Van Houtte sets price talk; EPD facility catches interest; LCDX slides lower

By Sara Rosenberg

New York, June 15 - Van Houtte Inc. came out with pricing guidance on its credit facility as the transaction was launched with a bank meeting during Friday's market hours.

Also in the primary, EPD Inc.'s credit facility has been going well since launching just a few days ago with a number of commitments already hitting the book.

Meanwhile, over in the secondary market, LCDX headed downward despite strength in the equity markets.

Van Houtte held a bank meeting on Friday to kick off syndication on its proposed $425 million credit facility, and in connection with the launch, price talk on the deal was announced, according to a buyside source.

The $50 million six-year revolver (B1/BB-) and the $250 million seven-year first-lien term loan (B1/BB-) were both presented to lenders with talk of Libor plus 225 to 250 basis points, the source said.

As for the $125 million 71/2-year second-lien term loan (Caa1/CCC+), that was presented with talk in the Libor plus 550 bps area, the source continued.

The revolver has a 50 bps commitment fee.

Credit Suisse and CIBC are the joint lead arrangers on the deal.

Proceeds will be used to help fund the leveraged buyout of the company by Littlejohn & Co. LLC for C$25.00 per share.

The total enterprise value of the transaction is about C$600 million, including the assumption of existing debt.

The transaction will be implemented by way of a statutory plan of arrangement under the Canada Business Corporations Act and will have to be approved by the shareholders of Van Houtte at a special meeting to be held on July 9. Once approved by the shareholders, the plan of arrangement will then have to be sanctioned by the Superior Court of Quebec.

The transaction will also be subject to certain other customary conditions, including receipt of a limited number of regulatory approvals and no material adverse change in the company's business.

Van Houtte is a Montreal-based gourmet coffee roaster, marketer and distributor.

EPD filling up

EPD's $1.26 billion senior secured credit facility has seen some good traction over the short time that it's been in market, as a "significant number of orders" from lenders have already been placed, according to a market source.

"It should go very well," the source added.

The credit facility is comprised of a $100 million six-year multi-currency revolver (Ba3/B+), a $650 million seven-year first-lien term loan (Ba3/B+), a $100 million 12-month delayed-draw, with seven-year final maturity, term loan (Ba3/B+) and a $410 million eight-year second-lien term loan (Caa1/CCC+).

The revolver, first-lien term loan and delayed-draw term loan are all being talked at Libor plus 225 bps to 250 bps, and the second-lien term loan is being talked at Libor plus 550 bps to 575 bps.

Call protection on the second-lien term loan is 102 in year one and 101 in year two.

Lehman Brothers, JPMorgan and Goldman Sachs are the joint lead arrangers and joint bookrunners on the deal.

Proceeds will be used to help fund the Carlyle Group's acquisition of EPD, which is the engineered products division of the Goodyear Tire & Rubber Co., in an all-cash transaction valued at $1.475 billion.

EPD is an Akron, Ohio, manufacturer of hoses, conveyor belts and power transmission belts, as well as tank tracks for military and off-road vehicles.

Allen Systems shifts funds

Allen Systems Group Inc. moved $30 million out of its revolver and into its term loan, according to a market source.

The term loan is now sized at $295 million, up from $265 million, and the revolver is now sized at $45 million, down from $75 million, the source said.

"That amount was going to be funded under the revolver anyway," the source added.

As was previously reported, pricing on the two tranches is set at Libor plus 325 bps.

Originally, both the revolver and the term loan were launched with price talk of Libor plus 225 bps to 250 bps. However, once credit facility ratings of B1/B were announced, the price talk was modified upward to Libor plus 300 bps to 325 bps, before firming up at the wide end of that revised talk.

BMO Capital is the lead bank on the deal.

Proceeds will be used to help fund the acquisition of Mobius Management Systems, Inc., a Rye, N.Y.-based provider of integrated services for enterprise archiving and records management, for $10.05 per share in cash.

Allen Systems is a Naples, Fla.-based enterprise software provider.

LCDX weaker

Moving to the trading news, LCDX was softer on Friday as the index basically ignored the positive momentum that equities were seeing during the session, according to a trader.

The index ended the day at 100.12 bid, 100.15 offered, down from Thursday's levels of 100.20 bid, 100.25 offered, the trader said.

Meanwhile, Nasdaq closed up 27.30 points, or 1.05%, the Dow Jones Industrial Average closed up 85.76 points, or 0.63%, and the S&P 500 closed up 10.13 points, or 0.67%.

"It's kind of a technical picture right now," the trader said in explanation of why LCDX was lower.

By comparison, the cash loan market was pretty much "sideways all day," the trader said.

"There was a firm undertone today, whereas the past couple of days there was more of a weak undertone," the trader added.

Navistar closes

Navistar International Corp. closed on its new $200 million five-year asset-backed revolving credit facility that is priced at Libor plus 150 bps, with a 37.5 bps commitment fee.

Credit Suisse, Bank of America and JPMorgan acted as the lead arrangers on the deal.

Proceeds will be used for working capital.

Navistar is a Warrenville, Ill.-based commercial truck and mid-range diesel engine producer.

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