Gymboree tweaks deal, levels rise; Reynolds, Affinion, Oriental Trading, Sedgwick break

By Sara Rosenberg

New York, Feb. 10 - Gymboree Corp. revised its refinancing/repricing plans, reducing the spread on the new deal to an amount that's less than the existing deal. This, in turn, triggered the existing call protection and caused trading levels on that debt to move higher.

In more loan happenings, Reynolds Group Holdings Ltd.'s bank debt freed up for trading, with the U.S. term loan E quoted well above par, and Affinion Group Inc., Oriental Trading Co. and Sedgwick Claims Management Services Inc. broke too.

Back over in the primary, BWAY Holding Co., Vantage Oncology Inc., Arrowhead General Insurance Agency Inc. and U.S. TelePacific released price talk as their bank deals were presented to lenders during the session, and Cedar Fair LP and Regal Cinemas Corp. started circulating talk on their upcoming loans.

In addition, Burlington Coat Factory Warehouse Corp. is getting ready to bring a new term loan to market, essentially resurrecting the deal that was pulled late last year as a result of unfavorable market conditions.

Furthermore, Walter Energy Inc. moved some funds around between its term loans and finalized B loan pricing, Global Cash Access Inc. reduced the spread and Libor floor while also revising the original issue discount talk, and Tomkins Ltd. trimmed the spread on its repricing B loan.

Gymboree cuts pricing

Gymboree reverse flexed pricing on its $820 million covenant-light term loan B (B1/B+) to Libor plus 350 basis points from Libor plus 412.5 bps, while leaving the 1.5% Libor floor, par offer price and 101 soft call protection for one year against repricings intact, according to a market source.

Credit Suisse is the lead bank on the deal and asked lenders to get their recommitments in by 4 p.m. ET on Thursday.

Proceeds will be used to refinance an existing $820 million term loan B that was obtained in November, when the company was acquired by Bain Capital Partners LLC.

The existing loan includes maintenance covenants and is priced at Libor plus 400 bps with a 1.5% Libor floor. It was sold at an original issue discount of 991/2.

Gymboree paydown revised

Gymboree's existing term loan also includes 101 soft call protection for one year against repricings.

Under the original refinancing plan, lenders were getting repaid at par since the company was not lowering the yield with the new term loan B. However, now that yield is being lowered, existing guys are getting paid down at 101, the source remarked.

As a result, levels on the San Francisco-based specialty retailer's existing term loan moved to 101 bid, 101½ offered on Thursday morning from par 1/8 bid, par 5/8 offered previously, a trader added.

Reynolds starts trading

Also on the trading front, Reynolds Group's bank debt hit the secondary market early on in the session, with the $2.325 billion seven-year term loan E (Ba3/BB) quoted at par ½ bid, 101 offered on the open and then it moved up to 101 bid, 101 3/8 offered, according to trader.

Pricing on the U.S loan is Libor plus 325 bps with a 1% Libor floor, and it was sold at par.

During syndication, pricing on the U.S. loan was lowered from Libor plus 350 bps and the floor was reduced from 1.5%.

The company's bank deal also includes a €250 million seven-year term loan B (Ba3/BB) priced at Euribor plus 350 bps with a 1.5% floor that was also sold at par. The B loan flexed from Euribor plus 375 bps.

Reynolds repays debt

Proceeds from Reynolds' new term loans, which closed on Thursday, were used to repay existing term loan borrowings.

Specifically, the company paid down $500 million of its term loan A, roughly $1 billion of its term loan B, $790 million of its term loan C and about €244 million of its European term loans.

Credit Suisse acted as the lead bank on the deal.

Reynolds Group is an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products.

Affinion frees up

Affinion's $250 million incremental term loan (Ba3/BB-) also broke for trading, with levels quoted at par 5/8 bid, 101 offered, according to a trader. The new debt is trading together with the existing term loan.

On Wednesday, the existing term loan was quoted at par 1/8 bid, par 5/8 offered, so it got a bit of a pop when the incremental freed up, the trader added.

Pricing on the incremental term loan is Libor plus 350 bps with a 1.5% Libor floor, same as existing pricing. The new debt was sold at an original issue discount of 99¾ after firming up from talk in the mid-to-high 99s.

Bank of America Merrill Lynch and Deutsche Bank are the leads on the deal that will be used for general corporate purposes, to fund future strategic initiatives, to pay a dividend and to redeem preferred equity.

Affinion is a Norwalk, Conn.-based provider of marketing services and loyalty programs.

Oriental Trading breaks

Another deal to start trading was Oriental Trading's $220 million six-year first-lien term loan (B2/B), with levels quoted at 99¾ bid, par ¼ offered, according to a trader.

Pricing on the term loan is Libor plus 550 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99.

During syndication, the term loan was upsized from $200 million, pricing was lowered from Libor plus 650 bps, the Libor floor was cut from 1.75% and the original issue discount tightened from 98.

Credit Suisse and JPMorgan are the lead banks on the deal that will be used, along with a $50 million ABL revolver that is being led by GE Capital, to help fund the company's exit from bankruptcy protection. Revolver borrowings at close will now be $11.2 million, down from $21 million because of the term loan upsizing.

Oriental Trading is an Omaha-based direct marketer of party and school supplies.

Sedgwick hits secondary

Sedgwick Claims Management Services' $650 million amended and restated term loan B due Dec. 31, 2016 broke for trading as well, with levels quoted at par ¾ bid, 101 1/8 offered on the open and then it moved up to par 7/8 bid, 101¼ offered, according to a trader.

Pricing on the term loan is Libor plus 350 bps with a step-down to Libor plus 325 bps when leverage is less than 4.25 times. There is a 1.5% Libor floor and 101 soft call protection for six months, and the debt was sold at par.

During syndication, the term loan was upsized from $600 million, pricing was lowered from Libor plus 375 bps and the step-down was added.

Proceeds will be used to fund the purchase of Specialty Risk Services LLC, a third-party claims administrator, from the Hartford Financial Services Group Inc. for $278 million in cash.

Sedgwick refinancing loan

Sedgwick is also using proceeds from its term loan to refinance an existing $400 million first-lien term loan B that is priced at Libor plus 400 bps with a 1.5% Libor floor. It was sold at an original issue discount of 99 when it was obtained last year to help fund the buyout of the company by Stone Point Capital LLC and Hellman & Friedman LLC.

Bank of America and Barclays are the lead banks on the credit facility.

Closing on the transaction is expected occur during the first quarter. The acquisition of Specialty Risk Services is subject to regulatory approval and other required consents.

Sedgwick is a Memphis, Tenn.-based provider of claims and productivity management services to corporate and institutional clients.

BWAY talk emerges

Going back to the primary, BWAY held a call on Thursday to launch its $512.5 million seven-year covenant-light term B, at which time price talk of Libor plus 350 bps with a 1.5% Libor floor and a par offer price were announced, according to a market source. There is 101 soft call protection for one year.

Deutsche Bank, Bank of America Merrill Lynch and Barclays are leading the deal that will be used to refinance existing debt.

In June 2010, BWAY got a $490 million seven-year term loan for its buyout by Madison Dearborn Partners LLC that is priced at Libor plus 375 bps with a 1.75% Libor floor and was sold at an original issue discount of 991/2, and then, in December, the company said that it was getting a $25 million incremental term loan for general corporate purposes.

BWAY, an Atlanta-based supplier of general line rigid containers, expects to complete the refinancing in the third week of this month.

Vantage pricing

Vantage Oncology also came out with price talk as its new credit facility was launched with a bank meeting on Thursday, according to a market source.

The company's $221 million six-year term loan B was presented to lenders with talk of Libor plus 525 bps with a 1.75% Libor floor and an original issue discount of 981/2, the source said.

Jefferies and SunTrust are the lead banks on the $246 million senior secured credit facility (B), which also includes a $25 million five-year revolver.

Proceeds will be used to help fund the buyout of the company by Oak Hill Capital Partners and its portfolio company, Physicians Oncology Services LP, an Atlanta-based operator of outpatient radiation oncology centers.

Vantage, a Manhattan Beach, Calif.-based owner and operator of radiation oncology centers, will have total leverage of roughly 4 times based on LTM Sept. 30 pro forma combined EBITDA of $58.8 million.

Arrowhead releases talk

Arrowhead General Insurance Agency launched a $172 million senior secured credit facility with a bank meeting on Thursday in New York and disclosed price talk on the first- and second-lien deal, according to a market source.

The $15 million five-year revolver (B3) is being talked at Libor plus 575 bps with a 1.75% Libor floor and a 75 bps unused fee, the $115 million six-year first-lien term loan (B3) is being talked at Libor plus 575 bps with a 1.75% floor and an original issue discount of 98, and the $42 million seven-year second-lien term loan (Caa1) is being talked at Libor plus 950 bps with a 1.75% floor and a discount of 97, the source said. Call protection on the second-lien term loan is 103 in year one, 102 in year two and 101 in year three.

RBC and Macquarie are the joint lead arrangers and bookrunners on the deal that will be used to refinance an existing first- and second-lien credit facility.

Arrowhead is a San Diego-based national insurance program manager owned by Spectrum Equity Investors and JMI Partners.

U.S. TelePacific guidance

U.S. TelePacific disclosed that it is talking its $435 million six-year term loan at Libor plus 500 bps with a 1.25% Libor floor and an original issue discount of 99½ as the deal was launched with a call on Thursday, according to a market source. There is 101 soft call protection for one year.

Credit Suisse, Deutsche Bank and Bank of America Merrill Lynch are the lead banks on the $460 million credit facility, which also includes a $25 million five-year revolver.

Proceeds will be used to refinance existing debt.

Early in 2010, the company got a $25 million revolver - and a $370 million 51/2-year first-lien term loan priced at Libor plus 725 bps with a 2% Libor floor - that was sold at an original issue discount of 98. The 101 soft call protection on the existing term loan is about to expire, so lenders will be getting paid down at par when this new deal is done.

U.S. TelePacific is a Los Angeles-based competitive local exchange carrier.

Cedar Fair floats talk

Cedar Fair began circulating price talk of Libor plus 300 bps to 325 bps with a 1.25% Libor floor and a par offer price on its proposed $1.175 billion term loan that will be used to reprice/refinance an existing term loan, according to a market source.

Pricing on the existing term loan that was obtained in the summer of 2010 to refinance existing debt is Libor plus 400 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99.

JPMorgan is the lead bank on the deal.

Following the news of the repricing, the company's existing term loan was quoted by one trader at par 7/8 bid, 101 1/8 offered versus 101 3/8 bid, 101 5/8 offered on Wednesday, and by a second trader at par 5/8 bid, 101 1/8 offered, down from 101¼ bid, 101¾ offered.

Cedar Fair is a Sandusky, Ohio-based regional amusement-resort operator.

Regal repricing coming

Regal Cinemas is scheduled to hold a lender call on Friday to launch an amendment to its term loan (Ba2/BB-) to extend the maturity to August 2017 from Nov. 19, 2016 and reduce pricing to Libor plus 325 bps with a step-down to Libor plus 300 bps at less than 3 times leverage, according to a market source.

The amended term loan, which is being led by Credit Suisse, is being offered at par and will include 101 soft call protection for one year.

The originally sized $1.25 billion term loan was completed in May 2010 to refinance existing bank debt. Pricing is Libor plus 350 bps with a step-up to 375 bps based on leverage.

The company said in a 424B3 filed with the Securities and Exchange Commission on Thursday that it plans on repaying some of its senior credit facility borrowings with proceeds from a new offering of $100 million of 9 1/8% senior notes.

Regal term loan size

At Sept. 30, as adjusted for the paydowns from a notes offering in January and the current bond deal, the term loan was $997.8 million, net of debt discount.

Remaining proceeds from the new bond deal will be used for general corporate purposes, which may include the redemption, repayment or repurchase of debt.

The amendment is expected to be completed concurrently with the closing on the bonds, which is targeted for Feb. 15.

Regal Cinemas is a subsidiary of Regal Entertainment Group, a Knoxville, Tenn.-based motion picture exhibitor.

Burlington readies launch

Burlington Coat Factory has set a conference call for Friday to launch a proposed $1 billion term loan via lead banks JPMorgan, Goldman Sachs, Bank of America Merrill Lynch and Wells Fargo, according to an informed source.

Proceeds, along with $400 million of senior notes, will be used to repay an existing term loan, repurchase $305 million of 11 1/8% senior notes due 2014 and roughly $99 million of 14½% senior discount notes due 2014, and make a distribution to equity holders as well as for general corporate purposes.

As of Oct. 30, there was about $853 million outstanding under the existing term loan.

The tender offers for the notes expire on March 9.

Burlington back

Burlington had already tried to get a $1 billion term loan and $500 million notes offering done in November, but that financing was pulled because of changing market conditions and less favorable pricing.

The company is now coming back with the proposal, albeit with a smaller bond deal, because the credit markets have seen a vast improvement since that time, the source explained.

In November, the company had launched its $1 billion term loan with price talk of Libor plus 525 bps with a 1.75% Libor floor and an original issue discount of 981/2, and the notes had been talked with a 10% area yield.

Burlington Coat Factory is a Burlington, N.J.-based discount retailer.

Walter reworks deal

Also on the primary side, Walter Energy made a number of changes to its credit facility, including downsizing its seven-year term loan B to $1.4 billion from $1.75 billion and upsizing its five-year term loan A to $950 million from $600 million, according to a market source.

Pricing on the term loan B was set at Libor plus 300 bps, the tight end of the initial Libor plus 300 bps to 325 bps talk, and there is now a step-down to Libor plus 275 bps based on leverage. And, the tranche is now being issued at par, instead of at a discount of 991/2, and 101 soft call protection for one year was added, the source said. The 1% Libor floor was left unchanged.

Meanwhile, pricing on the company's term loan A and $375 million five-year revolver was left at Libor plus 300 bps with no Libor floor. The revolver has a 50 bps unused fee and the term loan A is being issued at par, compared to prior talk of to be determined.

Walter lead banks

Morgan Stanley, Credit Agricole and the Bank of Nova Scotia are the lead arrangers Walter Energy's the $2.725 billion senior secured credit facility (B1/BB-).

Commitments are due on Friday and allocations are expected to go out in the next week or so.

Proceeds will be used to help fund the acquisition of Western Coal Corp. for C$11.50 per share, to refinance existing debt and to contribute to working capital.

Walter Energy is a Tampa, Fla.-based producer and exporter of metallurgical coal for the steel industry. Western Coal is a Vancouver, B.C.-based producer of metallurgical coal.

Global Cash cuts pricing

Global Cash Access lowered pricing on its $205 million term loan B to Libor plus 550 bps from talk of Libor plus 600 bps to 625 bps, cut the Libor floor to 1.5% from 1.75%, and revised original issue discount talk to 99 to 99½ from just 99, according to a market source.

Commitments are due on Tuesday.

The company's $235 million credit facility (B1/BB-) also includes a $30 million revolver.

Deutsche Bank and Wells Fargo are the lead banks on the deal that will be used to refinance existing debt.

Global Cash Access is a Las Vegas-based provider of cash access services to the gaming industry.

Tomkins tweaks spread

Tomkins lowered pricing on its term loan B to Libor plus 300 bps from Libor plus 325 bps, while leaving the 1.25% Libor floor unchanged, according to a market source. This loan is being done under an amendment to reprice the existing B loan that is at Libor plus 450 bps with a 1.75% floor.

Another change to the amendment proposal is that the company is revising the maximum capital expenditures requirement to $175 million. It was previously at $150 million, the source said.

All other terms of the amendment were left unchanged, including the company's plans to reduce term A pricing to Libor plus 300 bps with a 1.25% Libor floor from Libor plus 425 bps with a 1.75% floor, revise total leverage and interest coverage ratios and provide more flexibility with the accordion feature.

Citigroup, Bank of America, Barclays Capital, RBC Capital Markets and UBS are leading the amendment and have asked for recommitments by noon on Friday.

Tomkins is a Denver-based engineering and manufacturing group providing products for the industrial, automotive and building products markets.

Rockwood wraps refi

In other news, Rockwood Holdings Inc. closed on its $850 million seven-year term loan that was used to refinance existing bank debt, according to a news release. The loan was led by Credit Suisse, Deutsche Bank, Morgan Stanley, UBS and KKR.

Pricing on the term loan is Libor plus 275 bps with a step-down to Libor plus 250 bps at less than 2 times net total leverage. There is a 1% Libor floor and 101 soft call protection for one year, and the debt was issued at par.

During syndication, pricing on the term loan was reduced from Libor plus 300 bps, the step-down was added and the 99½ original issue discount was terminated.

The Princeton, N.J.-based specialty chemicals and advanced materials company's $1.03 billion credit facility (Ba1/BBB-/BB+) also includes a $180 million five-year revolver priced at Libor plus 275 bps (after flexing from Libor plus 300 bps) with a 1% Libor floor. It was sold at a discount of 99.

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