U.S. TelePacific well met; Bucyrus tweaks deal; Cedar Fair, Smurfit-Stone may allocate soon

By Sara Rosenberg

New York, Feb. 5 - On the new deal front, U.S. TelePacific's term loan has received a lot of attention from investors since launching a little over a week ago, so much so that the book has overfilled with orders, and Bucyrus International Inc. revised size and pricing on its term loan.

In other news, investors are anticipating that Cedar Fair LP and Smurfit-Stone Container Corp. will be allocating their new deals sometime within the next couple of days.

Meanwhile, over in trading, Freescale Semiconductor Inc.'s term loan held firm on Friday after running up by a few points during the previous session on the back of news of a proposed amend and extend transaction.

U.S. TelePacific going strong

U.S. TelePacific's $360 million 51/2-year first-lien term loan has been doing very well since launching on Jan. 28, with chatter being that about $450 million in commitments have already been placed, according to a buyside source.

A second source said that he wasn't surprised by the strong reception being that U.S. TelePacific is a good company.

Price talk on the term loan is Libor plus 750 basis points, with a 2% Libor floor, an original issue discount of 98 and 101 soft call protection for one year.

The company's $385 million credit facility (B2/CCC+) also includes a $25 million revolver.

U.S. TelePacific lead banks

Credit Suisse, Deutsche Bank and Bank of America are the lead banks on U.S. TelePacific's credit facility that will be used to refinance existing bank debt and add some cash to the balance sheet.

The facility was initially scheduled to launch on Jan. 27, but that meeting was delayed by one day after Standard & Poor's came out with surprise ratings of CCC+ on the credit facility and B- pro forma corporate family.

At the time of the launch, a source told Prospect News that pricing looked to be a bit more generous than he expected, which might have been a way to solve any ratings problem.

U.S. TelePacific is a Los Angeles-based competitive local exchange carrier.

Bucyrus reworks term loan

Bucyrus came out with a number of changes to its term loan, reducing the size and lowering pricing, the Libor floor and the original issue discount, according to a market source.

Under the changes, the six-year term loan now carries a total size of $1 billion, down from up to $1.2 billion, with $875 million being a U.S. dollar tranche and $125 million being an Australian dollar tranche, the source said.

Pricing on the term loan is now Libor plus 300 bps with a step-down to Libor plus 275 bps when leverage is less than 2.0 times, compared to original talk at launch of Libor plus 325 bps.

Also, the Libor floor on the loan has been trimmed to 1.5% from 2% and the original issue discount tightened to 99½ from 99, the source continued.

And, 101 soft call protection for one year was added to the deal.

Recommitments are due from lenders on Tuesday.

Bucyrus acquiring business

Proceeds from Bucyrus' term loan will be used to fund the acquisition of Terex Corp.'s mining equipment business for $1.3 billion.

Although the loan was launched at up to $1.2 billion, the market was expecting it to be downsized to around $1.075 billion after a definitive agreement was reached to issue roughly 5.8 million shares of equity to Terex in place of $300 million in cash.

JPMorgan, Bank of America and Macquarie are the lead banks on the deal (Ba2/BB).

In connection with the acquisition, Bucyrus is also planning to get a $50 million revolver add-on and an amendment and extension of its existing credit facility.

Closing on the acquisition is expected to take place during the first quarter, subject to regulatory approvals and other customary conditions.

Bucyrus is a Milwaukee, Wis.-based designer and manufacturer of high-productivity mining equipment for surface and underground mining.

Cedar Fair allocating shortly

Cedar Fair is anticipated to allocate its $1.45 billion senior secured credit facility (Ba3/BB-) during the week of Feb. 8, with the target being for Monday or Tuesday, according to a market source.

The facility consists of a $1.2 billion six-year term loan B and a $250 million five-year revolver, with both tranches priced at Libor plus 375 bps with a 1.5% Libor floor.

New lenders to the term loan B are being offered the paper at an original issue discount of 991/2, and lenders who extended their term loan B commitments during the company's previous amend and extend transaction are getting 50 bps for rolling over their commitments and waiving the 101 call protection.

During syndication, the term loan B was upsized from $1 billion as the company downsized its bond offering to $500 million from $700 million.

Bank of America, JPMorgan, Barclays Capital, UBS and KeyBanc Capital Markets are the lead banks on the credit facility.

Cedar Fair being bought out

Proceeds from Cedar Fair's credit facility, notes and up to $765 million in equity will be used to fund Apollo Global Management's acquisition of the company for $11.50 in cash per limited partnership unit. The transaction is valued at about $2.4 billion, including the refinancing of outstanding debt.

Initially, the company was planning to do an amend and extend with an incremental loan, but it then changed to a whole new deal with new documentation and new debt tranches since market conditions are favorable.

Under the original proposal, the company was asking to extend its existing $250 million revolver and non-extended term loan debt to 2014 from 2012 with pricing of Libor plus 400 bps with no Libor floor. The amended term loan would have been sized at $1 billion, including $100 million of incremental debt.

Closing on the buyout is expected by the beginning of the second quarter, subject to approval of holders of two-thirds of Cedar Fair's outstanding units, the receipt of regulatory approvals and other conditions.

Cedar Fair is a Sandusky, Ohio-based amusement-resort operator.

Smurfit-Stone also readies allocations

Another deal that is expected to allocate and hit the secondary market during the week of Feb. 8 is Smurfit-Stone's oversubscribed $1.2 billion six-year term loan (B2), according to a market source.

The term loan is talked at Libor plus 500 bps with a 2% Libor floor, is being offered at an original issue discount of 981/2, and includes 101 soft call protection for two years.

There is a $400 million accordion feature under the term loan, subject to, among other things, 25 bps MFN pricing protection.

The facility includes 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 getting revolver too

Smurfit-Stone also plans on obtaining a new $650 million four-year asset-based revolver, with proceeds from the entire $1.85 billion credit facility going towards 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.

Smurfit-Stone'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.

The company is expecting to emerge from Chapter 11 and fund the bank deal in April.

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

Freescale stays firm

Switching to the secondary market, Freescale Semiconductor's term loan held up at 93½ bid, 94½ offered, where it moved to late in the day on Thursday after company held an amendment call, according to a trader.

Prior to news of the amendment hitting the market, the term loan was being quoted in the 90¾ bid, 91¾ offered context.

Under the amendment proposal, which is being led by JPMorgan, the term loan maturity would be extended to Dec. 1, 2016 from Dec. 1, 2013, and pricing on the extended debt would be Libor plus 425 bps, compared to Libor plus 175 bps on the existing loan.

In addition, Freescale's amendment would allow for the issuance of $750 million senior secured notes that would be used to repay bank debt and would permit the sale of additional senior secured notes to prepay bank debt at par.

Lenders are being offered a 25 bps amendment fee.

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

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