Plastech mulls second-lien tweaks; Ford firms new revolver size, breaks for trading

By Sara Rosenberg

New York, Dec. 12 - Plastech Engineered Products Inc. is anticipated to price its second-lien term loan above the current spread guidance and make the call premiums more attractive in an effort to get the deal fully done.

In other news, Ford Motor Co. finalized the new size of its revolving credit facility just shy of the maximum amount proposed and then allocated the transaction with the term loan B seen trading actively atop par.

Plastech Engineered Products is expected to come out with pricing on its $150 million second-lien term loan (Caa2/B-) that is wider than the original guidance of Libor plus 750 to 800 basis points before syndication on the deal wraps up, according to a market source.

Furthermore, it is anticipated that additional call protection will be added to the second-lien tranche in order to attract more investors, the source said. Currently, the call premiums on the loan are 102 in year one and 101 in year two.

Meanwhile, pricing on the company's $250 million first-lien term loan B (B2/B+) is expected to firm up at Libor plus 500 bps, the high end of most recent guidance of Libor plus 475 to 500 bps and original guidance of Libor plus 450 to 500 bps.

The term loan B, which is oversubscribed at this point, has 101 soft call protection for one year.

As for the company's $200 million ABL revolver (B1/BB), that too is oversubscribed and pricing is expected to firm up at initial talk of Libor plus 200 bps, the source added.

Goldman Sachs is the lead bank on the $600 million deal that will be used to refinance existing debt.

Plastech is a Dearborn, Mich., maker of blow-molded and injection-molded plastic products, primarily for the automotive industry.

Ford firms size, frees to trade

Ford finalized the size of its five-year revolver, opting for a total of $11.485 billion - slightly short of the maximum proposed amount of $11.5 billion, according to a market source.

The revolver tranche, which is priced at Libor plus 275 bps, was originally launched with a size of $8 billion; however, during syndication, the company announced plans to upsize to anywhere from $10.5 billion to $11.5 billion due to overwhelming market support.

In addition, now that Ford firmed up the structure of its $18.485 billion senior secured credit facility (Ba3/B), which also includes a $7 billion seven-year term loan B, allocations were able to go out and the new debt freed for trading, according to traders.

The term loan B hit the secondary market with levels of par ½ bid, par ¾ offered, softened to par 3/8 bid, par 5/8 offered and then tightened to par 3/8 bid, par ½ offered where it closed the day, traders said.

The term loan B is priced at Libor plus 300 bps with a step down to Libor plus 275 bps if the corporate credit rating is B2, and is non-callable for two years, then at 101 in year three and par thereafter. During syndication, the pricing step down was added to the deal and the call protection was softened from non-callable for two years, then at 102 in year three, 101 in year four and par thereafter.

Another change made to the credit facility during syndication regarded availability of the $2 billion basket for pari passu first-lien debt from either incremental facilities and/or permitted additional notes.

The condition that was added was that Ford must meet one of the following two conditions to access any amount of the basket - it must pledge its investment in Mazda Motor Corp. as additional collateral for all of the senior secured debt, or it must decrease commitments under the revolver or repay term loan B debt by at least the amount of the additional debt.

Security for the facility is first-priority liens on principal domestic manufacturing facilities and substantially all of the company's other domestic automotive assets, certain intellectual property, certain real property, all or a portion of the stock of certain subsidiaries, certain intercompany payables and notes, and up to $4 billion of domestic cash without restriction on its use.

Proceeds from the loan, along with $4.5 billion in convertibles, will be used to replace the company's existing unsecured $6.3 billion credit facility, address near- and medium-term negative operating-related cash flow, fund its restructuring and provide added liquidity to protect against a recession or other unanticipated events.

JPMorgan, Citigroup and Goldman Sachs are the joint lead arrangers on the deal.

Ford is a Dearborn, Mich.-based manufacturer and distributor of automobiles.

Corel closes

Corel Corp. closed on its $70 million term loan B add-on, according to a company news release. JPMorgan acted as the lead bank on the deal.

Proceeds were used to help fund the acquisition of InterVideo Inc. for $13.00 per share or $198.6 million.

Corel is an Ottawa, Ont., packaged software company. InterVideo is a Fremont, Calif., provider of multimedia DVD software.

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