Aeroflex, Integra tweak deals; Chrysler mulls OID change; Myers postponed; Bisys banks stuck with loan

By Sara Rosenberg

New York, July 31 - Aeroflex Inc. came out with some changes to its credit facility including increasing the total amount of term loan debt, creating first-out and first-loss term loan tranches with new pricing and adding call protection and original issue discounts.

Also, Integra Telecom Inc. upsized, increased pricing and revised call protection on its second-lien term loan and unsecured PIK loan and postponed syndication of its downsized first-lien bank debt that has also seen an increase in pricing.

In other primary news, Chrysler Financial is considering revising the original issue discounts on its first- and second-lien term loans, Myers Industries Inc. postponed syndication of its credit facility due to market conditions and Bisys Crump's credit facility is expected to be taken down by the underwriters at revised pricing.

Moving to the secondary, LCDX ended the day lower after having a strong open, and the cash market saw a lot of volume in a "mixed" session.

Aeroflex made a round of modifications to its credit facility as it's pushing to wrap up on Wednesday that included upsizing and retranching the term loan debt at new spread levels, adding call protection and adding original issue discounts, according to fund managers.

The total amount of term loan debt was increased to $525 million from $500 million and is now structured as a $400 million first-out term loan and a $125 million first-loss term loan, as opposed to just one regular term loan tranche, fund managers said.

The first-out term loan is priced at Libor plus 325 basis points, is being sold to investors at a discount of 95 and carries 101 call protection for one year.

The first-loss term loan is priced at Libor plus 375 bps, is being sold to investors at a discount of 92 and carries call protection of 102 in year one and 101 in year two, the fund managers added.

By comparison, the original $500 million term loan was launched with price talk in the Libor plus 275 bps area, with no call protection and no discount.

Aeroflex's $585 million (up from $560 million) senior secured credit facility also includes a $60 million revolver.

The credit agreement contains a total leverage covenant.

Originally, the deal was going to be covenant-light, but the syndicate decided to add the leverage test prior to the July 10 bank meeting, which had been rescheduled from June 28.

Goldman Sachs is the lead bank on the deal, which will be used to help fund the buyout of the company by Veritas Capital for $1.1 billion. Stockholders will receive $14.50 per share in cash.

Based on pro forma adjusted EBITDA for the last 12 months ended March 31, senior secured leverage is 4.2 times and total leverage is 7.3 times. Net-of-cash leverage comes down 0.3 times on each.

Aeroflex is a Plainview, N.Y., provider of high technology services to the aerospace, defense, cellular and broadband communications markets.

Integra reworks deal, postpones first-lien

Integra Telecom made a round of modifications to its second-lien term loan and unsecured PIK term loan, including upsizing the tranches, lifting pricing and sweetening call premiums, according to market sources.

In addition, the company decided to postpone syndication of its first-lien bank debt to a later date after flexing pricing higher and downsizing the debt, sources said.

The second-lien term loan is now sized at $330 million, up from $270 million, pricing was raised to Libor plus 700 bps from original talk of Libor plus 600 bps and call protection was changed to 103 in year one, 102 in year two and 101 in year three from just 102 in year one and 101 in year two.

Meanwhile, the unsecured PIK term loan is now sized at $275 million, up from $215 million, pricing was increased to Libor plus 1,000 bps from original talk of Libor plus 850 bps, the 50 bps step up in pricing after 12 months was removed from the tranche and call protection was changed to 103 in year one, non-callable in year two, 106 in year three, 104 in year four, 102 in year five and 101 in year six from non-callable for one year, then at 106 in year two, 104 in year three and 102 in year four, sources remarked.

As for the first-lien debt that was pushed off, that consists of a $50 million revolver, size unchanged, and a $595 million first-lien term loan B that was downsized from $715 million.

Pricing on the revolver and the first-lien term loan B had been flexed up to Libor plus 425 bps from original talk of Libor plus 325 bps, sources added.

Deutsche Bank and Morgan Stanley are the joint lead arrangers on the deal, and CIBC is the documentation agent.

Proceeds will be used to help fund the acquisition of Eschelon Telecom, Inc. for $30.00 per share or a total purchase price of $710 million, including the repayment of about $144 million in Eschelon debt.

Through this acquisition, one of the largest competitive local exchange carriers in the nation will be formed, as total company revenues are predicted to be more than $700 million annually with more than $200 million in pro forma 2007 EBITDA.

Integra is a Portland, Ore.-based provider of local, long-distance and internet services for businesses. Eschelon is a Minneapolis-based competitive communications services provider of voice and data services and business telephone systems.

Chrysler Financial discussing revised OIDs

Chrysler Financial is currently talking to accounts about changing the original issue discounts on its first- and second-lien term loans to somewhere in the 95 to 96 range, as opposed to at 99 on the first-lien and at 98½ on the second-lien, according to market sources.

The $4 billion five-year first-lien term loan B (B1/BB-/BBB-) is priced at Libor plus 400 bps and the $2 billion six-year second-lien term loan (B2/CCC+/BB) is priced at Libor plus 650 bps.

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

So far, during syndication, pricing on the first-lien term loan B was flexed up from revised talk of Libor plus 300 bps and original talk at launch of Libor plus 275 bps, and pricing on the second-lien term loan was flexed up from revised talk of Libor plus 550 bps and from original talk at launch of Libor plus 500 bps.

In addition, the first-lien term loan B was originally going to be sold at par, then saw the addition of a 99½ OID, which was then changed to 99 and now might be changed again.

The second-lien term loan was also originally going to be sold at par, then saw the addition of a 99 OID, which was then changed to 98½ and now might be changed again as well.

Furthermore, call protection on the first-lien term loan was originally set at 101 in year one and call protection on the second-lien was originally set at 102 in year one and 101 in year two.

The company's $8 billion credit facility also includes a $2 billion five-year ABL revolver (B1/BB-) that is priced at Libor plus 275 bps, in line with original talk at launch.

JPMorgan, Citigroup, Goldman Sachs, Bear Stearns and Morgan Stanley are the joint bookrunners on the deal, with JPMorgan, Citigroup and Goldman Sachs the joint lead arrangers.

Proceeds will be used to help fund the buyout of the provider of financial services for vehicles in the NAFTA region by Cerberus Capital Management LP from DaimlerChrysler AG.

Myers delayed

Myers decided to push off syndication of its $685 million senior secured credit facility (Ba3/B+) and come back to market with the deal at a later date, according to a buyside source.

The facility, which had been launched already with a bank meeting on July 19, consists of a $535 million seven-year term loan and a $150 million six-year revolver.

Price talk at launch had been Libor plus 250 bps.

Goldman Sachs is the lead bank on the deal, which was originally supposed to launch on June 27 but was postponed to post-July 4 business and is now postponed again.

Proceeds will be used to help fund the buyout of Myers by GS Capital Partners in a transaction valued at $1.07 billion, including the assumption or repayment of about $276 million of debt. Shareholders will receive $22.50 per share in cash for each share of common stock they hold.

Myers' shareholders have already approved the buyout.

Myers is an Akron, Ohio, manufacturer of polymer products for industrial, agricultural, automotive, commercial and consumer markets.

Bisys Crump ends up with banks

Bisys Crump's $555 million credit facility (B2/B+) is anticipated to be funded by the underwriters and then they will try to sell down what they can, when they can, according to a market source.

Wachovia, Citigroup and Bear Stearns are the lead banks on the deal.

The facility consists of a $40 million revolver and a $515 million term loan, with both tranches priced at Libor plus 300 bps, the source said.

Pricing on the debt was revised from original talk at launch of Libor plus 225 bps.

Proceeds will be used to help fund JC Flowers' acquisition of Bisys' insurance services group and retirement services business. JC Flowers will be combining its existing commercial insurance business, Crump, with the Bisys business.

The transaction is expected to close on Wednesday.

CEVA flexes up, adds OID

CEVA Group plc increased pricing on its $525 million in incremental bank debt (Ba2/BB-) and added an original issues discount of 99 to the term loan and synthetic letter-of-credit facility add-ons, according to a market source.

The $425 million term loan add-on, the $50 million synthetic letter-of-credit facility add-on and the $50 million revolver add-on are now all priced at Libor plus 300 bps, up from original talk at launch of Libor plus 275 bps, the source said.

As before, the company is repricing its existing bank debt from Libor plus 250 bps to match the add-on pricing.

In addition, the existing bank group is now getting a 50 bps consent fee to approve this deal, the source remarked. The consent has been approved by the majority lenders.

Credit Suisse, Morgan Stanley, Bear Stearns, JPMorgan and UBS are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds will be used to help fund the acquisition of EGL Inc. for $47.50 in cash per share, for a total transaction consideration of about $2 billion.

CEVA is a Hoofddorp, Netherlands-based logistics and supply chain management company. EGL is a Houston-based transportation, supply chain management and information services company.

LCDX lower

Switching to secondary news, LCDX ended the day weaker after opening at much higher levels, according to a trader.

The index went out at 91.80 bid, 92.10 offered, down from Monday's levels of 92 7/8 bid, 93 1/8 offered, the trader said.

However, at the open on Tuesday, LCDX was seen as high as 95¼ bid before steadily declining over the course of the session, the trader continued.

"Equities opened up triple digits now closed down triple digits. High yield indices in the morning were a lot stronger. Maybe that's why LCDX popped in the morning," the trader explained.

As for the cash market, that saw a good bit of trading volume and was described as "kind of a mixed bag" where movement in levels was somewhat name dependant, a second trader added.

InterGen closes

InterGen closed on its $1.55 billion credit facility (Ba3/BB-) consisting of an $800 million term loan B and a $750 million five-year revolver, according to a company news release.

The term loan B is priced at Libor plus 225 bps, and the revolver is priced at Libor plus 150 bps.

During syndication, pricing guidance on the term loan B was revised to Libor plus 250 bps to 275 bps from initial talk at launch of Libor plus 200 bps to 225 bps, but then it ended up settling in at the high end of the original talk.

The term loan B is split between U.S. and euro.

Merrill Lynch, Lehman Brothers and Barclays acted as the lead banks on the deal, with Merrill Lynch the left lead.

Proceeds were used to refinance existing debt, to fund a dividend payment and for working capital needs and general corporate purposes.

InterGen is a Burlington, Mass., power generation company.

Tower Automotive closes

Cerberus Capital Management, LP has completed its acquisition of Tower Automotive, Inc., according to a news release.

To help fund the buyout, Tower got a new $895 million credit facility consisting of a $200 million five-year asset-based revolver, a $60 million synthetic letter-of-credit facility at Libor plus 400 bps, a $275 million six-year first-lien term loan at Libor plus 400 bps, a $235 million euro first-lien term loan at Euribor plus 400 bps, a $75 million seven-year second-lien term loan at Libor plus 750 bps and a $50 million euro second-lien term loan at Euribor plus 750 bps.

The first-lien term loans were sold at a discount of 981/2, with 101 soft call protection for one year.

The second-lien term loans were sold at a discount of 98, with call protection of 104 in year one, 102 in year two and 101 in year three.

During syndication, pricing on the synthetic letter-of-credit facility and the first-lien term loans was increased from talk of Libor plus 325 bps to 350 bps, pricing on the second-lien term loans was increased from talk of Libor/Euribor plus 625 bps to 650 bps, the original issue discounts were added, the first-lien call protection was added and the second-lien call protection was changed from just 102 in year one and 101 in year two.

The credit agreement contains a net senior leverage test, which was also added to the deal during syndication.

JPMorgan and Goldman Sachs acted as the lead banks on the credit facility.

Tower Automotive is a Novi, Mich.-based auto parts maker.

ITC^DeltaCom closes

ITC^DeltaCom, Inc. closed on its $315 million credit facility consisting of a $230 million six-year first-lien term loan, a $10 million five-year revolver and a $75 million seven-year second-lien term loan issued to Tennenbaum Capital Partners, LLC, according to a news release.

Credit Suisse acted as the bookrunner and lead arranger on the deal.

Proceeds were used to help refinance the company's outstanding debt.

ITC^DeltaCom is a Huntsville, Ala., provider of integrated communications services.

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