Consolidated Precision Products allocates, term loans tops OIDs; Vestcom reworks pricing

By Sara Rosenberg

New York, Dec. 21 - Consolidated Precision Products Corp. (WPP CPP Holdings LLC) saw its credit facility emerge in the secondary market on Friday, with the first- and second-lien term loans quoted above their original issue discounts.

On the primary front, Vestcom International Inc. increased the coupon on its credit facility and widened the discount price.

Consolidated Precision breaks

Consolidated Precision Products' credit facility freed up for trading in the morning, and levels on the $415 million seven-year covenant-light first-lien term loan (B1/B) were seen at par ¼ bid, par ¾ offered, while the $185 million 71/2-year covenant-light second-lien term loan (Caa1/CCC+) was seen at 99¾ bid, par ¾ offered, a trader remarked.

Pricing on the first-lien term loan is Libor plus 450 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

The second-lien term loan is priced at Libor plus 925 bps with a 1.25% Libor floor, and was sold at a discount of 98. This debt has call protection of 103 in year one, 102 in year two and 101 in year three.

During syndication, pricing on the first-lien loan firmed at the low end of initial talk of Libor plus 450 bps to 475 bps. At one point, it was thought that the spread would firm at the high end of the talk, but the debt received more demand than expected.

Also, the second-lien loan saw pricing increase from talk of Libor plus 825 bps to 850 bps, the discount widen from 981/2, the maturity shorten from eight years and the call protection sweeten from 102 in year one and 101 in year two.

Consolidated getting revolver

Consolidated Precision Products' $700 million credit facility also includes a $100 million five-year revolver (B1/B) that has a 50 bps unused fee.

UBS Securities LLC, GE Capital Markets and RBC Capital Markets LLC are the bookrunners on the deal.

Proceeds will be used to help fund the acquisition of ESCO Corp.'s Turbine Technologies Group, a manufacturer of superalloy precision investment cast components, and to refinance existing debt.

Closing is expected following satisfaction of regulatory requirements and other customary conditions.

Consolidated Precision Products is a Pomona, Calif.-based manufacturer of highly engineered components and sub-assemblies, supplying the commercial aerospace, military and industrial markets with small- to large-function critical products.

Vestcom flexes up

Vestcom International lifted pricing on its $197 million credit facility to Libor plus 575 bps from Libor plus 475 bps and revised the original issue discount to 98½ from 99, according to sources. The 1.25% Libor floor was left intact.

The facility consists of a $25 million revolver and a $172 million term loan B that has 101 soft call protection for one year.

GE Capital Markets is leading the deal.

Proceeds will be used to help fund the company's buyout by Court Square Capital Partners.

Vestcom is a Little Rock, Ark.-based provider of shelf-edge marketing services.

Heartland closes

In other news, Heartland Dental Care Inc. completed its $750 million credit facility on Friday, according to a market source.

The deal consists of a $100 million revolver, a $400 million six-year first-lien term loan and a $250 million 61/2-year second-lien term loan.

Pricing on the first-lien loan is Libor plus 500 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

The second-lien loan is priced at Libor plus 850 bps with a 1.25% Libor floor, and was sold at 981/2. There is hard call protection of 103 in year one, 102 in year two and 101 in year three.

First-lien leverage is 3.6 times.

Heartland being acquired

Proceeds from Heartland Dental's credit facility will help fund the roughly $1.3 billion buyout of the company by Teachers' Private Capital. At close, Heartland Dental founder and chief executive officer Rick Workman will retain a significant minority position along with management and employees.

RBC Capital Markets LLC, BMO Capital Markets Corp. and Jefferies & Co. led the deal, which underwent some changes during its syndication process.

Specifically, the first-lien loan was downsized from $450 million, pricing was lifted from Libor plus 450 bps, call protection was added and the maturity was revised from seven years.

In addition, the second-lien loan was upsized from $200 million, pricing was raised from talk of Libor plus 800 bps to 825 bps and the maturity was shortened from eight years.

Heartland Dental is an Effingham, Ill.-based provider of office support services to dental offices.

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