More people vie for Huntsman bank debt as pricing of Huntsman AM bond deal approaches

By Sara Rosenberg

New York, June 20 - There has been some additional interest in Huntsman Corp.'s bank debt lately as the market anticipates the successful completion of the Huntsman Advanced Materials bond deal, according to a trader. The bank paper is still being quoted at around 92 bid, 93 offered, but there were more bids seen in the market place for this particular name on Friday, the trader added.

Huntsman Advanced Materials is scheduled to price $345 million of senior secured notes due 2008 on Monday via Deutsche Bank Securities and UBS Investment Bank. Proceeds from this bond offering will be used to repay debt and fund the acquisition of Vantico SA.

Meanwhile, Broadwing Inc.'s revolver continued to head higher on Friday as investors wait for "a big pay down that's coming on the term loan A," a trader said. The revolver traded at 97 on Friday, up about a point from previous levels.

In follow-up news, Wackenhut Corrections Corp.'s term loan B is already over three times oversubscribed and the revolver is fully subscribed, according to a syndicate source.

"We have $330 million in commitments and the book keeps growing," the source said in regards to the $100 million term loan B.

As for the revolver, "we have gotten two big tickets and if we get the third we anticipate it will be oversubscribed. It's already fully subscribed," he added.

The term loan B is priced at Libor plus 375 basis points, 25 basis points lower than the interest rate on the existing term loan B. The $50 million revolver has an interest rate of Libor plus 300 basis points, the same as the interest rate on the existing facility.

The deal, which launched this past Wednesday, had already received over $50 million in commitments for the term loan B prior to the bank meeting.

Many of the commitments that came in before the deal officially hit the market were from people who are familiar with and like the credit, and are either existing lenders or people who wanted to be lenders when the deal came out last year.

In December 2002, the company obtained a $175 million senior secured facility (Ba3/BB), consisting of a $50 million five-year revolver with an interest rate of Libor plus 300 basis points and a $125 million six-year term loan with an interest rate of Libor plus 400 basis points and a Libor floor of 2% for the first 18 months. BNP Paribas and Wachovia Securities, Inc. acted as co-lead arrangers on the deal that was used to purchase four properties in operation under an operating lease facility for approximately $155 million.

Proceeds from this new $150 million credit facility will be used by the Palm Beach Gardens, Fla. correctional and detention facilities company to repurchase all common stock held by Group 4 Falck A/S.

BNP Paribas is leading the new deal.

Riverwood Holding Inc.'s $1.6 billion credit facility that launched in early June will probably allocate late next week, a source close to the deal told Prospect News. The $850 million seven-year term loan B has received over $1.8 billion in commitments already and the syndicate is continuing to "work on the pro rata", the source said,

As of early June, the revolver was already about a quarter done as three managing agents had joined the $400 million six-year revolver with $40 million in commitments each for a total of $120 million.

The credit facility that launched on Thursday also contains a $350 million six-year term loan A.

Pricing on the term loan B and the revolver is Libor plus 300 basis points, and the term loan A is priced at Libor plus 275 basis points. The term loan B is being offered at par. On the pro rata, a commitment of $25 million will get 150 basis points and a commitment of $15 million will get 125 basis points.

JPMorgan, Deutsche Bank, Goldman Sachs and Morgan Stanley are the lead banks on the deal.

Proceeds will be used to help fund the merger between Riverwood and Graphic Packaging International Corp.

Riverwood is an Atlanta provider of paperboard packaging solutions to multinational beverage and consumer products companies. Graphic Packaging is a Golden, Colo. folding carton packaging supplier to the food, beverage and other consumable products markets.

Fairchild Semiconductor International Inc. closed on a new $480 million credit facility (Ba3/BB-), consisting of a $180 million four-year revolver with an interest rate of Libor plus 250 basis points and a $300 million five-year term loan B with an interest rate of Libor plus 275 basis points. Deutsche Bank and Fleet were the lead banks on the deal.

Proceeds from the term loan B will be used by the South Portland, Maine semiconductor company to retire $300 million in 10 3/8% senior subordinated notes, which the company has called for redemption on July 19.

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