Worldspan, Riverdeep, Herbst, Coffeyville, GP, Tishman, Meridian break; McMoRan tweaks deal

By Sara Rosenberg

New York, Dec. 21 - New issues were the name of the game in the secondary market Thursday as everyone rushed to get their deals out before the holidays, with Worldspan LP, Houghton, Mifflin Riverdeep Group plc (Riverdeep Interactive Learning Ltd.), Herbst Gaming Inc., Coffeyville Resources LLC, Georgia-Pacific Corp., Tishman Speyer Properties LP and Meridian Automotive Systems, Inc. all freeing for trading.

Meanwhile, in the primary, McMoRan Oil & Gas LLC made some changes to its second-lien term loan including increasing pricing, adding an original issue discount and sweetening call premiums.

Worldspan's credit facility allocated a broke for trading on Thursday morning, with the $700 million seven-year first-lien term loan B (Ba3/B) quoted at par 3/8 bid, par 5/8 offered and the $250 million eight-year second-lien term loan (B3/CCC+) quoted at par ¾ bid, 101 1/8 offered, according to a market source.

The first-lien term loan B is priced at Libor plus 325 basis points, and the second-lien term loan is priced at Libor plus 700 bps.

The second-lien term loan is callable at par for the first nine months, then at 100.5 for months nine through 12, 101 for months 12 through 18, 101.5 for months 18 through 36 and 100.75 for months 36 through 48.

Worldspan's $1 billion credit facility also includes a $50 million six-year revolver (Ba3/B) priced at Libor plus 325 bps.

Credit Suisse and Lehman are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds will be used to refinance the company's existing senior credit facility and to redeem all of its outstanding senior second-lien secured floating-rate notes due 2011.

The $300 million of outstanding notes will be redeemed in full on or about Jan. 8 at a redemption price of 103.

Simultaneously with the recapitalization, Worldspan is being merged into a subsidiary of Travelport Ltd. in a transaction that values Worldspan at $1.4 billion.

As part of the merger, Travelport is loaning $125 million to Worldspan in exchange for a payment-in-kind note. Furthermore, one of Travelport's parent companies is also loaning Worldspan $125 million in exchange for a PIK note.

Worldspan is an Atlanta-based provider of travel technology services for travel suppliers, travel agencies, e-commerce sites and corporations.

Riverdeep trades atop par

Houghton Mifflin Riverdeep Group's credit facility also hit the secondary early in the session, with the $1.62 billion seven-year term loan B quoted at par 5/8 bid, par 7/8 offered, according to a trader.

The term loan B is priced at Libor plus 275 bps. During syndication, the tranche was upsized from $1.57 billion so as to give the company incremental liquidity. There was more than $3.5 billion in orders for the term loan B.

Houghton Mifflin Riverdeep's $1.87 billion credit facility (Ba3/B) also includes a $250 million six-year revolver priced at Libor plus 275 bps with a 50 bps commitment fee.

Credit Suisse and Citigroup are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds will be used to fund the acquisition of Houghton Mifflin Co., a Boston-based educational publisher, from Thomas H. Lee Partners, Bain Capital Partners, The Blackstone Group and management for $3.4 billion, including the assumption of $1.61 billion in net debt.

HM Rivergroup plc, a newly formed Irish public limited company, is acquiring Houghton Mifflin, concurrently acquiring Riverdeep and then merging the two companies together.

Riverdeep, a Dublin, Ireland, provider of CD-ROM and internet-based educational products for the K-12 market, is being acquired in a share-for-share exchange valuing it at $1.2 billion, including the assumption of net debt.

HM Rivergroup expects to complete the acquisitions of Houghton Mifflin and Riverdeep before the end of 2006, subject to limited conditions, including the receipt of customary regulatory approvals.

Following closing of the transactions, HM Rivergroup will change its name to Houghton Mifflin Riverdeep Group plc.

Herbst frees to trade

Herbst Gaming's was yet another deal to free for trading on Thursday, with the $375 million seven-year funded term loan B quoted at par 5/8 bid, par 7/8 offered and the $325 million one-year, with seven-year final maturity, delayed-draw term loan quoted at par ¼ bid, par ½ offered, according to a trader.

The two term loan tranches are priced at Libor plus 187.5 bps. During syndication, pricing on the debt was reverse flexed from original talk at launch of Libor plus 225 bps.

The delayed-draw term loan has an unused fee of 50 bps. It is expected that funding of the tranche will take place at the end of the first quarter of 2007.

Herbst's $875 million senior secured credit facility (Ba3/B+) also includes a $175 million five-year revolver priced at Libor plus 200 bps, in line with original talk.

Lehman Brothers and Wachovia are the lead banks on the deal that will be used to help fund the acquisition of some MGM Mirage assets and The Sands Regent in Reno, Nev.

Herbst is buying the Sands for about $139 million and MGM Mirage's Buffalo Bill's, Primm Valley and Whiskey Pete's hotel-casinos, which are located in Primm, Nev., for $400 million.

The Sands transaction is expected to close in early January, and the Primm transaction is expected to close by the end of the first quarter of 2007 (which is what the delayed-draw loan will be used for), subject to customary closing conditions, including receipt of necessary regulatory and governmental approvals.

In addition to helping fund the acquisitions, the new credit facility will also refinance existing bank debt and be used for working capital and general corporate needs.

Herbst is a Las Vegas-based slot route operator.

Coffeyville trades in upper pars

Also starting to trade during market hours was Coffeyville Resources' credit facility, with the strip of synthetic letter-of-credit facility and term loan B debt quoted at par ½ bid, par ¾ offered, according to a trader.

The $150 million four-year synthetic letter-of-credit facility and $775 million seven-year term loan B are priced at Libor plus 300 bps with a step down to Libor plus 275 bps based on the company's planned initial public offering of common stock and ratings confirmation. During syndication, pricing on these tranches was flexed up from original talk at launch of Libor plus 275 bps with the addition of the step.

Coffeyville's $1.075 billion credit facility (B2/B+) also includes a $150 million six-year revolver priced at Libor plus 300 bps with a 50 bps unused fee. Pricing on this tranche was also increased from original talk of Libor plus 275 bps during the syndication process.

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

Proceeds will be used for a recapitalization that will include refinancing the company's existing first- and second-lien credit facility and funding a dividend to owners GS Capital Partners and Kelso & Co.

Total leverage is expected in the low 2 times area.

Coffeyville Resources is a Kansas City, Kan., supplier of petroleum and nitrogen fertilizer products.

Georgia-Pacific breaks

Continuing on the new issue path, Georgia-Pacific's $1 billion term loan B add-on (Ba2/BB-) hit the secondary on Thursday, with levels quoted at par 3/8 bid, par 5/8 offered on the open and then moving up to par ½ bid, par ¾ offered, where it closed the session, according to a trader.

The term loan B add-on is priced at Libor plus 175 bps. During syndication, pricing was reduced from original talk at launch of Libor plus 200 bps, however, the company's existing term loan B debt continues to carry a spread of Libor plus 200 bps.

Originally, the company was also planning on getting a $250 million revolver add-on but that was eliminated from the deal after its bond offering was upsized by $250 million to $1.25 billion.

Citigroup, Bank of America and Deutsche Bank are the lead banks on the bank deal, with Citigroup the left lead.

Proceeds from the new term loan debt and the bonds will be used to take out the company's second-lien term loan C.

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

Tishman trades in low pars

Tishman Speyer's credit facility broke for trading too, with the $370 million six-year term loan B quoted at par ¼ bid, par 3/8 offered, according to a market source.

The term loan B is priced at Libor plus 175 bps. During syndication, pricing on this tranche came in at the low end of original guidance of Libor plus 175 to 200 bps.

Tishman's $545 million credit facility (BB-) also includes a $175 million five-year revolver priced at Libor plus 175 bps with a 50 bps unused fee.

Lehman Brothers is the lead bank on the deal that will be used, along with equity and mortgage debt, to fund the acquisition of a large Washington, D.C., office portfolio from The Blackstone Group LP's portfolio company, CarrAmerica Realty Corp.

Leverage is less than 60% through the bank deal.

Tishman Speyer is a New York-based owner, developer, fund manager and operator of first-class real estate.

Meridian seen below par

Lastly, Meridian Automotive's exit financing credit facility freed for trading as well, with the strip of term loan and synthetic letter-of-credit facility debt quoted at 98¼ bid, 99¼ offered, according to a trader.

The $80 million six-year term loan and $25 million six-year synthetic letter-of-credit facility are priced at Libor plus 600 bps, were issued at an original issue discount of 98 and are non-callable for two years. During syndication, pricing on the tranches was flexed up from original talk at launch of Libor plus 550 bps with the addition of the OID.

The company's $175 million credit facility also includes a $70 million five-year asset-based revolver.

Court approval of the exit facility has already been obtained and the company is hoping to emerge from bankruptcy by the end of this month.

Deutsche Bank is the lead bank on the deal.

Meridian is a Dearborn, Mich., supplier of lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers.

McMoRan reworks loan

Moving into the primary market, McMoRan Oil & Gas made a bunch of changes to its $100 million second-lien term loan such as flexing pricing higher, adding an original issue discount of 99½ and adding an extra of call protection, according to a market source.

Under the modifications, the second-lien term loan is now priced at Libor plus 700 bps, up from original talk at launch of Libor plus 600 bps, and the call protection is now 103 in year one, 102 in year two and 101 in year three, as opposed to just 102 in year one and 101 in year two, the source said.

With the changes, the second-lien term loan fully circled, the source added.

JPMorgan and TD Securities are the lead banks on the deal, with JPMorgan the left lead.

Proceeds will be used to refinance debt and for capital expenditures.

McMoRan Oil & Gas is a subsidiary of McMoRan Exploration Co., a New Orleans-based explorer, developer and producer of oil and natural gas.

Sinclair closes

Sinclair Television Group closed on its new $225 million delayed-draw term loan A-1 (Baa3/BB) due December 2012 and priced at Libor plus 125 bps, according to a company news release.

JPMorgan acted as the lead bank on the deal.

Proceeds from the loan, along with cash on hand and additional borrowings under the company's revolving credit facility, will be used to redeem its 8.75% senior subordinated notes due 2011.

Sinclair is a Hunt Valley, Md., diversified television broadcasting company.

Samsonite closes

Samsonite Corp. closed on its $530 million senior secured credit facility (Ba3/BB-), according to a company news release. Merrill Lynch, Goldman Sachs and Deutsche Bank acted as the lead banks on the deal.

The facility consists of a $450 million seven-year term loan B priced at Libor plus 225 bps that was sold to investors with an original issue discount of 99¾ and an $80 million six-year revolver priced at Libor plus 225 bps.

The OID on the term loan B was added during syndication.

Proceeds are being used to help fund tender offers for the company's $164.97 million 8 7/8% senior subordinated notes due 2011 and €100 million floating-rate senior notes due 2010 and to help fund a $175 million special dividend to stockholders.

Samsonite is a Denver-based designer, manufacturer and distributor of luggage and travel-related consumer products.

Metrologic closes

An investor group led by Francisco Partners, C. Harry Knowles, founder and chief executive officer of Metrologic Instruments Inc., and Elliott Associates, LP completed its leveraged buyout of Metrologic, according to a news release.

To help fund the LBO, Metrologic got a new $235 million credit facility consisting of a $125 million seven-year first-lien term loan B (B1/B+) priced at Libor plus 275 bps with a step down to Libor plus 250 bps once the company's total leverage falls below 3.0 times, a $35 million five-year revolver (B1/B+) with a 50 bps undrawn fee and a $75 million eight-year second-lien term loan (Caa1/B-) priced at Libor plus 650 bps with call protection of 102 in year one and 101 in year two.

During syndication, pricing on the first-lien term loan B was reduced from original talk at launch of Libor plus 300 bps with the addition of the step and pricing on the second-lien was reduced from original talk at launch of Libor plus 700 bps.

Morgan Stanley acted as the lead bank on the deal.

Metrologic is a Blackwood, N.J., supplier for data capture and collection hardware, optical products and image processing software.

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