Formica breaks; Georgia-Pacific trades up; Plum Point adds second-lien; Infor raises second-lien spread

By Sara Rosenberg

New York, March 3 - In secondary doings Friday, Formica Corp. allocated its credit facility, with the term loan freeing for trading in the high-par to 101 type of context, and Georgia-Pacific Corp.'s term loan B inched its way higher on good buying interest.

In primary happenings, Plum Point Energy Associates LLC added a second-lien term loan to its capital structure, while reducing the size of its first-lien term loan B, and Infor Global Solutions AG flexed pricing higher on the new second-lien debt contained in its credit facility.

Formica's credit facility hit the secondary on Friday, with the $210 million seven-year term loan B quoted at par ¾ bid, 101 offered throughout the session, according to various market sources.

The term loan B is priced with an interest rate of Libor plus 300 basis points, in line with where it was talked since the deal first launched in late-January.

During syndication though, 101 hard call protection for one year was added to the term loan tranche.

In addition, the U.S. carve out under the term loan was raised to $135 million from $110 million as the Canadian term loan carve out was removed from the deal altogether. The $75 million of remaining term loan B funds is available in euros, as was always planned.

Formica's $300 million credit facility (B2/B) also contains a $60 million six-year revolver with an initial interest rate of Libor 275 basis points.

Bank of America and UBS are the joint lead arrangers on the deal that is being used to pay a dividend of about $30 million to the equity owners, including Cerberus Capital Management and Oaktree Capital, and to refinance debt.

Formica is a Cincinnati-based manufacturer and marketer of branded, design-coordinated decorative surfacing.

Georgia-Pacific heads up

Georgia-Pacific's term loan B moved into stronger territory on Friday in active trading as there was a noticeable amount of increased buying interest for the paper, according to a trader.

The term loan closed the session quoted at par 7/8 bid, 101 1/8 offered, about an eighth of a point higher than the previous closing levels of par ¾ bid, 101 offered, the trader said.

Georgia-Pacific is an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals.

Plum Point adds second lien

Plum Point Energy Associates added a $250 million 81/2-year second-lien term loan tranche to its credit facility structure, while reducing the size of its first-lien term loan B by the equivalent amount, according to a market source.

Price talk on the second-lien term loan emerged as Libor plus 325 basis points plus 200 basis points pay-in-kind, the source said.

With these changes, the eight-year term loan B (B1/B) is now sized at $340 million, compared to the original size at launch of $590 million, the source continued. This tranche is talked at Libor plus 325 basis points.

Plum Point's $65 million five-year revolver (B1/B) and $105 million eight-year synthetic letter-of-credit facility (B1/B) were left unchanged in terms of size and price talk, currently set at Libor plus 325 basis points on both tranches, the source added.

Credit Suisse, Goldman Sachs and Merrill Lynch are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds will be used to help finance the construction of the Plum Point Energy Station, a nominal 800 megawatt, coal-fired electric generating plant located near Osceola, Ark.

Chesterfield, Mo.-based Plum Point Energy Associates is a LS Power Group member. St. Louis-based LS Power Group develops, owns and operates large-scale power generation projects.

Infor ups second-lien pricing

Switching to the primary, Infor Global increased pricing on the new second-lien debt portion contained in its credit facility by 25 basis points, according to a market source.

The new $115 million of second-lien term loan debt now carries an interest rate of Libor plus 700 basis points, as opposed to the original price talk at launch of Libor plus 675 basis points, the source said.

Infor's $315 million six-year second-lien term loan (Caa2/CCC+) also contains $200 million in existing second-lien debt, which carried pricing of Libor plus 725 basis points before this new deal came into play and is expected to keep that spread even once this new deal closes.

"The existing second-lien guys tried to hold up [the deal] and asked for more than the one point consent fee that was being offered. JPMorgan yanked them from the deal at 103, which was their right under the credit agreement and brought in new lenders," one market source added.

Pricing on Infor's new $50 million four-year revolver (B2/B) and new $605 million five-year first-lien term B (B2/B) was left unchanged since launch at Libor plus 275 basis points.

JPMorgan and Credit Suisse are the lead banks on the Infor deal.

Proceeds from the credit facility will be used for the purchase of Geac Computer Corp. Ltd.'s ERP software products - including System21, Runtime, RatioPlan, Streamline and Management Data - and for the purchase of Greenville, S.C., asset management applications provider Datastream Systems Inc. for $10.26 per share in cash.

Infor, a Golden Gate Capital funded company, is an Atlanta-based software provider.

Navistar flexes up

Also on the pricing front, Navistar International Corp. increased the spread on its $1.5 billion three-year senior unsecured term loan to Libor plus 500 basis points from initial price talk at launch of Libor plus 475 basis points, according to a syndicate document.

The book on the deal is now closed, a market source added.

The interest rate on the loan will increase by an additional 50 basis points at the end of the 12-month period following the date of the first borrowing and by an additional 25 basis points at the end of each subsequent six-month period, according to the commitment letter that was previously filed with the Securities and Exchange Commission.

Credit Suisse and Bank of America are joint lead arrangers on the deal, with Credit Suisse the left lead. J.P. Morgan Chase Bank and Citigroup Global Markets are involved in the deal as well.

Proceeds from the term loan must be used to repurchase or refinance the company's 9.375% senior notes due 2006, 6.25% senior notes due 2012, 7.5% senior notes due 2011, 2.5% convertible notes due 2007 and/or its 4.75% subordinated exchangeable notes due 2009.

Navistar allegedly defaulted on these notes as the result of a delay in filing its fiscal 2005 annual report. The filing delay is a result of ongoing discussions with outside auditors about a number of complex and technical accounting items.

The company has already begun tender offers and consent solicitations for these notes.

If the fundings under the term loan do not occur before Aug. 9, the facility will expire.

Navistar is a Warrenville, Ill.-based commercial truck and mid-range diesel engine producer.

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