Web.com, Total Safety free to trade; Sequa tweaks deal; PolyOne accelerates deadline

By Sara Rosenberg

New York, Oct. 27 - Web.com Group Inc.'s first-lien term loan B hit the secondary market on Thursday morning and moved up from the original issue discount price that firmed at the wide end of revised guidance, and Total Safety broke as well.

Also on the trading front, Chrysler Group LLC and Revlon Inc. put out earnings and both companies saw their term loans rise. The general market strength, however, played a big part in that momentum.

Back over in the primary, Sequa Corp. made some issuer-friendly changes to its well oversubscribed term loan, including lowering the coupon, firming the discount at the low end of guidance and shortening the call protection timeframe.

Additionally, PolyOne Corp. moved up the commitment deadline on its well received term loan B, and Boyd Gaming Corp. surfaced with plans to bring an incremental term loan to market.

Web.com seen atop OID

Web.com's $600 million six-year first-lien term loan B (Ba3/B) made its way into the secondary on Thursday, with levels quoted at 89 bid, 90 offered on the open and then it moved up to 89¼ bid, 90¼ offered, according to a traders.

Pricing on the first-lien term loan is Libor plus 550 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 88. There is 101 soft call protection for one year.

The discount finalized at the wide end of recent talk of 88 to 89. At launch, the tranche was talked at a discount of 96½ to 97 and, as of a few weeks ago, unofficial chatter was circulating around in the low-90s area, before the official new price range emerged.

Prior to the deal's September launch, regulatory filings had the first-lien term loan B expected at Libor plus 425 bps with a 1.25% Libor floor.

Web.com second-lien

Web.com is also getting a $150 million seven-year second-lien term loan (B3/CCC+) talked at Libor plus 950 bps with a 1.5% floor and a discount of 88 to 89 that moved from early talk of 96½ to 97. The tranche is noncallable for one year, then at 103 in year two, 102 in year three and 101 in year four.

Regulatory filings had this second-lien loan expected at Libor plus 800 bps with a 1.25% Libor floor and call protection of 102 in year one and 101 in year two.

Besides changes to discounts, the deal saw the maturities shorten on the first-lien loan from seven years and on the second-lien loan from eight years, amortization on the first-lien loan had been reset at 1% in year one and 5% thereafter from just 1% per annum, and the excess cash flow sweep was revised to 75% in year one and 50% in year two with step-downs to 25% and 0% versus being 50% with step-downs.

Furthermore, the accordion feature on the first-lien was reduced to $50 million from $200 million, plus unlimited amounts up to 3.75 times first-lien leverage, the $100 million accordion under the second-lien was eliminated and most-favored-nation language moved to 25 bps from 50 bps.

Web.com getting revolver

Web.com's $800 million senior secured credit facility, which is being led by J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. and SunTrust Robinson Humphrey Inc., also includes a $50 million five-year revolver (Ba3/B).

First-lien leverage is 4.0 times, while second-lien leverage is 5.0 times.

Proceeds will be used to fund the acquisition of a majority stake in Network Solutions from General Atlantic LLC for $405 million in cash and 18 million shares of common stock, refinance existing debt and for general corporate purposes.

Web.com is a Jacksonville, Fla.-based provider of internet services and online marketing services. Network Solutions is a Herndon, Va.-based provider of website services, online marketing and domain-name registration.

Total Safety starts trading

Also freeing up for trading was Total Safety, with its $235 million 61/2-year term loan quoted at 97 bid, 98 offered, according to a market source.

Pricing on the term loan is Libor plus 625 bps with a 1.25% Libor floor, and it was sold at a discount of 96. There is soft call protection of 102 in year one and 101 in year two.

During syndication, pricing was increased from Libor plus 575 bps and the discount moved from 97. Additionally, the company increased the excess cash flow sweep to 75% from 50% and revised most-favored-nation language to 25 bps from 50 bps.

The company's $275 million credit facility (B2/B-) also provides for a $40 million five-year revolver.

Total Safety funding buyout

Proceeds from Total Safety's credit facility will be used to help fund its acquisition by Warburg Pincus from DLJ Merchant Banking Partners, which is expected to close in the fourth quarter.

Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC are the lead banks on the credit facility.

Leverage through the first-lien is 4.3 times and total leverage is 4.4 times.

Total Safety is a Houston-based outsourced provider of integrated safety and compliance services and the products necessary to support them.

Chrysler B loan rises

Chrysler's term loan B was stronger by a few points in trading as the company released quarterly results, and the secondary as a whole saw a strong improvement, according to traders.

One trader had the term loan B quoted at 95¾ bid, 96¼ offered, up from 93½ bid, 94½ offered, and a second trader had the debt quoted at 95 ¾ bid, 96 ¾ offered, up from 93½ bid, 94¼ offered.

For the third quarter, the Auburn Hills, Mich.-based automotive company reported net income of $212 million, compared with a net loss of $84 million in the previous year.

Net revenue for the quarter was $13.1 billion, up 19% from the third quarter of 2010.

And, modified EBITDA for the quarter was $1.1 billion, a $182 million improvement from last year.

Also, the company ended the quarter with $9.5 billion in cash versus $10.2 billion in cash at of June 30 and has $1.3 billion of availability under a revolver.

Revlon gains ground

Revlon also reported numbers on Thursday, and although the company showed a year-over-year loss in earnings, its term loan was better, with one trader quoting it at 99 bid, par offered, up from 98 bid, 99 offered, and a second trader quoting it at 99 bid, par offered, up from 98½ bid, 99½ offered.

Specifically, for the third quarter, Revlon had net income of $0.1 million, or nil per diluted share, compared to $12.5 million, or $0.24 per diluted share, in the 2010 quarter.

Net sales for the quarter were $337.2 million, up 5.7% from $319 million in the prior year.

Adjusted EBITDA for the quarter was $60.3 million versus $54.3 million last year.

Revlon is a New York-based cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirant/deodorant and beauty care products company.

Secondary rallies

As mentioned above, the secondary market in general was noticeably stronger during the day, with traders putting names higher by anywhere from a half a point to a couple of points.

One example of an issuer that saw a strong reaction to the positive sentiment Thursday was San Antonio-based media and entertainment company, Clear Channel Communications Inc., as its term loan B moved to 80 bid, 81 offered, from 76¾ bid, 77½ offered, one trader remarked.

Traders attributed the healthy tone to news of Europe debt deal, under which private creditors have agreed to a 50% discount on Greek debt and banks across Europe will be recapitalized.

"Market was just waiting for this one good headline and the market just ripped. Everything feels good today," a trader added.

Sequa reworks deal

Returning to primary happenings, Sequa announced revisions to pricing and call protection on its $200 million incremental senior secured term loan (B1/B-) as the deal has been extremely well met by investors, according to a market source.

Under the changes, the term loan is priced at Libor plus 475 bps with a 1.5% Libor floor and an original issue discount of 99, compared to initial talk of Libor plus 500 bps to 525 bps with 1.5% floor and a discount of 98½ to 99, the source said.

In addition, the loan now has 101 soft call protection for six months instead of for one year, the source continued.

Barclays Capital Inc. and Credit Suisse Securities (USA) LLC are the lead banks on the deal.

Sequa readies allocations

Commitments towards Sequa's term loan were due end of day Thursday, with the expectation being that allocations will go out on Friday.

When the deal launched this past Tuesday morning, lenders were given a commitment deadline of Nov. 1. However, the loan was strongly oversubscribed shortly after the launch and, as a result, lenders were told on Wednesday that the deadline was accelerated to Thursday.

Proceeds from the loan, along with cash on hand, will be used to fund the $245 million acquisition of Roll Coater Inc.

Sequa is a New York-based diversified aerospace and industrial company. Roll Coater is an Indianapolis-based coil coating company.

PolyOne shutting early

PolyOne accelerated the commitment deadline on its $300 million six-year term loan B (Ba1/BB-) to noon ET on Friday from Nov. 1 as a result of the deal reaching oversubscription levels quickly after launching this past Tuesday, according to a market source.

Price talk on the term loan B is Libor plus 425 bps with a 1.25% Libor floor and an original issue discount of 98 to 99, and there is 101 soft call protection for one year.

The company's $600 million credit facility also includes a $300 million five-year ABL revolver talked at Libor plus 200 bps.

Bank of America Merrill Lynch and Wells Fargo Securities LLC are leading the facility, with Bank of America left lead on the B loan and Wells Fargo left lead on the revolver.

PolyOne buying ColorMatrix

Proceeds from PolyOne's credit facility, along with cash on hand, will be used to fund the acquisition of ColorMatrix Group Inc. for $486 million.

The purchase is being made on a cash-free, debt-free basis, and the price is subject to a customary working capital adjustment and other closing conditions.

Closing is targeted for Nov. 17, subject to regulatory approvals.

PolyOne is an Avon Lake, Ohio-based provider of specialized polymer materials and services. ColorMatrix is a Berea, Ohio-based specialty provider of liquid colorants, additives and fluoropolymers.

Boyd plans loan

In more primary news, Boyd Gaming emerged with plans for a new $300 million incremental term loan due December 2015 and has set a bank meeting for Monday to launch the transaction, according to a market source.

The term loan includes 101 soft call protection for one year, the source said, adding that price talk is not yet available.

Bank of America Merrill Lynch, Wells Fargo Securities LLC, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and Barclays Capital Inc. are the leading the deal that will be used to pay down outstanding debt under the company's revolver.

Boyd is a Las Vegas-based owner and operator of gaming entertainment properties.

Compass Group funds

Compass Group Diversified Holdings LLC closed on Thursday its $515 million secured credit facility that consists of a $225 million six-year last-out term loan B (B1/BB-) and a $290 million five-year revolver (Ba1/BB+), according to a market source.

The term loan B is priced at Libor plus 600 bps with a 1.5% Libor floor, and was sold at a discount of 96, and the revolver is priced at Libor plus 350 bps.

During syndication, pricing on the B loan was increased from talk of Libor plus 525 bps to 550 bps and the discount widened from talk of 97 to 98. Also, the revolver was upsized from $275 million.

TD Securities (USA) LLC acted as the bookrunner on the deal and a joint lead arranger with BMO Capital Markets Corp. and SunTrust Robinson Humphrey Inc.

Proceeds are being used by the Westport, Conn.-based investment firm to refinance existing debt and to make acquisitions as well as for working capital and general corporate purposes.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.