International Coal restructures; Doane Pet cuts spread; Choctaw and New Skies break

By Sara Rosenberg

New York, Nov. 1 - International Coal Group reworked its credit facility (B2/B-) on Monday, increasing the overall size to $285 million from $245 million and lowering pricing. But that wasn't the only in-market deal to see some changes during the session as Doane Pet Care decided to cut pricing on its term loan as well.

While on the secondary front, Choctaw Resort Development Enterprise and New Skies Satellites NV broke for trading, with both deals' institutional pieces quoted over 101.

International Coal Group's five-year revolver was upsized to $110 million from $50 million and its six-year term loan was upsized to $175 million from $155 million, according to a market source. And, the letters-of-credit sub-facility under the revolver was increased to $60 million from $20 million.

Furthermore, pricing on the term loan was reduced to Libor plus 275 basis points from Libor plus 300 basis points and pricing on the revolver was reduced to Libor plus 250 basis points from Libor plus 275 basis points, the source said. In fact, the revolver grid was adjusted to remove the potential of a Libor plus 275 basis point spread altogether by making Libor plus 250 basis points the top tier level.

Lastly, the $40 million six-year synthetic letter-of-credit facility that was priced with an interest rate of Libor plus 300 basis points was cancelled.

The incremental term loan proceeds will be used to repay the $4 million drawn under the existing revolver and to increase the company's cash balance, the source added.

UBS is the lead bank on the deal, with GE Capital Corp. acting as documentation agent.

International Coal Group was formed by an investor group including, WL Ross & Co., Contrarian Capital Management LLC, Greenlight Capital Inc., Stark Event Trading Ltd., and Varde Partners Inc., to acquire the operating assets of Lexington, Ky.-based Horizon Natural Resources Co.

Doane trims pricing

Doane Pet Care lowered pricing on its $195 million five-year term loan to Libor plus 400 basis points from Libor plus 450 basis points on Monday, according to a market source.

Credit Suisse First Boston is the lead bank on the deal that will be used to refinance the company's existing credit facility due December 2005.

The $230 million senior secured credit facility (B2/B+) also contains a $35 million five-year revolver.

Doane is a Brentwood, Tenn.-based manufacturer of private label pet food.

Choctaw 101 plus

Meanwhile, Choctaw Resort Development Enterprise's term loan hit the secondary market on Monday with the paper first seen in the 101¼ bid, 101½ offered context before moving up to 101½ bid, 101¾ offered by day's end, according to a trader.

The approximately $143.8 million term loan (Ba3/BB) is priced with an interest rate of Libor plus 225 basis points. The deal had originally gone out at Libor plus 250 basis points but was reverse flexed during syndication.

Bank of America is the lead bank on the facility.

Proceeds from the term loan, combined with proceeds from a $150 million 15-year amortizing senior note offering that priced this week at par to yield 7¼%, will be used to fund the tender offer for the company's 9¼% senior notes due 2009 and to repay some existing bank debt.

The tender offer is scheduled to expire on Nov. 10.

Choctaw Resort Development Enterprise was established by the Mississippi Band of Choctaw Indians to operate the Silver Star Hotel and Casino and to develop and operate the Golden Moon Hotel and Casino.

New Skies breaks

New Skies term loan also broke for trading at the typically high new issues levels that have become a noticeable trend in this incredibly strong secondary market, with the paper trading at 101¾ and closing the day at 101 5/8 bid, 101 7/8 offered, according to a trader.

The $460 million term loan B is priced with an interest rate of Libor plus 275 basis points, after being reverse flexed during syndication from price talk of Libor plus 300 to 325 basis points.

The $535 million credit facility (B1/B+) also contains a $75 million revolver with an interest rate of Libor plus 275 basis points.

Deutsche Bank and ABN Amro are the lead banks on the deal, with Deutsche listed on the left.

Proceeds will be used to help fund The Blackstone Group's acquisition of The Hague, Netherlands-based fixed satellite communications company.

FMC closes

FMC Corp. closed on its new $600 million credit facility (Ba1/BBB-), consisting of a $400 million five-year revolver, a $100 million five-year term loan, and a $100 million five-year stand-alone letter-of-credit facility, according to a company news release.

All three tranches are priced with an initial interest rate of Libor plus 125 basis points. The revolver and the letter-of-credit facility have a 25 basis point undrawn fee.

Citigroup and Bank of America were the lead banks on the deal, with Citigroup listed on the left.

Proceeds were used to refinance existing debt, including taking out the Philadelphia chemical company's existing term loan B.

"The company expects to achieve significant savings from the approximately $140 million reduction in its term loan borrowings, the elimination of its restricted cash balances and savings from lower interest rate margins under its new credit agreement," the release added.

Natural Resource Partners closes

Natural Resource Partners LP closed on its new $175 million five-year revolver with an interest rate of Libor plus 125 basis points. This revolver also contains the ability to upsize to $300 million without lender consents.

Citigroup Global Markets Inc. and Wachovia Capital Markets LLC were joint lead arrangers on the deal, which replaced the Houston coal company's previous three-year credit facility set to expire in October 2005.

Citibank is administrative agent, Wachovia is syndication agent, and BNP Paribas, BB&T and Bank of Montreal are co-documentation agents.

Borrowings will be available for general corporate purposes.

"NRP is very pleased with the attractive terms of the new five-year credit facility. Not only will NRP benefit from lower annual fees, but also reduced pricing and lower administrative costs, with the added flexibility to increase the size of the facility as acquisitions warrant," said Dwight Dunlap, chief financial officer and treasurer, in a company news release.

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