Reddy Ice term loan B holds steady at par plus levels; Jostens anticipated to break any day

By Sara Rosenberg

New York, July 25 - Activity slowed down a bit on Reddy Ice Group Inc.'s new term loan B in the secondary bank loan market on Friday after allocating, breaking and actively trading on Thursday, according to a market source. The tranche was quoted at par ¾ bid, 101 offered and was originally sold to investors at par.

Jostens Inc.'s new credit facility is expected to allocate and break for trading shortly, according to market sources. The facility was expected to begin trading this past Thursday and then was expected to hit the secondary this past Friday but failed to materialize. Currently, the market anticipates seeing the deal trade early next week.

Reddy Ice's new $170 million facility (B1/B+) consists of a $35 million five-year revolver with an interest rate of Libor plus 300 basis points and a 50 basis points commitment fee and a $135 million six-year term loan B with an interest rate of Libor plus 300 basis points with a step-down to Libor plus 275 basis points at a leverage grid of 3.75 times.

Credit Suisse First Boston, Bear Stearns and CIBC are leading the deal, which will be used to help fund the leveraged buyout of the Dallas packaged ice company by Trimaran Capital Partners and Bear Stearns Merchant Banking.

Jostens credit facility (Ba3/BB-) consists of a $150 million five-year revolver (upsized by $25 million) with an interest rate of Libor plus 275 basis points, a $475 million seven-year term loan B with an interest rate of Libor plus 250 basis points and a $50 million seven-year delayed draw term loan with an interest rate of Libor plus 250 basis points.

Credit Suisse First Boston and Deutsche are the lead banks on the deal, which will be used to help fund the leveraged buyout of Jostens by DLJ Merchant Banking Partners III, LP and affiliated funds, each managed by CSFB Private Equity from Investcorp, its co-investors and MidOcean Partners.

Jostens is a Minneapolis provider of school related affinity products.

Meanwhile, Allegheny Energy Inc.'s second-lien bank debt remained at 94 5/8 bid, 95 1/8 offered on Friday despite news that the company completed a private placement of $300 million convertible trust preferred securities.

According to one trader, this announcement was already priced into the bank debt since banks had previously voted on an amendment to the credit facility and knew the deal was coming.

The net proceeds will be used to improve liquidity at Allegheny Energy, help Allegheny Energy Supply meet future collateral requirements and for general corporate purposes.

Payment obligations under the new trust preferred securities are subordinate to the Hagerstown, Md. energy company's existing credit facilities.

"The issuance of this security is a major step in improving our liquidity and financial condition. Our top priority is restoring the financial health of our company. We were pleased to work with the two lead investors, Perry Capital and Zimmer Lucas Partners, whose investment reflects their confidence in Allegheny Energy," said Paul J. Evanson, chairman, president, and chief executive officer, in a news release.

In follow-up news, the syndicate is looking for commitments by the middle of next week for Waste Industries USA Inc.'s $175 million 31/2-year revolver, a syndicate source said. Fleet is the administrative agent and lead arranger, Wachovia is the syndication agent and BB&T is the documentation agent.

"It seems to be going fine," the source said. "It's a refi so they have an existing bank group."

Opening pricing on the revolver is Libor plus 225 basis points.

The facility has an accordion feature that would allow the company to increase the total revolver size to $200 million at any time during the life of the loan.

Proceeds are being used to refinance an existing $200 million revolver that was set to expire in November 2004. The existing facility has an interest rate of Libor plus 175 to 275 basis points, depending on the company's ratio of funded debt to EBITDA. As of March 31, an aggregate of approximately $65 million was outstanding under the existing revolver and the average interest rate on outstanding borrowings was approximately 3.7%, according to a filing with the Securities and Exchange Commission.

Waste Industries is a Raleigh, N.C. solid waste services company.

Monitronics International Inc.'s $325 million credit facility, which launched earlier this past week, has received good initial feedback from potential investors and is expected to syndicate without a hitch, a source close to the deal told Prospect News on Friday.

The facility consists of a $200 million five-year revolver and a $125 million six-year term loan B, both priced at Libor pus 375 basis points.

"There's a strong management team and they have a good relationship with existing banks so the large revolver piece should go smoothly," the source said. He continued to say that given the strength of the institutional market at this time, the B tranche should not be a problem either.

Leverage is good with senior leverage at 1.7 times and total at 3.9 times, the source added.

Fleet is the administrative agent and co-lead arranger, and Bank of America is the co-lead arranger and syndication agent on this refinancing deal.

Monitronics is a Dallas provider of monitored security alarm systems.

Moran Transportation's $175 million senior secured credit facility is essentially completed as the institutional tranche is more than three times oversubscribed, according to syndicate source. Lead banks are currently in discussion with potential lenders about allocations.

The facility consists of a $125 million six-year term loan B with an interest rate of Libor plus 325 basis points and a $50 million five-year revolver with an interest rate of Libor plus 250 basis points.

Fleet is the sole lead arranger and Bank of America is the syndication agent on this refinancing deal.

AK Steel Corp. closed on its $400 million five-year senior secured revolver. Credit Suisse First Boston acted as the lead arranger and book running manager, and GE Capital acted as the collateral agent. Credit Suisse First Boston is also serving as administrative agent for the new facility.

The revolver has an initial interest rate of Libor plus 225 basis points and a 75 basis points commitment fee.

Security for the new loan is inventory and borrowings would be used for general corporate purposes.

AK Steel is a Middletown, Ohio producer of flat-rolled carbon, stainless and electrical steels.

NBTY Inc. closed on its $375 million senior secured credit facility (BB) in conjunction with closing on the acquisition of Rexall Sundown Inc. from Royal Numico, NV for $250 million in cash.

The facility consists of a $100 million five-year revolver with an interest rate of Libor plus 225 basis points and a $275 million six-year term B with an interest rate of Libor plus 250 basis points.

JPMorgan and Fleet led the bank deal for the Bohemia, N.Y. manufacturer, marketer and retailer of nutritional supplements.

TransDigm Holding Co. closed on its previously announced merger with TD Acquisition Corp., an affiliate of Warburg Pincus Private Equity VIII, L.P. In order to help fund the merger the company obtained a new $375 million credit facility (B1/B+), consisting of a $295 million seven-year term B with an interest rate of Libor plus 300 basis points and an $80 million six-year revolver with an interest rate of Libor plus 350 basis points and a 50 basis points commitment fee.

Credit Suisse First Boston and Bank of America acted as the lead arrangers with GECC and UBS acting as co-documentation agents.

TransDigm is a Richmond Heights, Ohio supplier of aerospace components.

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