 bps in amendment and extension fees.

In addition, under the amendment, $1.4 billion of revolver loans would be converted into term loans, the company would be allowed to issue additional secured debt and covenants would be revised.

Final approvals are being sought by Feb. 24.

Lenders approving the proposed amendments would receive prepayments of at least 20% of their outstanding loans and lending commitments. The prepayments would increase by 1% for each full percentage by which lender participation in the transaction exceeds 80%, to a maximum of 25%.

Bank of America is the lead bank on the deal.

MGM Mirage is a Las Vegas-based gaming, hospitality and entertainment company.

FairPoint up with plan filing

FairPoint Communications' term loan gained some ground on Monday following the company's filing of its plan of reorganization and disclosure statement after a couple of delays, according to a trader.

The term loan was quoted at 77 bid, 79 offered, up from 76 bid, 77 offered, the trader said.

Under the plan, FairPoint will convert $1.1 billion of credit facility debt into equity so that lenders will have approximately 98% of the equity ownership in the reorganized company.

Meanwhile, the company's $570 million senior notes due 2018 and its other unsecured debt will be converted into about 2% of the equity. These creditors will also be issued warrants to purchase up to 5% of the ownership interest in the company.

FairPoint getting term loan

As part of the restructuring plan, FairPoint expects to get a new $1 billion five-year secured term loan.

Pricing on the term loan is Libor plus 450 bps with a 2% Libor floor.

Amortization is $10 million in years one and two, $50 million in year there and increasing annual amounts thereafter through maturity.

Holders of pre-bankruptcy credit facility claims will receive a share of the new term loan, as well as common stock and cash distributions.

FairPoint is a Charlotte, N.C.-based provider of communications services.

Smurfit-Stone revises loan

Switching to new deal happenings, Smurfit-Stone modified pricing and the original issue discount on its $1.2 billion six-year term loan (B2) as a result of strong demand, according to a market source.

Under the changes, pricing on the term loan was reverse flexed to Libor plus 475 bps from initial talk at launch of Libor plus 500 bps, the source said.

Also, the original issue discount on the loan was revised to 99 from 981/2, the source continued.

Furthermore, a 50 bps ticking fee was added to the tranche, the source added.

The term loan's 2% Libor floor and 101 soft call protection for two years were left unchanged, and there are still no maintenance covenants. However, there is a debt incurrence test of 2.0 times interest coverage.

JPMorgan, Deutsche Bank and Bank of America are the lead banks on the deal.

Smurfit-Stone funding exit

Proceeds from Smurfit-Stone's term loan, along with a new $650 million four-year asset-based revolver, will be used for exit financing.

Through the company's plan of reorganization, debt will be reduced by $2.9 billion. Pre-petition secured lenders will be repaid in full and there will be an equity distribution to about $3 billion face value of unsecured obligations.

The company's pro forma capital structure as of March 31 is expected to include 2.5 times total debt and 2.3 times net debt. By comparison, the company's current structure as of Dec. 31 included 8.0 times total debt and 6.5 times net debt.

Smurfit-Stone is a Chicago-based manufacturer of paperboard and paper-based packaging.

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