Ashtead term loan breaks in the high 101 context; General Growth Properties fills books and then some

By Sara Rosenberg

New York, Nov. 2 - Ashtead Group plc's $675 million first priority asset-based senior credit facility (B1/BB-) due November 2009 allocated on Tuesday, with the term loan trading in the high 101s. Meanwhile, on the primary front, General Growth Properties Inc.'s term loan B is oversubscribed and the pro rata is pretty much done as well ahead of Wednesday's commitment deadline.

Ashtead's $275 million term loan was quoted at par 5/8 bid, par 7/8 offered by the end of the day, according to a trader.

The tranche is priced with an interest rate of Libor plus 250 basis points after being reverse flexed from Libor plus 275 basis points during syndication.

The facility also contains a $400 million revolver with pricing of Libor plus 275 basis points.

Banc of America Securities LLC and Deutsche Bank Securities Inc. are joint lead arrangers on the deal that was fully underwritten by Bank of America, Deutsche Bank Trust Co. and General Electric Capital Corp.

Proceeds will be used to repay the amounts outstanding under the company's existing senior debt facility and its accounts receivable securitization with the balance of the facility available to fund future requirements. At Sept. 30, approximately £270 million was outstanding under the facilities being replaced.

Ashtead Group is a U.K.-based equipment rental group serving the construction, industrial and homeowner markets.

General Growth oversubscribed

General Growth Properties Inc.'s $2 billion four-year term loan B is officially oversubscribed, according to a market source, which is not a total surprise being that the tranche was already half done within two days of launching.

And, the pro rata portion of the deal is said to have about $4 billion in commitments with projections for $5 billion before the deal wraps up, according to a second market source. During the senior managing agent process, north of $2 billion in orders had already come in for the pro rata debt.

The term loan B is talked at Libor plus 250 basis points and is being offered at par, the $250 million three-year revolver is talked at Libor plus 225 basis points, and the $3.9 billion three-year term loan A is talked at Libor plus 225 basis points

Upfront fees for the pro rata strip are 50 basis points for a $100 million commitment and 25 basis points for anything less than $100 million.

General Growth's $9.75 billion credit facility (Ba2/BB+) also contains a $3.6 billion six-month bridge loan.

The $3.6 billion six-month bridge loan is not being syndicated since it that will be taken out by CMBS transactions. In fact, it is expected that only about $1.5 billion of the bridge loan will be left at closing of the credit facility.

Some factors that may be drawing investors to the deal are that it's a large, liquid, relatively well rated deal at BB+ with underlying asset value and a management team that over time wants to take the company to investment-grade status, a source previously said.

Lehman Brothers, Credit Suisse First Boston, Wachovia and Bank of America are joint lead arrangers and joint bookrunners on the deal, with Lehman listed on the left.

Proceeds, along with $500 million of new equity, will be used to help fund the acquisition of The Rouse Co. for $7.2 billion, including the assumption of about $5.4 billion of Rouse debt, and to redo $2 billion of General Growth's unsecured credit.

The transaction is expected to close in the fourth quarter of 2004.

Post closing, General Growth, a Chicago-based shopping mall owner, will have about $23 billion of debt, or about 71% of total pro forma capitalization of $32.5 billion based upon the current stock price. Estimated interest coverage is approximately 1.6x for the first full year after closing, assuming the transaction closes in the fourth quarter.

Texas Genco timing fluid

It is now considered "most likely" that Texas Genco Holdings Inc.'s retail bank meeting will take place some time next week as opposed to this week as was previously expected, according to a market source.

Basically the hold up has nothing to do with the credit facility itself but rather with regulatory issues as the syndicate is just waiting for "the SEC to sign off on the proxy," the source explained.

Because of this reliance on "forces beyond control" - meaning the Securities and Exchange Commission - timing for the retail launch can not be finalized but rather just be estimated at this time, the source added.

Originally, it was anticipated that the $2.2 billion credit facility would be presented to retail investors as early as Oct. 25 before being pushed off again and again. The deal already launched to senior managing agents on Oct. 12.

The facility consists of a $900 million seven-year term loan B talked at Libor plus 275 basis points, a $475 million seven-year delayed-draw term loan B talked at Libor plus 275 basis points, a $325 million five-year revolver talked at Libor plus 250 basis points, a $200 million five-year letter-of-credit facility talked at Libor plus 250 basis points, and a $300 million five-year "special" letter-of-credit facility talked at Libor plus 250 basis points.

Goldman Sachs, Deutsche Bank, Morgan Stanley and Citigroup are lead banks on the deal, with Goldman listed on the left.

Proceeds, combined with proceeds from a proposed bond deal, will be used to help fund GC Power Acquisition LLC's acquisition of Texas Genco from CenterPoint Energy Inc. for about $3.65 billion in cash.

GC Power Acquisition LLC is a newly formed entity owned in equal parts by affiliates of The Blackstone Group, Hellman & Friedman LLC, Kohlberg Kravis Roberts & Co. LP, and Texas Pacific Group.

The transaction, subject to customary regulatory approvals, will be accomplished in two steps. The first step, expected to be completed in the fourth quarter of 2004, involves Texas Genco's purchase of the 19% of its shares owned by the public for $47 per share, followed by GC Power Acquisition's purchase of a Texas Genco unit that will be formed to own its coal, lignite and gas-fired generation plants.

The second step, which is expected to take place in the first quarter of 2005 following receipt of approval by the Nuclear Regulatory Commission, GC Power Acquisition will complete the acquisition of Texas Genco, the principal remaining asset of which will then be Texas Genco's interest in the South Texas Project nuclear facility.

Texas Genco is a Houston wholesale electric power generating company.

Berkline/BenchCraft par plus

Berkline/BenchCraft Holdings LLC's first- and second-lien term loans were being quoted at par ¼ bid, 101 offered on Tuesday - in line with where the deal broke Monday evening at muted activity levels, according to a trader.

The $110 million first-lien term loan (B1/B+) is priced at Libor plus 300 basis points, and the $50 million second-lien term loan (B2/B-) is priced at Libor plus 800 basis points. The $195 million facility also contains a $35 million revolver (B1/B+).

Originally, the first-lien term loan was talked at Libor plus 275 to 300 basis points and the second-lien term loan was sized at $70 million with price talk of Libor plus 650 to 700 basis points, but spreads were changed and final sizes were modified during syndication.

Furthermore, the scheduled amortization on the first lien was increased to 5% a year in the first six years from 1% a year.

The second-lien term loan contains call protection of 103 in year one, 102 in year two and 101 in year three.

There is also a 75% excess cash flow sweep provision in the credit agreement.

Goldman Sachs is the lead bank on the refinancing and dividend deal for the Morristown, Tenn., manufacturer of residential stationary and motion upholstery furniture.

As a result of the second-lien downsizing, the dividend being paid with a portion of the proceeds from the facility is being reduced by $20 million.

The deal is expected to close Wednesday, according to a market source.

New Skies closes

Affiliates of The Blackstone Group completed its acquisition of New Skies Satellites NV on Tuesday, according to a company news release.

To help fund the transaction, New Skies got a new $535 million credit facility (B1/B+) consisting of a $460 million term loan B with an interest rate of Libor plus 275 basis points and a $75 million revolver with an interest rate of Libor plus 275 basis points.

The Hague, Netherlands-based fixed satellite communications company's term loan B was initially talked in the Libor plus 300 to 325 basis points but was reverse flexed during syndication.

Deutsche Bank and ABN Amro were the lead banks on the deal, with Deutsche listed on the left.

Allegheny closes

Allegheny Energy Supply Co. LLC closed on its $1.044 billion term loan B due March 8, 2011 with an interest rate of Libor plus 275 basis points, according to a company news release. Citigroup was the lead bank on the deal.

Proceeds were used to refinance and essentially combine the company's existing term loan B and term loan C into one large term loan with lower pricing. The company had a total of $1.244 billion of term B and term C debt, with the term B priced at Libor plus 300 basis points and the term C priced at Libor plus 425 basis points.

The $200 million that was not refinanced under the new term loan B was paid down using $50 million of cash and $150 million of equity proceeds previously raised by parent company, Allegheny Energy Inc.

Once the Greensburg, Pa., owner and operator of electric generating facilities pays down an additional $200 million of the new term B tranche using cash flow, net cash proceeds from asset sales or net cash proceeds from the issuance of equity, pricing will step down to Libor plus 250 basis points.

"This refinancing is another step in improving the financial condition of Allegheny Energy and is itself a testimony to the progress we've already made," said Paul Evanson, chairman and chief executive officer, in the release. "We remain on track toward achieving our goal of $1.5 billion of debt reduction by the end of 2005."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.