Citco upsizes; Millennium, Foster Wheeler set talk; Crown breaks; Georgia-Pacific, HealthSouth trade up

By Sara Rosenberg

New York, Aug. 3 - Citco announced Thursday the upsizing of its institutional term loans and the elimination of its originally proposed mezzanine cash and pay-in-kind debt, with the move attributed to strong market demand.

In other primary news, Millennium Radio came out with official price talk on its credit facility that allows for a bit more room on the first lien than the previous talk floating around the market, and tightened up the range of possible spreads on the second- lien. And, Foster Wheeler Ltd. announced price talk on its credit facility as it too was launched on Thursday.

Meanwhile, in secondary happenings, Crown Holdings Inc.'s repriced and upsized term loan B freed for trading during market hours, with the paper quoted right atop par, and Georgia-Pacific Corp. and HealthSouth Corp. saw a little boost in levels as the overall market tone felt better.

Citco made some changes to its capital structure, including eliminating the cash-and-PIK mezzanine debt and moving those funds into the two first-lien institutional term loans, and adding a new smaller mezzanine piece that's all PIK, according to a market source.

Under the modifications, the seven-year term loan B is now sized at $197.5 million compared to an original size of $150 million and the eight-year term loan C is now sized at $197.5 million compared to an original size of $150 million, the source said.

Pricing on the two term loans was unchanged, with the term loan B carrying a spread of Libor plus 275 basis points and the term loan C carrying a spread of Libor plus 325 basis points, the source continued.

The $95 million of mezzanine debt that was eliminated had a tenor of nine-year and was talked at 5% cash pay plus 6% PIK.

Lastly, a new non-cash $48 million PIK mezzanine financing is now being obtained by the company that will carry an interest rate of Libor plus 1,250 basis points.

These changes were made because the term loan B and the term loan C were a blowout in terms of syndication and it gives the company more flexibility, the source explained.

The extra $48 million in funds that the company is getting through the new all PIK mezzanine debt will be used for a contingent payment due in the future, the source added.

Rumors of the potential term loan upsizings and the removal of the original mezzanine piece had started floating around last week, spurred on by the amount of demand that the deal was heard to be receiving.

Citco's now $475 million credit facility (up from $380 million) also contains a $20 million six-year revolver with an interest rate of Libor plus 225 basis points and a $60 million six-year term loan A with an interest rate of Libor plus 225 basis points.

UBS is the bookrunner on the deal that will be used to refinance existing debt.

Citco is a provider of administrative, fiduciary and financial services around the world primarily for hedge funds.

Millennium price talk

Millennium Radio released price talk on its proposed $175 million senior secured credit facility as the deal was launched with a bank meeting Thursday, and the company announced that General Electric Capital Corp. has signed on to the transaction in the role of documentation agent, according to a market source.

The $15 million six-year revolver and the $120 million six-year first-lien term loan B were launched to investors with talk of Libor plus 250 to 275 basis points, the source said. Previous whispers in the market had the two tranches talked only at Libor plus 275 basis points.

As for the $40 million seven-year second-lien term loan, that was launched with talk of Libor plus 550 to 575 basis points, the source said, a bit of a tighter range than the unofficial Libor plus 550 to 600 basis points price talk that was floating around the market.

UBS and The Bank of New York are joint lead arrangers on the deal, with UBS the left lead.

Proceeds will be used to fund a recapitalization plan, which includes a refinancing of all of the company's outstanding debt and a distribution to equity holders.

Millennium Radio is a Lawrenceville, N.J. privately held radio broadcasting company.

Foster Wheeler sets talk

Foster Wheeler came out with price talk of Libor plus 200 basis points on all tranches under its $350 million credit facility (Ba3/BB-) as the deal was presented to lenders with a bank meeting Thursday, according to a market source.

Tranching on the facility consists of a $200 million revolver and a $150 million synthetic letter-of-credit facility.

The revolver has a 50 basis point unused fee.

BNP Paribas is the lead bank on the deal that will be used to refinance existing debt.

Foster Wheeler is a Clinton, N.J., provider of engineering and construction services to the energy industries.

Primedex sets second-lien premiums

Primedex Health Systems Inc. (Radnet Inc.) released call premiums on its $135 million seven-year second-lien term loan (Caa1/CCC+) as syndication on the deal officially kicked off with a bank meeting Thursday, according to a market source.

The second-lien loan was launched with call protection of 102 in year one and 101 in year two, the source said. As was previously reported, price talk on the tranche is Libor plus 750 basis points.

Primedex's $405 million credit facility also contains a $45 million revolver (B2/B) and a $225 million six-year first-lien term loan B (B2/B), with both of these tranches talked at Libor plus 350 basis points.

General Electric Capital Corp. is the lead bank on the deal.

Proceeds will be used to fund the acquisition of Radiologix Inc. in a cash and stock transaction valued at about $208 million, including net debt, and to refinance existing debt at Primedex and Radiologix.

Under the terms of the agreement, Radiologix shareholders will receive total consideration of 22,621,922 shares of Primedex common stock and $42.95 million in cash.

In conjunction with the transaction, Primedex intends to change its corporate name, subject to shareholder approval, to Radnet.

Primedex is a Los Angeles-based operator of outpatient diagnostic imaging facilities. Radiologix is a Dallas-based provider of imaging services.

Kendle flexes up

Kendle International Inc. flexed pricing higher on all tranches under its $225 million senior secured credit facility (B1/B+), moving spreads to Libor plus 275 basis points from original talk at launch of Libor plus 250 basis points, according to a market source.

In addition, under the term loan, a step down to Libor plus 250 basis points was added that becomes effective under certain conditions, the source said.

Tranching under the facility consists of a $200 million six-year term loan and a $25 million five-year revolver.

UBS is the lead arranger on the deal that will be used to help fund the company's purchase of Charles River Laboratories International, Inc.'s phase 2-4 Clinical Services business, a provider of phase 2-4 clinical trials management services to the pharmaceutical and biotechnology industries.

Kendle is a Cincinnati-based clinical research organization that provides a range of phase 1-4 clinical development services to the pharmaceutical and biotechnology industries.

Crown frees to trade

Switching to the secondary, Crown Holdings' $200 million term loan B add-on and the repriced existing term loan B bank debt freed for trading early Thursday, with the U.S. paper quoted at par bid, par ¼ offered, according to a market source.

The term loan B add-on is priced with an interest rate of Libor plus 175 basis points, and the company's existing U.S. and euro term loan B debt were repriced to the same Libor plus 175 basis points spread from previous pricing of Libor plus 150 basis points.

Deutsche Bank and Lehman are the lead banks on the deal, with Deutsche the left lead.

Proceeds from the add-on will be used to fund a stock buyback and for general corporate purposes.

Crown is a Philadelphia-based designer, manufacturer and seller of packaging products for consumer goods.

Georgia-Pacific, HealthSouth stronger

Georgia-Pacific and HealthSouth both saw their bank debt levels head up by about an eighth of a point as the general secondary market had a positive tone, according to a trader.

Georgia-Pacific's term loan B closed out the day quoted at 99¾ bid, par ¼ offered and its term loan C closed out the day at par ¾ bid, 101¼ offered, the trader said. The company is an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals.

HealthSouth's bank debt closed out the day at 99¾ bid, par ¼ offered, the trader continued. The company is a Birmingham, Ala.-based provider of outpatient surgery, diagnostic imaging and rehabilitative health care services.

"HealthSouth has a decent coupon so maybe people are buying it because of that," the trader said.

"[Also], the general market is feeling better. This week is the best it's been in a while," the trader added.

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