Envirocare ups second-lien spread, sweetens call protection; Allied, Fidelity lower on market heaviness

By Sara Rosenberg

New York, April 4 - Envirocare of Utah Inc. made its second round of changes since launch, this time focusing on the second-lien term loan, which saw pricing widen out and the addition of extra call protection.

Meanwhile, the secondary market felt somewhat heavy on Monday, with names like Allied Waste Industries Inc. and Fidelity National Information Services Inc. succumbing to the downward pull.

Envirocare's $170 million second-lien term loan C was flexed up to Libor plus 550 basis points from original price talk of Libor plus 500 basis points on Monday, according to a market source.

Furthermore, call protection on the tranche was changed to 103 in year one, 102 in year two and 101 in year three from original call protection of 102 in year one and 101 in year two, the source said.

At the end of last week, the syndicate modified the $440 million first-lien term loan B tranche by adding 101 soft call protection for one year but price talk was left unchanged at Libor plus 275 basis points.

Envirocare's facility also contains a $30 million revolver talked at Libor plus 275 basis points.

Commitments were due Monday, and with all the recent changes "the deal should be done," the source added.

Citigroup and Calyon are the lead banks on the $640 million credit facility, with Citigroup the left lead, although Calyon will remain administrative agent.

Proceeds will be used to repay and refinance existing bank debt and fund a dividend.

Envirocare, which was recently purchased by investment firm Lindsay Goldberg & Bessemer, is a Salt Lake City provider of waste management services.

Allied, Fidelity weaker

In secondary activity, Allied Waste's bank debt fell off by about a quarter of a point to par ½ bid, par ¾ offered and Fidelity National's term loan B fell off by about an eighth of a point to par bid, par ¼ offered, but was seen as low as 99¾ bid, par offered during the session, according to a trader.

"It's a heavy market," the trader remarked.

Allied Waste is a Scottsdale, Ariz.-based non-hazardous solid waste management company.

Fidelity National is a Jacksonville, Fla., provider of technology solutions, processing services and information services to the financial services and real estate industries.

Protection One oversubscribed

Protection One Inc.'s $250 million term loan B was around three times oversubscribed as Monday's commitment deadline rolled around, according to a market source. The tranche is talked at Libor plus 350 basis points.

The $275 million credit facility (B2/B+) also contains a $25 million revolver talked at Libor plus 325 basis points.

The term loan B was offered to investors at par, and revolver commitments of $10 million got an upfront fee of 75 basis points.

Bear Stearns and Lehman Brothers are the lead banks on the, with Bear Stearns the left lead.

Proceeds will be used to refinance existing bank debt and some bonds.

Protection One is a Lawrence, Kan., provider of commercial and residential security services.

Chiquita oversubscribed

Chiquita Brands International Inc.'s $375 million seven-year term loan B was "significantly oversubscribed" by Monday morning, with lenders still having plenty of time to throw in any last commitments prior to Wednesday's deadline, according to a market source.

The term loan B is talked at Libor plus 225 basis points and is rated B1/BB-.

Chiquita's $650 million facility also contains a $125 million five-year term loan A talked at Libor plus 175 basis points and a $150 million five-year revolver talked ay Libor plus 175 basis points with a commitment fee of 50 basis points. The term loan A and the revolver, which only went out to existing lenders, are rated B1/B+.

The reason behind Standard & Poor's rating discrepancy between the pro rata tranches and the institutional term loan has to do with the collateral packages that are being used to secure these deals.

Security on the term loan A and the revolver is more focused on Chiquita's existing business, while security on the term loan B is more focused on the Fresh Express business that Chiquita is acquiring.

Wachovia and Morgan Stanley are joint lead arrangers and joint bookrunners on the term loan B, with Wachovia the left lead, and Goldman Sachs as documentation agent. Wachovia is sole bookrunner on the term loan A and the revolver.

Prior to the late-March bank meeting, it was anticipated that the credit facility would be sized at $600 million, but it was upsized by $50 million as the company expects to only raise $300 million in junior capital - comprised of convertible preferreds and high-yield bonds - as opposed to $350 million in junior capital.

The increase in the facility came from adding $25 million to the term loan A, which was originally expected to be sized at $100 million, and adding $25 million to the term loan B tranche, which was originally expected to be sized at $350 million.

Proceeds from the term loans, the junior capital and $75 million of cash on hand will be used to finance the $855 million cash acquisition of Fresh Express, the fresh-cut produce segment of Performance Food Group Co., and refinance existing Chiquita debt.

Borrowings under the revolver will be primarily available for working capital requirements and general corporate purposes.

Pro forma for the acquisition, the company's debt to EBITDA ratio is expected to be 4 times and EBITDA to interest coverage of 3.5 times, but by 2006 the company expects the debt ratio to drop below 3 times and interest coverage to rise to more than 5 times.

Closing of the transaction is expected to be complete during second quarter.

Chiquita is a Cincinnati marketer, producer and distributor of bananas and other fresh produce.

Centerplate closes

Centerplate Inc. closed on its new $215 million five-year credit facility (B2) consisting of a $107.5 million term loan with an interest rate of Libor plus 325 basis points and a $107.5 million revolver with an interest rate of Libor plus 350 basis points. General Electric Capital Corp. was the lead bank on the deal.

Originally, the term loan was launched with a size of $100 million and was talked at Libor plus 350 basis points and the revolver was launched with a size of $115 million and was talked at Libor plus 350 basis points, but the syndicate shifted some fund from the revolver into the term loan and reverse flexed pricing on the term loan during syndication.

Proceeds from the term loan were used to repay the existing $65 million term loan and outstanding revolver loans, as well as transaction fees and expenses, including a prepayment premium.

The revolver replaces the company's previous $50 million revolver.

"This refinancing allows Centerplate to respond more effectively to new business opportunities, such as the recent reemergence of new stadium construction, and to invest more heavily in our business, particularly our service and quality initiatives, including those with outside partners," said Lawrence E. Honig, chairman and chief executive officer of Centerplate, in a company news release.

Centerplate (formerly Volume Services America Holdings Inc.) is a Spartanburg, S.C., provider of catering, concessions, merchandise and facility management services for sports facilities, convention centers and other entertainment venues.

Consol closes

Consol Energy Inc. closed on its new $750 million five-year senior secured revolving credit facility. Originally the deal was sized at $600 million but was increased on strong demand. In fact, the facility was subscribed at about $1.25 billion, according to a company news release.

PNC Bank and Citicorp North America acted as co-administrative agents and joint lead arrangers, and Bank of Nova Scotia, Fleet National Bank, and Union Bank of California acted as co-syndication agents.

There are 35 lending institutions in the syndicate.

The new facility replaces the company's previous $600 million credit facility, which included a $200 million term loan B, at more attractive pricing levels.

Borrowings are available for general corporate purposes, including working capital, capital expenditures and letter-of-credit needs.

Security is company assets.

"This new facility further enhances our financial liquidity," said J. Brett Harvey, president and chief executive officer, in the release. "In addition, the strong response we received once again from our banking partners shows continued confidence in the company. We were pleased to be able to expand the size of the facility while reducing our costs."

Consol is a Pittsburgh-based multi-fuel energy producer and energy services provider.

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