LSP $1.69 billion deal allocates; Nutro upsizes term loan, flexes pricing; GM revolver trades down

By Paul A. Harris

St. Louis, April 14 - A holiday shortened Thursday session preceding the three-day Easter weekend saw syndicate and trading desks staffed by skeleton crews.

However the market did produce some news.

The LSP Gen Finance Co. $1.69 billion credit facility allocated and "went flying" as the paper broke, according to one trader.

Elsewhere California pet food maker Nutro Products Inc. wolfed up $30 million from its new bond deal and shifted it to the term loan. Nutro also flexed the term loan pricing inward by 25 basis points, where, according to one source, it is still a bargain.

Meanwhile in the secondary market General Motors Corp.'s revolver traded off as the rumor engine generating expectations of a new secured deal seemed to one source to be running low on gas.

LSP "went flying"

LSP Gen Finance Co.'s $1.69 billion credit facility allocated and broke for trading on Thursday, with the first-lien paper and especially the second-lien paper trading up smartly.

The $950 million seven-year first-lien term loan (Ba3/BB-) priced at Libor plus 175 basis points.

Soon after the paper broke a trader saw a 101 bid, and said that it went out Thursday at 100.75 bid, 101 offered.

More dramatic still was the aftermarket action on LSP's $150 million eight-year second-lien term loan (B2/B) which priced at Libor plus 350 basis points. The trader spotted it going out at 102 bid, 102.25 offered.

Credit Suisse and Goldman Sachs are leading the acquisition deal, which also contains a $100 million five-year revolver (Ba3/BB-) priced at Libor plus 175 basis points and a $450 million letter-of-credit facility provided by Goldman Sachs and Credit Suisse.

Nutro Products upsizes, flexes in

Word circulated Thursday that Nutro Products upsized its term loan B to $470 million from $440 million and flexed the pricing inward to Libor plus 200 basis points from 225 basis points.

A buy-side source said that the original 225 basis points spread to Libor had been "cheap," and added that even if it comes at 200 "it's a little bit of a gift."

The increase in the size of the term loan upsizes the overall credit facility (B1/B) to $570 million from $540 million. The facility also contains a $100 million revolver talked at Libor plus 250 basis points.

JP Morgan and Lehman Brothers are leading the LBO deal which is expected to allocate late in the week of April 17.

In addition to the upsizing and price flexing, Nutro Products introduced a 175 basis points grid step-down at 5.5-times total leverage.

The City of Industry, Calif., pet food manufacturer also downsized its concurrent high-yield bond deal to $315 million from $345 million.

A trader commented that the pressure on U.S. Treasuries - with the 10-year going out Friday at 5.04% - will only serve to amplify the already-keen interest in floating-rate assets among institutional investors.

"It's been such a huge phenomenon recently because we have had so many more investors familiar with the bank loan market," the source commented.

"Before, you didn't see as much money move because some of these investors weren't doing loans. But the institutional market for loans has doubled in the past three to four years."

GM revolver trades lower

This trader also said that GM's revolver was on the move Thursday, and marked it down a couple of points at 94 bid, 95 offered, although there had been no real news for the past couple of days.

The trader remarked that GM had improved a little on the news that the company is expected to receive over $14 billion for its sale of 51% of its auto financing arm, General Motors Acceptance Corp., to Cerberus Capital Management, during the April 3 week.

Early in the week of April 10 the bonds had traded in a 96 bid, 97 offered context, the source added.

The trader said that the earlier move up may have been predicated upon a rumor that GM is about to do a new secured deal.

"The loan jumped about 10 points after [GM chief executive] Wagoner hinted that they would look to do a secured deal, or upsize the existing bank deal and add on more debt.

"It seemed as though the market had done its homework and had gotten comfortable with the collateral package.

"But it seems like the reason for the softening in the past couple of days is because investors have gotten tired. There's no new news to fuel the speculation, so it's kind of fragile."

MultiPlan closes

In follow-up news, Carlyle Group completed its acquisition of MultiPlan, Inc., a transaction financed in part by a $475 million credit facility (B2/B+).

Goldman Sachs, Bank of America and Morgan Stanley were lead banks on the loan, which included a $50 million revolver and a $425 million term loan at Libor plus 200 bps with a possible step down to Libor plus 175 bps.

MultiPlan is a New York-based independent Preferred Provider Organization network.

Allied Waste reprices

Allied Waste Industries, Inc. said it completed the repricing of its $1.275 billion term loan B and $495 million institutional letter-of-credit facility to Libor plus 175 bps from Libor plus 200 bps. Pricing will step down again to Libor plus 150 basis points when the company's leverage ratio is equal to or less than 4.25x.

The Scottsdale, Ariz., waste services company said the change will save it $4 million a year in borrowing costs.

JPMorgan is lead arranger.

Burlington Coat Factory acquired

Burlington Coat Factory Warehouse Corp. said that Bain Capital Partners, LLC completed its acquisition of all the company's stock on Thursday for $2.1 billion.

Funding for the transaction included a new $1.7 billion senior secured credit facility via Bear Stearns and Bank of America.

Included in the facility were a $735 million ABL revolver (NA/NA/BB-) at Libor plus 150 bps, a $65 million tranche A+ first-in, last-out ABL revolver (NA/NA/BB-) at Libor plus 275 bps, a $900 million term B (B2/B/B-) at Libor plus 225 bps.

Burlington Coat Factory is a Burlington, N.J., retailer of branded apparel at discount prices.

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