Arby's, Norcross, Carrizo sign up for Tuesday launch; price talk surfaces on two out of three

By Sara Rosenberg

New York, June 24 - Deals are lining up for a Tuesday launch, with previously talked about transactions like Arby's Restaurant Group Inc. and Norcross Safety Products LLC opting to arrange their bank meetings for that day, and a newly announced deal for Carrizo Oil & Gas Inc. finding its way into the schedule as well.

In addition to a firmed up timetable, price talk was set on Arby's and Carrizo's term loans, while Norcross price talk is still yet to be heard.

Arby's plans on launching a $700 million senior secured credit facility on Tuesday consisting of a $600 million term loan talked at Libor plus 225 to 250 basis points and a $100 million revolver, according to a market source.

Citigroup, Bank of America and Credit Suisse First Boston are the lead banks on the deal.

Proceeds from the new credit facility will be used to fund the acquisition of RTM Restaurant Group and refinance debt.

New York-based holding company Triarc Cos. Inc., parent of Arby's franchise trust - which is the franchisor of the Arby's restaurant system, will acquire RTM for $175 million in cash plus either 10 million shares of its existing class B common stock, series 1, or 10 million shares of newly created nonvoting class B common stock, series 2, that will convert into class B-1.

As part of the transaction, Triarc will provide $135 million cash to fund the acquisition and will consolidate its restaurant operations, including RTM, under Arby's Restaurant Group.

Arby's Restaurant Group's financing commitments will cover the remaining cash needed to complete the acquisition, including transaction costs, and to refinance some of its own and RTM's existing debt.

Arby's Restaurant Group is assuming $420 million of net debt and related prepayment expenses, including about $185 million of RTM's capitalized lease obligations and financing obligations.

Triarc said it will look into creating a publicly traded restaurant company separate from its asset management business.

Norcross sets launch

Norcross Safety Products plans on launching its $127.3 million credit facility (B1/B+) consisting of an $87.3 million six-year term loan B and a $40 million five-year revolver via a Tuesday afternoon bank meeting, according to a market source.

Credit Suisse First Boston is the sole lead arranger on the deal.

Proceeds from the credit facility will be used to help fund the leveraged acquisition of the company by Odyssey Investment Partners LLC from an investor group that includes funds controlled by Trimaran Capital Partners, John Hancock Life Insurance Co. and CIVC Partners in a transaction valued at $495 million, including the assumption of Norcross's outstanding debt and cash at closing.

Remaining financing will be $25 million of new notes, $26 million in cash and a $110 million equity investment from the buyer.

Proceeds from the financing will also be used to fund a consent solicitation for Norcross Safety Products and Norcross Capital Corp.'s 9 7/8% senior subordinated notes due 2011 and NSP Holdings LLC's 11¾% senior pay-in-kind notes; repay $83.9 million of borrowings under the company's existing credit facility; pay fees and expenses; and other related transactions.

Norcross is an Oak Brook, Ill., maker of personal protection equipment.

Carrizo launch, price talk

Carrizo Oil & Gas plans on launching its $125 million six-year second-lien term loan on Tuesday with opening price talk of Libor plus 700 basis points, according to a syndicate document.

Credit Suisse First Boston is the sole lead arranger on the deal that will be used for working capital.

Carrizo is a Houston-based explorer, developer and producer of natural gas and oil.

Inmarsat closes

Inmarsat Investments Ltd. closed on its new $550 million five-year credit facility that was obtained in conjunction with the company's initial public offering of common stock, according to a company news release.

Barclays Capital, ING Bank and The Royal Bank of Scotland plc acted as joint bookrunners and joint lead arrangers on the deal.

The London-based satellite operator's facility consists of a $250 million term loan and a $300 million revolver, with both tranches carrying an initial interest rate of Libor plus 120 basis points. Pricing can vary based on a leverage grid.

The transaction was syndicated on a targeted basis among the company's core relationship banks.

Proceeds are available for general corporate purposes including refinancing existing debt.

Covanta closes

Covanta Energy Corp., a subsidiary of Danielson Holding Corp., closed on its new $1.115 billion credit facility consisting of a $275 million seven-year first-lien term B (B1/B+) at Libor plus 300 basis points, a $100 million six-year revolver (B1/B+) at Libor plus 300 basis points with a 50 basis point commitment fee, a $340 million seven-year pre-funded letter-of-credit facility (B1/B+) at Libor plus 300 basis points and a $400 million eight-year second-lien term loan (B2/B-) at Libor plus 550 basis points with call protection of 103 in year one, 102 in year two and 101 in year three.

The term loan B was originally sized at $250 million but it was increased by $25 million during syndication as the syndicate decided to decrease the second-lien term loan by $25 million.

Furthermore, pricing on the second-lien term loan ended up higher than the originally anticipated Libor plus 500 basis point spread.

Goldman Sachs and Credit Suisse First Boston acted as joint lead arrangers on the deal, with Goldman the left lead.

Proceeds were used to help fund the acquisition of American Ref-Fuel Holdings Corp. from DLJ Merchant Banking Partners and AIG Highstar Capital II LP for $740 million in cash and the assumption of about $1.2 billion in debt, and to refinance outstanding recourse debt of Covanta and its international holding company.

The equity component of the financing consisted of the successful completion of an approximately $400 million rights offering of common stock to shareholders.

Danielson is a Fairfield, N.J., renewable energy and waste disposal company.

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