ISP Chemco cuts term loan spread; Flag Luxury overfills; Prestige weakens on numbers

By Sara Rosenberg

New York, Feb. 7 - ISP Chemco Inc. reverse flexed pricing on its nearly billion dollar term loan Tuesday on strong investor demand, and Flag Luxury Properties LLC's credit facility has already reached the point of subscription, and then some, as investors have flocked to the deal in just the few days it's been in-market.

Meanwhile, in the secondary, Prestige Brands Holdings Inc.'s term loan B fell in trading as the company released disappointing financials.

ISP Chemco reduced pricing on its term loan B by 25 basis points, while leaving all other terms of the credit facility unchanged, according to a market source.

The $950 million term loan B is now priced with an interest rate of Libor plus 175 basis points, down from original price talk at launch of Libor plus 200 basis points, the source said.

ISP Chemco's $1.15 billion senior secured credit facility (Ba3/BB-) also contains a $200 million revolver.

JPMorgan and Bear Stearns are the lead banks on the deal, with JPMorgan the left lead.

Proceeds will be used to fund, among other things, the tender for International Specialty Holdings Inc.'s $200 million 10 5/8% senior secured notes due 2009 and $405 million 10¼% senior subordinated notes due 2011 issued by various of the company's subsidiaries.

International Specialty Products Inc., the parent company of International Specialty Holdings Inc. and ISP Chemco Inc., is a New York City-based multinational manufacturer of specialty chemicals, industrial chemicals, synthetic elastomers and mineral products.

Flag oversubscribed

Flag Luxury Properties' credit facility has been met with positive investor interest as the deal is already oversubscribed less than a week after the launch took place, according to a market source.

Approximately 120% of the target in orders has been met at this stage, the source added.

Flag Luxury Properties' $175 million credit facility consists of a $135 million first-lien term loan talked at Libor plus 350 basis points and a $40 million second-lien term loan talked at Libor plus 700 basis points.

Credit Suisse is the lead bank on the deal that launched with a bank meeting on Feb. 2 in Jupiter, Fla.

Proceeds will be used to repay existing debt and to fund development of a St. Regis resort on Anguilla.

Flag Luxury Properties is a New York-based owner and developer of hotel, residential and retail projects.

Burger King opts for refinancing

Burger King Corp. has reworked its deal to provide for a refinancing of its existing term loan debt along with the add-on that was already in-market, according to a market source.

The company is now marketing a total of $1.1 billion in term loan debt (Ba2), which includes the $350 million add-on that was launched last month to fund a dividend payment.

Pricing on the $350 million add-on was reverse flexed to Libor plus 150 basis points from Libor plus 175 basis points, and at the same, the company decided to reprice its existing term loan debt at Libor plus 150 basis points from Libor plus 175 basis points, the source said.

The Libor plus 150 basis points spread would be locked in for six months, the source added.

JPMorgan and Citigroup are the lead banks on the deal, with JPMorgan the left lead.

Burger King is a Miami-based fast food hamburger chain.

Prestige dips on numbers

Prestige Brands' term loan B softened by about three eighths of a point during Tuesday's session in reaction to the company's release of disappointing fiscal third-quarter numbers, according to a trader.

The term loan B closed the day quoted at par ½ bid, 101½ offered, the trader said.

Although the financials weren't announced until after the close Monday, the term loan B debt had been weakening in loan trading over the course of last week as well as investors were somewhat expecting the bad numbers, the trader explained.

At the start of last week, the term loan B was being quoted at 101½ bid, 102 offered, the trader added.

For the third quarter ended Dec. 31, 2005, Prestige reported net income of $9.3 million or $0.19 per basic and diluted share, compared with $9.1 million for the comparable prior-year period. On average, analysts were expecting the company to produce third-quarter earnings per share of $0.24.

Other third-quarter results included net revenues of $79.9 million, up 9% from last year's net revenues of $73 million, and operating income of $24.8 million or 6% below the third quarter of fiscal 2005.

For the nine months ended Dec. 31, 2005, net revenues were $216.7 million, up 2% increase from last year and net income was $22.6 million, up 90% increase from last year's net income of $11.9 million. Earnings per share for the nine-month period were $0.46 basic and $0.45 fully diluted.

Prestige is an Irvington, N.Y.-based marketer, seller and distributor of over-the-counter drug, personal care and household cleaning products.

Cooper-Standard closes

Cooper-Standard Automotive Inc. completed its acquisition of the Fluid Handling Systems business of ITT Industries Inc. in a transaction valued at about $205 million, according to a company news release.

To fund the transaction, the company got a new $215 million term loan D (B2/B+) priced with an interest rate of Libor plus 250 basis points and 101 soft call protection for one year.

The term loan has a $25 million euro carve out.

During syndication pricing on the term loan was reverse flexed from Libor plus 275 basis points and the euro carve out was added.

Deutsche Bank and Lehman Brothers acted as the lead banks on the Novi, Mich., automotive supplier's deal.

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