Bosque raises OID; Calumet tweaks pricing, discount; Tousa up with amendment; LCDX, cash soften

By Sara Rosenberg

New York, Dec. 11 - Bosque Power increased the original issue discount on its term loan on Tuesday, and Calumet Specialty Products Partners LP revised spreads and discounts on its credit facility.

Meanwhile, in trading, Tousa Inc.'s first-lien term loan was a bit higher after an amendment proposal was announced, and LCDX and the cash market in general both ended the day lower as investors were disappointed by the Federal Open Market Committee's latest rate cut.

Bosque Power revised the original issue discount on its $387.5 million seven-year term loan to 99 from the originally proposed level of 991/2, according to a market source.

Pricing on the term loan was left unchanged at Libor plus 450 basis points, the source added.

Bosque Power's $412.5 million credit facility (B1/B+) also includes a $25 million five-year revolver that is priced at Libor plus 450 bps, with a 50 bps commitment fee.

Credit Suisse is the lead bank on the deal, which will be used to help fund the acquisition of the Bosque power generation facility by Arcapita Inc. and Fulcrum Power Services LP from LS Power Group.

Located in Laguna Park, Texas, the Bosque facility commenced operations as a natural gas-fired power plant in 2000 and is currently undergoing conversion to a combined cycle facility with a capacity of over 800 megawatts.

Calumet ups spreads, OIDs

Calumet Specialty Products Partners also came out with changes to its credit facility during the session that included flexing pricing higher and widening original issue discounts, according to a market source.

The $385 million term loan B and the $50 million synthetic letter-of-credit facility are now both priced at Libor plus 400 bps, up from original talk at launch of Libor plus 350 bps, the source said.

Furthermore, the original issue discount on the term loan B and synthetic letter-of-credit facility was changed to 96 from the initially proposed level of 97, the source added.

Bank of America is the lead bank on the $435 million senior secured deal (B1/BB-).

At launch, the facility included a $75 million delayed-draw term loan (for a total deal size of $510 million) but that was nixed a few days after syndication began.

Prior to launch, based on filings with the Securities and Exchange Commission, it was expected that the credit facility would carry a total size of $425 million, consisting of a $375 million term loan, of which $275 million was anticipated to be funded, and a $50 synthetic letter-of-credit facility.

Proceeds from the credit facility, along with the issuance of common units, will be used to fund the acquisition of Penreco from ConocoPhillips Co. and M.E. Zukerman Specialty Oil Corp.

The letter-of-credit facility will support crack spread hedging.

Calumet is an Indianapolis-based producer of specialty hydrocarbon products. Penreco is a Dickinson, Texas-based manufacturer and marketer of highly refined petroleum products and specialty solvents.

Tousa better on amendment proposal

Switching to the secondary, Tousa's first-lien term loan traded a little stronger during market hours on the back of the company disclosing a new amendment proposition, according to a trader.

On Tuesday morning, the Hollywood, Fla.-based homebuilder said in an 8-K filed with the Securities and Exchange Commission that it is asking lenders to amend its first-lien term loan and revolving credit facility to extend through Feb. 1, 2008 the waiver of financial covenants.

The amendment, among other things, would also modify a provision regarding the obligation to pay amounts owed in connection with certain land banking arrangements.

In return for consents, lenders will be paid a 25 bps amendment fee.

Following this news, Tousa's first-lien term loan traded as high as 963/4, and it went out at 96¼ bid, 97¼ offered, up from 96 bid, 97 offered, the trader said.

The trader went on to explain that the amendment wasn't much of a surprise and that the positive momentum in the first-lien term loan was likely a result of investors responding to the proposed amendment fee that they would be paid.

LCDX, cash head lower

LCDX 9 and the overall cash market closed out the session at weaker levels after the Fed only reduced the federal funds rate by 25 bps, according to a trader.

The index went out around 96.35 bid, 96.65 offered, down from Monday's levels of 97.30 bid, 97.50 offered, the trader said.

Cash was off by about a quarter to three-eighths of a point by the end of the day, the trader remarked.

"Market was up an eighth to a quarter pre-Fed and post-Fed it was down. People were disappointed by the 25 bps cut. They were expecting more, or at least hoping for more," the trader added.

Upon disclosing its decision on interest rates, the Federal Open Market Committee said that incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending, and that strains in financial markets have increased in recent weeks.

The committee went on to say that the 25 bps reduction, combined with the policy actions taken earlier, should help promote moderate growth over time.

Stocks also took a dive following the announcement, with Nasdaq closing the day down 66.60 points, or 2.45%, Dow Jones Industrial Average closing the day down 294.26 points, or 2.14%, S&P 500 closing the day down 38.31 points, or 2.53%, and NYSE closing the day down 266.16 points, or 2.63%.

Cal Dive closes

Cal Dive International, Inc. closed on its $675 million senior secured credit facility, according to a company news release.

Bank of America acted as the lead bank on the deal.

The facility consists of a $375 million term loan A priced at Libor plus 225 bps and a $300 million five-year revolver.

Proceeds were used to help fund the acquisition of Horizon Offshore, Inc. for 0.625 of a share of Cal Dive common stock plus $9.25 in cash per Horizon Offshore share and to refinance an existing $250 million revolver.

Cal Dive is a Houston-based marine contractor that provides manned diving, pipelay and pipe burial services to the offshore oil and natural gas industry. Horizon Offshore is a Houston-based provider of marine construction services for the offshore oil and gas and energy industries.

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