TXU, Georgia-Pacific inch higher; Dayton extends deadline; Press Ganey nets interest

By Sara Rosenberg

New York, Feb. 22 - Texas Competitive Electric Holdings Co. LLC's (TXU) term loan Bs gained some ground on Friday in decent trading volume, and Georgia-Pacific Corp.'s term loan B was active and higher as well.

In other news, Dayton Superior Corp. decided to leave the books open on its credit facility past Friday's deadline and has not yet picked a new deadline, and Press Ganey Associates, Inc.'s credit facility is moving along quite nicely in terms of syndication, well enough so that the deal is currently expected to get done at initial terms.

Texas Competitive's term loan B-2 and term loan B-3 both were slightly stronger on Friday with a good amount of activity seen, especially in the first half of the day, according to traders.

The term loan B-2 was quoted at 91 7/8 bid, 92 3/8 offered, and the term loan B-3 was quoted at 91¾ bid, 92¼ offered, with both tranches up by about an eighth of a point, traders said.

Recent chatter has been that the lock-up on Texas Competitive's $3.45 billion term loan B-3 will end on Feb. 28, making it possible that the underwriters will then try to sell down some of that paper in the secondary market.

"It's potentially starting up some interest and guys might be making some room for it," one trader said about the lock-up rumor.

The trader went on to explain that the term loan B-1 has no call protection, unlike the B-2 and B-3, which some investors find favorable in this market since it allows for the opportunity to get paid down at par.

Texas Competitive is a Dallas-based energy company.

Georgia-Pacific rises

Also seeing good volume and higher levels during the session was Georgia-Pacific's term loan B, according to a trader.

The term loan B was quoted at 92 bid, 93 offered, up from 91½ bid, 92½ offered, the trader said.

"This thing keeps grinding higher," the trader remarked. "I don't think there's any credit specific reason. It's a good quality name. It's very liquid. This thing got beaten up. [Now] guys are getting back interested in it."

Georgia-Pacific is an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals.

Dayton stays open

Switching to primary happenings, Dayton Superior opted to extend the commitment deadline on its $250 million credit facility from Friday to an undetermined date so as to give potential investors more time to work on the transaction, according to a market source.

The facility consists of a $100 million six-year term loan (B1/BB-) that is talked at Libor plus 425 bps to 450 bps, with an original issue discount of 98, and a $150 million asset-based revolver that is talked at Libor plus 225 bps, with a 37.5 bps commitment fee.

Financial covenants include a maximum leverage ratio and a minimum interest coverage ratio.

GE Capital is the lead bank on the deal that will be used to refinance the company's existing $130 million revolver and retire its 10¾% senior second secured notes due in September 2008.

Upon completion of the refinancing, drawdowns against the new revolver are expected to be about $65 million.

Dayton Superior is a Dayton, Ohio-based provider of specialized products for the non-residential concrete construction market.

Press Ganey sees smooth sailing

Syndication of Press Ganey's credit facility is going very well, according to a market source, who said that the deal is currently expected to be fully circled at initial terms by closing.

Commitments on the credit facility, which just launched on Feb. 14, are due on Feb. 28.

The $220 million deal consists of a $20 million revolver and a $200 million first-lien term loan, with both tranches talked at Libor plus 400 bps.

The term loan is being offered with an original issue discount of 98.

The revolver has a 50 bps unused fee.

Lehman Brothers and GE Capital are the lead banks on the deal that is mostly being marketed towards banks, with Lehman the left lead.

Proceeds will be used to help fund Vestar Capital Partners' acquisition of a majority interest in the company from American Securities Capital Partners, LLC.

Other financing will come from $100 million of mezzanine debt priced at 12½% being led by Lehman and ICG, and Vestar and management are contributing over 50% in equity.

The mezzanine debt is already fully committed.

First-lien leverage is around 3.8 times, and leverage through the mezzanine is around 5.75 times.

Press Ganey is a South Bend, Ind.-based provider of quality improvement services to hospitals and health care facilities.

Axcan shifts funds

Axcan Pharma Inc. moved some funds out of its revolver and into its term loan A, according to a market source.

The revolver is now sized at $115 million, down from $125 million, while the term loan A is now sized at $175 million, up from $165 million, the source said.

Pricing on the two tranches is Libor plus 350 bps, and the term loan A was sold at an original issue discount of 96.

There is soft call protection on the term loan A of 102 in year one and 101 in year two.

Amortization on the term loan A is 5% in year one, 7.5% in year two, 7.5% in year three, 10% in year four, 12.5% in year five and 57.5% in year six.

Axcan's term loan A was added to the credit facility structure earlier on in syndication when the company decided to remove a $385 million seven-year term loan B that was being talked at Libor plus 350 bps, with an original issue discount in the range of 96 to 97 and call protection of 102 in year one and 101 in year two.

To make up for the lost term loan funds, the company increased the size of its bond offering to a $460 million two-tranche deal from a $240 million single-tranche senior unsecured deal.

However, Axcan only ended up pricing $228 million of senior secured notes. It withdrew from market a proposed $235 million tranche of eight-year senior unsecured notes that is going to be provided for through a bridge loan.

Bank of America, HSBC Bank and RBC are the lead banks on the $290 million senior secured credit facility (Ba2/BB-) and the bonds.

Proceeds from the financing will be used to help fund the buyout of the company by TPG Capital for $23.35 per common share. The all-cash deal has a total value of $1.3 billion.

When details on the buyout financing first came out in filings with the Securities and Exchange Commission, it was said that the credit facility would include a $350 million term loan B and a $125 million revolver for a total size of $475 million and that the bond deal would consist of a $275 million senior unsecured notes offering.

However, prior to the launch of the credit facility, the term loan B was upsized to $385 million and the bond deal was downsized to $240 million.

Axcan is a Mont-Saint-Hilaire, Quebec-based pharmaceutical company focused on the treatment of gastrointestinal disorders.

Boise closes

Aldabra 2 Acquisition Corp. completed its purchase of the paper, packaging and newsprint assets of Boise Cascade LLC, which includes Boise White Paper LLC, Boise Packaging & Newsprint LLC and Boise Cascade Transportation Holdings Corp., for $1.625 billion.

Aldabra, a special purpose acquisition corporation that was formed to acquire an unidentified operating business, was renamed Boise Inc. following completion of the transaction.

To help fund the acquisition, Boise got a new $1.2357 billion senior secured credit facility consisting of a $250 million five-year revolver (Ba2/BB+) priced at Libor plus 325 bps, a $250 million five-year term loan A (Ba2/BB+) priced at Libor plus 325 bps, a $475 million six-year first-lien term loan B (Ba2/BB+) at Libor plus 350 bps and a $260.7 million seven-year second-lien term loan (B2/B) priced at Libor plus 700 bps.

For commitments towards the revolver and the term loan A, lenders got a two-point discount for orders of $75 million and up, a 11/2-point discount for orders of $50 million and up, and a one-point discount for orders of $25 million and up.

The first-lien term loan B has was issued at an original issue discount of 95, has a 4% Libor floor, and carries call protection of 102 in year one and 101 in year two.

The second-lien term loan was issued at an original issue discount of 90, has a 5½% Libor floor, and is non-callable for three years, then at 105 in year four, 103 in year five and 101 in year six.

During syndication, the Libor floor on the second-lien loan was increased from 4½% floor, the original issue discount was widened from the 95 area and call protection was changed from non-callable for two years, then at 105 in year three, 103 in year four and 101 in five.

Covenants under the revolver, term loan A and first-lien term loan B include total leverage, interest coverage and capital expenditures. The second-lien term loan covenant package includes total leverage and capital expenditures.

Goldman Sachs and Lehman Brothers acted as the joint lead arrangers and joint bookrunners on the deal, with Goldman the administrative agent on the first-lien debt and Lehman the administrative agent on the second-lien debt. Goldman acted as the syndication agent on the entire deal.

Boise is a Boise, Idaho-based manufacturer and seller of uncoated free sheet, market pulp and containerboard.

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