Magellan Midstream, Hilb, Rogal & Hamilton open for trading; Jostens sweetens repricing

By Sara Rosenberg

New York, Dec. 9 - Magellan Midstream Holdings LP's term loan (Ba3/BB) and Hilb, Rogal and Hamilton Co.'s credit facility broke for trading on Thursday, with both companies' B loans quoted in the 101 context.

In primary news, Jostens IH Corp. made some changes to its term loan B repricing proposal including reducing the spread reduction request and putting in soft call protection.

Magellan's $250 million term loan B was quoted at 101 1/8 bid, 101 5/8 offered, according to a trader, although activity on the paper was relatively light.

The tranche, which was only marketed to existing lenders, is priced with an interest rate of Libor plus 225 basis points, down from original price talk of Libor plus 275 basis points following a 50 basis point reverse flex last week.

Lehman Brothers and Goldman Sachs are joint lead arrangers on the deal, with Lehman also acting as sole bookrunner.

Proceeds from the term loan will be used to refinance existing bank debt.

Magellan Midstream Holdings was formed by Madison Dearborn Partners LLC and Carlyle/Riverstone Global Energy and Power Fund to acquire interests in Williams Energy Partners LP, which was renamed Magellan Midstream Partners.

Magellan Midstream is a Tulsa, Okla., transporter, storer and distributor of refined petroleum products and ammonia.

Hilb, Rogal and Hamilton breaks

Hilb, Rogal and Hamilton Co.'s $200 million seven-year term loan B hit the secondary on Thursday at 101 bid, 101 3/8 offered and pretty much stayed within that context throughout the session, a trader said, explaining that the deal is not expected to move around much being that its smallish size makes its somewhat illiquid.

The tranche is priced with an interest rate of Libor plus 225 basis points.

The company's $400 million credit facility also contains a $150 million five-year revolver with an interest rate of Libor plus 175 basis points and a $50 million five-year term loan A with an interest rate of Libor plus 175 basis points.

Wachovia is the lead bank on the deal that will be used by the Glen Allen, Va., insurance broker to refinance existing debt.

Jostens reworks repricing

Jostens IH Corp. is now looking to reprice its $870 million term loan B at Libor plus 225 basis points with a step down to Libor plus 200 basis points if leverage falls below 4.25x, as opposed to the original proposal which called for pricing to immediately drop to Libor plus 200 basis points, according to a fund manager. The term loan is currently priced at Libor plus 250 basis points.

Furthermore, there will be one-year call protection at 101 only in the event of a "pure repricing," the fund manager added.

Lender consents are due by the close of business on Friday.

Credit Suisse First Boston is the lead bank on the deal for the Minneapolis-based printing and marketing services enterprise.

The term loan B was just obtained about two months ago in connection with the creation of one large company through the combination of Jostens Holding Corp., Von Hoffmann and Arcade Marketing that is owned by Kohlberg Kravis Roberts & Co., DLJ Merchant Banking Partners, management and certain other investors.

Cooper-Standard oversubscribed

Cooper-Standard Automotive's term loan B and term loan C are oversubscribed already, according to a market source, and in fact has been oversubscribed since early this week - within about two days of launching.

The $115 million seven-year term loan B that will be U.S. dollar denominated but borrowed by a Canadian subsidiary and the $185 million seven-year term loan C that will be borrowed by a U.S. subsidiary are both talked at Libor plus 250 basis points.

There are a number of strong points working in favor of this deal, aside from the current borrower friendly primary loan market, but the most prominent factor may be the company's ability to generate free cash flow and reduce debt.

"Pretty strong cash flow generation allows [the company] to delever fairly rapidly. Leading market positions in their three principal product segments. And, the management team has done a good job of running the business. The market probably just likes the free cash flow generation," the source said.

Cooper-Standard's $475 million credit facility (B1/BB-) also contains a $100 million six-year revolver, a $25 million multi-currency six-year revolver, a six-year term loan A in the Canadian equivalent amount of $50 million, all talked at Libor plus 250 basis points as well.

Commitments are due Dec. 16.

Deutsche Bank and Lehman Brothers are joint lead arrangers and joint bookrunners, with Deutsche listed on the left, and Goldman Sachs and UBS are co-documentation agents.

Proceeds will be used to help fund the acquisition of Cooper-Standard by an entity formed by The Cypress Group and Goldman Sachs Capital Partners for about $1.165 billion in cash from Cooper Tire & Rubber Co.

The company is also marketing $550 million in high-yield bonds via a roadshow that kicked off Monday for additional LBO financing. The bond deal, which is split between $200 million senior notes and $350 million subordinated notes, is expected to price Wednesday or Thursday of next week.

In early November, the U.S. District Court in Indiana granted a preliminary injunction on the sale of four of the 47 Cooper-Standard facilities - which delayed the launch of the credit facility - in response to a complaint filed by the United Steelworkers of America that claimed they have the right to require a buyer to negotiate new labor agreements before a sale takes place.

However, Cooper Tire announced on Dec. 1 that it reached an agreement with the Steelworkers, lifting the injunction, and therefore, allowing the company to move forward with the sale. Details on the agreement were not released.

Cooper-Standard is a Novi, Mich.-based manufacturer of fluid handling systems, body sealing systems, and active and passive vibration control systems.

Herbst Gaming done

Herbst Gaming Inc.'s $100 million term loan, which just launched via a conference call on Tuesday, is "about done already" as existing bank lenders have jumped at the change to get some term loan debt, according to a market source.

"They have an existing bank group that has $175 million lent on the revolver. They'd like the term loan exposure. Most existing banks will be taking this thing up. There will be some institutional guys but there's not really any room for them. It's a small deal," the source said.

The term loan, which is being talked at Libor plus 225 basis points, will be used to help fund the previously announced acquisition of Grace Entertainment's riverboat casino assets for about $287 million in cash.

Bank of America and Lehman are the lead banks on the deal, with Bank of America the left lead.

Herbst Gaming is a Las Vegas casino and slot route operator.

Aleris closes

Aleris International Inc. closed on its new $325 million revolver, according to a company news release.

The revolver, which refinances existing debt, was obtained in connection with the merger of Commonwealth Industries Inc. and Imco Recycling Inc.

Aleris is a Cleveland-based aluminum recycling and sheet manufacturing company.

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