National Surgical sets talk; Attachmate timing still fluid; NexTag reworks term loan

By Sara Rosenberg

New York, Jan. 7 - National Surgical Hospitals Inc. came out with price talk on its credit facility as the transaction was presented to lenders early on in Friday's session, and timing on Attachmate Corp. is still moving around with some now expecting the deal to come later in the month.

Also in the primary, NexTag Inc. made a number of changes to its term loan B, including shortening the maturity, increasing pricing and the original issue discount, adding call protection and beefing up amortization, and IWCO Direct Inc. emerged with plans to sell down an existing term loan.

National Surgical guidance

National Surgical Hospitals held a bank meeting at 10 a.m. ET on Friday to kick off syndication on its proposed credit facility, and in connection with the launch, price talk on the institutional tranches was released, according to a market source.

Both the $170 million six-year term loan and the $30 million six-year delayed-draw term loan are being talked at Libor plus 550 basis points with a 1.75% Libor floor and an original issue discount of 99, the source said.

The delayed-draw term loan is available for up to two years.

The company's $220 million senior secured credit facility (B2/B) also provides for a $20 million five-year revolver.

National Surgical being acquired

Proceeds from National Surgical Hospitals' credit facility will be used to help fund its buyout by Irving Place Capital. There will be about 40% equity as part of the transaction.

At close, senior and total leverage will be around 4 times.

Jefferies is the lead bank on the credit facility and is asking that lenders place their orders by Jan. 25.

National Surgical Hospitals is a Chicago-based owner, operator and developer of surgical hospitals and surgery centers in partnership with local physicians.

Attachmate launch moves

Attachmate is still working on figuring out when it will hold the bank meeting for its proposed $1.09 billion senior secured credit facility, with some sources now hearing that it could come during the week of Jan. 17, as opposed to during the week of Jan. 10.

A firm date for the launch is expected to emerge sometime over the next week or so, sources said.

Credit Suisse, RBC, Goldman Sachs and Citadel are the lead banks on the deal, with Credit Suisse the left lead.

The facility consists of a $40 million revolver, an $825 million first-lien term loan and a $225 million second-lien term loan, according to filings with the Securities and Exchange Commission.

Attachmate buying Novell

Proceeds from Attachmate's credit facility, along with $425 million of equity, will be used to fund the acquisition of Novell Inc. for $6.10 per share in cash in a transaction valued at $2.2 billion.

Novell has also entered into a definitive agreement for the concurrent sale of certain intellectual property assets to CPTN Holdings LLC, a consortium of technology companies organized by Microsoft Corp., for $450 million in cash. The cash payment is reflected in the price to be paid by Attachmate.

Closing on the acquisition is expected to occur in the first quarter, subject to regulatory approvals and clearance under the Hart-Scott-Rodino Act, the completion of the sale of assets to CPTN Holdings and approval by Novell's stockholders.

Attachmate is a Seattle-based provider of access and integration software for legacy systems. Novell is a Waltham, Mass.-based developer, seller and installer of enterprise software.

NexTag tweaks deal

NexTag reworked its $200 million term loan B as the deal has been in market since early December but has not had much luck filling out. As a result, in an attempt to attract investors, maturity, pricing, call protection and amortization were all revised.

Under the changes, the term loan B now has a five-year maturity instead of a seven-year maturity, pricing was lifted to Libor plus 550 bps from talk of Libor plus 475 bps to 500 bps, the discount widened to 97½ from 99, and 101 soft call protection for one year was added, a market source told Prospect News.

The 1.5% Libor floor was left unchanged.

Additionally, amortization was increased and the credit agreement now provides that no further dividends are allowed, the source said.

NexTag getting revolver

NexTag's $250 million senior secured credit facility (B1/BB-) also provides for a $50 million revolver.

Deutsche Bank, JPMorgan and Morgan Stanley are the lead arrangers on the deal, with Deutsche the left lead. Societe Generale and Bank of America are the co-managers.

Proceeds will be used to fund a distribution to shareholders and for general corporate purposes.

NexTag, a San Mateo, Calif.-based comparison shopping website for products and services, is owned by Providence Equity Partners LLC.

IWCO readies sell-down

IWCO Direct is set to hold a bank meeting on Tuesday to launch the sell-down of its $250 million term loan that was obtained in 2007 to help fund its buyout by Avista Capital Partners from Court Square Capital Partners, according to a market source.

The term loan is priced at Libor plus 337.5 bps and is expected to be offered an original issue discount somewhere in the high 80s to low 90s area, the source said.

Deutsche Bank is the lead bank on the deal.

IWCO is a Chanhassen, Minn.-based provider of direct marketing services.

Southern Pacific closes

In other news, Southern Pacific Resource Corp., a Calgary, Alberta-based explorer, developer and producer of in-situ thermal heavy oil and bitumen production, closed on its $275 million second-lien term loan and a C$30 million first-lien revolver, according to a news release.

Pricing is Libor plus 850 bps, after flexing from Libor plus 925 bps during syndication, with a 2% Libor floor, and it was sold at an original issue discount of 97. The loan is non-callable for one year, then at 102 in year two and 101 in year three.

Credit Suisse and RBC Capital acted as the joint lead arrangers and joint bookrunners on the deal, with BMO Capital and TD Securities bookrunners as well.

Proceeds are being used to help fund the development of the company's McKay phase 1 project and to replace an existing facility.

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