Lyondell rises with exit financing news; Weather Channel, Solutia, Ardent Health break

By Sara Rosenberg

New York, March 12 - LyondellBasell's pre-petition CAM headed higher during Friday's trading session as news emerged that its subsidiary, Lyondell Chemical Co., will be coming to market shortly with a proposed exit financing credit facility.

Also in the secondary market, Weather Channel (TWCC Holding Corp.) saw its term loan B free up for trading, with bids moving to the plus par arena, and Solutia Inc.'s and Ardent Health Services LLC's credit facilities broke as well.

In other news, after months and months of trying, CF Industries Holdings Inc. has finally won over Terra Industries Inc. as the two companies entered into a definitive merger agreement on Friday, which continues to be backed by a $2.3 billion credit facility commitment.

Lyondell strengthens

LyondellBasell's pre-petition CAM gained some ground in the secondary market as the company is moving forward with its bankruptcy exit plan and has set up launches for the financing of that plan, according to a trader.

The CAM "with rights" was quoted by the trader at 73 bid, 74 offered, up from Thursday's closing levels of 72 bid, 73 offered.

On Friday morning, word got around that LyondellBasell's subsidiary, Lyondell Chemical, has scheduled a bank meeting for Monday with a 10 a.m. ET registration time and a 10:30 a.m. ET start time to kick off syndication on a proposed $2.75 billion exit financing credit facility.

Tranching on the deal is comprised of a $1 billion six-year senior secured term loan B and a $1.75 billion ABL revolver, with price talk not yet available.

Lyondell lead banks

UBS, Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, JPMorgan, Morgan Stanley and Wells Fargo are the joint bookrunners on Lyondell Chemical's term loan B, with UBS the left lead.

Citigroup is the left lead on the ABL revolver.

Covenants under the term loan B include a maximum first-lien leverage ratio and a minimum interest coverage ratio.

Security for the term loan B will be a first-priority lien on substantially all of the issuer's and each subsidiary guarantors existing future property and assets other than the assets securing the U.S. ABL revolver, 100% of the capital stock of each U.S. subsidiary, 65% of the capital stock of LyondellBasell Subholdings BV and a second-priority lien on the assets that secure the U.S. ABL revolver.

Commitments towards the term loan B are due late in the week of March 22, the source added.

Lyondell selling notes

Also as part of its exit plan, Lyondell Chemical is going to approach the high-yield market later this month with $2.25 billion of 71/2-year senior secured notes, will get a new European securitization facility and plans to do a $2.8 billion rights offering.

The company has entered into an equity commitment agreement with Apollo Management VII LP, Access Industries and Ares Corporate Opportunities Fund III LP to backstop the equity rights offering by purchasing any shares of common stock left over by senior creditors.

Proceeds from the new financing will be used to help repay and replace the company's existing debt upon emergence from bankruptcy, including its debtor-in-possession facilities and an existing European securitization facility.

The hearing to confirm the company's plan of reorganization will begin on April 23.

Lyondell is a U.S. subsidiary of LyondellBasell Industries AF SCA, a Netherlands-based polymer, petrochemicals and fuels company.

Weather Channel frees up

Weather Channel's $1.3 billion term loan B (Ba2/BB) hit the secondary market on Friday, with levels quoted atop the original issue discount at which the paper was sold, according to traders.

The term loan B was quoted by one trader at par bid, par ¾ offered on the break and then he saw it move up to par ½ bid, 101¼ offered. A second trader saw the loan at par ¼ bid, 101 offered on the break before moving up to par ¾ bid, 101¼ offered.

Pricing on the term loan B is Libor plus 350 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 991/2. There is also 101 soft call protection for one year.

During syndication, pricing on the loan firmed at the low end of the Libor plus 350 bps to 375 bps talk and the discount was reduced from 99.

Weather Channel refinancing debt

Proceeds from Weather Channel's new term loan B are being used to refinance the company's existing term loan B, which is priced at Libor plus 400 bps with a 3.25% Libor floor, and to retire a portion of its subordinated notes.

The new term loan B will mature on Sept. 14, 2015, the same maturity as the existing term loan B, and will have the same covenants as the existing credit agreement.

Deutsche Bank is the lead arranger and is a joint bookrunner with Credit Suisse on the deal.

Weather Channel is an Atlanta-based media company devoted to bringing weather news via television, internet and mobile devices.

Solutia starts trading

Also breaking for trading was Solutia's credit facility, with the $750 million term loan due in 2017 quoted at par ¼ bid, 101¼ offered on the break and then moving to par ½ bid, 101¼ offered, according to traders.

The term loan is priced at Libor plus 325 bps with a step down to Libor plus 300 bps at 2.5 times leverage and a 1.5% Libor floor, and it was sold at an original issue discount of 991/2.

During syndication, pricing on the term loan firmed at the low end of initial talk of Libor plus 325 bps to 350 bps, the step-down was added and the original issue discount was lowered from 99.

The company's $1.05 billion senior secured credit facility (Ba2) also includes a $300 million revolver due in 2015.

Solutia led by five

Solutia's credit facility is being done via joint lead arrangers and joint bookrunners Deutsche Bank, Jefferies, Citigroup, HSBC Securities and JPMorgan.

Proceeds will be used to refinance the company's existing senior secured term loan facility due in February 2014 and the existing senior secured ABL facility due in February 2013.

The loan could also be used to help fund acquisition of Etimex Solar GmbH, a supplier of ethylene vinyl acetate encapsulants to the photovoltaic market, from Etimex Holding GmbH for €240 million.

Solutia is a St. Louis-based performance materials and specialty chemicals company.

Ardent breaks

Ardent Health Services' credit facility was another deal to free up for trading on Friday, with the $325 million term loan quoted at 98¾ bid, 99½ offered on the open and then moving to 99 bid, 99½ offered, according to a trader.

The term loan is priced at Libor plus 500 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 98. There is also call protection of 102 in year one and 101 in year two.

During syndication, the term loan was downsized from $400 million, pricing was increased from Libor plus 450 bps the original issue discount widened from 981/2, and call protection was changed from just 101 in year one.

Ardent getting revolver

Ardent Health Services' $400 million credit facility (B1/B) also includes a $75 million revolver.

Bank of America, Barclays and GE Capital are the lead banks on the deal.

Proceeds will be used to refinance existing debt and to fund a dividend, the size of which was reduced as a result of the term loan downsizing.

Ardent Health Services is a Nashville, Tenn.-based operator of acute care hospitals and specialty care facilities.

ILFC readies allocations

International Lease Finance Corp. is expected to give out allocations and free up for trading its $1.3 billion credit facility on Monday, according to a market source.

The facility consists of a $750 million senior secured term loan (Ba2/BBB/BBB-) priced at Libor plus 475 bps and a $550 million six-year term loan priced at Libor plus 500 bps.

Both terms loans include a 2% Libor floor and 101 soft call protection for one year, and were sold at an original issue discount of 98.

During syndication, pricing on the $750 million term loan firmed at the tight end of initial talk of Libor plus 475 bps to 500 bps and the $550 million term loan was added to the deal.

ILFC loans for two entities

Each of International Lease's term loans has its own package of airplanes as security and they are being raised for two separate entities.

Proceeds from the two new term loans will be used to refinance existing debt.

Bank of America and Goldman Sachs are the lead banks on both term loans, with Bank of America the left lead.

International Lease is a Los Angeles-based leaser and remarketer of advanced technology commercial jet aircraft to airlines. The company is a wholly owned subsidiary of American International Group Inc., a New York-based insurance and financial services firm.

CF Industries wins Terra

CF Industries has finally convinced Terra Industries to enter into a definitive agreement under which it will purchase Terra for $37.15 in cash and 0.0953 of a share of its common stock per Terra share, according to a news release.

The transaction has a total value of $4.7 billion.

CF Industries actually commenced an exchange offer for Terra's shares on March 5, and under the definitive agreement, that offer will expire on April 2.

As was previously reported, the acquisition will be financed in part by a $2.3 billion credit facility that is being led by Morgan Stanley and the Bank of Tokyo-Mitsubishi UFJ, with Morgan Stanley the administrative agent.

CF credit facility details

CF Industries' credit facility consists of an up to $2 billion five-year term loan B and a $300 million five-year revolver, with both tranches expected to be priced at Libor plus 350 basis points with a 2% Libor floor and an original issue discount of 981/2, according to recent filings with the Securities and Exchange Commission.

The revolver has a 75 bps commitment fee, and the term loan has a 75 bps ticking fee.

Financial covenants include a minimum interest coverage ratio and a maximum leverage ratio.

In addition to the credit facility, CF Industries has also received a commitment for an up to $1.75 billion one-year bridge loan priced initially at Libor plus 800 bps with a 2% Libor floor. After 30 days, the spread will increase by 100 bps, and by an additional 100 bps each 30 days thereafter.

CF to sell shares

CF Industries plans to do a roughly $1 billion shares offering to reduce amounts under the bridge loan and/or the term loan B, and the company may sell senior unsecured notes to refinance the bridge loan as well, the filings said.

Morgan Stanley is the lead arranger and bookrunner on the bridge loan.

Specifically, proceeds from the term loan B and the bridge loan will be used to fund the cash portion of the consideration to be paid to Terra's stockholders, to repay any outstanding amounts under CF Holdings' existing credit facility and to repurchase Terra's existing notes.

The revolver will be used for general corporate purposes.

CF Industries is a Deerfield, Ill.-based producer and distributor of nitrogen and phosphate fertilizer products. Terra is a Sioux City, Iowa-based producer and marketer of nitrogen and methanol products.

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