Verso Papers, SVP, Flakeboard, Oppenheimer, FTD set price talk; Mirant gyrates in trading

By Sara Rosenberg

New York, July 11 - Verso Papers Holdings LLC, SVP Worldwide, Flakeboard Co. Ltd. and Oppenheimer Holdings Inc. came out with price talk on their new credit facilities as all of these deals were launched into syndication with bank meetings on Tuesday.

In other primary news, FTD Group Inc. started floating price talk on its proposed term loan B as the deal is getting ready for its launch into syndication on Thursday afternoon.

Meanwhile, in secondary happenings, Mirant Corp.'s bank debt fell a touch in the morning as news came out that the company was going to be taking on more debt but rebounded shortly afterward to end the day essentially unchanged.

Verso announced opening price talk on its proposed $485 million credit facility (Ba2) Tuesday as syndication officially kicked off with a bank meeting during market hours, according to a source.

Both the $200 million six-year revolver and the $285 million seven-year term loan B were launched at Libor plus 200 basis points, the source said.

Credit Suisse is the lead arranger on the deal that will be used to help fund Apollo Management's leveraged buyout of International Paper's Memphis, Tenn.-based coated and supercalendered papers business for about $1.4 billion.

The Verso deal is being compared to the NewPage transaction, which was just launched this past Monday, since Dayton, Ohio-based NewPage is also an operator of pulp and paper mills.

NewPage's $1.025 billion credit facility consists of a $750 million term loan due Feb. 1, 2012 (Ba3/B+) talked at Libor plus 200 basis points and a $275 million ABL revolver due May 1, 2011 talked at Libor plus 150 basis points.

According to one market source, the Verso deal has some benefits over the NewPage deal. "[It] will have lower senior secured leverage and better ratings than NewPage. Also, [it is] more balanced toward coated groundwood, while NewPage is balanced more to coated freesheet, a less attractive segment competitively. Groundwood is all produced in North America, not subject to import competition. [Lastly, Verso has] all assets. [NewPage has] carved out working capital for [the] revolver," the source concluded.

Goldman Sachs is the lead bank on the NewPage deal that is being obtained in connection with the company's initial public offering of common stock and will be used to refinance existing debt.

SVP sets spreads

Continuing on the price talk front, SVP Worldwide launched its $315 million senior secured credit facility (B1) with opening spreads set at Libor plus 250 basis points on both the $75 million revolver and the $240 million term loan, according to a market source.

UBS is the lead bank on the deal.

Proceeds will be used to refinance existing debt and fund seasonal working capital build.

SVP is a manufacturer, marketer and distributor of consumer sewing machines that is owned by Kohlberg & Co. It is a combination of the Singer company that Kohlberg acquired in September 2004 and the VSM Group company that Kohlberg bought in February.

Flakeboard spread guidance

Also launching Tuesday was Flakeboard, with its proposed $230 million term loan B presented to lenders with opening guidance of Libor plus 325 to 350 basis points, according to a market source.

The company's $270 million credit facility also contains a $40 million revolver.

RBC Capital Markets is the lead bank on the deal that will be used to help fund the acquisition of Weyerhaeuser Co.'s composite panel business, which includes six MDF and particleboard mills.

Flakeboard is the Markham, Ont.-based manufacturer of composite panel products.

Oppenheimer price talk

Oppenheimer Holdings also released price talk on its new deal Tuesday, with the syndicate launching the company's proposed $125 million seven-year senior secured term loan (B1) at Libor plus 275 basis points, according to a market source.

Morgan Stanley is the lead bank on the deal.

Proceeds will be used to help fund Oppenheimer's buy back, in full, the first-and second-variable rate exchangeable debentures that were issued in connection with the acquisition of CIBC's U.S. Private Client and Asset Management Divisions in 2003.

The company will pay the par value of the debentures, approximately $160.8 million, in cash plus accrued interest.

Oppenheimer is a Toronto-based provider of financial services.

FTD floats talk

Spread guidance on FTD's $150 million term loan B has begun making its way around the market as the syndicate firmed up a Thursday afternoon launch for the transaction, according to a market source.

The term loan B is expected to carry opening talk of Libor plus 200 to 225 basis points, based on ratings that have yet to emerge.

FTD's $225 million senior secured credit facility also contains a $75 million revolver, which will have a pricing grid based on leverage.

Wells Fargo is the lead bank on the deal that will be used to fund the acquisition of Interflora Holdings Ltd. for about £66 million and to refinance existing FTD bank debt.

FTD's existing senior subordinated notes will remain outstanding.

The acquisition, which is subject to the satisfaction of certain conditions, is expected to close on July 31.

FTD is a Downers Grove, Ill.-based provider of floral services and products. Interflora is a U.K.-based provider of floral-related products and services.

Mirant seesaws

Moving to the secondary, Mirant's bank debt was a touch weaker in the morning as news came out that its Philippines business would be getting a new term loan that would help fund a stock buyback, according to a trader.

The bank debt closed the day quoted at 99 5/8 bid, par offered, basically unchanged from Monday's closing levels of 99¾ bid, par offered, but levels had gotten as low as 99½ bid, 99 7/8 offered immediately following the news, the trader said.

On Tuesday morning, Mirant announced that its Philippines business is planning on getting a new $700 million term loan to help fund a modified Dutch auction tender offer by Mirant for up to 43 million shares of its common stock and to pay off existing debt in the Philippines.

Mirant also announced that it is starting an auction process to sell the Philippines business, as well as its Caribbean business. The sales are expected to close by mid-2007.

"It's a shareholder friendly thing to do but kind of a non-event for the bank debt," the trader said about the tender offer and potential sale of the businesses. "Bonds were initially off because no one wants to see extra debt but they climbed back up to."

Mirant is an Atlanta-based energy company.

Fresenius trades up

Also in trading, Fresenius Medical Care AG's term loan B headed higher on market technicals, according to a trader.

The term loan closed the day quoted at 99¼ bid, 99½ offered, up from previous levels of 99 bid, 99¼ offered, the trader said.

Fresenius is a Bad Homburg, Germany-based dialysis products and services provider.

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