IAP Worldwide Services frees to trade; Mirant trims institutional loan pricing

By Sara Rosenberg

New York, Dec. 22 - IAP Worldwide Services Inc. allocated its credit facility on Thursday, with the first-lien term loan freeing for trading in the 101's and the second-lien term loan freeing for trading in the 102's.

In primary doings, Mirant Corp. reverse flexed pricing on the institutional tranches contained in its exit facility by 25 basis points.

IAP Worldwide Services' credit facility broke for trading early on in the session on Thursday, with the $415 million first-lien term loan (B2/B+) quoted in the 101 1/8 bid, 101 3/8 offered context throughout the day and the $120 million second-lien term loan (B3/B-) quoted in the 102¼ bid, 102¾ offered context, according to traders.

The first-lien term loan is priced with an interest rate of Libor plus 300 basis points. During syndication, this tranche was upsized from $350 million, and Moody's Investors Service lowered the rating on this debt to B2 from B1 because of the increased size.

The second-lien term loan is priced with an interest rate of Libor plus 800 basis points, contains call protection of 102 in year one and 101 in year two, and was sold to investors with a 50 basis point original issue discount. During syndication, this tranche was downsized from $225 million resulting in a Moody's upward rating revision to B3 from Caa1, pricing was flexed up on two occasions - first to Libor plus 750 basis points from Libor plus 575 basis points and then to Libor plus 800 basis points - and the OID was added.

IAP Worldwide Services' $610 million credit facility, which is down from an original size of $675 million, also contains a $75 million revolver (B2/B+) with an interest rate of Libor plus 300 basis points. During syndication, this tranche was downsized from $100 million and received the same Moody's rating revision as the first-lien term loan debt.

Goldman Sachs and Deutsche Bank are the lead banks on the deal, with Goldman the left lead.

Proceeds from the facility will be used to refinance existing debt and to fund a dividend payment. The size of the planned dividend payment was reduced by $40 million with the decision to reduce total term loan debt by $40 million.

IAP Worldwide Services is a Cape Canaveral, Fla., provider of logistic services to public and private sector companies and government agencies.

Mirant cuts spread

Mirant reduced pricing on its $500 million seven-year term loan and $200 million pre-funded letter-of-credit facility to Libor plus 175 basis points from Libor plus 200 basis points, according to a market source.

The company's $1.5 billion exit facility (Ba3/BB-/BB) also contains an $800 million six-year revolver. Pricing on this tranche was left unchanged at Libor plus 225 basis points.

JP Morgan, Deutsche Bank and Goldman Sachs are the lead banks on the deal, with JPMorgan the left lead.

Proceeds from the exit facility will be used to fund intercompany restructuring transactions and help pay claims against the consolidated Mirant Americas Generation LLC debtors.

Mirant is an Atlanta-based power company.

Compass Minerals closes

Compass Minerals Group closed on its new $475 million senior secured credit facility (B1/BB-) consisting of a $125 million five-year revolver with an interest rate of Libor plus 175 basis points and an undrawn fee of 37.5 basis points, and a $350 million seven-year term loan with an interest rate of Libor plus 150 basis points.

During syndication, pricing on the term loan was reverse flexed from Libor plus 175 basis points.

JPMorgan and Goldman Sachs acted as joint lead arrangers on the deal, with JPMorgan the left lead.

Proceeds are being used to refinance the company's existing revolver and term loan, to fund the previously announced tender offer for its 10% senior subordinated notes and for general corporate purposes.

"This is an important step toward strengthening Compass Minerals' capital structure," said Rodney Underdown, vice president and chief financial officer, in a news release. "By replacing our senior subordinated notes with lower-interest, pre-payable debt, Compass has enhanced its financial flexibility."

Compass Minerals is an Overland Park, Kan., producer of salt and sulfate of potash.

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