Landry's zeroing in on term loan discount level; Cash, LCDX flat in light volume

By Sara Rosenberg

New York, Feb. 6 - Landry's Restaurants Inc. is still working on finalizing the original issue discount on its in-market term loan. It, however, has become clearer as to within what type of range that discount will end up.

Meanwhile, over in the secondary market, cash in general and LCDX 10 were basically unchanged as activity was pretty light ahead of the weekend.

Landry's pricing nearing completion

Landry's Restaurants is getting close to nailing down the original issue discount price on its term loan, which is setting the deal on track to close and fund on Feb. 13, a market source told Prospect News on Friday.

The $165 million term loan is being targeted to carry an original issue discount of 96, the source said, adding that, at the most, the clearing price is not expected to be below 95.

Previously, the term loan size was said to be $160 million, but it was increased by $5 million primarily to account for the original issue discount.

As was already reported, pricing on the term loan is Libor plus 600 basis points with a 3.5% Libor floor.

Landry's $215 million amended and restated credit facility also includes a $50 million revolver that is priced at Libor plus 600 bps with a 3.5% Libor floor as well.

Landry's syndication moving along

Landry's credit facility was described by the market source as being "well subscribed" as of Friday afternoon.

The deal was quietly marketed to investors and never actually experienced a formal launch as a result of the informal marketing generating enough positive feedback.

Proceeds will be used to help refinance an interim credit facility as well as the company's 9.5% senior notes and 7.5% senior notes.

The interim facility, obtained in December, consists of a $31 million term loan and a $50 million revolver, with both tranches priced at Libor plus 600 bps with a 3.5% Libor floor, and that term loan was issued at roughly 961/2.

Landry's notes get done

To help with the refinancing, Landry's also approached the high-yield market with new senior secured notes.

Last Wednesday, the company priced the $295.5 million of 14% senior secured notes at 88 to yield 20.346%. The sale generated $260.04 million of proceeds.

The coupon on the notes came on top of talk, but the issue price came at the wide end of the 88 to 89 guidance. Yield talk had been in the range of 0.25% below or above 20%.

In addition, the notes offering had originally been launched to investors with a size of $270 million.

At first, the company was planning to get $210 million of notes and a $210 million term loan, but the notes were upsized and the term loan was downsized before marketing even started.

Wells Fargo Foothill and Jefferies are the lead banks on the credit facility.

Landry's is a Houston-based restaurant company.

Cash, LCDX hold steady

Switching to trading happenings, it was a pretty quiet Friday, with volume seen as being low and levels basically unchanged, according to a trader.

The trader said that the overall cash market was flat with the lack of activity.

And, LCDX 10 was quoted at 76.15 bid, 76.45 offered by late afternoon, which is right in line with where it was being quoted at the end of the day Thursday, the trader added.

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