Thermal North America sets talk; Precision Parts fills two agent roles; Movie Gallery rises on amendment

By Sara Rosenberg

New York, Sept. 14 - Thermal North America Inc. set price talk on its credit facility as the deal launched Wednesday to a favorable response with some early orders being placed before the day was through. And, Precision Parts International LLC's newly launched credit facility was also met with interest as two lenders signed on for agent roles.

In secondary doings, Movie Gallery Inc.'s term loan B headed higher as news surfaced that the company would be seeking an amendment to its credit facility, and Delphi Corp.'s revolver traded up a little on news surrounding the loan's security package.

Thermal North America came out with opening price talk of Libor plus 200 basis points on all three tranches contained in its proposed $312 million credit facility (Ba3) as the deal launched via a bank meeting at 2 p.m. ET on Wednesday, according to a market source.

Furthermore, syndication of the deal is off to a good start as some early commitments had already made their way into the books by late day.

The facility consists of a $35 million multi-currency revolver that is not being syndicated, a $30 million eight-year letter-of-credit facility and a $247 million eight-year term loan B that is being offered to investors at par.

"Initial response [is] very favorable," the source said, explaining that some factors working in the deal's favor are "long lived assets, extremely high barriers to entry, stable diversified cash flows [and a] strong management team."

Lehman is the lead bank on the deal that will be used to fund a dividend payment and refinance existing debt.

Thermal North America is a Boston-based private venture focused on investments in district heating and cooling systems.

Precision Parts finds agents

Precision Parts caught some investor interest on its proposed $120 million credit facility as both Anteres and Comerica signed on in an agent capacity to the deal by committing to the revolver and the term loan in a strip, according to a market source.

The $20 million five-year revolver is talked at Libor plus 350 basis points, and the $100 million six-year term loan is talked at Libor plus 375 basis points.

The term loan is being offered to investors at par.

Proceeds from the credit facility, which just launched via a bank meeting on Wednesday, will be used to help fund First Atlantic Capital Ltd.'s acquisition of Precision Parts from Morgenthaler Partners.

General Electric Capital Corp. is the lead arranger and bookrunner on the deal.

Revenue on a last-12-month basis is about $215 million, EBITDA is roughly $37 million, senior leverage is 2.9x and total leverage is 4.3x.

Precision Parts is a Rochester Hills, Mich., designer and manufacturer of high-precision metal components and subassemblies.

Kodak subscribed

Eastman Kodak Co.'s $1.5 billion seven-year institutional term loans were heard to be "slightly oversubscribed" ahead of Thursday's commitment deadline, according to a buyside source.

And, being that the deal got done, but not in a blowout fashion, investors are not expecting to see any price changes emerge before allocations are distributed, the source added.

The institutional term loans are divided into $1 billion that will be funded at close and $500 million that is delayed draw, with both tranches talked at Libor plus 175 basis points and being offered to investors at par.

The delayed-draw portion of the term loan carries a commitment fee of 150 basis points and is delayed draw until June 2006.

Kodak's $2.7 billion credit facility also contains a $1.2 billion five-year revolver talked at Libor plus 150 basis points. Upfront fees are 100 basis points for $100 million commitments, 75 basis points for $75 million commitments, 50 basis points for $50 million commitments and 37.5 basis points for $25 million commitments.

Citigroup Global Markets Inc. is the lead arranger on the deal.

Borrowings under the revolver, which will replace the company's existing $1.225 billion five-year revolver expiring in July 2006, will be available for general corporate purposes.

Term loan proceeds will be used to repay existing company debt primarily arising out of the acquisition of Creo, which was completed on June 15.

Kodak is a Rochester, N.Y.-based digital imaging products, services and solutions company.

Movie Gallery up on amendment

Movie Gallery's term loan B traded higher by about half a point during Wednesday's market hours as investors were apparently pleased to hear that the company would be seeking an amendment to its credit facility for covenant relief, as well as for a $50 million term loan B add-on.

The term loan B traded right around par and closed out the session being quoted at 99¾ bid, par ¼ offered, as compared to Tuesday when the paper was trading right around 99½ and closed out the session being quoted at 99 3/8 bid, 99¾ offered, according to a market source.

The company is scheduled to hold a conference call on Thursday at which time the amendment will be presented to lenders.

"Not sure which covenants for sure [will be amended] but I'd guess the leverage covenant is definitely one of them," a fund manager said.

The term loan B add-on is being sought after because a franchisee of several Hollywood video stores is exercising his option to put his stores back to the company, the fund manager explained.

Wachovia is the lead bank on the deal.

Movie Gallery is a Dothan, Ala.-based owner and operator of video specialty stores. The company purchased Hollywood Entertainment Corp. in an approximately $1.25 billion transaction earlier this year.

Delphi trades higher

Delphi's revolver felt stronger in trading during Wednesday's session as the loan's security package essentially took full affect.

The revolver traded around 97 and closed out the day quoted at 97 bid, 97¼ offered, according to a trader. On Tuesday the revolver closed out the session quoted at 96¾ bid, 97¼ offered.

"This thing got done in June," the trader said about Delphi's revolver. "It takes 90 days to perfect the lien. Today or tomorrow is the day that the liens were perfected."

Delphi is a Troy, Mich., supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology to vehicle manufacturers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.