MultiPlan term loan pricing drops to Libor plus 275 basis points on investor demand

By Sara Rosenberg

New York, Feb. 27 - MultiPlan Inc.'s $180 million five-year term loan B reverse flexed by 25 basis points on Friday to Libor plus 275 basis points from Libor plus 300 basis points due to strong demand, according to a market source.

The institutional tranche was said to be oversubscribed before the Thursday commitment deadline had even passed.

"Now that [it's] reverse flexed, [they] have to get all the accounts to recommit," the source said. "Recommitments are due either late Friday or Monday morning. I don't think anyone will drop out."

Allocations on the credit facility are expected to take place early next week. Closing is anticipated for mid-to-late next week, with the most likely date on Wednesday.

The $200 million credit facility (B+) also contains a $20 million five-year revolver with an interest rate of Libor plus 275 basis points.

UBS is the sole bookrunner on the deal.

Proceeds will be used to help fund the acquisition of U.S. Health Business, a subsidiary of BCE Emergis Inc., for $213 million in cash. The acquisition, which was announced Feb. 20, is subject to regulatory and BCE Emergis shareholder approval.

MultiPlan is a New York healthcare network.

Eaton Vance goes to CSFB

Credit Suisse First Boston came out as top bidder on Eaton Vance's $208 million portfolio of what was described as containing all pretty liquid names, according to a trader.

The portfolio went up for sale this past Wednesday with Bank of America arranging the sale.

Previously it was reported that 10 dealers were bidding on acquiring the portfolio.

Overall though, it was a pretty quiet day in the secondary bank loan market with one trader remarking that it felt "like a vacation day."

Adelphia higher

Adelphia Communications Corp.'s bank debt was relatively active on Friday with the company's revolver trading down and then heading back up and the Old Century paper quoted higher by about half to three quarters of a point on the day.

The revolver traded down to 92¾ earlier in the day on Friday but by late afternoon was quoted at 93 bid, 93¾ offered. On Thursday the revolver "went out" at 92½ bid, 93½ offered, according to a trader.

Meanwhile, the Old Century bank debt was stronger with quotes around 94¾ to 94½ bid, 95¾ to 95½ offered, according to the trader. On Thursday the paper was seen at 94¾ bid, 95¾ offered.

Adelphia's bank debt moved down over the second half of this week following the company's announcement of its plan of reorganization. The emergence plan left some feeling disappointed since the company intends to withhold cash and maintain a big escrow rather than paying everybody, a source previously explained to Prospect News.

However, on Thursday, the company's pre-petition bankers filed documents with the U.S. Bankruptcy Court for the Southern District of New York asking for an end to Adelphia's exclusive periods. The group of bankers believes creditors should have a choice of reorganization plans since they see this plan as one-sided benefiting a group of subordinated creditors, who, if the plan is approved, would become the new shareholders.

In its own motion, Bank of America, agent for the Century Cable Holdings LLC facility, said the plan is "nonconfirmable" and wants Century auctioned off to maximize recovery for creditors.

Meanwhile, Credit Lyonnais' New York branch said in a different filing that Adelphia's reorganization plan hands the post-reorganization company over to the bondholders while withholding some payment to the lenders until the litigation is resolved.

A hearing is scheduled for March 2. The Greenwood Village, Colo., cable television company and substantially all of its debtor subsidiaries filed for Chapter 11 on June 25, 2002.

Golden State Foods closes

Wetterau Associates completed the acquisition of the 50.3% stake in Golden State Foods formerly held by its five-year business partner, The Yucaipa Cos., according to a company news release.

In connection with the leveraged buyout, Golden State Foods obtained a new $195 million credit facility (B1) consisting of a $30 million five-year revolver with an interest rate of Libor plus 250 basis points, a $30 million five-year term loan A with an interest rate of Libor plus 250 basis points and a $135 million seven-year term loan B with an interest rate of Libor plus 250 basis points.

SunTrust was the lead bank on the Irvine, Calif., food processor and distributor's bank deal.

The credit facility was launched to existing lenders only, and as has happened time and time again recently, the term loan B was oversubscribed not too long after the bank meeting took place.

It did, however, take a couple of days for the term loan B to reach oversubscription since potential lenders who had already essentially committed to the deal were asked to recommit once Moody's Investors Service announced its B1 rating for the credit facility.

Moody's said the rating reflects Golden State's very high leverage for the rating level, weak balance sheet, and limited free cash flow available for debt reduction pro forma for the proposed transaction.

The ratings, however, also reflect Golden State's long-term relationship with key customer McDonald's Corp. (senior unsecured A2) and its historically stable operating performance and cash flows.

AMF Bowling closes

AMF Bowling Worldwide Inc. and Code Hennessy & Simmons LLC, a Chicago-based private equity firm, announced Friday that they have completed the merger transaction in which AMF has been acquired through a leveraged buyout by an affiliate of Code Hennessy & Simmons.

The merger transaction is valued at about $670 million, of which $250 million will be financed through the sale of certain real estate assets under a sale-leaseback facility.

Debt financing consists of $135 million in term loans under a new senior secured credit facility, as well as a recently completed offering of $150 million in senior subordinated notes. Finally, a $135 million equity investment was made by Kingpin Holdings, the acquiring affiliate of Code Hennessy.

Under the terms of the merger agreement, AMF shareholders will receive $25.00 in cash for each common share.

AMF is a Richmond, Va.-based operating of bowling centers and manufacturer of bowling and billiards products.

Pliant replaces loan

Pliant Corp. said Friday that it replaced its existing term loan and revolving credit facilities with a new $100 million five-year asset-based revolver as part of a refinancing that also included the sale of new senior secured discount notes.

Pliant said it completed the sale of $306 million principal amount at maturity of its 11 1/8% senior secured discount notes due 2009. The net proceeds from the offering of the notes, in the amount of about $225.3 million, together with borrowings under the new revolver, were used to pay off Pliant's outstanding debt under its existing term loan facilities totaling about $239.6 million, eliminating all principal amortization payments until 2009.

Pliant said the payoff of the term debt (which had variable rates of interest) has substantially reduced the company's exposure to interest rate risk. The new revolving credit facility also has no financial covenants through the first $75 million in borrowings, after which there is only a fixed charge ratio of 1.1-to-1.

Pliant said that although the effective interest rate on the notes is higher than the interest rate on the paid-off term loans, sale of the notes and the new revolver have enabled the company to realize greater short-term liquidity and flexibility in its debt structure.

Schaumburg, Ill.-based Pliant is a producer of value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets.

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