TXU softens; Paetec bid higher on paydown; Big West, Del Monte, Six Flags ready launches

By Sara Rosenberg

New York, Jan. 6 - TXU Corp.'s term loan B debt weakened a little bit on Wednesday as investors decided to take some profits after watching the paper spend the past couple of sessions edging higher.

Also in the secondary market, Paetec Holding Corp. saw the bid on its term loan B head upwards after the company announced plans to repay its bank debt with proceeds from a senior secured notes offering.

Over on the new deal front, the market is getting ready to see the launch of a couple of deals on Thursday, including exit facilities from both Big West Oil LLC and Six Flags Inc., and a pro rata refinancing transaction from Del Monte Corp.

TXU loses ground

TXU's term loan B debt saw some negative momentum during market hours as a result of market technicals, according to traders.

The term loan B-1 was quoted by one trader at 84¼ bid, 84¾ offered, down from 84 7/8 bid, 85 3/8 offered, and by a second trader at 84 bid, 85 offered, down from 84¼ bid, 85¼ offered.

The term loan B-2 was quoted by the first trader at 84½ bid, 85 offered, down from 84 7/8 bid, 85 3/8 offered, and by the second trader at 84¼ bid, 85¼ offered, down from 84½ bid, 85½ offered.

And, the term loan B-3 was quoted by the first trader at 83¾ bid, 84¼ offered, down from 84 3/8 bid, 84 7/8 offered, and by the second trader at 83½ bid, 84½ offered, down from 83¾ bid, 84¾ offered.

TXU selling notes

On Wednesday, Energy Future Holdings Corp., the parent company of TXU, said that it plans to commence a private offering of $300 million of senior secured notes due 2020.

Proceeds from the notes will be used for general or other corporate purposes, which may include working capital needs, investment in business initiatives, capital expenditures and prepayment or repurchase of outstanding debt of the company and/or its subsidiaries.

However, according to the second trader, the bond offering did not affect the bank debt's performance.

"Just technicals, nothing really related to the bond deal. Profit taking," the second trader remarked about the bank debt's slide in trading.

TXU is a Dallas-based energy company.

Paetec sees better bids

Paetec's term loan B was bid stronger on Wednesday following news that the company expects to repay borrowings under its credit facility in the near future, according to traders.

The term loan B was quoted by one trader bid in the 99s. By comparison, on Tuesday, one trader saw the paper bid in the 95s and another trader saw the loan bid at 953/4.

Early in the day, Paetec announced plans for a $275 million 8 7/8% senior secured notes offering that is expected to be completed this week.

Proceeds from these notes, along with cash on hand, will be used to fund the bank debt paydown.

Paetec is a Fairport, N.Y.-based provider of integrated communications services.

New deals hitting Thursday

Moving to the primary market, Thursday is shaping up to be a busy day with launches scheduled for Big West Oil, Six Flags and Del Monte.

Big West Oil will be kicking off syndication on a $360 million five-year term loan that is being talked at Libor plus 950 basis points with a 3% Libor floor and an original issue discount of 96.

Bank of America is the lead bank on the deal that will be used for exit financing.

Commitments are due on Jan. 21.

In addition to the term loan, Big West Oil is also getting a $75 million three-year ABL revolver.

Total leverage will be in the area of 2.9 times.

Big West Oil, a wholly owned subsidiary of Flying J Inc., is a Salt Lake City-based complex high conversion refinery.

Six Flags also seeking exit deal

Like Big West Oil, Six Flags' proposed $830 million credit facility that will be presented to lenders on Thursday is going to be used for exit financing as well.

The facility consists of a $150 million five-year revolver and a $680 million six-year term loan, with both tranches talked at Libor plus 425 bps with a 2% Libor floor.

The term loan is being offered at an original issue discount of 99, and the revolver is being offered with a 2% upfront fee.

JPMorgan, Bank of America, Barclays and Deutsche Bank are the lead banks on the deal, with JPMorgan the left lead.

Six Flags is a New York-based regional theme park company.

Del Monte looking to refinance

Rounding out the list for Thursday is Del Monte's proposed $1.1 billion senior secured credit facility that will be used to refinance existing debt.

The facility consists of a $500 million five-year revolver and a $600 million five-year term loan A, with both tranches talked at Libor plus 300 bps.

Details on upfront fees are not yet available, a market source told Prospect News.

Bank of America, BMO and Barclays are the lead banks on the deal that is expected to close in late January or early February.

Covenants include a maximum leverage ratio and a minimum fixed-charge coverage ratio.

Del Monte is a San Francisco-based producer, distributor and marketer of branded food and pet products.

Targa closes

In other news, Targa Resources Inc. closed on its $600 million credit facility (B1/BB-), consisting of a $100 million 41/2-year revolver and a $500 million 61/2-year term loan B.

Both the revolver and the term loan B are priced at Libor plus 400 basis points. The revolver has a 75 bps unused fee. The term loan B has a 2% Libor floor and was sold to investors at an original issue discount of 99.

The revolver was initially launched at $150 million. It was then downsized to the area of $125 million to $130 million before being set at the final level.

Also during syndication, the term loan B was downsized from $550 million, the discount firmed at the tight end of guidance in the 98½ to 99 area, and pricing on both the term loan B and the revolver finalized at the low end of talk of Libor plus 400 bps to 425 bps.

Targa lead banks

Targa's new credit facility was led by Deutsche Bank, Credit Suisse and Citadel.

Proceeds were used to refinance $250 million of 8½% senior unsecured notes due 2013, an existing senior secured term loan due in 2012 and a portion of Targa Resources Investments Inc.'s holdco loan due 2015.

As a result of the term loan B downsizing, less of the holdco loan than was originally planned was taken out, and the revolver downsizing was done given the lower needs at the opco company.

Targa is a Houston-based provider of midstream natural gas and natural gas liquid.

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