Contech Construction breaks above 101; Northwest Airlines heads higher in active trading

By Sara Rosenberg

New York, Nov. 22 - Contech Construction Products Inc.'s $350 million credit facility (Ba3/BB-) allocated and broke for trading on Monday, with the institutional term loan quoted at plus 101 levels. Meanwhile Northwest Airlines Inc.'s term loans traded up on Monday by a little less than a point with trading momentum really able to first begin following Friday's really late break.

Contech Construction's term loan B was quoted at 101 5/8 bid, according to a trader, who admitted that he hadn't seen an offer on the paper.

The tranche is priced with an interest rate of Libor plus 275 basis points.

Contech's facility also contains a $125 million five-year revolver with an interest rate of Libor plus 250 basis points.

Wachovia is the lead bank on the dividend recapitalization deal.

Contech is a Middletown, Ohio, civil engineering site solutions products and services company.

Northwest stronger

Northwest Airlines' term loan A and term loan B headed higher in trading on Monday as a good amount of activity was able to kick off in the name, according to a fund manager, who explained that since the deal broke so late in the day on Friday - around 4 p.m. ET - many people weren't around to really get the trading going.

The term loan B was quoted at 102¼ bid, 102½ offered towards the end of Monday's session compared to 101½ bid, 101 7/8 offered on Friday. The term loan A was quoted at par 5/8 bid, par 7/8 offered, compared to a trading level of right around par on Friday, the fund manager said.

At one point during the day, there was an offer for the B loan at 103, "but I think that was a bit on the opportunistic side", the fund manager explained.

Northwest's $575 million term loan A (which was downsized from $675 million) is priced with an interest rate of Libor plus 525 basis points (after reverse flexing from Libor plus 550 basis points). The $400 million term loan B (which was upsized from $300 million) is priced with an interest rate of Libor plus 675 basis points (after reverse flexing from Libor plus 750 basis points).

The term loan A was originally issued to investors at 99 and the term loan B was initially issued to investors at par.

Both term loans contain call protection of 103 in year one, 102 in year two and 101 in year three.

JPMorgan and Citigroup are the lead banks on the deal, with JPMorgan on the left, and Deutsche Bank is involved as well.

Proceeds from the $975 million credit facility (B1/B+) will be used by the Eagan, Minn.-based airline company to refinance existing revolver debt. The company currently has a $725 million five-year revolver due October 2005 and a $250 million 364-day revolver due October 2004 and renewable annually at the option of lenders. The revolvers carry an interest rate of Libor plus 325 basis points.

Texas Genco B oversubscribed

Texas Genco Holdings Inc.'s $1.375 billion seven-year term loan B, of which $475 million is delayed draw, is already "oversubscribed," an informed source told Prospect News on Monday afternoon. The deal (Ba2/BB) just launched to retail investors on Friday.

The tranche went out to lenders at Libor plus 250 basis points, as opposed to at Libor plus 275 basis points as was originally anticipated, because of the "Ba2 ratings" that the credit facility received, the source said.

In fact, price talk on the pro rata tranches, which include a $325 million five-year revolver, a $200 million five-year letter of credit facility and a $300 million five-year special letter of credit facility, also ended up cheaper than expected with opening pricing set at Libor plus 225 basis points, compared to the previously expected Libor plus 250 basis points.

Goldman Sachs, Deutsche Bank, Morgan Stanley and Citigroup are lead banks on the deal, with Goldman listed on the left.

Proceeds from the $2.2 billion credit facility, combined with proceeds from a proposed $1.375 billion bond deal, will be used to help fund GC Power Acquisition LLC's acquisition of Texas Genco from CenterPoint Energy Inc. for approximately $3.65 billion in cash.

GC Power Acquisition LLC is a newly formed entity owned in equal parts by affiliates of The Blackstone Group, Hellman & Friedman LLC, Kohlberg Kravis Roberts & Co. L.P. and Texas Pacific Group.

Texas Genco is a Houston wholesale electric power generating company.

Regency Gas reworks deal

Regency Gas Services LLC made a number of changes to the structure of its in-market credit facility, including increasing the size of the first-lien term loan and decreasing the size and pricing on its second-lien term loan.

The first-lien term loan (B1/B+) is now sized at $200 million, up from $160 million, according to a market source. Pricing on the tranche remained at Libor plus 275 basis points.

The second-lien term loan (B3/B-) is now sized at $50 million, down from $80 million, and is priced with an interest rate of Libor plus 600 basis points, down from Libor plus 725 basis points, the source said.

The revolver remained (B1/B+) unchanged at $40 million with an interest rate of Libor plus 275 basis points, the source added.

Through these modifications, the company ended up increasing its total credit facility size to $290 million from $280 million, As a result of this, the equity contribution for the Hicks, Muse, Tate & Furst Inc. leveraged buyout of Regency was reduced by $10 million.

UBS is the sole lead bank on the Dallas-based midstream gas gathering, processing, and transmission company's deal.

Rockwood adds call protection

Rockwood Specialties Group Inc. added soft call protection of 101 in year one against a repricing or refinancing of its U.S. term loan B to its recently launched repricing proposal, according to a market source.

The proposal calls for lowering the interest rate on the B loan to Libor plus 200 basis points from Libor plus 250 basis points.

Goldman Sachs and UBS are the lead banks on the repricing, with Goldman left lead.

Rockwood is a Princeton, N.J., specialty chemicals and advanced materials company.

SpectraSite closes

SpectraSite Communications Inc. closed on its new $900 million senior secured credit facility (Ba3/BB-), consisting of a $200 million revolver due 2011, a $400 million term loan B due 2012 and a $300 million delayed-draw term loan A due 2011. All three tranches are priced with an interest rate of Libor plus 150 basis points.

The new facility also includes a $400 million incremental facility that may be activated in whole or in part at any time, subject to certain conditions and limitations.

Originally, the term loan B was launched with pricing of Libor plus 175 basis points but was reverse flexed during syndication.

TD Securities and Citigroup were the joint lead arrangers on the deal, with TD listed on the left. TD is the administrative agent, Citi is the syndication agent, and Deutsche Bank, Lehman and Royal Bank of Scotland are co-documentation agents.

Security is a pledge of substantially all the company's assets.

Proceeds are being used to refinance the company's existing credit facility and for general corporate purposes, including acquisitions and financing distributions to its shareholders.

"This is truly a groundbreaking transaction for SpectraSite. Among other things, the new facility provides us with the ability to consistently return value to shareholders in the form of stock buybacks and dividends while also providing us with the ability to invest in prudent growth initiatives. In addition, the new facility will generate interest savings of approximately $4.5 million per year, thereby positively impacting our free cash flow on an annual basis," said Stephen H. Clark, president and chief executive officer, in a company news release.

SpectraSite is a Cary, N.C.-based wireless tower operator.

TRM closes

TRM Corp. closed on its $150 million credit facility (B2/B+) consisting of a $30 million revolver and a $120 million six-year term loan B. Bank of America was the lead bank on the deal.

Proceeds were sued to fund the acquisition of eFunds Corp.'s ATM network for $150 million, excluding fees, expenses and adjustments.

TRM is a Portland, Ore., consumer services company that provides convenience ATM and photocopying services.

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