Deluxe first lien frees to trade atop 101, second lien tops 102; AMC term loan breaks around 101

By Sara Rosenberg

New York, Jan. 27 - Deluxe Entertainment Services Group allocated its credit facility on Friday, with the first-lien U.S. term loan B trading around the mid-101 context and the second-lien term loan quoted in the mid-102 to 103 type area.

Also hitting the secondary on Friday was AMC Entertainment Inc., with the term loan B freeing up for trading wrapped around 101.

Deluxe Entertainment's new deal started trading on Friday, with the U.S. term loan B quoted at 101¼ bid on the break and then moving up to 101 3/8 bid, 101 5/8 offered by the close, according to one trader. However, according to a second trader, the paper was quoted a little wider by the close at 101 1/8 bid, 101 5/8 offered.

Meanwhile, Deluxe's Canadian term loan B was quoted at par ¾ bid, 101¼ offered by the end of the day, the second trader added.

And, the company's second-lien term loan was quoted at 102½ bid, 103 offered pretty consistently from the break until the close, both traders agreed.

The $457.5 million five-year term B (B1/B) - split between $405.5 million to be borrowed by the U.S borrower and $52 million to be borrowed by the Canadian borrower - is priced with an interest rate of Libor plus 375 basis points.

During syndication, pricing on the term loan B was reverse flexed from original price talk at launch of Libor plus 400 to 425 basis points and the Canadian borrower was added to the tranche (although the actual total size was not changed).

Deluxe's $150 million 51/2-year second-lien term loan (B3/CCC+) is priced with an interest rate of Libor plus 825 basis points. This tranche was pre-sold to investors prior to the actual bank meeting.

The company's $757.5 million credit facility, which in addition to allocating, closed on Friday, also contains a $150 million five-year revolver (B1/B) with an interest rate of Libor plus 375 basis points and a 100 basis point commitment fee.

During syndication, the revolver was upsized from an original size of $125 million and pricing was reverse flexed from original price talk at launch of Libor plus 400 to 425 basis points.

Credit Suisse and Bear Stearns acted as the joint lead arrangers and joint bookrunners on the deal, with Credit Suisse also acting as administrative agent and Bear Stearns acting as syndication agent.

Proceeds from the credit facility were used to help fund MacAndrews & Forbes Holdings Inc.'s purchase of the Deluxe film processing and creative services business from The Rank Group plc for $750 million.

Deluxe is a provider of products and services to the motion picture industry.

AMC breaks

AMC Entertainment's credit facility freed up for trading during market hours Friday, with the $650 million term loan quoted at par ¾ bid, 101¼ offered steadily from the break until the close, according to a trader.

The term loan is priced with an interest rate of Libor plus 212.5 basis points. During syndication, pricing on the term loan was reverse flexed from Libor plus 250 basis points on strong investor demand.

AMC's $850 million senior secured credit facility (Ba3/B+/BB) also contains a $200 million revolver with an interest rate of Libor plus 175 basis points.

The facility was obtained in connection with AMC's merger with Loews Cineplex Entertainment Corp., which was completed Thursday, and proceeds were used to refinance both Loews' and AMC's existing senior secured credit facilities.

The merged theatrical exhibition company is called AMC Entertainment and will be based in Kansas City, Mo.

Citigroup Global Markets Inc., JPMorgan Chase Bank and Credit Suisse acted as the lead banks on the deal.

Pep Boys closes

The Pep Boys - Manny, Moe & Jack closed on its new $200 million senior secured term loan (Ba2/B+) due Jan. 27, 2011, according to a company news release.

Wachovia Capital Markets LLC acted as the lead bank on the deal that contains a $125 million accordion feature.

Security for the loan is some of the company's real estate.

Amortization is 1% per year until maturity.

There are no ongoing operating performance covenant requirements under the loan as long as availability under the company's existing $357.5 million revolving credit facility remains above $50 million.

Proceeds were used to satisfy and discharge $43 million and $100 million in outstanding medium-term notes that mature in 2006 and to reduce borrowings under the company's revolver.

Pep Boys is a Philadelphia-based automotive aftermarket retail and service chain.

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