Invista decreases term loan B by $100 million as purchase price gets renegotiated

By Sara Rosenberg

New York, April 8 - Invista, once again, changed the size of its credit facility, this time reducing the term loan B to $1.325 billion from $1.425 billion due to an adjustment in the sale price of the company to Koch Industries by $240 million.

The purchase price has now been adjusted to $4.2 billion from approximately $4.4 billion, including the assumption of debt and certain joint venture and equity interests covered under a non-binding letter of intent, DuPont, the selling company, announced on Thursday.

Furthermore, the closing date for the acquisition has been accelerated to April 30 from June 30.

"We are very pleased to have reached final agreement on this enormously complex commercial and financial transaction," said Gary M. Pfeiffer, DuPont's chief financial officer, in the news release. "We are pleased to have a specific target date for closing. We believe this transaction positions DuPont to create outstanding value for our shareholders."

In addition to reducing the size of the term loan B, the company also reduced the size of the equity contribution by $100 million to $2.224 billion and there will be an additional $40 million of liquidity, according to an informed source.

Just last week, Invista had upsized its credit facility by a total of $250 million as the company had opted to downsize its bond offering to $575 million from $1.2 billion, increase its contribution of cash equity by $150 million and use estimated initial proceeds of $225 million from an accounts receivable securitization to help support the buyout.

The credit facility had been reworked to consist of a $225 million term loan A, increased from $150 million, with an interest rate of Libor plus 275 basis points, a $1.425 billion term loan B, increased from $1.25 billion, with an interest rate of Libor plus 275 basis points and a $400 million revolver, which was left unchanged, with an interest rate of Libor plus 275 basis points, according to a market source.

With the newest structure that incorporates the smaller term loan B, pricing was left unchanged across the board. All other tranche sizes were also left unchanged this time around.

JPMorgan, Deutsche Bank and Credit Suisse First Boston are the lead banks on the Invista credit facility, with JPMorgan listed on the left.

Invista is a Wilmington, Del., integrated fiber and intermediates business.

Buckeye oversubscribed

BPL Acquisition LP's $100 million term loan (Ba1/BBB-) was already oversubscribed one day after launching into the primary bank loan market even though the syndicate did not reveal price talk at the bank meeting and had still not determined official price talk by Thursday, according to a market source.

The term loan is being offered to investors at par, the source added.

Goldman Sachs is the sole lead bank on the deal.

Proceeds from the term loan will be used to fund the purchase of the owner of Buckeye Partners LP's general partner by Carlyle/Riverstone Global Energy & Power Fund II LP.

Buckeye Partners is an Emmaus, Pa., independent pipeline common carrier of refined petroleum products.

CACI reverse flexes

CACI International Inc.'s proposed $550 million credit facility (Ba2/BB) reverse flexed late Wednesday with pricing on both the $350 million seven-year term loan B and the $200 million five-year revolver shifting downwards to Libor plus 200 basis points from Libor plus 225 basis points, according to a fund manager.

Furthermore, all the levels contained in the revolver's pricing grid were ratcheted down by 25 basis points, the fund manager added. The revolver has a commitment fee of 50 basis points.

It did not come as a big surprise that the deal reverse flexed since by late last week already more than $700 million in commitments had been received, making the institutional tranche about two times oversubscribed. This large oversubscription led many to speculate that the deal would end coming in at a 200 basis points spread.

A number of factors were previously cited as positive for this deal including, CACI being a good business that appears like it's worth a lot of cash, decent credit ratings, low total and senior leverage of 2.9 times, and high interest coverage of more than eight times.

Currently, allocations on the deal are anticipated for April 16 since that's what the original schedule called for, according to the fund manager.

Banc of America Securities LLC is the lead bank on the deal.

Proceeds will be used to finance the $415 million cash acquisition of American Management System Inc.'s Defense and Intelligence Group.

Closing on the acquisition is expected to take place by May and is conditioned on CGI Group Inc.'s successful completion of a tender offer for all of the outstanding shares of AMS for $19.40 per share or $858 million. The transactions are also subject to regulatory and government approvals.

Assuming the transaction is consummated in May, CACI estimates the acquisition of the Defense and Intelligence Group will add about $275 to $285 million to its fiscal year 2005 revenues and incremental earnings per share of about $0.14 to $0.17. The EBITDA margin for the Defense and Intelligence Group in fiscal 2005 is expected to be 15% to 17%, according to a company news release.

During a conference call discussion of the acquisition that took place earlier in the month, the company projected pro forma debt at June 30 of $415 million, pro forma debt/last-12-months EBITDA of 2.6 times at June 30, pro forma cash of $20 million and available borrowing capacity of $135 million under the new credit facility at June 30.

CACI is an Arlington, Va., provider of IT and network solutions. The Defense and Intelligence Group is a Fairfax, Va., provider of business management solutions to the U.S. government.

Astoria second lien flexes down

Pricing on Astoria Energy LLC's project financing facility was reworked with the $200 million second lien term loan reverse flexed to Libor plus 875 basis points from Libor plus 887.5 basis points and the $500 million eight-year first lien term loan (Ba3/B+) coming in at the lower end of price talk at Libor plus 500 basis points, according to a syndicate document. Price talk on the first lien piece had been Libor plus 500 to 525 basis points.

Originally, when the deal was launched via conference call on March 26, it was structured as a $690 million eight-year term loan B. Although the syndicate never confirmed it, some sources placed price talk on the tranche at Libor plus 450 basis points.

However, last week, the deal was restructured to increase the total size to $700 million by reducing the first lien term loan and adding a second lien term loan tranche.

Credit Suisse First Boston is the lead bank on the deal.

Astoria Energy is a subsidiary of SCS Energy LLC, a Concord, Mass., electric company.

Meridian Auto second lien flexes up

Meridian Automotive Systems Inc. increased pricing on its $175 million seven-year second lien term loan (B-) to Libor plus 850 basis points from Libor plus 700 basis points, according to a syndicate document.

Pricing on the $100 million five-year revolver (B+) and the $275 million six-year term loan B (B+) was left unchanged at Libor plus 375 basis points. The revolver contains a 50 basis points commitment fee.

Credit Suisse First Boston and Goldman Sachs are the lead banks on the Dearborn, Mich., auto parts company's refinancing deal.

Mueller pricing firms

Pricing on Mueller Group Inc.'s $635 million credit facility (B2/B+) firmed up at the high end of price talk at Libor plus 325 basis points on both the $100 million five-year revolver and the $535 million seven-year term loan, according to a syndicate document.

Previously, the tranches had been talked in the area of Libor plus 300 to 325 basis points.

The revolver contains a 50 basis points commitment fee.

Credit Suisse First Boston is the sole lead arranger and sole bookrunner on the deal. JPMorgan and Deutsche are co-syndication agents.

Proceeds will be used to support the company's recapitalization.

Mueller Group is a Decatur, Ill., maker of fire hydrants and water and gas valves.

Hercules closes

Hercules Inc. closed on its $550 million credit facility (Ba1/BB) consisting of a $150 million five-year revolver with an interest rate of Libor plus 275 basis points and a 50 basis points commitment fee and a $400 million 61/2-year term loan B with an interest rate of Libor plus 225 basis points.

Credit Suisse First Boston and Wachovia acted as joint lead arrangers and joint bookrunners, with CSFB also the administrative agent and Wachovia the syndication agent.

Proceeds from the credit facility, combined with proceeds from a note offering, are being used to refinance the existing bank credit facility, refinance the 9.42% junior subordinated deferrable interest debentures due 2029 and for general corporate purposes, according to a company news release.

Hercules is a Wilmington, Del., manufacturer and marketer of specialty chemicals and related services.

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