Language Line breaks for trading with term loan B reaching near 101 levels

By Sara Rosenberg

New York, June 14 - Language Line Inc.'s credit facility (B2/B) broke for trading on Monday in an otherwise uneventful secondary, with the 'juicy' term loan B immediately moving higher by about a point from its original discounted issue price.

The tranche was quoted at par ¾ bid, 101 offered, according to a trader. During syndication, the B loan was sold to investors at 993/4.

Pricing on the $285 million term loan is Libor plus 425 basis points. This pricing just became finalized last week after the deal flexed up from Libor plus 400 basis points.

There is also 101 call protection.

Merrill Lynch and Bank of America are the lead banks on the credit facility, with Merrill listed on the left for the transaction.

The credit facility also contains a $40 million revolver priced with an interest rate of Libor plus 350 basis points.

Pricing was not the only portion of the deal that has been fluid since it first hit the primary. Originally, the deal was launched with a $335 million term loan B, but the tranche was reduced in size after the company decided to add a $55 million mezzanine tranche of nine-year non-call-four-year senior discount notes at the holding company level to its bond offering. The size of the company's eight-year non-call-four-year senior subordinated notes offering was reduced at that time to $165 million from $170 million.

Proceeds from the credit facility and the bonds will be used to fund Abry Partners LLC acquisition of Language Line from Providence Equity Partners.

Language Line is a Monterey, Calif., provider of over-the-phone interpretation services.

Secondary better bid, quiet

Overall, it was a very quiet trading day on Monday, according to a number of market participants, with some speculating that many investors are preoccupied with new issues, although it being a Monday after a long weekend did not help to increase activity either.

"The whole market is better bid," one trader said. "People seem to be focused on the new issue calendar."

Today was a really quiet day," a second trader said. "It was one of the worst days of the year."

Jean Coutu $1.5 billion plus

It is now anticipated that Jean Coutu Group Inc.'s proposed credit facility will be sized at $1.5 billion plus, according to a market source. The deal is expected to launch either late June or early July.

Deutsche, National Bank of Canada and Merrill Lynch will lead the U.S. portion of the credit facility, with Deutsche on the left.

National Bank of Canada, Deutsche and Merrill Lynch will lead the Canadian portion of the credit facility, with National Bank of Canada on the left.

The credit facility is fully committed and contains pretty standard covenants, company officials previously revealed during a conference call.

Proceeds from the credit facility, combined with proceeds from a 10-year high-yield notes offering, will be used to fund Jean Coutu's acquisition of the Eckerd drugstores for $2.375 billion from J.C. Penney Co. Inc.

Jean Coutu is a Longueuil, Quebec-based drugstore chain.

Worldspan nets early commitments

Worldspan Technologies Inc.'s proposed $225 million credit facility (BB+) is going well as the deal received a "number of early commitments" on the facility that launched via a bank meeting last Thursday, according to a market source.

As was previously reported, pricing on the $185 million term loan and the $40 million revolver is talked at Libor plus 225 basis points.

Lehman and JPMorgan are joint bookrunners on the credit facility, with Lehman listed on the left for the transaction.

The company is obtaining the credit facility in connection with its proposed initial public offering of common stock, which is expected to generate proceeds of about $604.4 million.

IPO proceeds along with the proposed term loan will be used to repay about $71 million of bank debt, repurchase about $107.4 million of 9 5/8% senior notes, prepay about $89.1 million under the 10% seller notes originally issued to Delta Air Lines and 12% seller notes originally issued to American, prepay all credit, or about $154.8 million, provided to Delta and Northwest Airlines pursuant to their FASA, terminate advisory fees payable to CVC Management LLC for about $5.3 million, prepay the approximately $3.5 million special dividend payable on class B convertible common stock and redeem shares of series A preferred stock, according to the filing.

When the company first filed its S-1 with the Securities and Exchange Commission it was anticipated that the revolver would be sized at $50 million. However, the revolver was later downsized to $40 million as was revealed in an S-1/A filed last week.

The revolver is expected to be undrawn at closing.

Worldspan Technologies is an Atlanta provider of mission-critical transaction processing and information technology services to the travel industry.

Advanced Medical price talk

Advanced Medical Optics' $275 million term loan is being talked at Libor plus 225 basis points and syndication has been "going very well" since the deal launched last Thursday, according to a market source.

The $385 million credit facility (BB-) also contains a $110 million revolver that is really just being amended so the company is basically only working with existing lenders on syndication of the tranche.

Bank of America and Lehman Brothers are the lead banks on the deal, with Bank of America listed on the left.

As was previously reported, proceeds will be used to help fund the purchase of Pfizer's surgical ophthalmology business for $450 million in cash. Equity will also be used to finance the acquisition.

When the acquisition was announced in late April it was unclear as to how the transaction would be financed since the company was looking into a number of options including getting a new credit facility, using a high-yield offering or just doing an add-on to its existing credit facility that consists of a $100 million revolver led by Bank of America.

Completion of the transaction is expected to take place this summer.

Advanced Medical Optics is a Santa Ana, Calif., developer, manufacturer and marketer of ophthalmic surgical and contact lens care products.

Coinstar price talk

Coinstar Inc.'s (Ba3/BB-) $250 million term loan B is being talked at Libor plus 250 to 275 basis points, according to a market source. Although pricing has not yet been refined, syndication is still moving along nicely, the source said.

"The rating expectation was low-to-mid BBs and that's where they came," the source added.

The facility also contains a $50 million revolver.

JPMorgan and Lehman Brothers are the lead banks on the deal, with JPMorgan listed on the left.

Proceeds will be used to finance the $235 million cash purchase of American Coin Merchandising Inc.

As part of the acquisition, Coinstar will not be assuming any of American Coin's existing debt. The transaction is expected to close in the third quarter of this year. Closing is contingent upon customary conditions including obtaining Hart-Scott-Rodino and other governmental approvals, securing contractual consents, and as was previously said, financing.

Coinstar is a Bellevue, Wash., owner and operator of automated self-service coin-counting machines. American Coin is a Louisville, Colo., owner and operator of coin-operated amusement vending equipment.

Riverside & Rocky Mountain prices

Riverside & Rocky Mountain Project Funding priced its secured institutional term loan (Ba3/BB-) and modified the size slightly, decreasing it to $661.5 million from an original size of $665 million, according to a company news release.

The seven-year term loan is priced with an interest rate of Libor plus 425 basis points and was issued at a discount to par of 99.5%, the release said.

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

Riverside in Beloit, Wis., and Rocky Mountain in Weld County, Colo., are Calpine Corp.'s 600-megawatt, natural gas-fired power plants. Both of the plants recently entered commercial operations.

The loan is secured by the power plants. None of the debt is guaranteed by Calpine.

Proceeds from the loan will be used to pay final construction costs and to refinance existing debt, including repaying the $250 million credit facility for the Rocky Mountain plant and the $230 million credit facility for the Riverside plant. The remaining balance of about $160 million from the term loan will be returned to Calpine and will be used for general corporate purposes.

Closing is expected for June 22.

Calpine is a San Jose, Calif., power company.

NEP pulled, with hopes of resurfacing

NEP Broadcasting LLC's proposed credit facility was pulled from the market "in its current form" with some "hopeful that there will be something coming" although the structure or form in which the deal would launch is still to be determined, according to an informed source.

"[They] have to find something that will work," the source added. "If there will be a new deal it should surface soon."

The facility was first launched in May as a $20 million five-year revolver, a $150 million 61/2-year term loan B and a $40 million seven-year second-lien term loan. It was later changed to consist of a $145 million term loan B, a $45 million second-lien term loan and a $20 million revolver. The term loan B was priced at Libor plus 325 basis points and the $45 million seven-year second-lien term loan was priced at Libor plus 650 basis points. And then, structure and pricing on the deal was no longer being publicized as the deal appeared to be fluid.

Wachovia and Bank of New York were the lead banks on the deal.

Proceeds from the credit facility were going to be used help fund Apax Partners and Spectrum Equity Investors' acquisition of NEP from Wachovia Capital Partners. Whether the acquisition was contingent upon the receipt of financing is not being revealed at this time, the source concluded.

NEP is a Pittsburgh provider of outsourced media services.

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