GM trades higher on Tracinda proposal; Select Personnel breaks; Cedar Fair flexes up

By Sara Rosenberg

New York, June 30 - General Motors Corp.'s revolver got a nice lift during Friday's somewhat quiet pre-holiday session on news of Tracinda Corp.'s proposition that GM join an alliance with Renault SA and Nissan Motor Co., Ltd.

Also in the secondary, Select Personnel Services (Koosharem Corp.) freed for trading, with the first-lien term loan quoted atop 99.

Moving to the primary, Cedar Fair LP flexed pricing higher on its $2 billion-plus credit facility and Lucite International Ltd. switched its term loan B over to a regular covenant package from a covenant-light structure on investor push back.

GM's revolver strengthened during market hours, spurred on by Tracinda's urging of the company to join an alliance with Renault and Nissan that could prove beneficial to GM and its shareholders, according to a trader.

The Detroit-based automaker's revolver closed the day higher by half a point at 94½ bid, 95½ offered, and had even gotten as high as 95 bid, 96 offered early on in the session, the trader said.

On Friday, Tracinda sent a letter to G. Richard Wagoner Jr., chairman of GM's board of directors, proposing that GM establish a committee to immediately and fully explore a possible opportunity to join the partnership-alliance between Renault and Nissan.

"It is our understanding that Renault SA and Nissan Motor Co., Ltd. are receptive to the concept of including General Motors Corporation in their partnership-alliance and purchasing from General Motors a significant minority interest in the company," the letter, which was filed with the Securities and Exchange Commission, read.

"The Renault-Nissan partnership-alliance has created tremendous engineering, manufacturing and marketing synergies, resulting in substantial benefits and cost savings to both Renault and Nissan.

"We believe that participating in a global partnership-alliance with Renault and Nissan could enable General Motors to realize substantial synergies and cost savings and thereby greatly benefit the company and enhance shareholder value. Accordingly, we urge the board of directors to form a committee to immediately and fully explore this opportunity together with management," the Tracinda letter concluded.

Tracinda is billionaire investor Kirk Kerkorian's investment company, which is a large minority shareholder in GM.

Select Personnel frees to trade

Select Personnel allocated its credit facility Friday, with the $140 million first-lien term loan (B2/B-) quoted at 99¼ bid, 99½ offered, according to a market source.

The first-lien term loan is priced with an interest rate of Libor plus 450 basis points, was issued at an original issue discount of 99 and contains call protection of 102 in years one and two and par thereafter.

During syndication, the first-lien term loan was reduced from a most recent size of $150 million and from an original size of $215 million, pricing was increased from most recent pricing of Libor plus 350 basis points and prior to that from Libor plus 300 basis points, and the original issue discount and call protection were added.

Select Personnel's $285 million credit facility also contains an $85 million revolver (B2/B-) and a $60 million second-lien term loan (CCC) with an interest rate of Libor plus 850 basis points.

The second-lien term loan was issued at an original issue discount of 98, and is non-callable for one year and then at 102 in year two, 101 in year three and par thereafter.

During syndication, this second-lien term loan was added to the capital structure, accounting for the original first-lien downsizing from $215 million to $150 million, with initial price talk of Libor plus 650 basis points and an initial size of $65 million.

However, during the second-lien syndication process, the tranche was downsized by $5 million, pricing was flexed up by 200 basis points and the original issue discount was added.

All in all, since first launching, Select Personnel's credit facility ended up being reduced by $15 million from $300 million, with the decrease in necessary funds explained by excess cash on the target's balance sheet.

Select Personnel is using the proceeds from the new credit facility to fund the acquisition of RemedyTemp Inc. for $17 per RemedyTemp share in cash, or about $169 million.

Goldman Sachs Credit Partners, LP is lead arranger, bookrunner, syndication agent and administrative agent on the deal, and Bank of the West will act as co-syndication agent.

Select Personnel is a Santa Barbara, Calif., temporary staffing services company. RemedyTemp is an Aliso Viejo, Calif., professional staffing organization.

Cedar Fair ups pricing

On the primary side, Cedar Fair increased pricing on its $2.095 billion credit facility (Ba3/BB-), moving spreads up to Libor plus 250 basis points from original official talk of Libor plus 175 to 200 basis points, according to a market source.

The deal consists of a $350 million five-year revolver and a $1.745 billion six-year term loan B.

Of the total revolver amount, $40 million will be in Canadian equivalent, and of the total term loan amount, $270 million will be in Canadian equivalent.

Recommitments from lenders were due on the deal on Friday.

It is considered likely that the deal will end up allocating during the week of July 10, although timing on allocations is still very much unknown, the source added.

Bear Stearns is the lead bank on the transaction.

Proceeds from the credit facility were used to help fund the $1.24 billion cash acquisition of five Paramount Parks from CBS Corp., which was completed Friday, and to refinance Cedar Fair's existing debt.

The five Paramount Parks consist of Canada's Wonderland near Toronto, King's Island near Cincinnati, King's Dominion near Richmond, Va., Carowinds near Charlotte, N.C., and Great America located in Santa Clara, Calif.

In 2005, the Paramount Parks generated revenues of about $423 million while entertaining 12.2 million guests. Cedar Fair reported $569 million in revenues and 12.7 million guest visits. On a combined basis, the two companies generated almost $1 billion in revenues and entertained approximately 25 million guests in 2005.

Pro forma for the acquisition, leverage will be around 5.6x.

Cedar Fair has said that it plans on repaying a portion of the proposed term loan debt using proceeds from an up to $250 million public offering of its limited partnership interests that is expected to be completed within the next six months.

The public offering, if completed, will reduce the company's overall leverage and achieve an economical total cost of capital.

Lucite tweaks covenant package

Lucite International has decided to no longer go after a covenant-light term loan B structure, but rather has switched the deal to a more conventional covenant package as a lot of market push back has been felt against the covenant-light type transaction, according to a market source.

Basically, the company added two maintenance covenants to the term loan B agreement - a gross debt to EBITDA test and an EBITDA to net cash interest coverage test, the source said.

However, with the addition of the two maintenance covenants, the company went ahead and removed one incurrence covenant - net cash pay EBITDA of 41/2x, the source added.

Price talk on the $900 million seven-year term loan B was left unchanged at Libor plus 275 basis points.

Lucite's $1 billion credit facility (B1/B+) also contains a $100 million six-year revolver talked at Libor plus 225 basis points.

Merrill Lynch is the lead bank on the deal that will be used to fund a recapitalization of the company and to repay a shareholder loan.

Lucite is a Southampton, U.K.-based designer, developer and manufacturer of acrylic-based products.

Standard Steel closes

Trimaran Capital Partners completed its acquisition of Standard Steel, LLC from Citicorp Mezzanine Partners LP and certain members of management, according to a news release.

To help fund the transaction, Standard Steel got a new $165 million credit facility consisting of a $20 million revolver (B2/B+) at Libor plus 250 basis points, a $100 million six-year first-lien term loan (B2/B+) at Libor plus 250 basis points, a $20 million six-year delayed-draw first-lien term loan (B2/B+) at Libor plus 250 basis points with a 100 basis point ticking fee, and a $25 million seven-year second-lien term loan (Caa1/B-) at Libor plus 600 basis points with call protection of 102 in year one and 101 in year two.

The delayed-draw term loan will be used to help fund a $30 million capital expansion project in Pennsylvania that the company has planned.

During syndication, pricing on the revolver, first-lien term loan and delayed-draw term loan was reverse flexed from original talk at launch of Libor plus 275 basis points.

UBS, Jefferies and Bear Stearns acted as the lead banks on the deal, with UBS the left lead.

Standard Steel is a Pittsburgh-based manufacturer of steel wheels and axles for use in freight railcars, locomotives and passenger railcars.

Bluegrass closes

Texas Pacific Group completed its acquisition of Smurfit-Stone Container Corp.'s consumer packaging segment, which was renamed Altivity Packaging (Bluegrass Container Co. LLC), according to a company news release.

To help fund the LBO, Bluegrass got a new $1.315 billion credit facility consisting of a $150 million revolver (Ba3/BB-), an $835 million first-lien term loan B (Ba3/BB-) priced at Libor plus 225 basis points and a $330 million second-lien term loan (B3/B-) priced at Libor plus 500 basis points with call protection of 103 year one, 102 in year two and 101 in year three.

During syndication, the first-lien term loan B was increased by $75 million from an original size of $760 million and pricing was flexed up from original talk at launch of Libor plus 200 basis points. In addition, the second-lien term loan was decreased by $75 million from an original size of $405 million, pricing was flexed up from original talk at launch of Libor plus 450 basis points and the call protection premiums were sweetened from just 101 for one year.

JPMorgan, Lehman Brothers and Bank of America acted as the lead banks on the deal, with JPMorgan the left lead.

J.L. French closes

J.L. French Automotive Castings, Inc. closed on its $255 million exit facility consisting of a $140 million five-year first-lien term loan at Libor plus 275 basis points, a $65 million six-year second-lien term loan at Libor plus 525 basis points with call protection of 102 in year one and 101 in year two, and a $50 million five-year revolver at Libor plus 275 basis points with a 50 basis point commitment fee.

During syndication, the first-lien term loan was downsized from $150 million and the second-lien term loan was upsized from $55 million.

Goldman Sachs and Morgan Stanley acted as the lead banks on the deal.

Proceeds from the term loans were used to fund the company's recapitalization under its plan of reorganization. Revolver proceeds will be used for working capital and general corporate purposes.

J.L. French is a Sheboygan, Wis., supplier of high-pressure die-cast aluminum automotive components and assemblies.

Madison River Capital closes

Madison River Capital LLC closed on its $50 million add-on to its existing term loan (B+), according to an 8-K filed with the Securities and Exchange Commission Friday, which is priced at Libor plus 225 basis points, in line with existing term loan pricing.

Merrill Lynch acted as the lead bank on the deal.

In return for approving the add-on, lenders got an extension on the 101 soft call protection contained in the existing term loan, putting the premium in affect for 12 months after closing on the amendment.

Proceeds from the incremental term loan debt are being used to repay $50 million of Madison's 13.25% senior unsecured notes due in 2010, resulting in lower interest expense for the company.

Madison River is a Mebane, N.C., operator of rural local telephone companies.

Knology closes

Knology Inc. completed the repricing of its $173.2 million first-lien term loan, dropping the spread to Libor plus 250 basis points from Libor plus 550 basis points, according to a company news release.

Credit Suisse and Wachovia acted as the lead banks on the deal.

Knology is a West Point, Ga., provider of interactive communications and entertainment services.

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