Weight Watchers term B anticipated to blow out; Rainbow Media, Sensus break near 101

By Sara Rosenberg

New York, Dec. 16 - Weight Watchers International Inc.'s bank meeting was well attended and some are even anticipating, based on current market trends, that the institutional piece will be a complete blowout as the company is essentially cutting down about $500 million in term loans to $250 million.

In the secondary, Rainbow Media Holdings Inc. and Sensus Metering Systems Inc. allocated and broke for trading, with the institutional term loans on both deals reaching around 101 levels.

Weight Watchers $500 million credit facility consists of a $250 million five-year revolver with price talk of Libor plus 175 basis points and a $250 million six-year term loan B with price talk of Libor plus 200 basis points. The company's existing institutional loans are priced at Libor plus 225 basis points, and the existing pro rata loans are priced at Libor plus 175 basis points.

"There was a great turnout. This is an opportunity for Weight Watchers to expand their commercial bank relationships," a market participant said regarding the revolver, which is larger than the one that is in place.

"[And the term loan] will probably be four or five times oversubscribed," the market participant said, explaining that since there currently is almost double that amount of institutional paper accounted for, the downsized term B should have no problem finding investors.

However, as of right after the Tuesday bank meeting, the syndicate only had "a couple of tickets in hand," the source said.

The company plans to draw down about $215 million of the revolver at closing to pay down its existing term loan debt. The $250 million term loan also will be used to refinance existing bank debt.

"It's actively trading north of par. I don't see this deal struggling. The company has clearly performed exceptionally well. They've tripled the size of EBITDA [over the last few years]" the participant added.

Commitments are due on Jan. 9 since there is not enough time for commercial banks to get their committees together before year-end.

Credit Suisse First Boston and The Bank of Nova Scotia are joint lead arrangers on the deal.

Weight Watchers is a Woodbury, N.Y., provider of weight loss services.

Rainbow Media's $575 million term loan C allocated and broke for trading on Tuesday with the tranche closing the day at par ¾ bid, 101 offered after being quoted at par 5/8 bid, 101 offered during the afternoon, according to a trader.

Bank of America, TD Securities and Wachovia are the lead banks on the deal, with Bank of America listed on the left.

The term loan C, which is really comprised of a $400 million add-on and a repricing/refinancing of existing loans, is priced with an interest rate of Libor plus 225 basis points.

The company's credit facility also contains a $200 million revolver, which was basically unchanged from existing terms, and carries an interest rate of Libor plus 325 basis points.

Security on the loan is Rainbow Media's 100% ownership interest in AMC, The Independent Film Channel and WE.

Proceeds from the add-on will be used by Cablevision to repay a $250 million MGM note maturing this month and by CSC Holdings to provide temporary additional liquidity. The amounts distributed to CSC Holdings as additional liquidity are expected to be returned to Rainbow to fund Rainbow DBS beginning in 2004.

Rainbow Media is a Jericho, N.Y., cable channel owner.

Sensus Metering's credit facility allocated and broke for trading on Tuesday morning with the term loan B quoted at 101 bid, 101¼ offered, according to a trader.

The $265 million institutional tranche is split into two parts consisting of a $235 million U.S. term loan and a $30 million European borrower term loan, both priced with an interest rate of Libor plus 300 basis points compared to initial price talk of Libor plus 300 to 325 basis points.

The $340 million credit facility (B2/B+) also contains a $75 million revolver priced with an interest rate of Libor plus 300 basis points.

Credit Suisse First Boston and Goldman Sachs are the joint lead arrangers on the deal.

Proceeds, combined with proceeds from a subordinated debt offering and equity capital provided by the Resolute Fund LP, will be used to help support the leveraged buyout of Invensys plc metering business.

Under the acquisition agreement, Sensus Metering will acquire the metering business for $650 million in cash. The transaction is expected to be completed by year-end.

Sensus Metering, a manufacturer and seller of water, gas, electric and heat metering and communication solutions for the utility industry, is sponsored by The Resolute Fund LP, which is a private equity fund managed by The Jordan Co. LP. The metering business being acquired is a Raleigh, N.C., provider of advanced metering and communications solutions for the worldwide utility industry.

Following up, since the addition of a pricing grid into Dr. Pepper/Seven Up Bottling Group's $730 million seven-year term loan B no potential lenders have pulled their commitments from the deal and, in fact, the tranche remains about two times oversubscribed with about $1.2 billion in the book, according to a fund manager.

Under the pricing terms, if total leverage falls below 3.5 times, then the interest rate on the B loan will be reduced to Libor plus 225 basis points from current pricing of Libor plus 250 basis points, the fund manager said.

The $855 million credit facility (B1) also contains a $125 million six-year revolver with an interest rate of Libor plus 200 basis points.

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

Proceeds will be used by the Dallas soft drink company to refinance existing debt.

Kraton Polymers Group is targeting next week to close on its proposed $420 million credit facility, according to a source close to the deal. Syndication has already been completed and allocations took place last week, however, in order to officially wrap this thing up, the company needs to complete a few more steps in the antitrust process, the source added.

The facility consists of a $360 million term loan B with an interest rate of Libor plus 250 basis points and a $60 million revolver with an interest rate of Libor plus 250 basis points. The term loan B was upsized from $330 million and reverse flexed from Libor plus 275 basis points last Thursday, following a $30 million downsize in the company's bond offering.

UBS Securities and Goldman Sachs are the joint lead arrangers on the bank deal.

Proceeds from the loan, combined with proceeds from a bond offering that is being led by UBS and Goldman as well, will be used to help support the company's leveraged buyout by Texas Pacific Group from Ripplewood Holdings LLC.

Kraton is a Houston specialty chemicals company and a producer of styrenic block copolymers.

Pioneer Natural Resources Co. closed on a new $700 million five-year unsecured revolving senior credit facility priced with an interest rate of Libor plus 125 basis points. Wachovia and JPMorgan were the lead banks on the deal.

The facility replaces the company's existing $575 million unsecured facility scheduled to mature in March 2005 and will be used for ongoing working capital and general corporate purposes.

Pioneer is a Dallas-based independent oil and gas exploration and production company.

Laidlaw International Inc. closed on its repricing of its $625 million term loan B maturing June 2009. Credit Suisse First Boston and Citibank were the lead banks on the deal.

Under the new credit agreement, the institutional tranche is now priced with an interest rate of Libor plus 375 basis points, reduced from previous pricing of Libor plus 500 basis points.

Furthermore, the Libor floor was reduced to 1.75% from the previous floor of 2%, according to a company news release.

Laidlaw is a Naperville, Ill., transportation company.

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