Texas Genco upsizes B loan; Propex cuts spread; Intelsat delays launch; Affinia and GenCorp break

By Sara Rosenberg

New York, Nov. 29 - It was a busy day on the primary front Monday - even excluding the massive amounts of new deals that were announced to launch this week - as Texas Genco Holdings Inc. increased the size of its seven-year term loan B by $250 million in response to an equivalent reduction in the proposed bond deal. Meanwhile Propex Fabrics Inc. reduced pricing by 25 basis points across the board on its facility and Intelsat Ltd. pushed off its launch indefinitely because of a failed satellite.

Meanwhile, in the secondary, Affinia Group Inc. and GenCorp. Inc. allocated their credit facilities, with Affinia's B loan floating around the mid-to-high 101 context and GenCorp.'s institutional paper quoted in the low 101 area.

Texas Genco's term loan B is now sized at $1.625 billion with the delayed draw portion of the tranche remaining sized at $475 million. Pricing on the term loan B was left unchanged at Libor plus 250 basis points, the source said.

The bond offering, which is kicking off with a roadshow starting on Wednesday, is now sized at $1.125 billion as opposed to $1.375 billion.

There had previously been talk of the possible addition of a second-lien term loan to the credit facility with a possible reduction to the bond deal, but the syndicate chose to increase the more than two times oversubscribed first-lien term B rather then add a new tranche.

Texas Genco's $2.45 billion credit facility (Ba2/BB) also includes a $325 million five-year revolver with price talk of Libor plus 225 basis points, a $200 million five-year letter of credit facility with price talk of Libor plus 225 basis points and a $300 million five-year special letter of credit facility with price talk of Libor plus 225 basis points.

Goldman Sachs, Deutsche Bank, Morgan Stanley and Citigroup are lead banks on the deal (excluding the special letter of credit facility), with Goldman listed on the left.

Deutsche is leading the syndication of the $300 million special letter of credit facility and is marketing the tranche to special investors, such as hedge funds and insurance companies.

CIT and GE Capital have already signed on to the revolver as co-documentation agents, ABN Amro and Royal Bank of Canada signed on as senior managing agents and NatCity signed on to the lower tier.

Proceeds from the facility, combined with proceeds from the bond deal, will be used to help fund GC Power Acquisition LLC's acquisition of Texas Genco from CenterPoint Energy Inc. for approximately $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. L.P. and Texas Pacific Group.

Texas Genco is a Houston wholesale electric power generating company.

Propex cuts pricing

Propex Fabrics reverse flexed its $175 million credit facility (B3/B+), cutting pricing on both the $65 million five-year revolver and the $110 million seven-year term loan B to Libor plus 250 basis points from Libor plus 275 basis points, according to a fund manager.

"I think it was like six times oversubscribed," the fund manager added.

BNP Paribas is the sole lead bank on the deal.

Allocations are expected to go out within the next couple of days.

Proceeds from the facility, along with proceeds from $150 million 10% senior notes, will be used to finance the acquisition of the Atlanta-based polypropylene fabrics business of BP Amoco, which is being renamed Propex Fabrics, by a group of financial sponsors led by the Sterling Group.

Intelsat delayed on satellite failure

The launch of Intelsat's $650 million credit facility, as well as the roadshow for a bond offering, has been postponed from this week with no date set for the new launches as the syndicate is waiting for resolution on the failed satellite matter, according to a market source.

On Sunday, Intelsat announced that its Americas-7 satellite experienced a sudden and unexpected electrical distribution anomaly that caused the permanent loss of the spacecraft. The satellite was self-insured by Intelsat.

More importantly, though, under the terms of the purchase agreement with Zeus Holdings Ltd. - the reason the debt is being obtained in the first place - the loss of the satellite allows Zeus to cancel the acquisition.

"Zeus Holdings Ltd. has advised Intelsat it is evaluating the impact of the IA-7 failure," the Intelsat news release said.

"They have a lot of satellites. One of them has a malfunction. Not so uncommon in this industry," the market source said. "Maybe they'll renegotiate a small purchase price adjustment. If they get everything resolved quickly, as I expect they will, it probably won't impact the process all that much."

Prior to this news, Intelsat was expected to get a $650 million credit facility consisting of a $300 million revolver and a $350 million term loan B, and $2.55 billion in bonds.

"I don't know that it will necessarily change," the market source speculated about the credit facility structure. "Whether they renegotiate a small purchase price adjustment, they probably won't knock that off the bank debt because it's so small and you want to get as much bank debt as you can. If anything, I think they would take it off the bonds."

Deutsche Bank, Credit Suisse First Boston and Lehman Brothers are the lead banks on the credit facility, with Deutsche listed on the left.

Zeus, a company formed by a consortium of funds advised by Apax Partners, Apollo Management, Madison Dearborn Partners and Permira, originally agreed to acquire Intelsat, a Pembroke, Bermuda-based satellite communications company, in a transaction valued at approximately $5 billion, including approximately $2 billion of existing net debt.

Affinia hits upper 101s

Affinia's seven-year term loan B was seen trading in the mid-to-high 101 context throughout the session as the paper was quoted anywhere from 101 3/8 bid, 101 5/8 offered, 101½ bid, 101¾ offered and, late in the day, as high as 101 5/8 plus bid, 101 7/8 plus offered, according to a trader.

The $325 million term loan B, which was downsized from $400 million during syndication, is priced with an interest rate of Libor plus 250 basis points, after reverse flexing from Libor plus 300 basis points during syndication.

The decision to decrease the B loan resulted from the company's choice to get a new $125 million accounts receivable securitization facility of which $100 million will be drawn. The accounts receivable facility was contemplated from the very start and was even presented to lenders at the bank meeting.

As $100 million will be drawn under the accounts receivable facility, the term loan B technically should have been reduced by $100 million not by $75 million as was the case. But, since there was such strong demand for the institutional paper the company opted to, in a sense, increase the term B by $25 million.

Because of the $25 million "increase" in funded debt, Affinia will not be drawing down on its $125 million six-year revolver at close as was originally contemplated. The revolver is priced with an interest rate of Libor plus 300 basis points, and both the spread and the size were left unchanged throughout syndication.

JPMorgan, Goldman Sachs, Credit Suisse First Boston and Deutsche Bank are joint lead arrangers on the deal, with JPMorgan left lead. UBS is acting as a documentation agent.

Proceeds from the $450 million credit facility (B2/BB-), along with proceeds from a $300 million 10-year senior subordinated notes offering, will be used to help fund The Cypress Group's acquisition of Dana Corp.'s Automotive Aftermarket Group, which is being renamed Affinia Group, for approximately $1.1 billion in cash.

Affinia Group is a producer of automotive replacement products.

GenCorp tops 101

GenCorp Inc.'s institutional paper was bid at 101 1/8 on Monday, according to a buyside source, who admitted that the paper wasn't really trading all that much, making an offer side level unavailable.

"Allocations were okay. I got about 45% of what I put in for," the source said. "Some [of the existing lenders] dropped out, some wanted exactly what they had and some said give me more. So the guys who wanted more ate up the paper of the guys who dropped out."

GenCorp's institutional debt consists of a $25 million six-year term loan B and a $75 million six-year credit-linked institutional letter-of-credit facility priced at Libor plus 300 basis points. The tranches were originally talked at Libor plus 300 to 325 basis points.

The $175 million secured credit facility (B1/BB/BB-) also contains a $75 million five-year revolver with an initial interest rate of Libor plus 275 basis points. Revolver pricing is grid based and can range from Libor plus 225 to 300 basis points depending on leverage.

GenCorp. is a Rancho Cordova, Calif., technology-based manufacturer of aerospace and defense products and systems.

NRG pushes launch to Tuesday

NRG Energy Inc. has decided, for the second time, to delay the launch of its $950 million credit facility, this instance pushing the bank meeting to Tuesday from Monday, according to a market source.

This delay was primarily attributed to the syndicate's decision to give people a day to settle in after the long holiday weekend, the source explained.

The bank meeting had originally been set for Nov. 15 but that date was rescheduled since the company wanted to revise some numbers to present to the market.

Credit Suisse First Boston and Goldman Sachs are the lead banks on the deal, with CSFB left lead.

The facility consists of an $800 million term loan B talked at Libor plus 275 basis points and a $150 million revolver talked at Libor plus 275 basis points.

NRG is a Minneapolis wholesale power generation company.

Nalco closes

Nalco Co. closed on its $1.081 billion term loan B repricing on Monday, according to a market source. Citigroup was the lead bank on the deal.

Under the repricing, the spread on the B loan was lowered to Libor plus 200 basis points from Libor plus 250 basis points.

There is soft call protection of 101 against refinancing/repricing in year one.

Nalco is a Naperville, Ill. provider of water treatment and process chemicals and services.

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