TravelCenters cuts term loan pricing, Euramax shuffles funds into U.S. term B, changes spreads

By Sara Rosenberg

New York, June 23 - Some more primary deals underwent some tweaks Thursday, including TravelCenters of America, which reduced pricing on its term loan by 25 basis points. And Euramax International Inc. increased the size of its first-lien U.S. term loan B while decreasing its sterling-denominated tranche and second-lien term loan B and modifying pricing on all terms.

TravelCenters' reverse flexed pricing on its $680 million term loan to Libor plus 175 basis points from original price talk of Libor plus 200 basis points, according to market sources.

The $805 million senior secured credit facility (B1/BB) also contains a $125 million revolver that was originally talked at Libor plus 225 basis points. Some heard that pricing on the revolver went down by 25 basis points as well to Libor plus 200 basis points, while others heard that it remained at original levels. Confirmation of pricing was unattainable prior to press time.

J.P. Morgan Securities Inc. and Lehman Brothers Inc. are joint bookrunners and co-lead arrangers on the deal.

Proceeds will be used to refinance outstanding borrowings under the company's existing senior secured credit facility and to fund a tender offer for its 12¾% senior subordinated notes due 2009.

TravelCenters of America is a Westlake, Ohio, network of full-service travel centers and heavy truck repair facilities.

Euramax shifts funds

Euramax upsized its first-lien U.S. term loan B, downsized its sterling term loan B and second-lien term loan, and reverse flexed pricing on all first-lien term loan tranches, while increasing pricing on its second-lien term loan, according to a market source.

The seven-year U.S. first-lien term loan B (B1/B+) is now sized at $332 million, up from an original size of $255 million, and pricing on the massively oversubscribed tranche has been finalized at Libor plus 250 basis points, down from original price talk of Libor plus 275 basis points, the source said.

The seven-year sterling term loan B (B1/B+) has been downsized to the equivalent of $28 million from $40 million and pricing on the tranche has been reverse flexed to Libor plus 275 basis points from Libor plus 300 basis points.

The seven-year euro term loan B (B1/B+) was unchanged in terms of size at the equivalent of $90 million but pricing on this tranche was also reverse flexed to Libor plus 275 basis points from Libor plus 300 basis points.

As for the eight-year second-lien term loan (B3/B-), the tranche size was reduced to $190 million from $255 million and pricing was finalized at Libor plus 700 basis points as compared to original price talk at launch of Libor plus 550 to 600 basis points, the source said. The tranche contains call protection of 102 in year one and 101 in year two.

Meanwhile, pricing on the $80 million six-year revolver (B1/B+) firmed up at Libor plus 250 basis points - the low end of original guidance of Libor plus 250 to 275 basis points, the source added.

With these modifications, leverage is now 3.5x through the first lien and 5x through the second lien.

Goldman Sachs and Credit Suisse First Boston are joint bookrunners on the $720 million credit facility.

Proceeds will be used to help fund the leveraged buyout of Euramax by GSCP Emax Acquisition LLC - a newly formed company organized by Goldman Sachs Capital Partners and management of Euramax -for a price of $1.038 billion less net debt and certain company transaction expenses.

Euramax is a Norcross, Ga., producer of aluminum, steel, vinyl and fiberglass products for original equipment manufacturers, distributors, contractors and home centers.

Brand Services drops second lien

Brand Services Inc. decided to remove the proposed $35 million second-lien term loan (B3/CCC+) due July 15, 2012 from its capital structure and upsized its first-lien term loan C (B2/B) by the equivalent amount, according to a market source.

In addition, the syndicate cut pricing on both the newly upsized $287.4 million first-lien term loan and the $15 million seven-year synthetic letter-of-credit facility by 25 basis points to Libor plus 300 basis points, the source said.

Lastly, the company is now trying to raise some Canadian money as a sub-limit to the term loans, and if that happens, the Canadian spread will likely be set at Libor plus 325 basis points, the source added.

According an 8-K previously filed with the Securities and Exchange Commission, the company had always hoped to price the term loan at Libor plus 275 basis points if it were rated in line or better and had the same outlook as the facilities under the existing credit agreement, and, in all other cases, at Libor plus 300 basis points.

Credit Suisse First Boston and JPMorgan are joint lead arrangers and joint bookrunners on the deal, with CSFB the left lead. JPMorgan is also syndication agent.

Proceeds from the term loans will be used to fund the acquisition of the operating assets of the Aluma Systems group of companies for C$255 million. In addition to the new bank debt, JPMorgan Partners has provided a commitment of $30 million of equity financing to help fund the transaction as well.

Brand Services is a Chesterfield, Mo.-based provider of scaffolding services. Aluma is a Toronto-based provider of services to customers in the scaffolding and concrete construction industries.

Rexair adds second-lien

Rexair Inc. reduced its first-lien five-year term loan B by $30 million and created a new $30 million six-year second-lien term loan with price talk of Libor plus 750 basis points, according to a fund manager.

Pricing on the downsized $94 million first-lien term loan B (B1/B) remained at Libor plus 325 basis points, the fund manager added.

The $20 million five-year revolver (B1/B) was unchanged in terms of size and pricing, which is set at Libor plus 325 basis points as well.

The first-lien term loan is being offered to investors at par while revolver commitments of $10 million get an upfront fee of 75 basis points.

Changes to the credit structure were made late Tuesday afternoon.

Credit Suisse First Boston is the sole lead arranger on the $144 million deal that will be used to fund Rhone Capital LLC's acquisition of the company from Jacuzzi Brands Inc. for about $170 million.

The acquisition, which is subject to financing, antitrust approval and other customary closing conditions, is expected to close by July 2.

Following completion of the acquisition, Jacuzzi will retain a 30% interest in Rexair.

Rexair is a Troy, Mich.-based manufacturer of the Rainbow vacuum cleaner system for the global direct sales market.

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