Hawkeye Renewables fuels good audience; Masonite piles on agent banks; Wyle, Accuride break

By Sara Rosenberg

New York, Jan. 28 - Hawkeye Renewables LLC held a very well attended bank meeting on Friday with the launch packed in person and on the phone. Meanwhile, Masonite International Corp. has signed on four banks, in addition to left lead Bank of Nova Scotia, to agent roles to help in the upcoming syndication of its $1.525 billion credit facility.

On the secondary side of things, Wyle Laboratories Inc. allocated its $180 million credit facility, and the first-lien term loan opened for trading in the high 101 context. Accuride Corp. also broke for trading on Friday with its institutional wrapping around 101.

Hawkeye Renewables launched its $185 million seven-year senior secured term loan (B2/B) to a relatively large audience, according to a market source.

Furthermore, the deal had already received its first $15 million commitment earlier this week before the tranche even was presented to investors, the source added.

Pricing on the term loan is talked at Libor plus 350 basis points.

The bank meeting was originally anticipated to take place on Wednesday but was postponed for two days as the syndicate had problems finding an available room to host the meeting.

Credit Suisse First Boston is the sole lead bank on the deal.

Proceeds will be used for project financing, which basically entails building up existing plants and new plants.

Hawkeye Renewables is an Iowa Falls, Iowa, manufacturer of alcohol-based fuel derived from corn.

Masonite circles agent banks

Masonite has added Deutsche Bank, UBS Securities, SunTrust and Bank of Montreal to its list of agent banks that will be working on syndicating its proposed $1.525 billion credit facility, according to a market source. As was previously reported, The Bank of Nova Scotia is the administrative agent and left lead on the deal.

SunTrust and Bank of Montreal are already part of the company's existing lender group, the source added.

The facility, which is expected to launch during the week of Feb. 7, consists of a $350 million revolver and a $1.175 billion term loan B. Price talk on the tranches is unavailable at this time.

Previously it was thought that the deal could launch as early as January, although timing was and still is fluid, and details on the loan were hazier with the deal said to have an estimated size of approximately $1.5 billion consisting of a revolver and a term loan B in excess of $1 billion.

Proceeds will be used to help fund Kohlberg Kravis Roberts & Co.'s acquisition of Masonite in an all cash transaction under which Masonite's shareholders will receive C$40.20 per share. The total value of the transaction is about C$3.1 billion.

The Mississauga, Ont.-based building products company's will also be approaching the high-yield market as part of the LBO financing package, probably in February as well, with about $825 million of bond debt that could come in a multi-tranche offering, the source added.

KKR will be providing some equity to fund the acquisition as well.

Both the loan and the bonds are expected to be done in U.S. currency, not Canadian dollars.

Closing of the LBO is subject to customary conditions, including regulatory, shareholder and court approvals.

Telcordia February business

Telcordia Technologies Inc. is expected to hold a bank meeting in February to launch its proposed leveraged buyout credit facility, with some hoping that the deal may come as early as late next week, according to a market source.

"It may launch the end of next week but there is a bit of wood to chop for that to happen. I would say it's 50/50," another source said.

Speculation is that the credit facility will be sized somewhere in the neighborhood of $600 million. "Nothing is finalized yet," the second source added.

Proceeds from the credit facility will be used to help fund the leveraged buyout of the company by Providence Equity Partners and Warburg Pincus for $1.35 billion in cash.

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

Telcordia is a Piscataway, N.J, provider of telecommunications software and services for IP, wireline, wireless and cable.

Wyle 101 plus

Wyle Laboratories allocated its oversubscribed credit facility, with investors not exactly excited over the size of their positions - something that has become somewhat of the norm in the currently hot market environment.

"Allocations were not great," a buyside source said. "The first lien was way oversubscribed and a lot of accounts on the books. We got about 25% of what we put in for on the first lien and about 40% on the second, and I heard we were one of the better allocations."

The $110 million six-year first-lien term loan B (B+) broke for trading around 101 3/8 bid, 101¾ offered and then moved up as the day progressed to 101 5/8 bid, 102 offered, the source said.

The $40 million 61/2-year second-lien term loan (B-) was seen bid at 102 at one point during the session but was not really seen quoted after that, the source added.

Wyle's first-lien term loan B, which was upsized at the start of the week from $100 million, is priced with an interest rate of Libor plus 275 basis points - 50 basis points lower than initial price talk.

The second-lien term loan, which was downsized at the start of the week from $50 million, is priced with an interest rate of Libor plus 650 basis points.

The facility also contains a $30 million five-year revolver (B+) with an interest rate of Libor plus 325 basis points and a commitment fee of 50 basis points.

Proceeds from the credit facility will be used to help fund the acquisition of the Aeronautics Services business of General Dynamics Advanced Information Systems Inc.

Wachovia and Credit Suisse First Boston are the lead banks on the deal.

Wyle is an El Segundo, Calif., provider of testing, research and engineering services to commercial, industrial and government customers.

Accuride straddles 101

Accuride's $550 million seven-year term loan B started trading on Friday with levels quoted at par ¾ bid, 101¼ offered, according to a trader. The term loan B was originally sold to investors at par.

The term loan, which was recently downsized from $615 million as the company upsized its bond deal by $50 million, is priced with an interest rate of Libor plus 225 basis points with a step down after six months to Libor plus 200 basis points if total leverage is 31/2x. At the time of the downsizing, pricing had been reverse flexed from Libor plus 250 basis points.

The $15 million reduction in size of the overall acquisition financing debt package - $50 million added to bonds but $65 million taken away from loans - will be covered by cash on hand.

Accuride's $675 million credit facility (B2/B+) also contains a $125 million five-year revolver with an initial interest rate set at Libor plus 250 basis points.

Proceeds from the credit facility, along with proceeds from the bond deal, will be used to refinance debt in connection with the acquisition of Transportation Technologies Industries Inc. Both Accuride and Transportation Technologies' senior bank debt and Transportation Technologies' subordinated debt are being refinanced.

Earlier this month, Accuride filed a registration form with the Securities and Exchange Commission for an initial public offering of common stock in which the company revealed that it plans on repaying some if its new term loan B debt with a portion of the IPO proceeds. This IPO is expected to take place around March of this year.

Citigroup Global Markets Inc. and Lehman Brothers Inc. are joint lead arrangers on the credit facility, with Citigroup the left lead. UBS Securities LLC is documentation agent.

Accuride is an Evansville, Ind., manufacturer and supplier of wheels for heavy/medium trucks and trailers. Transportation Technologies is a Chicago manufacturer of truck components for the heavy and medium-duty trucking industry.

JPMorgan wins two portfolios

JPMorgan emerged as the winner for two portfolios that were auctioned on Friday, according to a market source.

The portfolios were comprised of a total of $70 million in loans and $70 million in bonds, the source added.

Coventry closes

Coventry Health Care Inc. closed on its new $450 million senior unsecured credit facility (Ba1/BBB-/BB) consisting of $300 million five-year term loan and a $150 million five-year revolver, according to a company news release.

Both the term loan and the revolver carry an interest rate of Libor plus 150 basis points.

CIBC and Lehman Brothers were the lead banks on the deal, with CIBC the left lead.

Proceeds from the term loan, $65 million of revolver borrowings, $500 million of notes and about $221 million of cash on hand were used to fund the acquisition of First Health Group Corp., including the repayment of First Health's outstanding bank debt and related transaction expenses.

Under the acquisition agreement, First Health common stock was converted into a right to receive $9.375 cash and 0.1791 shares of Coventry common stock. Coventry is issuing about 16.5 million shares of its common stock to former First Health stockholders.

Coventry is a Bethesda, Md., managed health care company.

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