Pinnacle Foods decreases deal size; Nexstar breaks at 101 area; Nextel heads to par on refi news

By Sara Rosenberg

New York, Nov. 20 - In the primary market, Pinnacle Foods Corp. decreased its overall credit facility size by $25 million to $675 million following an increase to the company's bond offering by $50 million. While in the secondary, Nexstar Broadcasting Group Inc.'s term loan C allocated and broke for trading in the context of 101 and Nextel Communications Inc. headed slightly lower to par levels as investors await a huge paydown.

Pinnacle Foods' term loan B was reduced to $120 million from $170 million, while the delayed draw term loan was increased to $425 million from $400 million, according to a source close to the deal.

The company priced an upsized $200 million senior notes offering on Thursday at par to yield 8¼%.

"They apparently got a great rate on the bond deal," the source said regarding the changes in sizes.

Pinnacle's credit facility also contains a $130 million revolver.

All three tranches are priced at Libor plus 275 basis points. The delayed draw term loan has an undrawn fee of 125 basis points.

The $120 million term B will be used to help support the acquisition of Pinnacle Foods by JPMorgan Partners, in partnership with C. Dean Metropoulos, from Hicks, Muse, Tate & Furst Inc. The $425 million delayed draw term loan will be used to help finance the Aurora Foods Inc. acquisition.

JPMorgan and Deutsche are the lead banks on the transaction.

Pinnacle Foods is a Cherry Hill, N.J., manufacturer and marketer of branded food products formed by Hicks, Muse, Tate & Furst and C. Dean Metropoulos in 2001 to acquire Swanson frozen foods, Vlasic pickles and condiments, and Open Pit barbeque sauce from Vlasic Foods International. Aurora Foods is a St. Louis producer and marketer of leading food brands.

Nexstar Broadcasting's $195 million term loan C (Ba3) broke for trading on Thursday right around the 101 area, according to a trader. A second trader had the paper quoted more specifically at par 7/8 bid, 101 1/8 offered.

Bank of America is the lead bank on the tranche, which is priced at Libor plus 225 basis points, and will basically be used to refinance the company's existing term loan B.

Nexstar is an Irving, Texas, television broadcasting company.

Nextel's term loan B, term loan C and term loan D all headed down to par bid, 101 offered with no trading activity in sight as news emerged that the company may be rolling all three of these tranches into one giant institutional term loan with lower pricing, according to a trader.

On Wednesday, the term loan B and term loan C were quoted at par 3/8 bid, par 7/8 offered and the term loan D was quoted at par ¼ bid, par ¾ offered, the trader added.

Currently, the Reston, Va., wireless communications company is scheduled to launch a term loan of up to $2.2 billion on Monday with an interest rate of Libor plus 225 basis points. JPMorgan is the lead bank on the transaction.

Goodman Manufacturing Co. LP's new credit facility saw light trading volume in the secondary bank loan market on Thursday with quotes remaining in the same context from the previous day of 101 bid, 101½ offered on the term loan B, according to a trader.

Since the deal broke late in the day Wednesday it was no surprise that trading activity was light in its first day in the secondary. However, according to some, the expectation was that trading would pick up on Thursday once people had a chance to really go through their allocations.

The $150 million institutional tranche carries an interest rate of Libor plus 200 basis points.

Besides the term loan B, Goodman's facility also contains a $150 million revolver and a $100 million term loan A, both priced at Libor plus 200 basis points as well.

JPMorgan is the lead bank on the Houston air conditioning and heating company's refinancing deal.

Meanwhile, Alimentation Couche-Tard Inc.'s credit facility (Ba2), which launched via a bank meeting on Thursday, is looking like a huge success as market sources have reported hearing that commitments are flooding into the book.

"I heard the deal is going very well, very quickly," a fund manager said. "It's rapidly filling up. It's kind of like The Pantry if that's any indication of how it's going to go. The Pantry blew out and is trading above 101. Part of the reason [The Pantry is trading so high] is the Libor floor, which gives investors better yield, so that will probably trade higher than Couche-Tard. But, I would imagine that it's the same kind of industry, same trends."

The facility consists of a $150 million five-year revolver (available in both Canadian and U.S. dollars), a $280 million seven-year term loan B and a C$365 million term loan. All three tranches are priced with an interest rate of Libor plus 300 basis points.

Scotia Capital, CIBC World Markets and National Bank of Canada are the lead banks on the deal.

Proceeds from the term loans will be used to help fund the previously announced acquisition of The Circle K Corp. from ConocoPhillips for a net price of $830 million, including assumed debt of $9.1 million. The transaction is expected to close in December.

The revolver will be used for working capital purposes.

Couche-Tard is a Canadian-based convenience store operator.

Also launching on Thursday was Roper Industries Inc.'s $625 million senior secured credit facility (Ba2/BB+) consisting of a $450 million five-year term loan B and a $175 million three-year revolver, both talked at Libor plus 225 basis points. JPMorgan, Wachovia and Merrill Lynch are the lead banks on the deal.

Proceeds from the credit facility along with proceeds from the issuance of $150 to $200 million of convertible subordinated notes and $150 to $200 million of common stock will be used to help fund the acquisition of Neptune Technology from Investcorp for $475 million, net of cash acquired and including debt assumed, retire Roper's existing senior notes and repay its existing revolver, according to a company news release announcing the acquisition.

Neptune provides automatic meter reading, data collection and metering to the North American water industry; manufactures handdheld data collection equipment and computers, and automation software for meter reading and service order management.

Roper, a Duluth, Ga., diversified company, said it will incur debt extinguishment costs of $13 to $17 million in connection with the redemption of its notes due 2007 and 2010.

And, Tenneco Automotive Inc. launched an $800 million credit facility, consisting of a $400 million term loan B, a $200 million prefunded letter of credit facility and a $200 million revolver, with all three tranches talked at Libor plus 325 basis points, according to market sources. JPMorgan and Deutsche are the lead banks on the deal.

Proceeds will be used to refinance debt and for general corporate purposes.

Tenneco is a Lake Forest, Ill., manufacturer of automotive emissions control and ride control products and systems.

Following up, Thomas H. Lee Partners LP together with chairman and chief executive officer Gregg A. Ostrander and senior management completed their acquisition of Michael Foods Inc., according to a company news release.

To help fund the transaction, Michael Foods obtained a $730 million credit facility consisting of a $100 million revolver (B1/B+) with an interest rate of Libor plus 275 basis points, a $495 million term loan B (B1/B+) with an interest rate of Libor plus 250 basis points and a $135 million eight-year senior unsecured floating-rate tranche (B2/B-) with an interest rate of Libor plus 375 basis points and call protection of 103 in year one, 102 in year two and 101 in year three.

Bank of America and Deutsche Bank acted as lead arrangers, and UBS and Deutsche acted as co-syndication agents, with Bank of America as administrative agent.

Michael Foods is a Minnetonka, Minn., diversified food processor and distributor of egg products, refrigerated grocery products and refrigerated potato products.

Cincinnati Bell Inc. closed on its $525 million five-year term loan D due June 2008 with an interest rate of Libor plus 250 basis points, according to a company news release. Bank of America, Credit Suisse First Boston and Goldman Sachs acted as joint lead arrangers and joint bookrunners on the deal.

Proceeds were used to repay all of the company's $327 million outstanding term A, term B, and term C facilities, and $198 million of its revolver debt. These paid down term loans carried an interest rate of Libor plus 375 basis points, while the revolver bears interest at Libor plus 425 basis points.

Furthermore, the company completed its placement of $540 million 8 3/8% senior subordinated notes. Proceeds from the bond offering were used to purchase all of the company's outstanding convertible subordinated notes due 2009 and to reduce outstanding borrowings under its revolver.

Cincinnati Bell is a Cincinnati provider of data, voice and wireless communications services.

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