Valor, SI International, Network Communications cut spreads; Venetian oversubscribed; AMR breaks

By Sara Rosenberg

New York, Feb. 2 - Institutional demand for paper continues to be hot with a couple of companies - Valor Communications Group Inc., SI International Inc. and Network Communications Inc. - cutting pricing on their in-market term loan B's on Wednesday anywhere from 25 to 50 basis points, depending on the deal. Meanwhile, the Las Vegas Sands Inc./Venetian Casino Resort LLC bank meeting saw incredible results with the deal already oversubscribed.

In the secondary, American Medical Response Inc. (AMR), EmCare Inc. allocated its credit facility on Wednesday, with the term loan B opening for trading in the 101 context, and Tower Automotive Inc. had a rush of activity at higher levels after the company announced its Chapter 11 filing.

Valor Communications reverse flexed its $890 million term loan to Libor plus 200 basis points from Libor plus 225 basis points and added a step down to Libor plus 175 basis points under certain conditions, according to market sources.

Bank of America and Merrill Lynch are the lead banks on the deal, with Bank of America the left lead.

Valor's $990 million credit facility (BB-) also contains a $100 million revolver.

The Irving, Texas-based provider of telecommunications services is getting the new credit facility in connection with its proposed initial public offering of common stock.

Proceeds from the new credit facility, along with some IPO proceeds, will be used to refinance existing bank debt, including repaying in full the $265 million seven-year senior secured second-lien term loan and $135 million 71/2-year senior subordinated term loan. As of Nov. 30, amounts outstanding under the second-lien loan bore interest at a weighted average annual rate of 9.93% and amounts outstanding under the senior subordinated loan bore interest at an annual rate of 12.88%.

SI resets pricing, upsizes revolver

SI International, like Valor, reduced pricing on its term loan B by 25 basis points and added a step down provision as well, according to a market source.

Pricing on the $100 million six-year term loan B came down to Libor plus 250 basis points from Libor plus 275 basis points and can step down to Libor plus 225 basis points if leverage falls below 21/4x, the source said.

Pricing on the five-year revolver remained at Libor plus 250 basis points; however, the size of the tranche was increased to $60 million from $50 million, the source added.

Wachovia is the lead bank on the deal.

Proceeds from the $150 million credit facility (B1/B+) will be used to help fund the acquisition of Shenandoah Electronic Intelligence Inc. for $75 million in cash and refinance existing debt.

SI is a Reston, Va., provider of information technology and network solutions primarily to the federal government.

Network Communications cuts spreads

Network Communications made one of the larger pricing reductions of the day, reverse flexing its $125.7 million term loan B by 50 basis points to Libor plus 275 basis points from Libor plus 325 basis points, according to a market source.

And, the syndicate didn't stop there. Pricing was also reduced on both pro rata tranches, with the $25 million revolver reverse flexed to Libor plus 325 basis points from Libor plus 375 basis points and the $23 million term loan A reverse flexed to Libor plus 275 basis points from Libor plus 325 basis points, the source added.

TD Securities is leading the $173.7 million leveraged buyout financing package for Network Communications, a publisher of real estate information.

Las Vegas Sands sees strong interest

Las Vegas Sands Inc./Venetian Casino Resort LLC, subsidiaries of Las Vegas Sands Corp., had a very successful launch of its $1.215 billion term loan B on Wednesday as the tranche was already "oversubscribed many times" at a pricing level of Libor plus 175 basis points before day's end, according to a market source.

Of the total term loan B size, $105 million is delayed draw until Aug. 20 with a 75 basis point commitment fee.

The term loan B matures on June 15, 2011.

Las Vegas Sands/Venetian's $1.57 billion amended and restated senior secured credit facility (B1/BB-) also contains a $400 million revolver due March 2010 with an interest rate of Libor plus 175 basis points and a 50 basis point commitment fee.

Essentially through this deal, the company is increasing its term loan by $400 million, expanding its revolver by $275 million, extending the revolver maturity from Aug. 20, 2009, lowering its interest costs and revising some of its covenants to provide greater operational flexibility.

Currently, the company's existing term loan B and revolver carry an interest rate of Libor plus 250 basis points, so this new deal as launched would lower rates by 75 basis points across the board.

Goldman Sachs and The Bank of Nova Scotia are the lead banks on the deal, with Goldman the left lead.

The company's existing $115 million delayed-draw term loan A is expected to be terminated in connection with the amendment and restatement.

Proceeds from the additional term loan debt, along with proceeds from a $250 million senior notes offering, will be used to retire the outstanding 11% mortgage notes due 2010 of Las Vegas Sands Inc. and Venetian Casino Resort.

Proceeds from the remainder of the amended and restated facility will be used to refinance borrowings under the existing senior secured credit facility, to finance a portion of the design, development, construction and pre-opening costs of the Palazzo Casino Resort, and for general corporate purposes.

Closing on the facility is expected to occur this month.

Las Vegas Sands is a Las Vegas hotel, gaming, resort and exhibition/convention company.

AMR, EmCare breaks

AMR, EmCare allocated its credit facility and freed the deal up for trading on Wednesday, with the $350 million term loan B quoted at 101¼ bid, 101¾ offered, according to a trader.

The term loan B is priced with an interest rate of Libor plus 275 basis points.

The $450 million credit facility (B2/B+) also contains a $100 million revolver.

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

Proceeds will be used to help fund Onex Partners LP's acquisition of AMR and EmCare from Laidlaw International Inc. for $820 million - which includes the assumption of about $11 million or $12 million of capital lease debt. Onex will contribute $215 million in equity for acquisition financing as well.

AMR is a Denver-based provider of ambulance transport services. EmCare is a Dallas-based provider of outsourced hospital emergency department physician staffing and management services.

Tower Auto up on bankruptcy

Tower Automotive's bank debt headed higher after the company announced that it filed for Chapter 11, with the first-lien term loan was quoted at par bid, par ¼ offered, up about an eighth on the day, and the second-lien term loan was quoted at 103 bid, 104 offered, up about a point on the day, according to a trader.

When asked why the second-lien debt traded up so much, the trader responded, "I think there's some private information pushing it up."

Tower Automotive said that it filed for Chapter 11 to address liquidity needs and facilitate a debt restructuring.

"Over the past 12 months, we have been focused on launching our significant new business backlog while taking the actions necessary to improve profitability and restore long-term financial strength to Tower so that we can continue to grow and meet our customers' needs," said Kathleen Ligocki, president and chief executive officer, in a company news release.

"Like many companies in the automotive sector, Tower has been affected by lower production volumes on key auto maker platforms and increased steel prices. Additionally, the recent termination of early pay programs at certain auto makers has adversely affected our liquidity. These factors, combined with a complex and restrictive capital structure and an unsustainable debt load have made it clear that a financial reorganization was necessary to resolve these issues.

"By reducing our debt to more manageable levels and simplifying our capital structure, we will be better able to respond to changes in the market place, satisfy the needs of our customers and help ensure our long-term viability."

In connection with its bankruptcy filing, the Novi, Mich.,-based maker of automotive assemblies has arranged commitments for up to $725 million in debtor-in-possession financing from JPMorgan.

Oreck closes

Oreck Corp. closed on its $215 million credit facility (B1/B+) on Wednesday consisting of a $195 million seven-year term loan B is priced with an interest rate of Libor plus 275 basis points and a $20 million six-year revolver with an interest rate of Libor plus 275 basis points and a commitment fee of 50 basis points, according to a market source.

During syndication, the term loan B was upsized by $5 million and both the term loan B and the revolver were reverse flexed from Libor plus 300 basis points on strong oversubscription.

The additional $5 million of term debt was used to increase the size of the dividend payment to sponsor American Securities Capital Partners.

The dividend payment to American Securities totals $69.9 million, with the breakdown being $65.5 million from term loan proceeds (up from $60.5 million), $2.5 million from cash on hand and $1.9 million from a loan amortization payment that was made in December but is being reimbursed because of this new deal.

Based on a last-12-months number through December, pro forma for the refinancing senior and total leverage is 3.63x compared to 3.58x when the deal first launched due to the term loan upsizing.

Royal Bank of Scotland is the lead bank on the New Orleans vacuum company's deal that was used, in addition to paying a dividend, to refinance the existing credit facility.

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