PinnOak, Team Health set price talk; Alliant sets call premiums; Roundy's breaks; Reliant off on numbers

By Sara Rosenberg

New York, Nov. 1 - PinnOak Resources LLC and Team Health Inc. announced price talk on their credit facilities as the deals launched via bank meetings Tuesday. Also, Alliant Resources Group Inc. announced call premiums for its second-lien tranche at its well-attended launch.

In secondary happenings, Roundy's Supermarkets Inc. allocated its new credit facility to see its term loan B trade in the lower-par context. And, Reliant Energy Inc. saw levels fall off anywhere from a quarter to a half a point, depending on the tranche, after its release of disappointing third-quarter numbers.

PinnOak Resources came out with spread guidance in the Libor plus 300 basis point area on its $175 million senior credit facility (B) at its Tuesday launch, according to a market source.

The facility is comprised of a $50 million six-year revolving credit facility and a $125 million seven-year term loan.

UBS is the lead arranger on the facility that will be used to refinance certain existing debt and pay a dividend to equity holders.

PinnOak is a Pittsburg-based domestic producer of high quality, low volatile metallurgical coal.

Team Health sets price talk

Team Health came out with price talk of Libor plus 225 basis points on all tranches in its $500 million senior secured credit facility at its Tuesday bank meeting, according to a market source.

The facility is comprised of a $125 million revolver and a $375 million term loan.

JPMorgan, Lehman and Merrill Lynch are the lead banks on the deal, with JPMorgan the left lead.

Proceeds from the facility, along with a $365 million equity contribution and a $265 million senior subordinated bridge loan, will be used to fund The Blackstone Group's leveraged buyout of the company.

As part of the transaction, Team Health will refinance its existing senior secured credit facilities and redeem its 9% senior subordinated notes due 2012. As of June 30, TeamHealth had $145.7 million of the notes and $202.3 million of bank debt outstanding.

The transaction is expected to be completed by mid-February 2006.

Team Health is a Knoxville, Tenn., provider of outsourced physician staffing and administrative services to health care providers.

Alliant sets call protection

Alliant Resources announced call protection provisions of 102 in year one and 101 in year two for its $95 million second-lien term loan as syndication officially kicked off on Tuesday, according to a market source.

As was previously reported, price talk on the second-lien term loan is set at Libor plus 650 basis points.

In addition to the second-lien tranche, Alliant Resources' $300 million credit facility contains a $30 million revolver that was launched with opening price talk of Libor plus 300 basis points and a $175 million first-lien term loan B that was also launched with opening price talk of Libor plus 300 basis points.

Both the first- and the second-lien term loans are being offered to investors at par.

Alliant presented the deal to potential lenders on Tuesday, and attendance was relatively strong - especially given that something like five other deals were launched during the day - as more than 20 investors turned out for the bank meeting, the source said.

However, by mid-afternoon, there were no early commitments in as of yet, the source added.

JPMorgan and General Electric Capital Corp. are the lead banks on the deal, with JPMorgan the left lead.

Proceeds will be used to help fund Lindsay Goldberg & Bessemer LP's leveraged buyout of the company from GTCR Golder Rauner LLC.

Alliant is a Stamford, Conn., distributor of insurance and financial services.

FosterGrant, lenders clash on call premium

AAi.FosterGrant Inc.'s recently launched $215 million credit facility is being overshadowed somewhat by a dispute over the payment of soft call protection to existing lenders, and if the argument is not resolved, the new deal could be put at risk, according to a market source.

Under the existing term loan B, lenders are entitled to 101 soft call protection in the case of a refinancing.

However, lenders are currently being told that they may not be getting paid down at the 101 call protection premium because the new credit facility is part of a recapitalization, not a refinancing, the source explained.

The new dividend recapitalization deal that was launched this past Friday consists of a $15 million revolver talked at Libor plus 275 basis points, a $150 million term loan B talked at Libor plus 275 basis points and a $50 million second-lien term loan talked at Libor plus 625 basis points.

"I think they're eventually going to have to pay the call protection. If they don't, nobody will do the new deal," the source added.

JPMorgan and General Electric Capital Corp. are the lead banks on the deal, with JPMorgan the left lead.

AAi.FosterGrant is a Smithfield, R.I., eyewear and jewelry company.

Roundy's breaks in pars

Roundy's Supermarkets' credit facility freed up for trading on Tuesday afternoon, with the $750 million six-year term loan B quoted at par bid, and anywhere from par 1/8 to par ½ offered on the break and remaining in that context throughout the rest of the day, according to various sources.

The term loan, which was upsized from $700 million after the company decided to drop its bond offering, is priced with an interest rate of Libor plus 300 basis points. At the time of the upsizing, the syndicate added 101 soft call protection for one year to the deal.

As for allocations on the institutional paper, "We did pretty well, although I can't speak for anyone else. [We] got 100% of our order. [That] kind of makes it seem like it wasn't a blowout," a buyside source added.

Roundy's $875 million senior credit facility (B2/B+) also contains a $125 million five-year revolver with an interest rate of Libor plus 300 basis points.

Bear Stearns and Goldman Sachs are the lead banks on the deal, with Bear the left lead.

Proceeds from the credit facility will be used to fund a $280 million dividend payment, repay all of the company's existing bank debt and conduct a tender offer and consent solicitation for its 8 7/8% senior subordinated notes due 2012.

Originally, the Pewaukee, Wis., food retailer and wholesaler planned on paying a $550 million dividend to principal shareholder Willis Stein & Partners III LP using proceeds from the loan and $325 million in a two-tranche high-yield bond offering.

Then, Roundy's decided to cancel its struggling $150 million offering of senior subordinated notes and scale back the planned dividend payment to $400 million.

Lastly, after restructuring and changing covenants on its $175 million offering of eight-year senior fixed-rate notes, the company decided to pull the bond financing altogether, bringing the dividend payment down to $280 million.

Reliant dips on earnings

Reliant Energy' term loans were weaker during trading hours as the company announced a third-quarter loss and a weak full-year outlook.

The term loan B1 was quoted down about a quarter of a point at 99¾ bid, par 3/8 offered and the term loan B2 was quoted down about a half a point at par ¼ bid, par 5/8 offered, according to a trader.

For the third quarter, Reliant reported a loss from continuing operations of $267 million, or $0.88 per share, compared to income from continuing operations of $75 million, or $0.23 per diluted share, for the same period of 2004. Adjusted EBITDA was $462 million for the quarter, compared to $391 million for the third quarter of 2004, with the improvement primarily a result of asset sales.

The Houston-based electricity and energy company also revised its outlook for 2005, saying that it expects adjusted EBITDA to be closer to the bottom of the range of the $650 million to $850 million guidance.

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