Bushnell tweaks deal; Integra first-lien trades up; White Birch tumbles on numbers

By Sara Rosenberg

New York, Aug. 21 - Bushnell Outdoor Products made some changes to its credit facility, including downsizing its second-lien term loan, adding a new PIK loan tranche, increasing pricing on the first-lien debt again and firming up first- and second-lien discounts.

In secondary happenings, Integra Telecom Inc.'s first-lien term loan B inched its way higher in trading and White Birch Paper Co.'s first-lien term loan B plummeted on poor earnings results.

Bushnell Outdoor Products reworked its credit facility structure, carving a holdco PIK loan out of the second-lien term loan, flexing pricing higher on the first-lien debt, adding call protection to the first-lien term loan and setting original issue discounts, according to a market source.

The 61/2-year second-lien term loan is now sized at $156 million, down from $191 million, and was sold to investors at a discount of 99 as opposed to at par, the source said. Pricing on the tranche remained in line with original talk at Libor plus 650 basis points and call protection stayed at 102 in year one and 101 in year two.

To compensate for the second-lien downsizing, a new $35 million holdco PIK loan was added to the capital structure, the source continued.

As for the $40 million six-year revolver and the $278 million six-year first-lien term loan, pricing is now set at Libor plus 375 bps, up from revised talk of Libor plus 350 bps and from original talk at launch of Libor plus 300 bps, the source said.

The first-lien term loan now includes 101 soft call protection for one year, as opposed to no call protection, and was sold to investors at a discount of 99. When pricing was increased the first time on the loan, it was said that a discount was being considered but a firm issue level had not been determined.

With these changes, syndication on the credit facility has wrapped up and allocations are expected to go out in the near future, the source added.

GE Capital is the lead bank on the $509 million deal.

Proceeds will be used to help fund the buyout of the company by MidOcean Partners from Wind Point Partners. Bushnell's senior management team will have a significant ownership stake in the company.

Bushnell is an Overland Park, Kan., manufacturer and marketer of sports optics, eyewear and outdoor accessories.

Integra gains ground

Moving to the secondary, Integra Telecom's first-lien term loan B was quoted slightly stronger during Tuesday's market hours and is now trading pretty well above the discount price it was issued at just a few days ago, according to a market source.

The first-lien term loan B was quoted at 97¾ bid, 98¾ offered, up from Monday's levels of 97½ bid, 98½ offered, the source said. The loan started trading on Friday, with levels seen at 97 bid, 98 offered on the break.

The $595 million first-lien term loan B (Ba3/CCC+) is priced at Libor plus 425 bps and was sold to investors with an original issue discount of 96.

Integra's second-lien term loan was quoted at 97½ bid, par ½ offered on Tuesday and its holdco PIK loan was quoted at 99 bid, 101 offered, the source added.

The $325 million second-lien term loan (Caa1/CCC) is priced at Libor plus 700 bps, with call protection of 103 in year one, 102 in year two and 101 in year three, and was also sold to investors with an original issue discount of 96. The $280 million unsecured PIK holdco term loan (Caa2/CCC) is priced at Libor plus 1,000 bps and is non-callable for two years, then at 106 in year three, 104 in year four, 102 in year five and 101 in year six.

Integra's credit facility also includes a $50 million revolver (Ba3/CCC+) that is priced at Libor plus 425 bps.

During syndication, pricing on the first-lien term loan B and the revolver was flexed up from original talk of Libor plus 325 bps, and the term loan B was downsized from $715 million.

After these changes were made to the revolver and the first-lien term loan B, the lead banks decided to postpone syndication of these tranches to a later date because of market conditions. However, "guys were getting interested again so they started calling people and the book got built up pretty quickly. First-lien was two times oversubscribed when the book finally came together," the source remarked.

As for the second-lien term loan, that was upsized from $270 million during syndication, pricing was raised from original talk of Libor plus 600 bps and call protection was changed from just 102 in year one and 101 in year two.

And, the PIK loan was upsized during syndication from $215 million, pricing was increased from original talk of Libor plus 850 bps, a 50 bps step up in pricing after 12 months was removed and call protection was changed from non-callable for one year, then at 106 in year two, 104 in year three and 102 in year four.

The second-lien term loan and the PIK loan syndication process was continuous, meaning that at no point was there talk that syndication on these tranches would be postponed.

Deutsche Bank and Morgan Stanley are the joint lead arrangers on the deal, and CIBC is the documentation agent.

Proceeds will be used to help fund the acquisition of Eschelon Telecom, Inc. for $30 per share, or a total purchase price of $710 million including the repayment of about $144 million in Eschelon debt. The acquisition is expected to be completed on Aug. 31.

Through this acquisition, one of the largest competitive local exchange carriers in the nation will be formed, as total company revenues are predicted to be more than $700 million annually with more than $200 million in pro forma 2007 EBITDA.

Integra is a Portland, Ore.-based provider of local phone, long-distance phone and internet services for businesses. Eschelon is a Minneapolis-based competitive communications services provider of voice and data services and business telephone systems.

White Birch nosedives

White Birch Paper's first-lien term loan B dropped considerably after the company released earnings results to lenders, according to traders.

The term loan B ended the day at 79 bid, 81 offered, down from previous levels that were in the high-80s context, traders said.

The financial results were distributed to investors on a private call, one trader remarked, but based on the loan's performance it's obvious that investors were not pleased.

White Birch is a Toronto-based newsprint company.

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