Huntsman OID firms, breaks; Claire's on run-up; First Data rises; Warner Chilcott expected soon

By Sara Rosenberg

New York, Sept. 11 - Banks on Huntsman Corp.'s term loan finalized the original issue discount on the tranche at a price that allowed them to syndicate the entire deal and then freed the loan up for trading.

In other news, Claire's Stores Inc.'s term loan B spent another day moving upwards with investors, still reacting favorably to the company's recent quarterly results, and First Data Corp.'s term loan B-2 strengthened as well.

Also in the secondary market, NewPage Corp.'s term loan was quoted a little wider, but pretty much flat, on Friday as the company revealed that its credit facility amendment, which revised pricing and covenants, was approved.

Over in the primary market, market chatter is that Warner Chilcott plc's multi-billion dollar credit facility should be launched to retail investors sometime within the next two weeks. A firm date, however, has not yet been set.

Huntsman OID set

Credit Suisse and Deutsche Bank firmed the original issue discount on Huntsman's $500 million term loan at 90, pretty much in line with the talk that had surfaced in the low 90 context, according to a market source.

The spread on the seven-year senior secured term loan is Libor plus 225 basis points.

The loan was obtained on June 23 as part of a settlement agreement with the banks in connection with the terminated merger agreements with Basell and Hexion Specialty Chemicals Inc.

Proceeds were used by the company to repay some of its outstanding debt and enhance liquidity.

In addition to the term loan, the banks supplied Huntsman with a $600 million unsecured note that is priced at 5.5%.

Credit Suisse and Deutsche Bank each provided $550 million of the debt financing.

Huntsman frees to trade

After pricing the Huntsman deal, the banks broke the term loan for trading, with levels of 90½ bid, 91½ offered seen on the open, the source said.

By the end of the day, the newly syndicated loan was trading at 91½ bid, 91¾ offered, the source continued.

Huntsman's existing term loan, meanwhile, was quoted by the source at 91 bid, 91¼ offered versus 90½ bid, 91¼ offered on Thursday. A different source had the existing term loan quoted at 90¼ bid, 91¼ offered, unchanged on the day.

Huntsman is a Salt Lake City, Utah-based manufacturer and marketer of differentiated chemicals.

Claire's still going strong

Claire's Stores' term loan B was once again higher by a couple of points in trading as it continued to be spurred on by the recent better-than-expected second-quarter results that were announced by the company, according to traders.

The term loan B was quoted by one trader at 72¾ bid, 73¾ offered, up from 71 bid, 72 offered context on Thursday and by a second trader at 72¾ bid, 73½ offered, up from 70½ bid, 71½ offered. Prior to the earnings news, the debt was seen in the 66¾ bid, 68 1/8 offered area.

For the quarter, the company reported a net loss of 3.7 million versus a net loss of $16.9 million in the second quarter of 2008.

Net sales for the quarter were $314.2 million, down 12.7% from $360 million in the comparable period last year.

And, adjusted EBITDA for the second quarter was $50.5 million, compared to $58.1 million in the prior year.

Claire's is a Pembroke Pines, Fla.-based specialty retailer of value-priced fashion accessories and jewelry for girls and young women.

First Data moves higher

First Data's term loan B-2 was better on Friday, although there was no credit specific news seen behind the movement, according to traders.

The term loan B-2 was quoted by one trader at 86 bid, 86½ offered, up from the 85 to 85¼ bid, 85½ to 85¾ offered context on Thursday, and by a second trader at 86¼ bid, 87 offered, up from 84¾ bid, 85½ offered.

"Guessing it has something to do with new guys coming in," the trader remarked. "What else is going to push this thing up - everyone already owns this. Got to be new guys."

First Data is a Greenwood Village, Colo.-based provider of electronic commerce and payment services.

NewPage unmoved

NewPage's term loan was pretty much unchanged on the day despite news that the company's credit facility amendment was approved and took effect on Friday, according to a trader.

The term loan was quoted at 94 bid, 95 offered, compared to levels on Thursday of 94¼ bid, 94¾ offered, the trader said, who explained that the amendment was already priced in to trading levels.

Under NewPage's amendment, pricing on the revolver was increased by 150 bps to Libor plus 350 bps and the total leverage grid was removed, and pricing on the term loan was increased by 325 bps to Libor plus 700 bps. If senior leverage is less than 3.00:1.00, term loan pricing will drop to Libor plus 650 bps.

Also, a 2.5% Libor floor was added to the tranches and the revolver unused fee was increased to 50 bps from 37.5 bps.

NewPage modifies covenants

NewPage also reworked its credit facility covenants with this amendment, waiving compliance with the interest coverage, total leverage and senior leverage ratios until the fiscal quarter ending June 30, 2010 and the fixed-charge coverage ratio until the fiscal quarter ending March 31, 2011.

These covenants were also changed once the suspension period ends.

The minimum interest coverage ratio was revised to 1.00:1.00 beginning with the quarter ending June 30, 2010, stepping up over time to 2.00:1.00 for the quarter ending March 31, 2013 and subsequent quarters.

The maximum total leverage ratio was changed to 9.75:1.00 beginning with the quarter ending June 30, 2010, stepping down over time to 4.75:1.00 for the quarter ending June 30, 2013 and subsequent quarters.

The maximum senior leverage ratio was amended to 5.25:1.00 beginning with the quarter ending June 30, 2010, stepping down over time to 2.50:1.00 for the quarter ending Sept. 30, 2012 and subsequent quarters.

And, the minimum fixed-charge coverage ratio covenant was modified to 1.00:1.00 beginning with the quarter ending March 31, 2011, stepping up over time to 1.20:1.00 for the quarter ending June 30, 2013 and subsequent quarters.

NewPage can buyback loans

NewPage's amendment also permits the company to repurchase term loans at a discount through a Dutch auction; however, buybacks can only be made if senior leverage is less than 3.00:1.00 and excess availability under the revolver following the buyback is at least $75 million.

In addition, the amendment allows the company to request in the future an extension of the final maturity date of the revolver.

Furthermore, the restricted payments covenant was amended to permit repurchases of the company's floating-rate senior secured notes due 2012 and 10% senior secured notes due 2012 with the amount allowed to be repurchased subject to the senior leverage ratio, and to allow for the repayment of floating-rate senior unsecured PIK notes due 2013 and 2015 with the proceeds of an initial public offering.

Goldman Sachs is the administrative agent on the deal.

Lenders were paid a 50 bps amendment fee.

NewPage is a Miamisburg, Ohio-based coated paper manufacturer.

Warner Chilcott launch nears

Warner Chilcott's up to $2.75 billion senior secured credit facility is rumored to be getting ready for a retail launch, which is anticipated to take place sometime between now and the end of the week of Sept. 21, according to a market source.

As was previously reported, the credit facility, as outlined by a commitment letter filed with the Securities and Exchange Commission, consists of a $250 million five-year revolver priced at Libor plus 350 bps, a $1 billion five-year term loan A priced at Libor plus 350 bps and a $1.5 billion 51/2-year term loan B priced at Libor plus 375 bps.

Up to $350 million of the term loan A and/or the term loan B can be available as a 180-day delayed-draw loan. If the delayed-draw is not needed, the company expects to raise a total of $2.15 billion of term loan A and term loan B debt, as opposed to $2.5 billion.

All tranches will carry a 2.5% Libor floor.

The commitment letter said that the term loan A and the term loan B will be offered to lenders at an original issue discount of 98.

The revolver has a 75 bps commitment fee and the delayed-draw term loan commitment fee will be half of the drawn spread.

Warner Chilcott led by two

Co-lead arrangers on Warner Chilcott's credit facility are Bank of America and Credit Suisse. Bookrunners on the deal are Bank of America, Credit Suisse, Barclays, Citigroup, JPMorgan and Morgan Stanley. Credit Suisse is the administrative agent.

The banks have committed to provide 16 2/3% of the credit facility.

Financial covenants under the facility include a maximum leverage ratio opening at 4.25 times and decreasing until it reaches 2.5 times after Sept. 30, 2013, and an interest coverage ratio that opens at 2.0 times and increases until it reaches 3.0 times after Sept. 30, 2013.

Proceeds will be used to refinance the company's existing credit facility and to fund the purchase of Procter & Gamble Co.'s pharmaceuticals business for $3.1 billion.

Other funds for the refinancing and acquisition will come from the sale of $1.4 billion of senior unsecured notes, which are backed by a $1.4 billion one-year bridge loan priced at Libor plus 800 bps with a 2.5% Libor floor. The spread increases by 50 bps after each three-month period.

The transaction is expected to close in the fourth quarter, subject to regulatory approvals, the receipt of proceeds of the financing, the delivery of audited financial statements for the pharmaceuticals business and other customary conditions.

Warner Chilcott is a Rockaway, N.J.-based specialty pharmaceutical company.

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