Worldspan loan pulled as IPO is postponed; Jean Coutu well received

By Sara Rosenberg

New York, June 30 - Worldspan Technologies Inc.'s very oversubscribed $225 million credit facility was pulled from the bank loan market due to the company's decision to pull its initial public offering of common stock. Meanwhile, Jean Coutu Group Inc.'s $1.7 billion credit facility is moving along nicely with strong market interest seen on the deal.

In the secondary market, Dean Foods Co.'s term loan B dropped to near par as news of a refinancing hit the market.

Late Tuesday Worldspan announced that it was holding off on its proposed IPO due to current market conditions.

"Worldspan will continue to evaluate market conditions and may proceed with a public offering at a later date," the company added in a news release.

"The bank deal was contingent on a successful IPO", a fund manager said.

"It's kind of weird that they pulled the IPO," the fund manager commented. "Lots of other deals out there seem to be getting done."

"Something negative has to be going on," the fund manager speculated.

The credit facility was anticipated to allocate this week. It consisted of a $185 million term loan with an interest rate of Libor plus 225 basis points and a $40 million revolver with an interest rate of Libor plus 225 basis points.

And, the syndicate had recently added a step down in pricing to the well received term loan B, under which pricing would be reduced to Libor plus 200 basis points on total leverage being less than 2.25x.

Lehman and JPMorgan were joint bookrunners on the credit facility, with Lehman listed on the left for the transaction.

The IPO was expected to generate proceeds of about $604.4 million.

IPO proceeds along with the proposed term loan were going to be used to repay about $71 million of bank debt, repurchase about $107.4 million of 9 5/8% senior notes, prepay about $89.1 million under the 10% seller notes originally issued to Delta Air Lines and 12% seller notes originally issued to American, prepay all credit, or about $154.8 million, provided to Delta and Northwest Airlines pursuant to their FASA, terminate advisory fees payable to CVC Management LLC for about $5.3 million, prepay the approximately $3.5 million special dividend payable on class B convertible common stock and redeem shares of series A preferred stock.

Worldspan Technologies is an Atlanta provider of mission-critical transaction processing and information technology services to the travel industry.

Jean Coutu pro rata almost done

Jean Coutu's $600 million pro rata bank debt - consisting of a $350 million five-year revolver and a $250 million five-year term loan A, both priced at Libor plus 275 basis points - "is almost fully subscribed," according to a market source.

Meanwhile, the $1.1 billion seven-year term loan B, which is also priced at Libor plus 275 basis points, "is off to a terrific start" as Wednesday's bank meeting "went superb," the source added.

Deutsche, National Bank of Canada and Merrill Lynch will lead the credit facility, with Deutsche on the left.

Proceeds from the credit facility, combined with proceeds from a 10-year high-yield notes offering, will be used to fund the Jean Coutu's acquisition of the Eckerd drugstores for $2.375 billion from J.C. Penney Co. Inc.

Jean Coutu is a Longueuil, Quebec-based drugstore chain.

Dean Foods nears par

Dean Foods Co.'s term loan B was quoted around par ¼ bid after news of a refinancing surfaced, according to a trader. Before the news, the paper was quoted at 101 to 1011/4, the trader added.

The company is expected to launch a $3 billion credit facility to refinance existing debt during the week of July 12, according to a market source. Wachovia and Bank One - or soon to be JPMorgan - are the lead banks on the deal.

The Dallas food and beverage company's facility consists of a $750 million term loan B with an interest rate of Libor plus 175 basis points, a $1.25 billion term loan A with an interest rate of Libor plus 125 basis points and a $1 billion revolver with an interest rate of Libor plus 125 basis points, the source said.

Consol Energy closes

Consol Energy Inc. closed on its new $600 million senior secured credit facility (Ba2/BB), effective Wednesday, according to a company news release. Citicorp North America Inc. and PNC Bank acted as co-administrative agents, LaSalle Bank, Societe Generale and SunTrust Bank acted as co-documentation agents, and Citigroup Global Markets Inc. and PNC Capital Markets Inc. acted as joint lead arrangers.

There are 18 lending institutions in the syndicate.

The facility consists of a $400 million five-year revolver with an interest rate of Libor plus 300 basis points and a $200 million six-year tranche B credit-linked deposit facility with an interest rate of Libor plus 250 basis points. Pricing on the revolver is subject to a rating grid after six months. Pricing on the tranche B synthetic letter-of-credit facility can step down to Libor plus 225 basis points if ratings are bumped up by one level by both rating agencies.

The B tranche was subscribed at about $1.2 billion, the release said.

Consol originally came to market with a $450 million revolver priced with an interest rate of Libor plus 300 basis points and a $150 million term loan B priced with an interest rate of Libor plus 300 basis points, but the deal was restructured during syndication to decrease the revolver and convert the term loan B into a synthetic letter-of-credit facility that was reverse flexed and increased by $50 million.

Security is nearly all company assets. Collateral will be provided to the banks and shared equally and ratably with the holders of the company's 7 7/8% bonds maturing in 2012 and the Consolidation Coal Co. 8.25% medium-term notes maturing in 2007.

Proceeds will be used for general corporate purposes. The facility replaces Consol's previous $266.8 million credit facility. Current cash collateralized letters of credit issued under the previous facility will be transferred to the tranche B loan, and the $190 million of cash collateral will be released and used to pay down short-term debt.

"This new facility provides us with increased financial liquidity," said J. Brett Harvey, president and chief executive officer, in the release. "In addition, the strong response we got from our banking partners indicates that additional capacity exists in the term loan market for Consol Energy should we need to access that market again."

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

UTI closes

UTI Corp. closed on its $234 million credit facility (B2/B+) consisting of a $40 million five-year revolver with an interest rate of Libor plus 300 basis points and a 50 basis points commitment fee, and a $194 million six-year term loan B with an interest rate of Libor plus 300 basis points.

The term loan B was originally sized at $174 million but was increased to $194 million last week in response to the company's decision to decrease its bond offering to $175 million from $190 million. The company opted to over fund by $5 million so that there would be extra cash on the balance sheet.

Credit Suisse First Boston was the sole lead arranger and bookrunner on the deal. Wachovia was the syndication agent.

Proceeds were used to help fund the acquisition of MedSource Technologies Inc. Under the acquisition agreement, MedSource common stockholders received $7.10 per share in cash. The transaction value is about $230 million, including assumed net debt.

UTI also received equity financing from DLJ Merchant Banking Partners to help fund the transaction.

UTI is a Collegeville, Pa., provider of metal and plastic components, assemblies and finished devices to medical device manufacturers.

Ptek closes

Ptek Holdings Inc. closed on its new $120 million three-year revolver. Bank of America was the lead bank on the deal.

The new facility replaces the company's previous $60 million line and will be available to retire remaining public debt, and for working capital and expansion opportunities.

"We are pleased to have closed this new facility at a level higher than previously committed by Bank of America," said Boland T. Jones, founder, chairman and chief executive officer, in a news release. "The larger line demonstrates strong confidence in our business model and gives us increased flexibility to grow our business."

Ptek is an Atlanta provider of business, data and communications services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.