SunGard slides; Realogy bounces around; Research Pharma, Spectrum, National Mentor set talk

By Sara Rosenberg

New York, Jan. 18 - SunGard's incremental term loan B headed lower on Tuesday as the company launched a refinancing/repricing of the debt, and Realogy Corp.'s strip of institutional bank debt seesawed on amend and extend news.

Over in the primary, Research Pharmaceuticals Services Inc. came out with price talk on its credit facility as the transaction was presented to lenders during the session, Spectrum Brands Holdings Inc. and National Mentor Holdings Inc. began circulating price talk on their upcoming deals, and Styron, TowerCo and GEO Group surfaced with plans for new loans.

Also, EquiPower Resources Holdings and SourceMedia Inc. reduced pricing on their credit facilities, and Compass Diversified Holdings has been attracting lenders to its term loan B, with the expectation being that the tranche will be fully subscribed before this week is over.

SunGard softens

SunGard's incremental term loan B weakened in trading after the company launched a refinancing of the tranche via bookrunner JPMorgan, according to traders.

The incremental B loan was quoted by one trader at par ¼ bid, par ¾ offered, down from par ½ bid, 101¼ offered, and by a second trader at par ¼ bid, 101 ¼ offered, versus par ½ bid, 101¼ offered on Friday.

Under the transaction, the company is looking to get a new $479.22 million incremental term B due Feb. 28, 2014 that is talked at Libor plus 362.5 basis points with no Libor floor and an original issue discount of 99½ to 99¾ to replace its existing $479.22 million incremental term B due Feb. 28, 2014 that is priced at Libor plus 375 bps with a 3% Libor floor.

The new loan includes 101 soft call protection for one year.

SunGard is a Wayne, Pa.-based software and technology services company.

Realogy falls from highs

Realogy's strip of term loan and letter-of-credit facility debt dropped on Tuesday after experiencing a strong run-up on Friday when news of a lender call first hit the market, according to a trader.

The strip was quoted at 96½ bid, 97 offered in the afternoon versus 97½ bid, 98½ in the morning and 97¼ bid, 98 offered on Friday.

The debt rallied on Friday from 96 bid, 96½ offered when investors heard that the company would be holding a conference call at 11 a.m. ET on Tuesday with investors. Shortly before the call started, the company announced that it is looking to amend and extend is senior secured credit facility.

As for why the debt came off its highs after details on the amendment and extension emerged, the trader was unsure. He guessed that investors were possibly looking for a better amendment fee, higher pricing, or there could have just been some profit taking going on.

Realogy amendment details

Under the proposal, Realogy, a Parsippany, N.J.-based provider of real estate and relocation services, asked lenders to extend its revolver by three years to April 10, 2016 at pricing of be Libor plus 325 bps, up from non-extended pricing of Libor plus 225 bps.

The company is also looking to extend its first-lien term loan and synthetic letter-of-credit facility by three years to Oct. 10, 2016 at pricing of Libor plus 425 bps, up from Libor plus 300 bps on the non-extended.

In addition, the amendment would provide the company with additional flexibility to get secured debt and additional junior-lien debt. The secured debt would be used to refinance existing secured and unsecured debt.

Lenders are being offered a 10 bps amendment fee and responses are due on Jan. 25.

As a condition to the amendment, the company plans on issuing $700 million of secured bonds to prepay a portion of the extended term loans.

Delta moves with numbers

Also in trading, Delta Air Lines Inc.'s old term loan inched up to 99 5/8 bid, par 1/8 offered from 99 3/8 bid, 99 7/8 offered as the company released quarterly numbers, according to a trader.

The Atlanta-based airline company's new term loan was unchanged at 101 bid, 101¾ offered, the trader added.

For the quarter ended Dec. 31, the company reported net income of $19 million, or $0.02 per diluted share, versus a net loss of $25 million, or $0.03 per diluted share in the December 2009 quarter.

Total operating revenue for the quarter was $7.789 billion, up 14% from $6.805 billion compared to the same period last year.

In addition, the company ended the quarter with net debt of $15 billion, a $2 billion reduction from Dec. 31, 2009.

Research Pharma pricing

Switching to the primary, Research Pharmaceuticals Services launched its $115 million senior credit facility on Tuesday, and in connection with the event, price talk was announced, according to a market source.

Both the $35 million five-year revolver and the $80 million six-year term loan are being talked at Libor plus 525 bps with a 1.75% Libor floor and an original issue discount of 981/4, the source said.

GE Capital is the lead bank on the deal that will be used to help fund the buyout of the company by Warburg Pincus LLC in an all-cash transaction valued at $6.10 per share.

Closing on the transaction is expected to take place in February.

Research Pharmaceuticals Services is a Fort Washington, Pa.-based provider of clinical development services to the pharmaceutical, biotechnology and medical device industries.

Spectrum floats talk

Spectrum Brands started telling investors price talk on its proposed $680 million term loan as a conference call has been set for noon ET on Wednesday to launch the transaction, according to a market source.

The term loan is being talked at Libor plus 450 basis points with a 1.5% Libor floor and is being offered at par, the source said, adding that there is 101 soft call protection for one year.

Credit Suisse is the lead bank on the deal that will be used, along with cash on hand, to refinance an existing $680 million senior secured term loan at a price of 101 due to call protection.

Following news of the transaction, the existing term loan moved to par ¾ bid, 101¼ offered from 102 bid, 102½ offered on Friday, a trader remarked.

Closing on the refinancing is expected to occur this month.

Spectrum looking to cut costs

Through the refinancing, Spectrum Brands, a Madison, Wis.-based consumer products company, is basically looking to reduce pricing on its term loan borrowings.

The company's existing loan, which is scheduled to mature in June 2016, is priced at Libor plus 650 bps with a 1.5% Libor floor and was sold at an original issue discount of 98 when it was obtained in the summer of 2010.

During syndication of the existing loan, pricing had to be increased from talk of Libor plus 450 bps, the discount widened from 99 and the soft call protection was added.

The loan had also been downsized to $750 million from $1 billion. Since closing, the company has made voluntary prepayments of $50 million in November 2010 and $20 million in December 2010, which brought the size down to its current amount of $680 million.

National Mentor guidance

National Mentor also came out with price talk on its proposed credit facility as it scheduled a bank meeting for 10:30 a.m. ET on Thursday at the Palace Hotel in New York to present the deal to lenders, according to a market source.

Both the $75 million five-year revolver and the $505 million six-year term loan B are being talked at Libor plus 550 bps with a 1.75% Libor floor, the source said.

And, the term loan B is being offered at an original issue discount of 981/2, the source added.

UBS Investment Bank, Barclays Capital and Jefferies are the lead banks on the $580 million senior secured deal, with UBS the left lead.

National Mentor is a Boston-based provider of home and community-based health and human services.

Styron readies launch

In more primary news, Styron joined the forward calendar as it set a bank meeting for Thursday to launch a proposed $1.3 billion 61/2-year term loan led by Deutsche Bank, HSBC, Barclays and BMO, according to a market source.

Proceeds will be used to refinance an existing term loan, repay revolver borrowings, take out seller notes and fund a dividend.

Styron is a diversified chemical manufacturer of emulsion polymers and plastics.

TowerCo coming to market

TowerCo emerged with plans to get a new $390 million credit facility (BB), consisting of a $40 million four-year revolver and a $350 million six-year term loan, according to a market source.

Morgan Stanley, TD Securities and Fifth Third Bank are the lead banks on the deal that is set to launch with a bank meeting on Thursday afternoon.

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

TowerCo is a Cary, N.C.-based owner and leaser of communication towers.

GEO sets meeting

GEO Group scheduled a bank meeting for Wednesday to launch a $250 million credit facility, comprised of a $100 million revolver and a $150 million term loan A-2, and is expected to announce price talk at the launch, according to a market source.

BNP Paribas is the lead bank on the deal that will be used to help fund the acquisition of Behavioral Interventions Inc., a Boulder, Colo.-based provider of electronic monitoring services, for $415 million in an all-cash transaction, excluding transaction-related expenses.

When the purchase was first announced, the company said that it had a commitment for $425 million of debt financing, with that debt able to be comprised of both floating- and fixed-rate pieces.

Closing is expected this quarter, subject to regulatory approval and other customary conditions.

GEO is a Boca Raton, Fla.-based provider of correctional, detention, and residential treatment services to government agencies.

EquiPower flexes

Moving to deals that are already in market, EquiPower Resources Holdings lowered pricing on its $525 million secured credit facility (Ba3/BB-) to Libor plus 425 bps from talk of Libor plus 450 bps to 475 bps, according to a market source.

The facility consists of a $100 million revolver that has no Libor floor and a $425 million seven-year term loan that has a 1.5% Libor floor.

As part of the changes announced on Tuesday, the original issue discount on the term loan was moved to 99 from 981/2, the source said.

Recommitments are due from lenders at 5 p.m. ET on Wednesday.

EquiPower lead banks

Barclays, Credit Agricole and Union Bank are the lead banks on EquiPower's credit facility, with Barclays the left lead.

Proceeds will be used to fund the acquisition of Milford Power, the owner of a 548 megawatt combined cycle gas turbine power plant located in Milford, Conn., and to fund a distribution to the sponsor.

The transaction is expected to close early in the first quarter following receipt of all necessary approvals.

EquiPower is a Hartford, Conn.-based competitive power generation company that is owned by Energy Capital Partners LLC.

SourceMedia revises pricing

SourceMedia trimmed pricing on its $25 million revolver and a $145 million term loan to Libor plus 500 bps from Libor plus 525 bps, left the 1.5% Libor floor unchanged and tightened the original issue discount to 99 from 981/2, according to a market source.

In connection with the flex, 101 soft call protection for one year was added to the term loan, the source said.

Recommitments were due from lenders by 5 p.m. ET on Tuesday.

Citigroup, GE Capital and BMO are the lead banks on the $170 million credit facility that will be used to refinance existing debt.

SourceMedia is a New York-based provider of news, analysis, research, data and insights for members of the financial services community and related fields in professional services and technology.

Compass nets interest

Compass Diversified Holdings' $200 million six-year last-out term loan B (B1/BB-) has been seeing good demand from investors since launching a week ago and is expected to be fully circled this week within the original price talk range, a market source told Prospect News.

As was previously reported, talk on the term loan B is Libor plus 425 bps to 475 bps with a 1.5% Libor floor and an original issue discount of 981/2.

The company's $525 million senior secured credit facility also includes a $325 million five-year revolver (Ba1) talked at Libor plus 325 bps, subject to a leverage grid that kicks in six months after close, with no Libor floor and upfront fees based on commitment size.

Compass replacing debt

Proceeds from Compass Diversified Holdings' credit facility will be used to refinance existing debt and for general corporate purposes.

TD Securities, BMO Capital Markets and SunTrust are the lead arrangers on the deal, with TD the sole bookruner.

Compass Diversified Holdings is a Westport, Conn.-based investment firm specializing in acquiring controlling stakes in small- to middle-market companies.

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