Itron, LS Power, Fleetcor break; Michaels, Travelport slide; McKechnie tweaks deal; Gate sets talk

By Sara Rosenberg

New York, April 30 - Itron Inc., LS Power Group and Fleetcor Technologies, Inc. all saw their credit facilities free up for trading on Monday, Michaels Stores Inc.'s term loan dropped on refinancing news and Travelport Inc.'s strip of institutional first-lien bank debt slipped with the launch of incremental loans.

In primary news, McKechnie Aerospace moved some funds between its first- and second-lien term loans, lowered pricing on both tranches, and gave its second-lien loan a PIK toggle feature, and Gate Gourmet Inc. came out with official price talk on its credit facility now that ratings on the transaction have emerged.

Itron's credit facility allocated and broke for trading on Monday, with the $605 million first-lien term loan quoted at par 1/8 bid, par ½ offered immediately on the open and then trading up to par ¾ bid, 101 1/8 offered, where it closed out the day, according to a trader.

The term loan is priced at Libor plus 200 basis points with a step down to Libor plus 175 bps if leverage is less than 4.5 times.

During syndication, pricing on the term loan was reverse flexed from original talk at launch of Libor plus 225 bps, with the addition of the step down.

Itron's $1.2 billion senior secured credit facility (Ba3/B+) also includes a £50 million first-lien term loan, a $115 million multi-currency revolver and a €335 million first-lien term loan priced at Euribor plus 200 bps with a step down to Euribor plus 175 bps if leverage is less than 4.5 times.

During syndication, pricing on the €335 million term loan was also reverse flexed from original talk at launch of Euribor plus 225 bps, with the addition of the step.

UBS Securities LLC acted as the lead bank on the deal, which was used to help fund the recently completed acquisition of Actaris Metering Systems for €800 million plus the retirement of about €445 million of debt, which totals about $1.7 billion.

Itron is a Liberty Lake, Wash., provider of hardware, software and services to integrate the creation, measurement, collection, management, application and forecasting of data for electric, gas and water utilities. Actaris is a Luxembourg-based gas and water metering company.

LS Power breaks

Another deal to free up during market hours was LS Power, with its strip of institutional first-lien bank debt quoted at par ¼ bid, par ½ offered, according to a trader.

In addition, the company's second-lien term loan was quoted at 101 3/8 bid, 101 7/8 offered, the trader remarked.

The first-lien debt is comprised of an $800 million first-lien term loan (B1/BB-) and a $165 million synthetic letter-of-credit facility (B1/BB-), with both tranches priced at Libor plus 200 bps, while the $250 million second-lien term loan (B3/B) is priced at Libor plus 375 bps.

During syndication, the first-lien term loan was upsized from $700 million and the second-lien term loan was downsized from $300 million, with pricing reduced from original talk at launch of Libor plus 425 bps.

LS Power's $1.365 billion credit facility also includes a $150 million revolver (B1/BB-) priced at Libor plus 200 bps.

JPMorgan, Barclays and Lehman Brothers are the lead banks on the deal.

Proceeds will be used to fund the acquisition of six U.S. natural gas-fired power plants from Mirant Corp.

The U.S. plants being purchased are Zeeland (903 MW), West Georgia (613 MW), Shady Hills (469 MW), Sugar Creek (561 MW), Bosque (546 MW) and Apex (527 MW), constituting a total of 3,619 MW.

LS Power is a fully integrated investor, developer and management team focused on the power sector.

Fleetcor trades atop par

Fleetcor Technologies' credit facility also hit the secondary market on Monday, with levels on its $300 million term loan quoted at par ¼ bid, par ½ offered, according to a trader.

The term loan is priced at Libor plus 225 bps.

During syndication, pricing on the term loan was reduced from original talk at launch of Libor plus 275 bps.

The company's $350 million credit facility also includes a $50 million revolver.

JPMorgan is the lead bank on the deal, which will be used to fund a dividend.

Fleetcor is a Norcross, Ga., management services provider for business fleets.

Michaels dives on refi

In other trading news, Michaels Stores' term loan dropped off in trading as news of a refinancing deal hit the market, according to a trader.

The term loan was quoted at par 1/8 bid, par 5/8 offered, down from previous levels of 101 bid, 101 3/8 offered, the trader said.

At 4 p.m. ET on Monday, Michaels held a conference call to launch a proposed $2.344 billion term loan that is being talked at Libor plus 225 bps with a step down to Libor plus 200 bps if the corporate rating is upgraded to B1.

The term loan will carry 101 soft call protection for one year, the source added.

There will be no financial covenants under the term loan.

Proceeds will be used to replace an existing term loan of the same size that is priced at Libor plus 275 bps. This existing term loan had been repriced early on in the year from Libor plus 300 bps, leaving some to think that this new deal could see a bit of push back, the trader added.

Deutsche Bank is the lead bank on the deal.

Michaels Stores is an Irving, Texas, specialty retailer of arts, crafts, framing, floral, wall decor and seasonal merchandise.

Travelport pressured by add-on debt

Travelport's strip of synthetic letter-of-credit facility and first-lien term loan B bank debt also headed lower on Monday as the company launched $1.09 billion of incremental bank debt to investors, according to a trader.

The strip of institutional first-lien bank debt ended the day at par 3/8 bid, par 7/8 offered, down from previous levels of par ¾ bid, 101 1/8 offered, the trader said.

Travelport's newly launched incremental debt consists of a $25 million synthetic letter-of-credit facility add-on, a $1.04 billion first-lien term loan B add-on and a $25 million revolver add-on.

UBS and Credit Suisse are the lead banks on the deal, which will be used to refinance Worldspan LP's $1 billion credit facility that was obtained late last year in connection with its merger into Travelport.

Travelport is a Parsippany, N.J.-based travel distribution services company.

McKechnie shifts funds, cuts spreads

Moving to the primary market, McKechnie Aerospace shifted some funds out of its second-lien term loan and into its first-lien term loan, reverse flexed pricing on the tranches and added a PIK toggle provision to the second-lien deal, according to a market source.

With the changes, the first-lien term loan B (Ba3/B+) is now sized at $350 million, up from $300 million, and pricing was reduced to Libor plus 200 bps from original talk at launch of Libor plus 250 bps, the source said.

Of the total term loan B amount, $225 million is dollars, $75 million is dollar equivalent in euros and $50 million is dollar equivalent in sterling. It was known since launch that the term loan B would have euro and sterling sub tranches, but specifics sizes were still to be determined.

Meanwhile, the second-lien term loan (Caa1/CCC+) is now sized at $150 million, down from $200 million, pricing was reduced to Libor plus 500 bps from original talk at launch of Libor plus 550 bps and the loan now has a PIK toggle feature that, if elected, would increase pricing to Libor plus 575 bps PIK, the source continued.

Call premiums on the second-lien term loan remained unchanged at 102 in year one and 101 in year two, the source added.

McKechnie's $540 million credit facility also includes a $40 million revolver (Ba3/B+).

Bear Stearns and Morgan Stanley are the joint lead arrangers on the deal, with Bear Stearns the bookrunner. General Electric Capital Corp. is the documentation agent.

Proceeds will be used to help fund JLL Partners' acquisition of the company from Melrose plc for $855.6 million, including $5.6 million of assumed debt.

McKechnie is an Alcester, England-based producer of door latches, rods and struts for aircraft interiors and a distributor of aircraft batteries.

Gate Gourmet price talk

Also in the primary, Gate Gourmet released official price talk on its term loan debt as a B2 rating from Moody's Investors Service and a B rating from Standard & Poor's were announced on Monday, according to a market source.

Both the CHF 425 million funded term loan and the CHF 300 million delayed-draw term loan are being talked at Libor plus 225 bps, the source said.

Prior to the emergence of ratings, speculation was that the term loans may come in the Libor plus 200 bps to 225 bps context.

Gate Gourmet's CHF 850 million credit facility also includes a CHF 125 million revolver with price talk still to be determined. The revolver is rated Ba2/B+ because it is "super-senior in priority," the source added.

Goldman Sachs and Deutsche Bank are the lead banks on the deal, which was launched to U.S. investors with a New York bank meeting on April 24 and to European investors with a London bank meeting on April 23.

Proceeds will be used to refinance existing debt.

Gate Gourmet is a Zurich, Switzerland, provider of airline catering and provisioning services.

Delta closes

Delta Air Lines Inc. emerged from Chapter 11 bankruptcy protection on Monday, according to a company news release.

To help fund the exit, Delta got a new $2.5 billion credit facility consisting of a $600 million five-year first-lien synthetic revolver (B+) priced at Libor plus 200 bps, a $900 million seven-year second-lien term loan B (B-) priced at Libor plus 325 bps and a $1 billion five-year revolver (B+) priced at Libor plus 200 bps.

During syndication, the first-lien synthetic revolver was upsized from $500 million and pricing firmed up at the low end of original guidance of Libor plus 200 bps to 225 bps, the second-lien term loan B was downsized from $1 billion and pricing was reduced from original talk at launch of Libor plus 350 bps, and pricing on the revolver firmed up at the low end of original guidance of Libor plus 200 bps to 225 bps.

JPMorgan, Goldman Sachs, Merrill Lynch, Lehman Brothers, UBS, Barclays Capital, Royal Bank of Scotland, CIT, Credit Suisse and Calyon acted as the lead banks on the deal, with JPMorgan the left lead on the first-lien debt and Goldman Sachs the left lead on the second-lien debt.

Proceeds are being used to repay the Atlanta-based airline company's $2.1 billion DIP facility led by GE Capital and American Express, to make other payments required upon exit from bankruptcy and to increase its cash balance.

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