Weather Channel dips on refi; RCN up with buyout; ILFC adds loan; N.E.W. Customer floats talk

By Sara Rosenberg

New York, March 5 - The Weather Channel (TWCC Holding Corp.) saw its term loan B soften in trading on Friday after news surfaced that the debt will be refinanced, and RCN Corp.'s term loan strengthened after the company revealed that it is being acquired.

Meanwhile, over in the primary market, International Lease Finance Corp. (ILFC) decided to approach lenders with an additional term loan tranche since the current in-market deal is going so well, and pricing on the in-market loan firmed at the low end of talk.

Also on the new deal front, N.E.W. Customer Service Cos. Inc. came out with price talk on its credit facility as the transaction is getting ready for its upcoming launch.

Weather Channel slides

Weather Channel's term loan B inched its way lower in the secondary market after investors were told that the debt will be refinanced by a new term loan, according to traders.

The term loan B was quoted by one trader at par bid, 101 offered, down from previous levels of par ¼ bid, 101¼ offered, and by a second trader at par bid, par 3/8 offered.

The new $1.3 billion term loan B that the company will launch with a bank meeting on Tuesday at 11 a.m. ET will mature on Sept. 14, 2015, which is the same maturity as the existing term loan B, and it will have the same covenants as the existing credit agreement.

Weather Channel lead banks

Deutsche Bank is the lead arranger on what is essentially a repricing deal for Weather Channel and is a joint bookrunner with Credit Suisse.

Price talk is still to be determined, a market source told Prospect News, with details expected to come out at launch.

It is, however, known that the new loan will include 101 soft call protection for one year.

Weather Channel is an Atlanta-based media company devoted to bringing weather news via television, internet and mobile devices.

RCN rises

RCN's term loan was better on Friday on the back of news that the company is being bought out by ABRY Partners, which is expected to result in this debt being taken out, according to traders.

The term loan was quoted by one trader at 99 3/8 bid, 99 7/8 offered, and by a second trader at 99¼ bid, 99¾ offered. The last levels the first trader had seen on this loan were from a few weeks ago since the paper does not trade a lot, and at that time, it was seen in the mid-90s context.

Under the agreement, RCN, a Herndon, Va.-based broadband services provider, will be acquired for $15 per share. The transaction is valued at $1.2 billion, including the assumption of debt.

Closing on the buyout is expected in the second half of this year, subject to receipt of stockholder approval, regulatory approvals and satisfaction of other customary conditions. The transaction is not subject to any financing condition.

RCN plans new facilities

To help fund the buyout, RCN has received a commitment for $885 million in new credit facilities, with SunTrust, GE Capital and Société Générale the bookrunners, and SunTrust the left lead and the administrative agent.

The facilities are split into two transactions - one $620 million deal for RCN's cable business, consisting of a $40 million five-year revolver and a $580 million six-year term loan, and one $265 million for its fiber business, consisting of a $25 million five-year revolver and a $240 million six-year term loan.

Expected ratings on the cable facility are high single-Bs and expected ratings on the fiber facility are mid single-Bs.

Timing for the bank meeting has not yet been determined; however, it is expected that it may coincide with roughly the end of the 40-day go shop period (April 14) that RCN is entitled to under the buyout agreement.

Other financing for the transaction will come from equity.

Six Flags steady with numbers

Six Flags Theme Parks Inc.'s exit term loan held firm in trading after the company released fourth-quarter earnings results, according to traders.

The term loan was quoted by one trader at 99¼ bid, 99¾ offered, and by a second trader at 99 bid, 99¾ offered, with both putting the paper at unchanged on the day.

For the quarter ended Dec. 31, Six Flags reported a net loss of $194 million, or $2.51 per share, compared to a net loss of $79 million, or $1.46 per share, in the previous year.

Loss from continuing operations in the quarter was $125.9 million, compared to $203.6 million in the fourth quarter of 2008.

Total revenue for the quarter was $101.8 million, down 14% from $118.1 million in the prior year.

In addition, adjusted EBITDA for the quarter decreased by $16.5 million to an $11.3 million loss compared to positive $5.2 million in the 2008 quarter.

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

ILFC seeks additional loan

In other news, International Lease Finance Corp. is now looking to get a $550 million six-year term loan in addition to the $750 million senior secured term loan (Ba2/BBB/BBB-) that was launched to investors in late February, according to a market source.

The $550 million loan will be secured by different airplanes than the $750 million loan and is being raised for a separate entity.

Price talk on the $550 million is Libor plus 500 basis points with a 2% Libor floor and an original issue discount of 98, the source said.

Furthermore, the $550 million includes 101 soft call protection for one year.

Proceeds will be used to refinance existing debt.

Commitments are due during the week of March 8.

ILFC firms pricing

Also on Friday, International Lease Finance set pricing on its $750 million term loan at Libor plus 475 bps, the tight end of initial talk of Libor plus 475 bps to 500 bps, the source remarked.

As before, the loan includes a 2% Libor floor and 101 soft call protection for one year, and is being offered at an original issue discount of 98.

Proceeds from this term loan will be used to repay existing debt as well.

Bank of America and Goldman Sachs are the lead banks on both term loans, with Bank of America the left lead.

International Lease is a Los Angeles-based leaser and remarketer of advanced technology commercial jet aircraft to airlines. The company is a wholly owned subsidiary of American International Group Inc., a New York-based insurance and financial services firm.

N.E.W. Customer talk emerges

N.E.W. Customer Service began circulating some price talk on its proposed $1.1 billion credit facility ahead of the Tuesday bank meeting that will officially launch the deal into syndication, according to a market source.

The $700 million first-lien term loan is being talked at Libor plus 425 bps with a 1.75% Libor floor, and the $400 million unsecured term loan is being talked at Libor plus 725 bps with a 2% Libor floor, the source said.

In addition, the unsecured loan is non-callable for two years, then at 103 in year three, 102 in year four and 101 in year five.

Bank of America, Barclays and Deutsche Bank are the lead banks on the dividend recapitalization deal.

N.E.W. Customer Service is a Sterling, Va.-based provider of extended service plans and product protection programs for consumer products.

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