Securitization People and Markets

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

Investors oversubscribed to the $80 million add-on incremental "B" term loan for Language Line, which was increased from its originally proposed size of $75 million. Pricing was reverse flexed from LIBOR plus 4% to LIBOR plus 33/4%, a banker explained. The "B" loan, led by TD Securities, FleetBoston Financial and Wachovia Securities, will provide a dividend to the company's sponsor, Providence Equity Partners, he noted. The five-and-a-half-year loan will tack on to Language Line's existing $200 million credit put in place in October 2001. This credit has amortized down to $170 million. The banker said the add-on loan is being executed now because the performance of Language Line, a provider of over-the-phone translation services, has been very strong and it has de-levered back down to its 2001 levels. "It just made sense to recapitalize," he added.

The six-year, $135 million "B" loan for Packaged Ice was more than five times oversubscribed last week, with about $700 million in tickets in for the tranche, a banker said. Lead banks CIBC World Markets, Credit Suisse First Boston and Bear Stearns were set to close the books on the loan by last Thursday, just two days after syndication launched. The banker said it was not determined if the institutional piece would be increased or if a reverse price flex would occur. The "B" piece was shopped at LIBOR plus 31/2%. The credit backs Packaged Ice's $450 million acquisition by Trimaran Capital Partners and Bear Stearns Merchant Banking.

Goldman Sachs allocated the $750 million second priority term loan for Calpine Corp. late last week in conjunction with its $3.3 billion debt package. The entire bond and bank deal was increased from an initially planned $1.8 billion after receiving red hot reception in the debt markets. A banker familiar with the loan said over 100 investors came into the term loan from all corners of the market. The four-year loan and $500 million of four-year floating-rate notes were both priced at LIBOR plus 53/4%. Calpine also priced $1.15 billion of 81/2% fixed-rate senior secured notes due 2010 and $900 million of 83/4% senior secured notes due 2013.

The $475 million "B" loan backing the acquisition of school yearbook and class ring-maker Jostens had already gained about $1.2 billion in commitments as of late last week, according to bankers. The tranche is a part of a $650 million facility being used to partially finance the $1.2 billion acquisition. Credit Suisse First Boston and Deutsche Bank are the lead arrangers shopping the credit. Ring Acquisition Corp.--a newly formed company controlled and managed byCSFB Private Equity and its private equity fund DLJ Merchant Banking III LP--is acquiring Jostens from Investcorp, MidOcean Partners, First Union Leveraged Capital and Northwestern Mutual Life Insurance (LMW, 6/23).

Loan market players are hoping the increase in merger and acquisition activity over past weeks will continue to intensify and stir up a significant amount of much needed new bank credits. But while some sense the M&A pot is brewing up all sorts of deals, others wonder if many of the big transactions will deliver significant loan supply. Some of the deals are hostile, so they have "less than a 50/50 chance of being completed," one investor noted.

The $250 million "B" loan for Oriental Trading oversubscribed ahead of the bank meeting last Wednesday, with more than $260 million in hold-level commitments coming into the official launch and up to $350 million in tickets by press time, a banker said. Sole bookrunner BNP Paribas is shopping the $290 million recapitalization credit for the direct marketer of novelties, toys, party supplies and other related products. The deal will go toward refinancing holding company OTC Holdings' preferred stock, noted Anthony Choe, a director at Oriental Trading and a principal at the company's leading private equity sponsor, Brentwood Associates.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.