Rent-A-Center, Vail, Hayes and Laidlaw all flex; handful of deals hit the primary

By Sara Rosenberg

New York, May 21 - Pricing has changed on a number of deals in the market, with Rent-A-Center Inc. and Vail Resorts Inc. seeing their interest rates reduced and Hayes Lemmerz International Inc. and Laidlaw Inc. seeing their interest rates head higher.

Meanwhile, the primary bank loan market was pretty busy on Wednesday with a number of new deals launching including CBD Media LLC, Pacer International Inc., Global Imaging Systems Inc., Accuride Corp. and CSK Auto Corp.

Rent-A-Center's $400 million six-year term loan B was flexed down to Libor plus 225 basis points from price talk of Libor plus 250 to 275 basis points. However, "if leverage goes above two times then it goes back up to 250," a syndicate source said.

The $600 million credit facility also contains a $120 million five-year revolver with an interest rate of Libor plus 225 basis points and an $80 million five-year letter of credit facility with an interest rate of Libor plus 225 basis points.

All of the tranches were oversubscribed.

The term loan B is being offered at par. For the revolver, a $15 million commitment gets 5/8 on allocation and a $20 million commitment gets 75 basis points on allocation.

Lehman Brothers and JPMorgan are the lead banks on the deal, which will be used to refinance the company's existing senior debt.

Rent-A-Center is a Plano, Tex. operator of company-owned stores in the rent-to-own industry.

Vail Resorts flexed down its $100 million 5½ year term loan B to Libor plus 275 basis points from Libor plus 325 basis points, sources said.

The $425 million credit facility (BB-) also contains a $325 million four-year revolver with an interest rate of Libor plus 200 basis points.

Bank of America and Fleet are the lead banks on the Avon, Colo. ski resort operator's deal.

On the flip side, Hayes Lemmerz's $450 million six-year term loan B was flexed up to Libor plus 450 basis points from Libor plus 425 basis points, according to market sources. The term loan B is now being offered at 99, as opposed to 991/2.

The $575 million exit financing credit facility (Ba3/BB-) also contains a $125 million five-year revolver with an interest rate of Libor plus 350 basis points.

"We continue to chip away, receiving commitments after the flex," a syndicate source told Prospect News. "Bonds price tomorrow. Price talk is 10½ to 3/4. And bank commitments are due tomorrow."

Citibank and Lehman Brothers are the lead banks on the deal.

The Northville, Mich. auto parts maker and its subsidiaries located in the United States and one subsidiary in Mexico filed voluntary petitions for reorganization under Chapter 11 on Dec. 5, 2001.

Laidlaw flexed its $625 million six-year term loan B up to Libor plus 425 basis points from an original price of Libor plus 350 basis points, according to a fund manager. The institutional tranche is being offered at 991/4.

The $825 million senior secured credit facility (Ba3/BB) also contains a $200 million five-year revolver with an interest rate of Libor plus 300 basis points.

Credit Suisse First Boston and Citibank are leading the Burlington, Ont. transportation company's exit financing deal. The company filed for Chapter 11 on June 28, 2001 and hopes to emerge by the end of this month.

CBD Media's $165 million secured credit facility (Ba3/B+), which launched on Wednesday, is expected to go "very well" as potential investors anticipate being paid down with free cash flow in the future, according to a fund manager.

"The company generates a lot of free cash flow. They don't have any particularly large capital needs, which is why it's such a small revolver. With free cash flow, the company can pay down debt. For example, in 2002 they generated $30 million free cash flow and if there's' a $160 million term loan it's going to get paid down," the fund manager explained.

Lehman Brothers and Bank of America are the lead banks on the Cincinnati directories company's deal.

The facility consists of a $160 million 61/2-year term loan B with an interest rate of Libor plus 400 basis points and a $5 million six-year revolver with an interest rate of Libor plus 350 basis points.

Proceeds, combined with proceeds from a $150 million senior subordinated note offering, will be used to repay existing senior indebtedness and provide a cash dividend to the existing equity holders, Spectrum Equity Investors and Broadwing Inc.

Pacer launched a $330 million credit facility on Wednesday, according to a syndicate source. Deutsche Bank is the lead bank on the deal.

The loan consists of a $75 million five-year revolver with an interest rate of Libor plus 325 basis points and a $255 million seven-year term loan B with an interest rate of Libor plus 325 basis points, the syndicate source said.

Proceeds will be used to refinance the Concord, Calif. logistics provider's existing credit facility and redeem or repurchase all its existing 11¾% senior subordinated notes.

Global Imaging held a bank meeting for a $250 million senior secured credit facility (BB-/Ba3), consisting of a $100 million five-year revolver with an interest rate of Libor plus 275 basis points and a $150 million six-year term loan with an interest rate of Libor plus 350 basis points. Wachovia is the lead

Proceeds will be used by the Tampa, Fla. provider of office technology solutions to refinance the existing senior credit facility.

"I think Pacer and Global Imaging were both favorably received," a fund manager said.

Accuride held a bank meeting on Wednesday for a $240 million credit facility consisting of a $50 million revolver with an interest rate of Libor plus 400 basis points and a $190 million second lien term loan with an interest rate of Libor plus 625 basis points. Citigroup is the lead bank on the deal.

Proceeds will be used to refinance the existing revolver, term loan A and term loan B. The existing term loan C will be amended to allow the new revolver to be pari passu with the term loan C and to permit Accuride to raise the new second lien term loan.

Accuride is an Evansville, Ind. manufacturer and supplier of wheels for heavy/medium trucks and trailers.

CSK Auto Corp. launched a $325 million credit facility, consisting of a $100 million revolver and a $225 million term loan B, both talked at Libor plus 300 basis points, according to a syndicate source. JPMorgan is the lead bank on the deal.

Proceeds will be used to refinance the Phoenix automotive parts and accessories company's existing asset-based loan.

Meanwhile, Wyndham International Inc. proposed amendment, which would basically extend the maturity date of the company's IRLs and revolver, is still being worked on, according to a fund manager, who anticipates the agents on the facility to submit a new proposal within the next week or so. However, this time, the expectation is that the amendment may pass.

"They're talking to IRL holders to address the issues," the fund manager said. "Maintaining a shorter maturity than the B loan. Why do they have to extend to June 30, 2006? Why not make it till January?

"Compensation. I think there will be additional economics proposed to IRL and B holders," the fund manager continued. "Better amendment fee, although that's not a big deal.

"They're realizing these are things that need to be addressed. I expect a new proposal and that will probably result in the amendment getting done," the fund manager added.

This amendment has been floating around the marketplace for months. Under the April proposal, which was essentially the same as the February proposal, the company wanted to extend its IRLs and revolver to June 30, 2006 from June 30, 2004.

At that time, the Dallas hotel enterprise proposed that the cash portion of the revolver's pro rata distribution from proceeds of asset sales would be used towards paying down the IRLs. Meanwhile, the revolver availability would be reduced by whatever the pro rata portion of the paydown would have been.

In return for extending the maturity, IRL holders would have gotten a 2% fee payable at maturity (June 30, 2006), based on the outstanding IRLs at June 30, 2005. Furthermore, from the date that the maturity extension becomes effective, which only occurs once $85 million of the IRLs is paid down, there would have been a 50 basis points payment in kind increase on the coupon. So, IRL holders would have gotten Libor plus 475 basis points plus the additional 50 basis points PIK. Additionally, if the company does not reduce overall debt by at least $100 million in 2004 then another 25 basis points PIK would have been tacked on and the same terms would have applied for 2005 as well. So, the maximum amount that IRL holders would have received was the Libor plus 475 basis points coupon and 100 basis points PIK.

Wyndham also proposed to give the lenders a security interest in its LaGuardia Airport property, which is worth about $35 million.

The proposed amendment fee payable to the term loan B holders was only 1/8 since they were only voting on the allocation of asset sale proceeds. IRL holders would have received an amendment fee of 25 basis points for signing. The amendment would have become effective if there was 95% approval.

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