A $275 million term loan B is being prepped for ION Geophysical, a Canadian seismic processing servicer to the global oil and gas industry, to help fund its acquisition of ARAM Systems, a Canadian provider of seismic recording systems, and its affiliate Canadian Seismic Rentals. The purchase price was $350 million. The bank(s) arranging the deal could not be determined, and calls to ION and to ARAM were not returned by press time. Evercore Group acted as ION's financial advisor, while Tudor, Pickering, Holt & Co. advised ARAM.
     A $135 million credit facility, consisting of a $65 million term loan B and a $40 million revolver, is being marketed for Strategic Materials, a Houston-based glass recycler, to help fund its acquisition of Container Recycling Alliance. The facility also consists of a $5 million capital expenditure facility, a C$10 million revolver and a C$15 million term loan B. Price talk on all tranches is at Libor plus 375 bps, with an OID between 98.5 and 99 bps, and includes a 3.0% Libor floor. The bank(s) arranging the deal could not be determined, and calls to Strategic Materials were not returned by press time. Strategic is a portfolio company of Willis Stein and Partners, while Container Recycling is owned by WHI Capital Partners.
     Morgan Stanley is arranging an exit financing package for Hilex Poly Co., a Hartsville, S.C. maker of plastic bags used by most supermarket chains. The exit facility will consist of a $50 million DIP term loan and a $75 million revolver. The prepackaged plan, which was confirmed last week by the U.S. Bankruptcy Court in Wilmington, Del., places Hilex under the ownership of its first- and second-lien lenders while wiping out its old common stock. The company filed for Chapter 11 on May 6. The company was done in by its heavy debt burden, which was difficult to pay back because of the high price of polyethylene resin, the chief raw material for manufacturing plastic bags, and one that uses petroleum as its base. As of Dec. 31, 2006, Hilex had about $318.2 million in assets and roughly $329.1 million in debt.
     A $325 million credit facility led by Credit Suisse and GE Capital Markets for Applica Pet Products was called off last week. Applica planned to buy the pet supply business of Spectrum Brands. But then Salton Inc., the owner of Applica, put a muzzle on the deal, citing its inability to obtain consent from its senior lenders, a lingering concern when the deal was launched earlier this month. The facility consisted of a $300 million first-lien term loan B and a $25 million revolver. Price talk on the first lien was at Libor plus 500 bps, with an OID of 98 and a 3.25% Libor floor. Standard & Poor's assigned the debt a BB rating, two notches above the B+ corporate credit rating, with a recovery rating indicating a 90% to 100% recovery of principal in the event of a payment default. Moody's Investors Service assigned a B1 corporate family and debt rating. Spectrum is a consumer products company whose brands include Rayovac and Remington.
     Credit Suisse has established price talk on a $325 million term loan B for Nations Petroleum, a Canadian oil and gas company operating in North America, Europe and Southeast Asia. Price talk is at Libor plus 750 bps, with an OID of 98 and a 3.25% Libor floor. Credit Suisse launched the term loan two weeks ago (BLR, July 14, 2008) and despite the deal being related to the recently hot energy sector, investors seem to be pushing it back. "We're not looking at it. There should be more incentives," said a Chicago-based investor. The proceeds from the term loan will help Nations Petroleum purchase a large oil producing plot in Malaysia.
     CIT and CIBC have launched a $205 million credit facility for Contec, a Schenectady, N.Y.-based repairer of TV cable receivers. The debt package consists of a $285 million term loan B and a $20 million revolver. Price talk is at Libor plus 400 bps, with an OID between 97 and 98. In addition to the term loan, the banks expect to price $67.5 million in notes in the coming weeks. The proceeds from the debt will help fund Contec's acquisition by American Capital Strategies.
     Wells Fargo last week amended a deal for FTD Group Inc., a Downers Grove, Ill.-based provider of floral products. The term loan B was upsized to $300 million from $200 million, while the term loan A was downsized to $75 million from $175 million. Price talk on the term loan B was left unchanged at Libor plus 450 bps, with an OID of 98 and a 3% Libor floor. However, Wells Fargo added a step-down feature to it that would cause the price to go down to Libor plus 425 bps if total leverage goes below 2.5x. Price talk on the term loan A is at Libor plus 350 bps. The proceeds will help fund FTD's acquisition by United Online, a Woodland Hills, Calif.-based Internet provider. Wells Fargo began to shop the deal late last month (BLR, June 23, 2008). Combined, United Online and FTD had total revenues of roughly $1.15 billion and pro forma operating income of $175 million for the 12 months ended December 2007. The debt is rated BB by Standard & Poor's and B1 by Moody's Investors Service. Both rating agencies put FTD on watch as a result of the acquisition.
     While some term loan B's get upsized, others are getting downsized. BMO Capital Markets and CIT last week downsized the term loan B for Keeley Holdings to $150 million from $175 million, while increasing the amount of mezzanine debt to $60 million from $35 million. Price talk on the term loan is at Libor plus 475 bps, with an OID of 98 and a 3% Libor floor. Keeley's debt package also consists of a $10 million term loan. The proceeds will be used to fund a minority purchase in the company by TA Associates. The term loan will amortize quarterly and include a 75% excess cash-flow sweep. Opening senior leverage is expected to be in the low-2x area and total leverage is expected to be in the mid-to-high 2x area. Based in Chicago, Keeley is a boutique value investment manager that specializes in investing in companies undergoing internal corporate restructuring. President and CIO John L. Keeley Jr. founded the firm in 1982, and it now has $9 billion in assets under management. BMO and CIT launched the deal early last month (BLR, June 2, 2008).
     Bank of America last week established price talk on a $250 million term loan B for L-1 Identity Solutions, a Stamford, Conn.-based provider of technology products, systems and solutions that protect, manage and secure personal identities and assets. Price talk is at Libor plus 450 bps, with an OID of 98. L-1's debt also consists of a $100 million revolver. The proceeds will help fund L-1's acquisition of Digmarc Corp. Bank of America is looking to launch the deal in the third quarter (BLR, July 14, 2008). Following the closing of the transaction, L-1 forecasts that revenues will reach approximately $670 million, according to a company release. S&P assigned a BB+ and Moody's a Ba3 rating to the term loan B.
     Highland Capital Management is bulking up its institutional sales and investor relations team in New York and plans to open an Asia-Pacific regional office in Singapore on Aug. 8, the firm said last week. Paul Adkins, a Highland managing director currently based in Dallas, will relocate to head up the new Asia operation. Additionally, John Mackin, Christopher Harrison and Elizabeth Goldstein have joined Highland as managing directors, focusing on sales and investor relations for the firm's institutional clients. Beginning Aug. 1, the three will be based in the New York office and report to Maureen Mitchell, managing director and head of institutional sales. Mackin joins Highland from Pardus Capital Management, where heserved as the hedge fund's director of investor relations. Harrison was previously president of Maidstone Capital, a firm he established in 2006. And Goldstein joins Highland from Bear Stearns, where she was a senior managing director in the leveraged finance group for nine years. Before that she worked in Goldman Sachs' global finance group and at the Federal Reserve Bank of New York as an economist and member of the international capital markets staff.
     Alcentra, a specialist investor focused on subinvestment-grade debt, is moving one of its top managing directors from London to New York to lead its U.S. leveraged loan business. Paul Hatfield, who will relocate in September, will also oversee the firm's expansion through the addition of two specialist managers-Bank of New York Mezzanine Partners and Hamilton Loan Asset Management-which have been incorporated into Alcentra's U.S. business. Both firms were divisions of BNY Mellon Capital Markets. Alcentra became a subsidiary of The Bank of New York Mellon Corp. in 2006. Hatfield, who joined Alcentra in 2003 as a portfolio manager for its European CLO group, will be replaced in London by Graham Rainbow, who joins the firm as executive director from the leveraged finance team at Barclays Capital. Rainbow will serve as portfolio manager, while David Forbes-Nixon remains senior portfolio manager for the firm's European CLOs. (c) 2008 Bank Loan Report and SourceMedia, Inc. All Rights Reserved. http://www.bankloanreport.com http://www.sourcemedia.com


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