BI-LO breaks atop par; Patriot Media cuts pricing, removes term A; Lionbridge sets price talk

By Sara Rosenberg

New York, July 27 - BI-LO LLC allocated its credit facility on Wednesday, with the term loan quoted in the pars. Rexair Inc. also allocated its credit facility during market hours; however, even though the paper was free to trade, levels on the bank debt were not actually seen by investors or traders.

Meanwhile, Patriot Media & Communications CNJ LLC reverse flexed pricing on all tranches as the deal was massively oversubscribed, and, the syndicate opted to eliminate the term loan A from the capital structure by putting the funds into the term loan B.

And, Lionbridge Technologies Inc. came out with opening price talk on its $125 million credit facility as the deal launched via a well attended bank meeting.

BI-LO's $345 million six-year term loan B freed up for trading Wednesday afternoon, with the paper opening up a par 1/8 bid for $2 million, par 5/8 offered for $2 million, according to a fund manager, who said that levels were unchanged throughout the session. However, according to a trader, the paper was being quoted at par ¼ bid, par 5/8 offered by day's end.

The term loan is priced with an interest rate of Libor plus 400 basis points and contains hard call protection of 103 in year one, 102 in year two and 101 in year three.

Originally, the term loan was launched with pricing of Libor plus 325 basis points but was flexed up during syndication.

The syndicate had also added soft call protection of 102 in year one and 101 in year two during syndication that was later revised into the hard call protection that the deal currently contains.

Furthermore, the excess cash flow sweep in the credit agreement was increased to 75% from 50% during syndication.

And, lastly, the syndicate changed the amortization schedule on the term loan B, increasing it to $5 million in 2005, $15 million in 2006, $20 million in 2007 and 2008, $25 million in 2009, $30 million in 2010 and $230 million in 2011. Amortization was originally planned to be 1% of the term loan per year for the first five years and the balance due in equal quarterly installments during the sixth year.

BI-LO's $420 million credit facility (B1/B) also contains a $50 million five-year revolver with an interest rate of Libor plus 400 basis points and a $15 million synthetic letter-of-credit facility with an interest rate of Libor plus 400 basis points. The revolver was originally sized at $75 million but was reduced as the syndicate recently opted to add the letter-of-credit tranche into the capital structure. Furthermore, pricing on the revolver was increased from original talk of Libor plus 325 basis points during syndication.

Bear Stearns is the sole lead bank on the deal that will be used to refinance some acquisition loans that were put in place by the sponsors.

With this new deal, bank leverage will be less than 2x and total debt will be in the mid-3x area.

BI-LO is a Greenville, S.C., supermarket operator that was bought by Lone Star Funds early this year from Royal Ahold.

Rexair allocates

Rexair allocated its $144 million credit facility consisting of a $94 million first-lien term loan B (B1/B) with an interest rate of Libor plus 425 basis points, a $30 million six-year second-lien term loan with an interest rate of Libor plus 750 basis points and a $20 million five-year revolver (B1/B).

Pricing on the first-lien term loan was flexed up from Libor plus 325 basis points during syndication. Furthermore, the tranche was downsized from $124 million due to the addition of the second-lien term loan. Amortization on the first-lien term loan was also tweaked during syndication, going to $7.5 million per year as opposed to the original amount of 1% per year.

The first-lien term loan was offered to investors at par while revolver commitments of $10 million got an upfront fee of 75 basis points.

Although the bank debt was free to trade as of Wednesday afternoon, fund managers and traders that were asked did not actually see quotes floating around the market.

Credit Suisse First Boston acted as the sole lead arranger on the deal that was used to fund Rhone Capital LLC's completed acquisition of the company from Jacuzzi Brands Inc. for about $170 million.

Following completion of the acquisition, Jacuzzi retained a 30% interest in Rexair.

Rexair is a Troy, Mich.-based manufacturer of the Rainbow vacuum cleaner system for the global direct sales market.

Patriot Media cuts spreads

Patriot Media & Communications reduced pricing on its revolver and two institutional term loans, while eliminating the $50 million term loan A from the deal by upsizing the term loan B by the equivalent amount.

The 71/2-year term loan B (B1) was increased to $210 million from $160 million and pricing on the tranche was reduced to Libor plus 225 basis points from Libor plus 275 basis points with a step down to Libor plus 200 basis points based on total leverage, according to a market source. Furthermore, 101 soft call protection for one year was added to the deal.

As for the $47 million eight-year second-lien term loan (B3), pricing was lowered to Libor plus 500 basis points from Libor plus 550 basis points, the source said. The 101 one-year hard call protection that the tranche was launched with remained intact.

Lastly, the $25 million seven-year revolver (B1) saw its pricing go down to Libor plus 225 basis points from Libor plus 250 basis points, the source added.

Recommitments are due from lenders by the close of business Thursday.

Bank of New York is the sole lead bank on the $282 million credit facility that will be used for a dividend recapitalization and to refinance existing debt.

Patriot Media is a Greenwich, Conn.-based cable operator.

Hanley Wood reverse flexes

Hanley Wood Inc. reduced pricing on both its $260 million seven-year term loan and its $32 million seven-year delayed-draw term loan to Libor plus 250 basis points from Libor plus 300 basis points, according to a market source.

Credit Suisse First Boston and JPMorgan are joint lead arrangers on the deal, with CSFB the left lead.

Hanley Wood's $352 million credit facility (B) also contains a $60 million six-year revolver with a 50 basis point commitment fee.

Proceeds will be used to help fund the leveraged buyout of the company by JPMorgan Partners, Wasserstein & Co., and current and former Hanley Wood management from Veronis Suhler Stevenson.

Hanley Wood is a Washington, D.C., business-to-business media company serving the residential and commercial construction industries.

F&W cuts spreads

F&W Publications Inc. reverse flexed pricing on its first- and second-lien term loans by 75 basis points each, according to a market source.

More specifically, the $250 million seven-year first-lien term loan is now priced with an interest rate of Libor plus 225 basis points compared to original price talk of Libor plus 300 basis points and the $100 million 71/2-year second-lien term loan is now priced with an interest rate of Libor plus 625 basis points compared to original price talk of Libor plus 700 basis points, the source said.

F&W's $400 million credit facility also contains a $50 million six-year revolver that has a 50 basis point commitment fee.

JPMorgan and Credit Suisse First Boston are joint lead arrangers on the deal, with JPMorgan on the left.

Proceeds will be used to help fund the leveraged buyout of F&W by Abry Partners from Providence Equity Partners.

F&W is a Cincinnati-based publisher of special interest magazines and books.

Lionbridge price talk

Lionbridge Technologies launched both its $100 million six-year term loan B and $25 million five-year revolver with opening price talk of Libor plus 350 to 375 basis points at Wednesday's bank meeting, which was described as well attended, with no major concerns or questions raised by investors and the company presenting well, according to a market source.

In fact, the deal had already received a few small commitments prior to the actual launch, the source added.

The revolver contains a 50 basis point commitment fee.

Amortization on the term loan is 1% per year with a balloon payment due at maturity.

Security is substantially all company assets.

Proceeds from the credit facility will also be used to refinance Lionbridge debt and to help fund the acquisition of Bowne Global Solutions

Under the acquisition agreement, Lionbridge will purchase Bowne Global Solutions, a division of Bowne & Co. Inc., for at least $180 million, consisting of $130 million in cash, up to 9.4 million shares of Lionbridge common stock, subject to adjustment, and a potential subordinated note of no more than $20 million.

The transaction, which is expected to close in the third quarter, is subject to customary conditions and approvals, including approval under the Hart-Scott-Rodino Antitrust Improvements Act.

Wachovia is the sole lead arranger, bookrunner and administrative agent on the $125 million deal.

Lionbridge is a Waltham, Mass., provider of globalization and testing services.

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