Lee gains on refi update; Nebraska Book breaks; Lion Copolymer, U.S. Coal release talk

By Sara Rosenberg

New York, July 15 - Lee Enterprises Inc.'s term loan headed higher on Friday after the company announced that it is taking steps to refinance its existing debt, including talking to lenders about extending its credit facility, and Nebraska Book Co. Inc.'s credit facility freed up for trading.

Over in the primary market, Lion Copolymer LLC revealed price talk on its credit facility on the back of ratings coming out, and U.S. Coal Corp. started circulating guidance on its term loan ahead of its launch.

Also, Water Pik Inc., Insight Pharmaceuticals Corp. and Phillips Plastics Corp. disclosed that they are getting ready to bring new deals to market.

Lee rises on refi chatter

Lee Enterprises' term loan gained some ground in trading with news that the company is targeting a refinancing of its $1 billion of debt before maturity in April 2012, according to a trader.

"We are in substantive and productive discussions with key lenders about an extension of our credit agreement and fully expect a satisfactory outcome, though the process will likely take several months", said Mary Junck, Lee's chairman and chief executive officer, in a news release.

Following the announcement, the company's term loan was quoted at 83¼ bid, 84¼ offered, up from 82½ bid, 83½ offered, the trader said.

In April, the company said that it would repay substantially all of its existing debt with proceeds from $1.055 billion of new senior secured notes and the sale of up to 8,928,175 shares of common stock. However, the bond and stock deals were pulled in May as a result of market conditions.

Lee stock faces deficiency

Lee Enterprises also said on Friday that it has been notified by the New York Stock Exchange that its 30-trading-day average share price has fallen below the $1.00 minimum standard, and the deficiency will need to be cured within six months for continued listing.

"We believe that investor sentiment will improve when questions about our refinancing are resolved, especially as our revenue outlook strengthens," Junck remarked in the release.

The company expects to record an impairment charge related to the decline in its stock price when it reports results on Aug. 5.

The charge has no impact on cash flows, but will reduce reported earnings, resulting in a loss for the quarter.

Lee Enterprises is a Davenport, Iowa-based newspaper publisher.

Nebraska Book starts trading

Nebraska Book's debtor-in-possession financing facility made its way into the secondary market, with the $125 million term loan B quoted at 101½ bid, 102 offered on the open and then it moved down to par ½ bid, 101 offered, according to a trader.

Pricing on the B loan is Libor plus 600 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 99.

During syndication, pricing was lowered from Libor plus 700 bps and the discount firmed at the low end of the 98½ to 99 talk.

The company's $200 million one-year DIP also includes a $75 million ABL revolver priced at Libor plus 350 bps with no Libor floor

J.P. Morgan Securities LLC is leading the deal that will be used by the Lincoln, Neb.-based retailer and wholesaler of college textbooks for general corporate purposes during its Chapter 11 process.

Lion Copolymer talk surfaces

Lion Copolymer came out with price talk on its $400 million credit facility on Friday, following the emergence of B2/B+ facility ratings on Thursday night, according to market sources.

The $350 million six-year term loan B is talked at Libor plus 500 bps with a 1.25% Libor floor and an original issue discount of 99, for an all-in-yield of 6.5%, sources said. There is 101 soft call protection for one year.

And, the $50 million five-year revolver is being talked at Libor plus 350 bps with no floor and an upfront fee of 100 bps.

HSBC Securities (USA) Inc. and Wells Fargo Securities LLC are the lead banks on the deal that will be used by the Baton Rouge, La.-based manufacturer of synthetic rubber to refinance existing debt and fund a dividend.

The facility launched with a bank meeting on Thursday and commitments are due on July 28.

U.S. Coal floats guidance

U.S. Coal is getting ready to hold a bank meeting on Monday at 1:30 p.m. ET at the W Hotel in New York to launch a proposed $105 million six-year term loan, and in preparation for the event, price talk began making its way around the market, according to a source.

The term loan is talked at Libor plus 600 bps with a 1.5% Libor floor and an original issue discount of 98, and includes call protection of 103 in year one, 102 in year two and 101 in year three, the source remarked.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to refinance existing debt.

Expected corporate ratings are B2/B.

U.S. Coal is a Lexington, Ky.-based producer of coal in Central Appalachia.

Water Pik sets launch

Continuing on the topic of upcoming deals, Water Pik has scheduled a bank meeting for Tuesday to launch a proposed $197 senior secured credit facility (B2/B) that is being led by GE Capital Markets, according to a market source.

The facility consists of a $20 million five-year revolver and a $177 million six-year term loan, the source said, adding that price talk is not yet available.

Proceeds will be used to refinance existing debt and fund a dividend.

Water Pik is a Fort Collins, Colo.-based developer and manufacturer of personal and oral health care products.

Insight Pharma coming soon

Insight Pharmaceuticals will be holding a bank meeting on Thursday to launch a proposed $420 million credit facility that will be used for acquisition financing, according to a market source.

The facility consists of a $20 million revolver, a $290 million first-lien term loan and a $110 million second-lien term loan, the source said.

GE Capital Markets, SunTrust Robinson Humphrey Inc. and RBC Capital Markets LLC are the lead banks on the deal.

Leverage through the first-lien is 3.5 times and leverage through the second-lien is 4.9 times.

Insight is a Langhorne, Pa.-based marketer and distributor of branded over-the-counter pharmaceutical products.

Phillips readies deal

Phillips Plastics set a bank meeting for Wednesday to launch a proposed $245 million credit facility, which consists of a $45 million revolver and a $200 million term loan, according to a market source.

GE Capital Markets and BNP Paribas Securities Corp. are the lead banks on the deal that will be used to fund an acquisition.

Phillips Plastics is a Hudson, Wis.-based outsource provider of design and manufacturing services to the commercial and medical device and drug delivery markets.

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