First Data, Chrysler up on earnings; Generac restructures; Summit Entertainment sets talk

By Sara Rosenberg

New York, Feb. 1 - First Data Corp. and Chrysler Group LLC saw their bank debt strengthen in trading on Wednesday with the release of quarterly results, and Mondrian Investment Partners Ltd.'s first-lien term loan B was slightly lower with news of an amendment.

Switching to the new deal front, Generac Power Systems Inc. made a round of changes to its credit facility, including moving some funds between the term loan A and the term loan B and tightening the spread and discount on the institutional tranche.

Also, Summit Entertainment LLC came out with price talk on its term loan as syndication kicked off during the session, and Schaeffler AG launched its term loan C-2 at a discount that is in line with earlier expectations.

Additionally, Cequel Communications Holdings I LLC launched its credit facility, and the deal is already heard to be attracting interest as it's helped along by a large existing lender group and strong company performance.

First Data gains

First Data's extended and non-extended term loans were better on Wednesday after the company announced fourth-quarter numbers that showed a year-over-year improvement in earnings, according to traders.

One trader was quoting the extended loan at 89 bid, 90½ offered, up from 87½ bid, 88½ offered on the open and 87¼ bid, 88¼ offered on Tuesday, and the non-extended loan at 95¾ bid, 96½ offered, up from 94½ bid, 96 offered on the open and 94 bid, 95½ offered during the previous session.

A second trader, meanwhile, had the extended loan at 89½ bid, 90½ offered, up from 87¾ bid, 88½ offered, and the non-extended loan at 96 bid, 96½ offered, up from 94¾ bid, 95½ offered.

For the fourth quarter, First Data, a Greenwood Village, Colo.-based provider of electronic commerce and payment services, had a net loss of $69 million, versus a loss of $179 million a year ago.

Revenue for the quarter was $2.69 billion, down 2% from $2.73 billion in 2010 quarter.

And, adjusted EBITDA for the quarter was $655 million, up 16% from $564 million last year.

Chrysler rises with numbers

Chrysler's term loan B also headed higher in trading on the release of favorable fourth-quarter and full-year numbers, and the company came out with positive sales results for the month of January as well, according to traders.

The term loan B was quoted by one trader at 98¾ bid, 98 7/8 offered, up from 97¾ bid, 98½ offered on the open and 98 bid, 98½ offered on Tuesday, and by a second trader at 98½ bid, 99 offered, up from 98 bid, 98½ offered.

For the fourth quarter, the company reported net income of $225 million versus a loss of $199 million in the prior year, and for the full-year, net income was $183 million, up from a net loss of $652 million a year ago.

Net revenue for the quarter was $15.1 billion, compared to $4.4 billion in the 2010 quarter, and for the full-year it was $55 billion, up from $13 billion last year.

Also, modified EBITDA for the quarter was $1.2 billion, up from $289 million in the prior year, and the full-year it was $4.8, compared to $1.3 billion in 2010.

Chrysler sales results

In addition, on Wednesday, Chrysler came out with January sales numbers that showed total sales of 101,149, a 44% increase from 70,118 in January 2011.

Total car sales for the month were 28,832, up 137% from 12,190, and total truck sales were 72,317, up 25% from 57,928 last year.

January was the company's 22-consecutive month of year-over-year sales gains and eighth-consecutive month of sales increases of at least 20%.

Chrysler is an Auburn Hills, Mich.-based automotive company.

Mondrian softens

Mondrian's term loan B moved down to par bid, par ½ offered from par 1/8 bid, par 5/8 offered with news that the company is looking to amend the debt to eliminate the total leverage covenant, according to a market source.

As part of the amendment, the 101 soft call protection would be extended until Dec. 31, 2012, while pricing would remain at Libor plus 425 basis points with a 1.25% Libor floor.

The source said that the company is attempting the amendment due to "its strong performance, low leverage and current market conditions."

Currently, the term loan B is sized at $328 million, down from $440 million at close last summer. Paydowns came from amortization and voluntary repayments.

Morgan Stanley & Co. Inc. is the sole lead arranger and bookrunner on the deal.

Mondrian is a money manager with offices in London and Philadelphia.

Generac reworks deal

Moving to the primary, Generac Power Systems revised its credit facility, shifting funds between the term loans and reducing term loan B pricing, according to a market source, who said that lenders have until noon ET on Thursday to recommit to the deal.

Under the revised structure, the five-year term loan A is sized at $325 million, up from $250 million, while pricing on the tranche, as well as on a $150 million five-year revolver, was left at Libor plus 225 bps.

Meanwhile, the seven-year term loan B is now sized at $250 million, up from $325 million, and pricing is Libor plus 275 bps with a 1% Libor floor and an original issue discount of 991/2, versus initial talk of Libor plus 300 bps with a 1% Libor floor and a discount of 99, the source added. The B loan still includes 101 soft call protection for one year.

Generac lead banks

J.P. Morgan Securities LLC, Goldman Sachs & Co. and Bank of America Merrill Lynch are the lead banks on Generac's $725 million senior secured credit facility (Ba3/BB+).

Proceeds will be used to refinance a revolver due in November 2012 and a term loan due in November 2013.

Additionally, the new credit facility will be used for other general corporate purposes.

Generac is a Waukesha, Wis.-based designer and manufacturer of generators and other engine-powered products.

Summit guidance emerges

Continuing on the topic of new deals, Summit Entertainment held its conference call on Wednesday morning, launching its $500 million 41/2-year senior secured term loan (B1/B+) at talk of Libor plus 525 bps to 550 bps with a 1.25% Libor floor, an original issue discount of 98½ and 101 soft call protection for one year, according to a market source.

Price talk came out tighter than the Libor plus 600 bps spread that the company outlined in recent filings with the Securities and Exchange Commission.

J.P. Morgan Securities LLC, Barclays Capital Inc. and Jefferies & Co. are leading the loan that closed on Jan. 13 but has just started its syndication process. Commitments are due on Feb. 10.

Proceeds were used to refinance an existing term loan in connection with the company's $412.5 million buyout by Lions Gate Entertainment Corp., a Vancouver, B.C.-based filmed entertainment studio.

Summit Entertainment is a Santa Monica, Calif.-based motion picture studio.

Schaeffler OID talk

Schaeffler AG held a bank meeting in the morning to launch its €1 billion five-year term C-2 (B1) to U.S. investors, and the deal is officially being shopped at a discount of 97, which is where sources were expecting the offer price to surface.

The loan is talked at Libor plus 550 bps with a 1.5% Libor floor, and includes 101 soft call protection for one year.

The C-2 tranche is being marketed to U.S. and euro funds, and will be split between euros and dollars, but the amounts are still to be determined.

J.P. Morgan Securities LLC is the left lead bank on the deal. Other participants in the company's credit facility include BNP Paribas Securities Corp., Commerzbank, Deutsche Bank Securities Inc., HSBC Securities Inc., LBBW, Royal Bank of Scotland and UniCredit.

Schaeffler repaying debt

Proceeds from Schaeffler's credit facility will be used to refinance an existing €7.7 billion credit facility that was set to mature in June 2014 and for general corporate purposes.

On Friday, the company announced that it signed a new €8 billion credit facility that consists of a €1 billion revolver and €7 billion in term loans.

The term loan C-2 is part of the new term loan debt. Other tranches include a €3 billion three-year term loan B and a €1 billion five-year term loan C-1.

Furthermore, the company is planning to issue €2 billion of senior secured notes, upsized from €1 billion, to repay existing debt.

Schaeffler is a Herzogenaurach, Germany-based supplier of components and systems for the automotive industry and a variety of industrial sectors.

Cequel nets interest

Cequel Communications, which just held its bank meeting on Wednesday, is hoping to wrap up syndication on its $2.7 billion senior secured credit facility (Ba2/BB-) fairly quickly as the commitment deadline has been set for Feb. 9 amidst good momentum, a market source told Prospect News.

The source explained that the company already has an existing $2 billion term loan B, so a lot of rollover commitments are expected, and guys already know the credit, so it should take less time for them to look at the transaction.

In addition, the source said that the company has performed really well over the last year, and although secured leverage is going up with the new facility to 3.1 times from 2.5 times, investors aren't concerned that the company will push the envelope much further with leverage.

And, with the change in leverage, existing lenders who decide to rollover will get a bump in coupon, the source added.

Cequel pricing details

As was already reported, Cequel's proposed credit facility consists of a $500 million five-year revolver talked at Libor plus 250 bps with no Libor floor and a $2.2 billion seven-year term loan B talked at Libor plus 325 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

By comparison, the company's existing term loan B is priced at Libor plus 200 bps, the source remarked.

Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., J.P. Morgan Securities LLC, Bank of America Merrill Lynch and RBC Capital Markets LLC are the lead banks on the new deal.

Proceeds will be used by the St. Louis-based cable operator to refinance existing debt and fund a $370 million dividend.

Total leverage will be 5.6 times.

Rockwood launches

Rockwood Specialties Group Inc. held its bank meeting too, launching its $350 million five-year term loan A at previously outlined talk of Libor plus 225 bps with no Libor floor, according to a market source.

Lead banks Credit Suisse Securities (USA) LLC and KKR Capital Markets are seeking commitments by Feb. 15.

Proceeds, along with cash on hand, will be used to help fund the redemption of senior subordinated notes, consisting of €250.1 million of 7.625% euro-denominated notes and $200 million of 7.5% dollar-denominated notes. The notes are due on Nov. 15, 2014.

In addition, the company launched an amendment to its existing credit facility to allow for the new term loan A, the source said, adding that consents towards the amendment are due on Feb. 8.

Senior secured and total debt is 1.9 times and net debt is 1.7 times.

Rockwood is a Princeton, N.J.-based inorganic specialty chemicals and advanced materials company.

Genesys buyout wraps

In other news, the roughly $1.5 billion acquisition of Genesys by Permira from Alcatel-Lucent has been completed, according to a news release.

To help fund the transaction, Genesys got a new $625 million credit facility (B1) consisting of a $50 million five-year revolver and a $575 million seven-year covenant-light term loan B.

Pricing on the term loan B is Libor plus 525 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 98. There is 101 soft call protection for one year.

During syndication, the B loan was upsized from $550 million and the mezzanine debt was downsized to $200 million from $225 million, the spread firmed at the low end of the Libor plus 525 bps to 550 bps talk and the leverage and interest coverage covenants were removed.

Goldman Sachs & Co., Citigroup Global Markets Inc., RBC Capital Markets LLC and Macquarie Capital led the deal for the Daly City, Calif.-based supplier of contact center technology software.

Prestige Brands closes

Prestige Brands Holdings Inc. completed its acquisition of 17 over-the-counter GlaxoSmithKline plc brands for $660 million, according to a news release.

For the transaction, Prestige got a new $710 million senior secured credit facility comprised of a $50 million five-year asset-based revolver and a $660 million seven-year term loan B (Ba3/BB-) priced at Libor plus 400 bps with a 1.25% Libor floor. The B loan was sold at an original issue discount of 98½ and has 101 soft call protection for one year.

During syndication, the term B was upsized from $620 million as a bond deal was reduced to $250 million from $290 million, the spread was cut from Libor plus 450 bps and the discount moved from 98.

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and RBC Capital Markets LLC led the deal that was also used to refinance existing debt.

Prestige is an Irvington, N.Y.-based marketer of branded consumer products in the over-the-counter health care and household cleaning industries.

Morton's completes deal

The purchase of Morton's Restaurant Group Inc. by Tilman J. Fertitta for $6.90 per share in cash has successfully closed, according to a news release.

For the buyout, Morton's got a new $215 million senior secured credit facility (B2/BB-) consisting of a $15 million 41/2-year revolver and a $200 million five-year term loan, both priced at Libor plus 725 bps with a 1.5% Libor floor. The term loan was sold at an original issue discount of 971/2.

Prior to wrapping, the term loan was upsized from $190 million as the rollover equity was decreased by the equivalent amount and the discount tightened from 97.

Jefferies & Co. led the deal for the Chicago-based operator of company-owned upscale steakhouses.

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