Landmark floats OIDs; RE/MAX sets structure, allocates; Countrywide up with buyout news

By Sara Rosenberg

New York, Jan. 11 - Landmark FBO LLC came out with original issue discounts on its credit facility as the deal was launched with a bank meeting during Friday's market hours.

In other news, RE/MAX International Inc. finalized the structure on its term loan debt, which now carries an overall bigger size and includes a first-priority and a second-priority piece, and proceeded to allocate the deal.

In trading, Countrywide Financial Corp.'s revolver headed higher as the company announced that it is being bought by Bank of America Corp.

Landmark FBO held a bank meeting on Friday to jumpstart syndication on its $338 million credit facility, and with the launch, lenders were told what type of original issue discount they are being offered for commitments, according to a buyside source.

The $188 million first-lien term loan (BB-) is being offered to investors at a discount of 981/2, and the $120 million second-lien term loan (B-) is being offered at a discount of 98, the source said.

Price talk on the first-lien term loan is Libor plus 375 basis points, and price talk on the second-lien term loan is Libor plus 725 bps.

Landmark FBO's credit facility also includes a $30 million revolver (BB-) that is being talked at Libor plus 375 bps as well.

Barclays Capital is the lead bank on the deal.

Proceeds will be used to help fund GTCR Golder Rauner LLC and Encore FBO, LLC's acquisition of the fixed base operator business, including the related charter, aircraft sales and maintenance parts assets, of Landmark Aviation from Dubai Aerospace Enterprise.

Landmark Aviation is a Tempe, Ariz., provider of aftermarket services to the business aviation industry.

RE/MAX tweaks deal, breaks

RE/MAX International came out with details on the final structure of its term loan debt and then gave out allocations, according to a market source.

The total size of the deal was increased to $295 million from $265 million, and the funds were divided into two tranches - a $225 million first-priority term loan and a $70 million second-priority term loan - as opposed to just being one term loan tranche, the source said.

The first-priority term loan is priced at Libor plus 350 bps and was sold at an original issue discount of 90, and the second-priority term loan is priced at Libor plus 750 bps and was sold at an original issue discount of 90, the source remarked.

By comparison, at launch, the original single-tranched deal was talked at Libor plus 350 bps with a discount of 99.

During syndication, there were rumors going around that the original issue discount was going to move into the low-90 context.

Citigroup is the lead bank on the deal, which is being used to refinance $260 million in funded term loan debt that was used to finance the acquisitions of RE/MAX of California and Hawaii and RE/MAX of Carolina and Florida.

According to the market source, the $30 million upsizing to the transaction will be used to fund the revised original issue discount.

The debt that is being refinanced was obtained in 2007 and consists of a $145 million eight-month funded term loan B and a $155 million eight-month delayed-draw term loan (not fully funded) that are both priced at Libor plus 175 bps. The delayed-draw term loan has a 50 bps undrawn fee.

RE/MAX is a Denver-based real estate company.

Countrywide gains on buyout

Moving to the secondary market, Countrywide's May '08 revolver was stronger on the announcement that it will be acquired by Bank of America, according to a trader.

The revolver was quoted in the area of 93 bid, 98 offered, the trader said, adding that he thought the real market on the debt was more like 95 bid, 96 offered. By comparison, on Thursday, the revolver traded at 90, a second trader remarked.

Bank of America is purchasing the Calabasas, Calif.-based company in an all-stock transaction worth approximately $4 billion. Shareholders of Countrywide will receive 0.1822 of a share of Bank of America stock in exchange for each share of Countrywide.

The purchase will make Bank of America the United States' largest mortgage lender and loan servicer.

"Countrywide presents a rare opportunity for Bank of America to add what we believe is the best domestic mortgage platform at an attractive price and to affirm our position as the nation's premier lender to consumers," Kenneth D. Lewis, Bank of America chairman and chief executive officer, said in a news release.

"We are aware of the issues within the housing and mortgage industries," Lewis continued in the release. "The transaction reflects those challenges. Mortgages will continue to be an important relationship product, and we now will have an opportunity to better serve our customers and to enhance future profitability."

The acquisition is expected to close in the third quarter, subject to approval by Countrywide's shareholders and customary regulatory approvals.

Secondary softer

In general the secondary market was weaker on Friday, although there wasn't a whole lot of activity going on, according to traders.

The cash market was off by about an eighth of a point to a quarter of a point, traders said.

"No specific credit reason. Everything was down. Everything feels weak," one trader added.

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