Calpine's new first lien debt heads up by about a point on first full day of trading

By Sara Rosenberg

New York, Aug. 8 - Calpine Construction Finance Co. LP's first lien term loan and second lien notes traded higher on Friday with the loan quoted at par ½ bid, 101½ offered and the notes quoted at 98¼ bid, 98¾ offered, according to a trader.

Upon breaking in the secondary on Thursday evening, the term loan was quoted around 99 bid, 99½ offered. The tranche was offered to investors at 98.

The $750 million debt offering hit the capital markets late in the day Thursday, with the syndicate managing to solidify terms and fully distribute the deal by nightfall.

Under the final terms, the six-year first priority secured term loan is sized at $385 million with an interest rate of Libor plus 600 basis points and the eight-year second priority secured floating-rate notes issued under Rule 144A are sized at $365 million with an interest rate of Libor plus 850 basis points.

Furthermore, the first lien tranche contains a 1½% Libor floor and is non-callable for four years and then callable in year five at 103.

The second lien piece was also offered at 98, has a 1¼% Libor floor, and is non-callable for six years and then callable in year seven at 1041/4.

Goldman Sachs is the lead bank on the San Jose, Calif. energy company's deal, which is expected to close on Thursday.

In the primary, commitments were due on Friday for Tempur World Inc.'s $135 million term loan B add-on (B1/B+), according to a syndicate source, who said that the tranche was very well oversubscribed. The lead banks are aiming to close on the loan next week.

GE and Lehman led the deal, which was priced with an interest rate of Libor plus 350 basis points.

Proceeds, combined with proceeds from a $150 million senior subordinated note offering that priced Friday at the wide end of talk at 10 ¼%, will be used by the Lexington, Ky. mattress and pillow company to refinance existing bank and mezzanine debt, and pay a dividend.

Meanwhile, Dex Media West LLC's (QwestDex) $2.11 billion credit facility (BB-) is now scheduled to hold a bank meeting on Monday, according to a syndicate source. The deal was originally slated for July 29, but was postponed due to regulatory issues. A meeting for managing agents has already taken place.

JPMorgan, Bank of America, Deutsche Bank, Wachovia Securities and Lehman Brothers are the lead banks on the facility.

The facility consists of a $1.05 billion term loan B talked at Libor plus 275 basis points, 25 basis points lower than initial price talk, a $100 million revolver talked at Libor plus 300 basis points and a $960 million term loan A talked at Libor plus 300 basis points, the source said.

Last year, Qwest reached an agreement to sell QwestDex, its yellow pages directories business, to The Carlyle Group and Welsh, Carson, Anderson & Stowe for $7.05 billion.

The buyout involves two stages. In the first stage, which was already completed, QwestDex's operations in Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota were purchased for $2.75 billion. In this second stage, operations in Arizona, Idaho, Montana, Oregon, Utah, Washington and Wyoming will be purchased for $4.3 billion.

For the acquisition of Dex Media East, approximately $1.79 billion of bank debt was syndicated, consisting of a $700 million term loan B with an interest rate of Libor plus 400 basis points, a $690 million term loan A with an interest rate of Libor plus 300 basis points and a $100 million revolver with an interest rate of Libor plus 300 basis points.

In follow-up news, Graphic Packaging International Corp. closed on its $1.6 billion credit facility (B1/B+) in connection with closing on the previously announced merger with Riverwood Holdings Inc.

JPMorgan and Deutsche Bank acted as joint lead arrangers, Goldman Sachs and Morgan Stanley were syndication agents, and Citibank and Credit Suisse First Boston acted as co-leads.

The facility consists of a $325 million revolver with an interest rate of Libor plus 300 basis points, a $150 million term loan A with an interest rate of Libor plus 275 basis points and a $1.125 billion seven-year term loan B with an interest rate of Libor plus 275 basis points.

With the completion of the merger, which came on the heels of Thursday's shareholder approval, the company has an enterprise value of approximately $3.2 billion and expects substantial free cash flow for debt reduction, according to a news release.

The new Marietta, Ga.- based paperboard packaging company will be known as Graphic Packaging Corp.

"The combined company is built on common operating philosophies, including a commitment to innovation, cost reduction, quality and excellent customer service," said Steve Humphrey, president and chief executive officer, in the news release. "The keys to our success will be our ability to provide the highest level of quality and service at the lowest cost and to offer proprietary products to help our customers be more successful. Graphic Packaging Corporation has a pre-eminent position in the best segments of our industry, the best customers and the best solution set for those customers."

DirecTV closed on its new $1.225 billion term loan B-1 that replaced the company's existing $1.05 billion term loan B. Terms under the new term B-1 are the same as terms under the previous term B except for the initial interest rate, which is set at Libor plus 275 basis points, 75 basis points lower than the previous B loan.

In addition, pricing can be reduced further if certain conditions are met.

The additional $175 million obtained with the B-1 tranche was used to repay the $175 million outstanding under the company's term loan A.

As a result, $200 million remain available under the term loan A and $250 million will remain available under the revolving credit facility, according to a filing with the Securities and Exchange Commission.

Deutsche Bank, Bank of America, Salomon Smith Barney; Credit Suisse First Boston and Goldman Sachs are the lead banks on the deal.

DirecTV is an El Segundo, Calif.-based digital satellite television service provider.

Corrections Corp. of America closed on its $275 million term loan B add-on, which was priced with an interest rate of Libor plus 275 basis points, according to a syndicate source. Lehman was the lead bank on the deal.

Proceeds are being used to repay existing debt.

Corrections Corp. of America is a Nashville, Tenn. owner, operator and manager of prisons and other correctional facilities, and provider of inmate residential and prisoner transportation services.

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