National Bedding's new B loan trades at par plus during shortened session

By Sara Rosenberg

New York, Feb. 14 - National Bedding Co.'s newly allocated term loan B traded a little at par and 3/8 on Friday in an otherwise quiet pre-holiday secondary bank loan market, according to a trader. The loan, which was issued at 993/4, broke on Thursday with a par bid and a par 3/8 offer.

National Bedding term loan B is sized at $100 million and carries an interest rate of Libor plus 375 basis points. The company's new facility also contains a $75 million term loan A.

Bank of America is the lead bank on the Illinois bedding manufacturer's deal that will be used to help fund the acquisition of Sleepmaster LLC.

Another loan that broke on Thursday above par was Therma-Tru Corp.'s term loan B, which broke in the secondary at par 5/8, according to a syndicate source. Pricing on the two times oversubscribed $255 million term loan B (upsized from $230 million since the agent bank meeting) was flexed down earlier in the week to Libor plus 300 basis points from Libor plus 325 basis points.

The loan is expected to fund and close by next Friday, the syndicate source said, adding that the hope is to get it all done by Thursday.

Included in the new credit facility is a $75 million revolver with an interest rate of Libor plus 275 basis points.

Therma-Tru's new credit facility is basically a pricing refinancing of its existing loan. The loan was originally closed and funded in June of 2000 with the term loan B priced at Libor plus 325 basis points. However, the company fell short on its performance and amended its facility, changing the interest rate on the term B to Libor plus 375 basis points. Now that performance is back on track, the company wanted to obtain at a minimum the original pricing on the loan.

CIBC World Markets is the lead bank on the Maumee, Ohio fiberglass door manufacturer's deal. Fifth Third Bank and NatCity are agents on the deal.

Isle of Capri Black Hawk LLC's $135 million add-on, which launched on Feb. 5, (B1/B+) is currently almost half done, according to a syndicate source, who explained that the Penn National Gaming Inc.'s loan is making "guys wait till that clears." CIBC is the administrative agent on the deal.

"We do have a bunch of guys on the board. There's no concern. It's a single market. Guys have to do a lot of work to get comfortable with it. It's almost half done. The other half should come from traditional pro rata lenders. There are some institutional guys looking too."

The facility consists of a $105 million term loan C due 2006 with an interest rate of Libor plus 400 basis points and a $30 million add-on to the revolver due 2005 with an interest rate of Libor plus 325 to 400 basis points depending on leverage.

Penn's loan is much larger in size compared to Isle of Capri Black Hawk. The deal, which totals $800 million, contains a $600 million term loan B that was recently flexed up to Libor plus 400 basis points from Libor plus 350 basis points, making the tranche equally priced and equally rated to the Black Hawk deal.

In addition to the term B, the Penn loan also contains a $100 million revolver with an interest rate of Libor plus 300 basis points and a $100 million term loan A with an interest rate of Libor plus 300 basis points. Bear Stearns and Merrill Lynch are joint lead arrangers, joint bookrunners and syndication agents on the deal.

Proceeds from the Black Hawk term loan C will be used to help fund the purchase of Colorado Central Station Casino and Colorado Grande Casino from International Game Technology, Inc. The transaction is expected to be completed some time in April.

Isle of Capri Black Hawk is a Colorado hotel casino that is jointly owned by Isle of Capri Casinos and Nevada Gold & Casinos.

Penn National Gaming is a Wyomissing, Pa. owner and operator of gaming properties.

International Transmission Co.'s credit facility has been a massive blowout, with the holding company loan four times oversubscribed and the operating company loan three times oversubscribed, according to a syndicate source. The deal is expected to allocate some time in the middle to the end of next week.

The operating company's loan consists of a $185 million six-year term loan B with an interest rate of Libor plus 250 basis points and a $15 million three-year revolver with an interest rate of Libor plus 250 basis points. The facility was rated Baa1/A-, according to the syndicate source

The holding company's loan consists of a $120 million six-year term loan B with an interest rate of Libor plus 375 basis points. The facility was rated Baa3/BBB-.

CIBC is the lead bank on the deal and Union Bank of California and SocGen are co-syndication agents.

Proceeds from the facilities will be used to help fund the acquisition of International Transmission by affiliates of Kohlberg Kravis Roberts & Co. and Trimaran Capital Partners L.L.C. for approximately $610 million in cash.

International Transmission is the Detroit-based transmission business subsidiary of DTE Energy.

The book is almost filled on Norcross Safety Products LLC's $165 million credit facility, according to a syndicate source. CIBC and Fleet are the lead banks on the deal that was launched on Feb. 7 and is expected to close during the first week of March.

The loan consists of a $35 million five-year revolver with an interest rate of Libor plus 350 basis points and a $130 million six-year term loan B with an interest rate of Libor plus 425 basis points.

Proceeds are being used to refinance bank debt that was coming up on maturity.

Norcross Safety Products is an Oak Brook, Ill. manufacturer of personal protection equipment.

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