Rental Service, Freescale, GM cuts spreads; Focus pulled; Trident wraps syndication; HCA climbs

By Sara Rosenberg

New York, Nov. 17 - Rental Service Corp. reduced pricing on its second-lien term loan tranche amid strong investor demand, and Freescale Semiconductor Inc. and General Motors Corp. both lowered pricing on their term loans.

In other primary news, Focus Corp. pulled its deal from market and Trident Resources Corp. wrapped up syndication for its pay-in-kind loan.

Meanwhile, in the secondary, HCA Inc.'s term loan debt maintained its positive momentum as levels ticked higher in active trading once again.

Rental Service reverse flexed pricing on its $1.13 billion second-lien term loan (B3/B-) to Libor plus 350 basis points from original talk at launch of Libor plus 375 bps due to the strong market reception that the loan received, according to a market source.

Pricing on the company's $1.3 billion asset-based revolver (Ba2/BB-) and $400 million asset-based term loan (Ba2/BB-) was left unchanged at Libor plus 175 bps, the source added.

Deutsche Bank and Citigroup are the lead banks on the $2.83 billion deal, with Deutsche the left lead.

Proceeds from the credit facility, along with $620 million of senior notes and $585 million of equity, will be used to help fund the acquisition of Rental Service by Ripplewood Holdings and Oak Hill Capital Management.

The sponsors are buying Rental Service from Atlas Copco for $3.4 billion, plus up to $400 million of additional consideration in the form of notes, based on the achievement of profitability targets through 2008. Atlas Copco will retain a 14.5% stake in the company.

The eight-year senior notes priced on Friday at par to yield 9½%. Price talk on the notes had originally been in the 9¾% area.

Scottsdale, Ariz.-based Rental Service is the second-largest heavy equipment rental company in the United States.

Freescale reverse flexes

Freescale Semiconductor reduced pricing on its $3.5 billion seven-year term loan B to Libor plus 200 bps from original talk at launch of Libor plus 225 bps, according to a market source.

Pricing on the company's $750 million six-year revolver remained at Libor plus 225 bps, the source added.

The two tranches contain only incurrence-based covenants.

Citigroup, Credit Suisse, JPMorgan, Lehman Brothers and UBS are joint bookrunners on the $4.25 billion senior secured credit facility (Baa3/BB), and Citigroup and Credit Suisse are joint lead arrangers. Citigroup is administrative agent, Credit Suisse is syndication agent and JPMorgan is documentation agent.

Proceeds from the credit facility will be used to help fund the leveraged buyout of Freescale by a private equity consortium, which is led by The Blackstone Group and includes The Carlyle Group, Permira Funds and Texas Pacific Group, for $40.00 per share in cash. The total equity value of the transaction is $17.6 billion.

Other LBO financing will come from $5.95 billion of high-yield bonds and equity.

Leverage through the secured debt is 1.6 times, and total leverage is 4.9 times.

Freescale is an Austin, Texas, designer and manufacturer of embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets.

GM trims pricing

Also on the pricing front, General Motors reduced the spread on its $1.5 billion seven-year senior secured term loan (Ba3/B+/BB) to Libor plus 237.5 bps from original talk at launch of Libor plus 275 bps, according to a market source.

There is, and has been since launch, 101 soft call protection for one year.

JPMorgan and Credit Suisse are the joint lead arrangers on the deal, with JPMorgan the administrative agent.

Security is a first-priority interest in machinery and equipment and special tools located at GM's U.S. manufacturing facilities.

Proceeds will be used to enhance the Detroit-based automaker's liquidity position.

Focus cancels deal

Focus has opted to remove its proposed credit facility (B-) from the market because it "couldn't get the deal done with the dividend," according to a market source.

The company will instead redo the credit facility as an all Canadian transaction syndicated strictly to the Canadian commercial bank market, the source said.

The pulled facility consisted of a C$30 million revolver talked at Libor plus 325 bps, a $146.5 million first-lien term loan talked at Libor plus 325 bps and a $62.5 million second-lien term loan talked at Libor plus 700 bps.

The second-lien term loan was going to carry call premiums of 103 in year one, 102 in year two and 101 in year three.

Credit Suisse and BMO Capital Markets were acting as the joint bookrunners on the revolver and first-lien term loan, and Credit Suisse was acting as the bookrunner on the second lien.

Proceeds were going to be used to fund the acquisitions of Sunbow Consulting Ltd., a provider of engineering and legal survey services to the land development industry, and DPH Engineering Inc., an engineering, procurement and construction management company.

In addition, proceeds were going to be used to pay a dividend to the company's equity partner, KRG Capital Partners.

Focus is an Edmonton, Alta., consulting firm that provides a range of engineering, geomatics, planning and project management services to clients involved in oil and gas, oil sands, infrastructure, land development and environmental projects.

Trident shuts books

Trident Resources completed syndication of its $270 million five-year loan that carries an interest rate of PIK Libor plus 1,200 bps for the first three years and cash pay Libor plus 1,200 bps for the last two years, according to a market source.

Lenders also got warrants for 10% of the company.

Allocations on the deal are expected to go out on Monday, and closing is targeted for Wednesday.

Credit Suisse is the lead bank on the loan that will be used to pay off the company's existing unsecured loan and provide additional liquidity.

Trident is a Calgary, Alta.-based company focused on the discovery and commercial development of natural gas in coal resources in the Western Canadian Sedimentary Basin.

HCA trades strong

Switching to secondary news, HCA's term loan debt continued to move higher in trading on Friday with the paper being one of the more active names in an otherwise tame session, according to a trader.

The $8.8 billion seven-year term loan B (Ba3/BB) closed the day at par ¾ bid, 101 offered, up from previous levels of par 5/8 bid, par 7/8 offered, the trader said. When the loan first freed for trading on Tuesday, it was being quoted at par ½ bid, par 3/4.

As for the $2.75 billion six-year term loan A (Ba3/BB), that closed the day at par bid, par ¼ offered, up from previous levels of 99¾ bid, par offered, the trader remarked. When the loan broke on Tuesday, it opened at 99½ bid, 99¾ offered.

The term loan B is priced with an interest rate of Libor plus 275 bps, in line with original price talk at launch, although during syndication a step down to Libor plus 250 bps was added to the tranche.

The term loan A is priced at Libor plus 250 bps, also in line with original talk.

HCA got these two term loans, along with a $2 billion six-year senior secured revolver (Ba3/BB) at Libor plus 250 bps, a $2 billion six-year asset-based revolver (Ba2/BB) at Libor plus 175 bps and a $1.25 billion seven-year European term loan (Ba3/BB) at Euribor plus 250 bps, to help fund its leveraged buyout by Bain Capital, Kohlberg Kravis Roberts & Co., Merrill Lynch Global Private Equity and company founder Thomas F. Frist Jr. - which was completed on Friday.

Pricing on the European term loan was reverse flexed during syndication by 25 bps from original talk at launch of Euribor plus 275 bps.

Bank of America, Citigroup, JPMorgan, Merrill Lynch, Deutsche Bank and Wachovia acted as the bookrunners on the $16.8 billion deal, with Bank of America the left lead.

HCA is a Nashville, Tenn., health care services company.

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