Quality Home Brands breaks; Ozburn-Hessey sets talk; Texas Petrochemicals seeks recommits

By Sara Rosenberg

New York, June 14 - Quality Home Brands allocated its credit facility Wednesday, with the first-lien term loan breaking for trading in the par-plus context and the second-lien term loan breaking for trading in the 101-plus context.

In the primary, Ozburn-Hessey Logistics LLC came out with price talk on its term loan add-on and Texas Petrochemicals LP held a call asking lenders to recommit to its credit facility as the syndication process resumed following a slight hiatus.

Quality Home Brands' credit facility freed for trading during market hours, with the $290 million 61/2-year first-lien term loan quoted at par 3/8 bid, par 5/8 offered on the break, getting as high as par ½ bid, and then settling back down to opening levels where it closed out the session, according to a market source.

As for the $100 million seven-year second-lien term loan, levels opened at 101 bid, 101½ offered and then headed up to 101 3/8 bid, 101 5/8 offered where they stayed through the close, the source said.

The first-lien term loan is priced with an interest rate of Libor plus 250 basis points and contains a step down to Libor plus 225 basis points effective once the company's total debt/EBITDA falls below 3.5x. During syndication, this tranche was upsized from $270 million and the step down was added.

The second-lien term loan is priced with an interest rate of Libor plus 625 basis points and carries call protection of 101 for one year. During syndication, this tranche was downsized from $120 million and pricing was reverse flexed from original talk at launch of Libor plus 650 to 675 basis points.

Quality Home Brands' $420 million credit facility also contains a $30 million six-year revolver with an initial interest rate of Libor plus 250 basis points.

Bear Stearns and BNP Paribas are the lead banks on the, with Bear Stearns the left lead.

Proceeds will be used to fund the acquisition of a lighting company and to refinance existing bank debt.

Quality Home Brands is a Bronx, N.Y., lighting fixtures, ceiling fans and decorative products company.

Secondary weakness persists

The secondary loan market in general continued to feel weaker across the board by about an eighth to a quarter of a point over the course of the trading day, although some par desks did find that volume was relatively decent, according to a trader.

"High yield opened up significantly weaker today. Treasuries were off. People are becoming more and more risk adverse. We're moving off step with the high-yield market," the trader said.

One name that saw a fairly significant drop in levels was General Motors Corp., as its revolver closed out the day quoted at 95 bid, 96 offered, down about 2 points when compared to levels two days ago, a second trader added.

GM is a Detroit-based automaker.

Ozburn-Hessey price talk

Switching to the primary, Ozburn-Hessey released price talk on its $140 million term loan B add-on as the debt was launched to investors with a bank meeting on Wednesday, according to a market source.

The add-on is talked at Libor plus 250 to 275 basis points, the source said.

The company's existing term loan B debt is priced at Libor plus 250 basis points.

If the add-on prices at Libor plus 250 basis points, then the existing debt will stay at Libor plus 250 basis points. However, if the add-on prices at Libor plus 275 basis points, the existing debt will be repriced at Libor plus 275 basis points. Basically, wherever the new debt ends up in terms of spread, the existing debt will price in line, the source explained.

Morgan Stanley is the lead bank on the deal.

Proceeds from the incremental term loan debt will be used to fund the acquisitions of Barthco International Inc., a Philadelphia-based logistics organization, and Turbo Logistics, a Gainesville, Ga.-based logistics management services company.

Ozburn-Hessey is a Brentwood, Tenn.-based third-party logistics provider.

Select Personnel talk surfaces

Price talk on Select Personnel Services also emerged on Wednesday, with both the $85 million revolver and the $215 million term loan being marketed at Libor plus 300 basis points, according to a source.

Goldman Sachs Credit Partners, LP is sole lead arranger, sole bookrunner, syndication agent and administrative agent on the $300 million deal (B2) that launched with a bank meeting Tuesday, and Bank of the West is co-syndication agent.

Proceeds will be used to help fund the acquisition of RemedyTemp Inc. for $17 per RemedyTemp share in cash, or about $169 million.

The transaction is subject to RemedyTemp shareholder approval, completion of financing and other customary regulatory and closing conditions.

Select Personnel is a Santa Barbara, Calif., temporary staffing services company. RemedyTemp is an Aliso Viejo, Calif., professional staffing organization.

Trilogy spread guidance

Another name that came out with pricing guidance was Trilogy as it markets its $400 million first-lien term loan (Ba3/B) in the Libor plus 350 to 400 basis point range and its $160 million second-lien term loan (B2/CCC+) in the Libor plus 600 to 650 basis point range, according to a market source.

Goldman Sachs is the lead bank on the $590 million credit facility that also contains a $30 million revolver (Ba3/B).

Proceeds from the new deal which launched with a bank meeting last Thursday, will be used to help fund the merger of CTC Communications, Choice One Communications and Conversent Communications Inc. and to refinance existing debt.

The new company, named Trilogy, will be the second-largest competitive communications provider in the United States.

Texas Petrochemicals back on track

In other primary happenings, Texas Petrochemicals held a call on Wednesday asking for recommitments toward its $395 million credit facility after syndication on the deal had been put on hold for a few weeks because of problems with the Huntsman Corp. assets that the company is purchasing, according to a market source.

The recommitment process is expected to go on for about a week or two, the source said.

The structure of the deal is the same structure that was seen when it first launched around mid-April - a $280 million seven-year covenant-light term B (Ba3/B+) talked at Libor plus 225 bps to 250 basis points and a $115 million five-year asset-based revolver talked at Libor plus 150 basis points with a 37.5 basis point commitment fee, the source added.

Deutsche Bank and Credit Suisse are joint lead arrangers on the deal, with Deutsche the left lead.

Proceeds will be used to help fund the acquisition of Huntsman's U.S. butadiene and related MTBE operations, which includes a manufacturing facility located in Port Neches, Texas.

The Port Neches manufacturing facility has a capacity of about 900 million pounds of butadiene per year. The addition of these assets creates a business with more than $1.7 billion in revenues on a pro forma basis based on calendar year 2005 results.

Texas Petrochemicals is a Houston-based chemical company.

Natural Products upsizes

Natural Products Group LLC increased the size of its credit facility as the dividend payment that is being funded with this transaction was enlarged, according to a market source.

The seven-year first-lien term loan B was upsized to $385 million from $365 million and the 71/2-year second-lien term loan was upsized to $195 million from $175 million, the source said.

Meanwhile, the dividend payment amount was increased by a total of $50 million, with $40 million coming from the incremental first- and second-lien term loan debt and $10 million coming from additional cash on hand, the source explained.

Pricing on the term loans was left unchanged at Libor plus 300 basis points on the first lien and Libor plus 650 basis points on the second lien.

Natural Products' $605 million credit (up from $565 million) also includes a $25 million six-year revolver with an interest rate of Libor plus 300 basis points and a 50 basis point commitment fee.

CIBC and Credit Suisse are the joint lead arrangers on the dividend recapitalization deal.

Natural Products Group, a Harvest Partners portfolio company, is a Chatsworth, Calif., manufacturer and marketer of branded natural and organic personal care products.

AttachmateWRQ reworks deal

AttachmateWRQ tweaked its credit facility structure, moving some funds out of its first-lien term loan and into its second-lien term loan, increasing pricing on the first-lien term loan and revolver, adding call protection to the first-lien term loan and lowering pricing on the second-lien, according to a market source.

The six-year first-lien term loan B (B2/B) is now sized at $300 million, down from an original size of $320 million, and pricing was flexed up to Libor plus 350 basis points from original talk at launch of Libor plus 325 basis points, the source said.

In addition, 101 soft call protection for one year was added to the first-lien term loan tranche, the source continued.

Meanwhile, the 61/2-year second-lien term loan is now sized at $185 million, up from an original size of $165 million, and pricing was reverse flexed to Libor plus 675 basis points from original talk at launch of Libor plus 700 basis points.

The second-lien term loan carries, and has since launch, call protection of 102 in year one and 101 in year two.

Lastly, pricing on the company's $20 million five-year revolver (B2/B), size unchanged, was flexed up to Libor plus 350 basis points from original talk at launch of Libor plus 325 basis points, the source added. The revolver has a 50 basis point commitment fee.

Recommitments on the transaction were due Wednesday, with allocations hoped to go out Monday or Tuesday of next week.

Credit Suisse and UBS are the lead banks on the $505 million credit facility (overall size unchanged) that will be used to fund the acquisition of NetIQ Corp. for $12.20 per share in cash, in a transaction valued at about $495 million.

AttachmateWRQ, which is owned by an investment group led by Francisco Partners, Golden Gate Capital and Thoma Cressey Equity Partners, is a Seattle-based provider of access and integration software for legacy systems. NetIQ is a San Jose, Calif.-based provider of integrated systems and security management solutions.

Longview Fibre closes

Longview Fibre Co. closed on its new $300 million senior secured seven-year term loan (Ba3), according to a company news release, which carries an interest rate of Libor plus 175 basis points.

Bank of America and Goldman Sachs acted as the lead banks on the deal.

Proceeds were used to retire all of the $215 million principal amount of the company's 10% senior subordinated notes due 2009 and will also be used to help fund the cash portion of a special distribution to stockholders.

Longview announced Wednesday that its board of directors has declared a special cash-and-stock distribution to common stock holders of $7.54 per share, or about $385 million in the aggregate, in connection with its plan to convert to a real estate investment trust.

The aggregate amount of cash payable to shareholders in the special distribution, other than cash payable in lieu of fractional shares, will be limited to $77 million, or about 20% of the total amount of the special distribution.

The special distribution will be payable on Aug. 7.

Longview Fibre is a Longview, Wash., manufacturer of corrugated and solid-fiber containers, and other paper products.

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