Worldspan term loan B jumps by about two points from original offer price on first day of trading

By Sara Rosenberg

New York, June 27 - Worldspan LP's $175 million credit facility allocated and broke for trading on Friday, with the term loan B immediately moving up to par ¼ bid, par ½ offered from its initial offer price of 99, according to market sources.

"Allocations were pretty thin," one market source said. "I think they had 50 plus accounts on the book."

Some positive factors cited as influencing the deal included lack of new issuance, relatively decent yield for a B1/BB- credit and decent economic performance in one of the worst possible markets for the travel industry.

The facility consists of a $125 million term loan and a $50 million revolver, both with a term of four years and both priced at Libor plus 375 basis points.

The B loan was upsized by $25 million during the syndication process and pricing on the tranche as well as on the revolver was reverse flexed from price talk of Libor plus 450 to 500 basis points due to strong demand.

The extra funds transferred to the bank deal came from the company's bond offering, which was downsized to $280 million from $315 million. Furthermore, the company increased its capitalized lease deal by $10 million.

As part of the deal structure, there was an option to commit $15 million, with $10 million going towards the term loan and $5 million going towards the revolver, which gave 150 basis points upfront. In return for committing to both tranches in this fashion, the investor got 2% bond economics.

Lehman Brothers and Deutsche Bank are the lead banks on the deal, which is targeted to close on Monday.

Proceeds will be used to help fund the previously announced leveraged buyout of Worldspan from its three airline owners by Travel Transaction Processing Corp., a company formed by Citigroup Venture Capital Equity Partners LP and Teachers' Merchant Bank.

Worldspan is an Atlanta travel technology resource for travel suppliers, travel agencies, e-commerce sites and corporations.

Otherwise, it was more of the same story in the secondary bank loan market with lots of demand for paper but little supply.

"The secondary has been incredibly quiet. I'm dying of boredom," one fund manager said. "There are no offerings and if there are offerings it's because there's a credit problem."

In follow-up news, Riverwood Holdings Inc. $1.6 billion credit facility (B1/B+) underwent some structural changes, as the institutional tranche was reverse flexed and increased in size and the pro rata was decreased in size.

The term loan B was increased by $275 million bringing the new total to $1.125 billion. Pricing on the tranche was flexed down by 25 basis points to Libor plus 275 basis points.

The pro rata portion of the deal was decreased by $275 million bringing the new total size to $475 million, according to a source close to the deal. However, how much of the reduction came from the revolver and how much came from the term loan A.

JPMorgan and Deutsche Bank are joint lead arrangers, Goldman Sachs and Morgan Stanley are syndication agents, and all four are equal underwriter leads. Citibank and Credit Suisse First Boston are co-leads.

Proceeds will be used by the Atlanta paperboard packaging company to help fund the merger with Graphic Packaging International Inc.

Noveon Inc.'s approximately sized $500 million credit facility is "well oversubscribed", a source close to the deal told Prospect News on Friday.

The facility, which launched via a conference call on Monday, is a repricing of the company's existing term loan B. The company is seeking to lower pricing on the tranche to Libor plus 275 basis points, as opposed to the existing rate of Libor plus 350 basis points.

"People are just rolling their commitments, maybe increasing a couple. The size of the deal is the same so people know they will probably get the same amount they have today so it's not going to be a huge blowout," the source said.

More specifically, the new facility consists of $470 million and €30 million, both maturing on Dec. 31, 2009.

Commitments are due by Wednesday and the expectation is that the deal will allocate and close during the week of July 7.

Deutsche Bank and Credit Suisse First Boston are the lead banks on the deal.

Noveon is a Cleveland specialty chemical company.

The books are closing Monday at noon on Infinity Property & Casualty Corp.'s $180 million seven-year term loan, which just launched this past Thursday, according to a fund manager.

"I heard they have like $380 million in the book and it was building from there [so], they're shutting down the order taking process," the fund manager said.

The deal was said to be half subscribed at the bank meeting.

The term loan is talked at Libor plus 300 basis points, which according to some, is a pretty solid spread for the rating of BBB/Baa3.

In addition to the favorable rate, the amortization schedule of 5% in year one, 5% in year two, 7½% in year three, 10% in year four, 17½% in year five, 25% in year six and 30% in the final year was also listed as a plus for the deal.

Lehman and Bear Stearns are the lead banks on the deal.

Proceeds from the term loan will be used to repay the $55 million 10-year note payable to American Financial Group Inc. (the ex-parent company), for working capital and general corporate purposes.

Infinity Property & Casualty is a Birmingham, Ala. auto insurance policy provider.

Coming up next week in the primary is the launch of TransDigm Holding Co.'s $440 million senior secured credit facility on Tuesday morning, according to market sources. Credit Suisse First Boston is the lead arranger.

The facility is expected to consist of a $360 million term loan B and an $80 million revolver, sources said. Price talk on the term loan B is currently Libor plus 375 basis points, "but it will probably come inside of that given market conditions today," a market professional added.

"We looked at [a deal from TransDigm] a year or two ago when it came to market and then we immediately pulled out because of problems with the airline sector. It's still not a great market out there for this kind of stuff. People are a bit weary with anything related to airline stuff. But, market technicals are causing people to be pretty irrational - buying anything out there," a fund manager said.

"If it does actually come at 375 it would be more attractive to where anything else is coming," the fund manager added.

Proceeds will be used to help fund the leveraged buyout of TransDigm by an affiliate of Warburg Pincus and senior members of management from Odyssey Investment Partners LLC.

TransDigm is a Richmond Heights, Ohio supplier of proprietary aerospace components.

Rockwood Specialties Group Inc. is scheduled to hold a bank for a new $535 million senior secured credit facility (B1/B+). JPMorgan, Merrill Lynch and Goldman Sachs are leading the deal.

The facility consists of a $100 million six-year revolver, a $100 million six-year term loan A and a $335 million seven-year term loan B, the source said.

The Princeton, N.J. chemical company is seeking this new credit facility as part of a recapitalization plan that also includes the issuance of $375 million senior subordinated notes due 2011 and a $25 million equity infusion from Kohlberg Kravis Roberts & Co. This new capital structure of bank debt, bonds and equity will replace the existing capital structure, which consists of only bank and bond debt, the source said.

Closing on both the credit facility and the bond offering is expected to occur around July 23.

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