Dex West, Mobile Mini set talk; LyondellBasell progress slows; EnergySolutions trades up

By Sara Rosenberg

New York, May 13 - Dex Media West and Mobile Mini Inc. came out with price talk on their credit facilities as both deals were launched with bank meetings during the session.

In other news, sources are saying that syndication of LyondellBasell Industries' term loan B-2 has lost some steam from the frenzy that was seen prior to the deal's official launch as the book is still only about a half-plus done.

Moving to the secondary market, EnergySolutions Inc.'s term loan headed higher after the company reported positive first-quarter results.

Dex Media West held a bank meeting on Tuesday to kick off syndication on its proposed $1.19 billion credit facility, and in connection with the launch, price talk emerged, according to a market source.

The $100 million revolver due October 2013 and the $140 million term loan A due October 2013 were both presented to lenders with talk of Libor plus 325 basis points to 350 bps, and the $950 million term loan B due October 2014 was presented with talk of Libor plus 350 bps to 375 bps, the source said.

Guidance on the term loan B original issue discount is in the 98 area, the source continued.

The revolver has a 50 bps commitment fee.

The facility has a 3% Libor floor, the source added.

JPMorgan and Bank of America are the lead banks on the deal that will be used to refinance the company's existing credit facility.

Dex Media is a Cary, N.C.-based publisher of Yellow Pages and White Pages directories.

Mobile Mini price talk

Mobile Mini came out with price talk of Libor plus 250 bps on its proposed $1 billion five-year asset-based senior secured revolving credit facility as it too held a bank meeting during market hours, according to an informed source.

The unused fee on the revolver can range from 25 bps to 37.5 bps based on usage, the source added.

Previously, based on filing with the Securities and Exchange Commission, the revolver was expected to carry initial pricing of Libor plus 225 bps, but those filings did say that final pricing was subject to adjustment pursuant to a "market flex" provision.

Financial covenants include a maximum leverage ratio, minimum fixed-charge coverage ratio and minimum utilization rate, each of which will only be tested if excess availability under the borrowing base is less than the greater of $100 million and 10% of the total commitments under the credit facility.

Deutsche Bank, Bank of America and JPMorgan are the lead banks on the deal that will be used to help fund the acquisition of Mobile Storage Group Inc. from Welsh, Carson, Anderson & Stowe in a transaction valued at $701.5 million.

Under the transaction agreement, Welsh, Carson, together with the other equity holders, will be converting substantially all of their equity ownership in Mobile Storage into Mobile Mini preferred stock.

Mobile Mini will assume about $535 million of Mobile Storage's outstanding indebtedness and will acquire all outstanding shares of Mobile Storage for $12.5 million in cash and shares of newly issued Mobile Mini convertible preferred stock with a liquidation preference of $154 million.

The transaction is expected to close as early as June, subject to approval by Mobile Mini stockholders, receipt of the new revolver and customary conditions.

Tempe, Ariz.-based Mobile Mini and Glendale, Calif.-based Mobile Storage are providers of portable storage.

LyondellBassell loses speed

LyondellBasell's term loan B-2 has somewhere around $1.1 billion to $1.2 billion in commitments, which means it's more than half done; however, taking into account that about $1 billion of the orders came in prior to launch, it becomes clear that progress has decelerated, according to sources.

One source pointed out that since the deal launched early last week, the loan market has gotten weaker, whereas during the early syndication round there was a stronger tone.

"With Clear Channel news, people aren't in a rush to get in the book right now. Also, doesn't help that Moody's downgraded the second lien," a second source added.

By Clear Channel news, the source was referring to Monday's announcement that the company and the banks that committed financing for Clear Channel's leveraged buyout are working on a settlement that could result in the buyout actually taking place.

Also on Monday, Moody's Investors Service downgraded the senior second-lien guaranteed facility raised at BIL Holdings to B3 from B2 and changed the outlook on all LyondellBasell ratings to negative.

Moody's said that the rating action reflects the agencies assessment of the current operating performance of the group and the expectation that current weakness in the U.S. olefins market is likely to present additional challenge to the company's initial plans to substantially reduce its leveraged buyout debt prior to the anticipated turnaround of the chemical cycle.

LyondellBasell's term loan B-2, comprised of roughly $2.5 billion plus €433 million term loan B-2, is initially priced at Libor plus 375 bps, with a 3.25% Libor floor, and the paper carries call protection of 103 in year one and 101½ in year two.

Guidance on the original issue discount on the B-2 is in the low-to-mid 90s context. "They're getting tiered orders between 92 and 94. That's really the focus here," one source said.

Goldman Sachs, Merrill Lynch, ABN Amro and UBS are the joint lead arrangers and joint bookrunners on the already funded deal, with Goldman the left lead.

Originally, Citigroup was the left lead bank on the deal, but sources said that the bank sold off its 20% share already and, therefore, is no longer involved.

If you take out the 20% sold by Citi, plus some amortization, there's less than $2 billion of the term loan B-2 currently for sale.

Commitments from lenders are due on May 21.

The term loan B-2 is part of about $9.5 billion in total term loan B debt that is currently in the company's possession.

The rest of the term loan B debt is divided between a term loan B-1 with no call protection and a term loan B-3 that is non-callable for two years, with each of these tranches also sized at roughly $2.5 billion plus €433 million and carrying pricing of Libor plus 375 bps, with a 3.25% Libor floor.

The term loan B-1 and term loan B-3 have yet to be launched into syndication. The assumption is that Citi's 20% was taken equally out of each B loan tranche.

Rumor has it that if an investor shows an interest in, for example, the B-3, the banks will take that order, but the focus right now is really to wrap up and allocate the B-2, sources added.

Pricing on all three term loan B tranches can step down to Libor plus 350 bps if first-lien senior secured leverage is less than or equal to 1.625:1, according to a recent filing with the SEC.

The term loan B is part of a senior secured credit facility that funded in December and includes a cash flow revolver, a term loan A, an ABL receivables purchase program facility and an ABL inventory-based facility.

When the term loan B first funded it was sized at $9.45 billion and was priced at Libor plus 325 bps.

In order for the term loan B debt to have a Libor floor, a three tranche structure and a 50 bps increase in pricing from when it funded, the company agreed to amend and restate the credit agreement, effective April 30.

The amendment and restatement also modified certain debt covenants - including increasing the debt basket, eliminating an interest rate hedging requirement, and adding a covenant prohibiting any reduction of aggregate commitments under the $750 million access group revolver before its initial maturity - upsized the company's ABL inventory-based facility to $1.6 billion from $1 billion by using the accordion feature and increased that accordion feature to $1.1 billion from $600 million, and raised pricing on the term loan A and cash flow revolver to Libor plus 350 bps.

Proceeds from the credit facility were used to help fund Basell AF SCA's acquisition of Lyondell Chemical Co. for $48 per common share in an all-cash transaction with a total enterprise value of about $19 billion, including the assumption of debt.

LyondellBasell is a Netherlands-based polymers, petrochemicals and fuels company.

Education Media "roadshow" continues

Education Media & Publishing met with guys in London on Tuesday to discuss syndication of its seven-year second-lien term loan, which started making its way around to U.S. investors last week, according to a market source.

Syndication of the deal is being done like a roadshow, the source said, adding that some orders towards the loan have already been placed by investors.

The second-lien loan is sized at $1.7 billion and carries pricing of Libor plus 950 bps, of which 400 bps is cash pay and 550 bps is PIK.

The original issue discount on the loan is being talked at 85.

Call protection on the loan is non-callable for 18 months, then at 104 for one year and at 102 for one year.

Credit Suisse and Lehman Brothers are the two banks that are currently marketing their portions of the second-lien loan. The third lead bank on the deal, Citigroup, is not involved in this process.

The loan funded in December to help fund Houghton Mifflin Co.'s acquisition of the Harcourt Education, Harcourt Trade and Greenwood-Heinemann divisions of Reed Elsevier for $4 billion, consisting of $3.7 billion in cash and $300 million of common stock of Houghton Mifflin Riverdeep Group plc, Houghton Mifflin's parent company.

In connection with the acquisition, Boston-based Houghton Mifflin was renamed Education Media & Publishing.

United Rentals sees interest

United Rentals Inc.'s $1 billion asset-based revolving credit facility (Baa3) has been met with good feedback since launching with a bank meeting this past Thursday, according to a market source.

"Responses have been positive so far as in typical ABL," the source added.

Bank of America, UBS and Wachovia are the lead banks on the deal.

Proceeds will be used to refinance the company's existing cash flow revolver, letter-of-credit facility and term loan, a portion of which matures in early 2009, and is also to be used for working capital and other corporate purposes.

The company's current $300 million accounts receivable-backed facility will remain in place.

United Rentals is a Greenwich, Conn., equipment rental company.

EnergySolutions better on numbers

Switching to trading news, EnergySolutions' term loan debt was stronger on Tuesday as the company released earnings that beat estimates, according to a trader.

The term loan debt was quoted at 96½ bid, 97½ offered, up from 96 3/8 bid, 97 3/8 offered, the trader said.

For the first quarter, the company reported revenues of $502 million, compared to $114 million for the same quarter in 2007, net income was $19.3 million, or $0.22 per share, compared to a loss of $10.3 million last year, and net income before the non-cash impact of amortization of intangible assets was $23.8 million, or $0.27 per share, based on 88.3 million fully-diluted shares outstanding.

EBITDA for the quarter was $54 million versus EBITDA of $12 million for the prior year, and gross profit was $73 million, compared to gross profit of $30.8 million last year.

The company generated cash flow from operations of $25.7 million during the quarter, enabling it to repay $20 million of long-term debt.

"This has been an excellent start to 2008 for EnergySolutions," said R Steve Creamer, chief executive officer, in a news release.

"All of our business segments performed well during the quarter. In particular, we benefited from early substantial completion of two of our commercial services projects and the expected first-quarter margin increase from our international operations. We see this strong first quarter largely as a shift in timing of some of our commercial business rather than any change from our original full year expectations."

Also on Tuesday, the company affirmed its full year guidance of revenues in the range of $1.8 billion to $1.9 billion and earnings per share in the range of $0.69 to $0.74. Earnings per share before the impact of non-cash amortization of intangible assets is expected to be in the range of $0.89 to $0.94.

Furthermore, EBITDA for the year is expected to be between $195 million and $205 million.

EnergySolutions is a Salt Lake City provider of technology-based nuclear services to government and commercial customers.

Cash down, LCDX up

The cash market in general felt down across the board, although volume was pretty light, while LCDX 10 was a bit higher, according to a trader.

The index was quoted around 98.65 bid, 98.75 offered, up from 98.55 bid, 98.65 offered, the trader said.

Still weighing on cash is the chatter that the Clear Channel buyout is likely happening, which would bring a lot of new debt into the market, the trader added.

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