Accuride dips on filing; Neiman up; GenTek sees good reception; Busch details emerge

By Sara Rosenberg

New York, Oct. 8 - Accuride Corp.'s term loan headed lower in trading following the company's announcement that it filed for bankruptcy protection and Neiman Marcus Inc.'s term loan gained some ground with news of September revenue results.

Over in the primary market, GenTek Inc. launched its credit facility during the Thursday session and appeared to attract investor interest. However, official price talk on the deal was not revealed since the banks are waiting on ratings to come out.

In other news, some details on Busch Entertainment Corp.'s proposed credit facility surfaced, including size and tranching, while timing on the general syndication launch of the transaction is still to be determined.

Accuride slides with bankruptcy news

Accuride's term loan moved lower in the secondary market as the company agreed to a balance sheet restructuring with lenders and filed for Chapter 11, according to traders.

The term loan was quoted by one trader at 97½ bid, 98½ offered, down from 98 bid, par offered, and by a second trader at 96 bid, 98¾ offered, down from 98 bid, 102 offered.

Under the proposed restructuring, the company will amend its existing credit facility to modify financial covenants and extend the maturity through June 30, 2013.

And, Accuride's 8½% senior subordinated notes will be canceled. Noteholders will receive 98% of the common stock of the reorganized company, subject to dilution, including dilution for stock issued upon conversion of the new notes and warrants.

The company has secured a $50 million debtor-in-possession credit facility that will be provided by certain of its senior lenders and noteholders.

Accuride to sell convertibles

In addition, the reorganized Accuride will complete a $140 million rights offering of new senior unsecured convertible notes to current noteholders.

A portion of the proceeds from the rights offering will be used to repay the last-out term loan currently held by an affiliate of Sun Capital Partners, with the remainder to provide on-going liquidity.

"Accuride's debt restructuring efforts are designed to create a sustainable capital structure that will support greater profitability and solidify the company's position as the market leader in its product categories," said Bill Lasky, president, chief executive officer and chairman of the board, in a news release.

"Accuride expects to quickly emerge from Chapter 11 having rationalized its capital structure and de-levered its balance sheet. I believe this restructuring transaction maximizes our financial flexibility and positions Accuride for future growth," Lasky added.

Accuride is an Evansville, Ind.-based manufacturer and supplier of commercial vehicle components.

Neiman trades higher

Neiman's term loan was stronger bid on Thursday as the company announced September revenues, despite those results showing a year-over-year decline, according to traders.

The term loan was quoted by one trader at 86½ bid, 87½ offered, up a half a point on the day, and by a second trader at 86½ bid, 87 1/8 offered, up on the bid side from 86¼ bid, but down on the offer side from 87¼ offered.

For the month of September, the company reported total revenues of $354 million, down 14.8% from $415 million in the comparable period last year.

Comparable revenues for the month were $344 million, down 16.9% from $414 million in the prior year.

In terms of liquidity, the company ended the month with about $330 million of cash and had no borrowings outstanding under its $600 million asset-based revolving credit facility.

Neiman Marcus is a Dallas-based high-end specialty retailer.

GenTek launches

Moving to primary happenings, GenTek held a bank meeting on Thursday to kick off syndication on its proposed $330 million senior secured credit facility that will be used to help fund its acquisition by American Securities LLC for $38 per share.

Goldman Sachs is the lead arranger and bookrunner on the deal, KeyBank is the syndication agent and GE Capital is the administrative agent.

"Heard reception was generally positive given limited supply of new issuances, so my guess is investors will be fighting over whatever new issuance comes to market," one source told Prospect News.

"Concerns over sustainable margins going forward. EBITDA has ramped from $85 million level to $120 [million] to 140 million level due to commodity price volume that is likely unsustainable," the source continued.

"Big equity check - 45%, I believe - low leverage 2 to 2.5 times out the box," the source added.

The equity contributions for the buyout are expected to be in excess of $270 million, according to filings with the Securities and Exchange Commission.

GenTek waiting on price talk

Although the launch already took place, GenTek has not yet revealed formal price talk on its credit facility because ratings have not come out, sources said.

"What I heard was price talk to be determined post-ratings. Likely will come with a modest OID also," one source remarked.

The facility consists of a $300 million five-year term loan B and a $30 million four-year revolver.

According to a commitment letter filed with the SEC, pricing on the term loan B is expected to be Libor plus 475 basis points and pricing on the revolver is expected to be Libor plus 450 bps with a 75 bps undrawn fee.

The commitment letter also said that both tranches will carry a 2.5% Libor floor.

In the event that the company's corporate credit ratings on the closing date are lower than B1/B+, the weighted average of the interest rate of the facility will be increased by 100 bps, allocated by the arranger in its discretion, the commitment letter added.

Financial covenants under the facility include a minimum interest coverage and a maximum total leverage ratio.

GenTek is a Parsippany, N.J.-based provider of specialty inorganic chemical products and valve actuation systems and components for automotive and heavy duty/commercial engines.

Busch structure surfaces

Some additional details came out on Busch Entertainment's proposed financing for its buyout by the Blackstone Group, including that the size of the senior secured credit facility will be $1.05 billion, according to a market source.

Tranching on the deal is comprised of a $100 million revolver and a $950 million term loan, the source said.

Bank of America Merrill Lynch, Barclays, Deutsche Bank, Goldman Sachs and Mizuho Corporate Bank are the lead banks on the facility.

Other financing for the buyout will come from $450 million of mezzanine debt and around $1 billion in equity.

Goldman Sachs Mezzanine Partners and funds managed by GSO Capital Partners LP are providing the mezzanine financing.

Blackstone is acquiring the company from Anheuser-Busch InBev for $2.3 billion in cash plus the right to participate in Blackstone's return on its initial investment capped at $400 million.

Busch Entertainment is an entertainment park operator.

Zuffa going well

Zuffa LLC's $100 million senior secured incremental term loan (Ba3/BB-) is moving a long nicely as a strong book has come together since price talk was announced on Wednesday, according to a market source.

The term loan is talked at Libor plus 500 bps to 550 bps with a 2% Libor floor, and an original issue discount of 97, the source said.

Deutsche Bank is the lead bank on the deal that will be used to repay revolving credit facility borrowings and to fund a dividend.

Zuffa is the Las Vegas-based company that owns the Ultimate Fighting Championship brand.

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