Lee trades up; CCS trims OID; Blue Coats modifies size, structure; Generac, CKx set talk

By Sara Rosenberg

New York, Jan. 17 - Lee Enterprises Inc.'s term loan was higher during Tuesday's trading hours as the company came out with quarterly results and disclosed that it hopes to emerge from bankruptcy by the end of this month.

Moving to the primary market, CCS Corp. announced some changes to its add-on term loan, tightening the original issue discount and accelerating the commitment deadline, and Blue Coat Systems Inc. revised its credit facility structure ahead of its upcoming bank meeting.

Also, Generac Power Systems Inc. revealed tranching and pricing guidance on its credit facility, CKx Inc. set price talk on its first-lien term loan and American Dental Partners Inc. released unofficial talk as all of these transactions were presented to lenders during the session.

Additionally, Kabel Deutschland Holding AG, Vantage Specialty Chemicals and Great Atlantic & Pacific Tea Co. Inc. (A&P) emerged with plans to bring new deals to market.

Lee Enterprises rises

Lee Enterprises' term loan was stronger on Tuesday with the company's release of first fiscal quarter earnings and announcement that it is targeting a Jan. 30 Chapter 11 emergence date, according to a trader.

The term loan was quoted at 70½ bid, 72½ offered, up from 70 bid, 72 offered on Friday, the trader said.

For the first fiscal quarter ended Dec. 25, the company reported net income of $14.6 million, or $0.32 per diluted share, compared to net income of $18.9 million, or $0.42 per diluted share, last year.

Operating revenue for the quarter totaled $199.6 million, a decline of 3.9% from $207.7 million in the previous year's first quarter.

Also, debt was reduced $10.6 million in the quarter and free cash flow totaled $29.2 million.

Lee is a Davenport, Iowa-based print and digital provider of local news, information and advertising.

Fresenius holds steady

Fresenius Medical Care AG & Co.'s term loans were unchanged near the par context as word surfaced that the company plans on paying down some term debt with proceeds from a $1.2 billion and €250 million senior unsecured notes offering, according to a trader.

Specifically, the term loan B-1 and B-2 were quoted at par bid, par ½ offered, and the term loan B was quoted at 99¾ bid, par ¼ offered, the trader said.

In addition to repaying bank debt, proceeds from the notes will be used for acquisitions, including the purchase of Liberty Dialysis Holdings Inc., and for general corporate purposes.

Fresenius is a Bad Homburg, Germany-based provider of products and services for individuals undergoing dialysis.

CCS tweaks deal

Over in the primary, CCS revealed revisions to its C$200 million add-on term loan due November 2014, moving the original issue discount to 99 from 98 and advancing the commitment deadline to Tuesday from Wednesday, according to a market source.

As before, pricing on the term loan is Libor plus 500 basis points with a 1.5% Libor floor, the source remarked.

Deutsche Bank Securities Inc. and Goldman Sachs & Co. are the lead banks on the deal that will be used to refinance revolver borrowings.

CCS is a Calgary, Alberta-based oil and gas environmental services company.

Blue Coat restructures

Blue Coat has reworked tranching on its senior secured credit facility ahead of its Wednesday afternoon bank meeting, increasing the amount of term loan debt and adding a second-lien tranche, according to a market source.

The $495 million facility now consists of a $50 million revolver, a $360 million first-lien term loan and an $85 million second-lien term loan, the source said, adding that official price talk is not yet out.

By comparison, based on filings with the Securities and Exchange Commission, it was previously thought that the facility would total $465 million, comprised of a $50 million revolver and a $415 million term loan that would both be priced at Libor plus 650 bps with a 1.5% Libor floor.

Jefferies & Co. is the lead bank on the deal.

Blue Coat funding buyout

Proceeds from Blue Coat's credit facility will be used to help fund the acquisition of the company by Thoma Bravo LLC and Ontario Teachers' Pension Plan for $25.81 in cash per share, in a transaction valued at roughly $1.3 billion.

As a result of the change to the credit facility structure, the equity being used for the deal was reduced to around $479 million from $514 million, the source remarked.

Closing is expected in the first quarter of 2012, subject to customary conditions including regulatory and shareholder approvals.

Upon completion, Blue Coat, a Sunnyvale, Calif.-based provider of web security and WAN optimization services, will have total leverage of about 3.75 times

Generac structure, talk

In more primary happenings, Generac Power Systems held a bank meeting in the afternoon to kick off syndication on its proposed $725 million senior secured credit facility (Ba3/BB+), and with the event, tranching and price talk were announced, according to market sources.

The facility consists of a $150 million five-year revolver, a $250 million five-year term loan A and a $325 million seven-year term loan B, sources said.

Price talk on the revolver and term loan A is Libor plus 225 bps, and the B loan is talked at Libor plus 300 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, sources continued.

J.P. Morgan Securities LLC, Goldman Sachs & Co. and Bank of America Merrill Lynch are the lead banks on the deal that will be used to refinance existing bank debt and for general corporate purposes.

Generac, a Waukesha, Wis.-based designer and manufacturer of generators and other engine-powered products, is seeking lender commitments by Jan. 31.

CKx guidance surfaces

CKx released price talk of 9% fixed-rate on its $200 million first-lien 51/2-year term loan in connection with its Tuesday morning bank meeting, but informed investors that the original issue discount is still to be determined, a market source told Prospect News. The tranche is non-callable for 2½ years.

Lead banks, Goldman Sachs & Co. and Macquarie Capital, are seeking commitments towards the loan by Jan. 31.

Proceeds will be used to help replace a portion of the $360 million bridge loan that was used to fund the purchase of the company by Apollo Global Management in 2011. The remaining debt is expected to be replaced with a $160 million second-lien financing.

CKx is a New York-based owner of entertainment content.

American Dental launches

Also holding a bank meeting was American Dental Partners, and unofficial talk on the $241 million senior secured credit facility surfaced as Libor plus 575 bps with a 1.5% Libor floor and an original issue discount of 98, based on expected ratings of B2/B, according to a source. Official talk will come out once ratings are release.

The facility consists of a $36 million five-year revolver and a $205 million six-year term loan B - down from the $220 million amount that was outlined in recent filings with the Securities and Exchange Commission.

KeyBanc Capital Markets LLC, CIT Capital Securities and NXT Capital LLC are leading the deal that will be used, along with about $220 million of equity, to fund the buyout of the company by JLL Partners Inc. for $19 per share. The transaction is valued at about $427.2 million on a fully diluted basis.

Commitments are due Jan. 31 and closing is expected this quarter, subject to customary conditions, including receipt of shareholder and regulatory approvals.

American Dental is a Wakefield, Mass.-based business partner to dental group practices.

Kabel Deutschland coming soon

In other news, Kabel Deutschland has set a bank meeting for Wednesday in New York to launch a proposed $500 million seven-year senior secured term loan that will be done as a new tranche under the existing credit facility, according to a market source.

Proceeds will be used to repay a portion of the existing term loan A due in March 2012, term loan C due in March 2013, term loan A-1 due in March 2014, term loan A-2 due in March 2014 and term loan C-1 due in March 2014.

Goldman Sachs & Co., BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and RBS Securities Inc. are the mandated lead arrangers on the deal.

Kabel Deutschland is an Unterfoehring, Germany-based cable operator.

Vantage readies launch

Vantage Specialty Chemicals also joined the forward calendar, scheduling a bank meeting for Jan. 24 to launch a $300 million credit facility, according to a market source.

The facility consists of a $60 million five-year revolver and a $240 million six-year term loan B, the source said, adding that price talk is not yet available.

RBC Capital Markets LLC and Fifth Third Securities Inc. are leading the deal that will be used, along with more than 50% equity, to back the already completed acquisition of the company by Jordan Co. from H.I.G. Capital LLC.

With this transaction, Vantage, a Chicago-based specialty chemicals company, has total and senior leverage of around 4.2 times.

A&P sets meeting

Another new deal announcement came from Great Atlantic & Pacific Tea with a bank meeting set to take place on Wednesday afternoon in Mew York to launch a $750 million exit facility, according to a market source.

The facility consists of a $400 million ABL revolver and a $350 million term loan, with price talk still to be determined, the source said.

J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC are the lead banks on the deal that will be used to repay a debtor-in-possession facility, pay Chapter 11 emergence costs and for general corporate purposes.

A&P is a Montvale, N.J.-based operator of supermarkets.

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