Thomson Learning, American Axle set talk; Dollar Thrifty trims spread; Lear breaks; OSI trades up

By Sara Rosenberg

New York, June 5 - Thomson Learning and American Axle & Manufacturing Holdings, Inc. came out with price talk on their new bank deals as both transactions were launched with bank meetings during Tuesday's session.

In other primary news, Dollar Thrifty Automotive Group Inc. reverse flexed pricing on its term loan B and added a step down to the tranche.

Meanwhile, in the secondary, Lear Corp.'s credit facility freed up for trading, with the term loan B quoted in the 99s, and OSI Restaurant Partners Inc.'s term loan traded higher as stockholders finally approved the company's buyout transaction.

Thomson Learning held a bank meeting on Tuesday to kick off syndication on its proposed $3.74 billion senior credit facility, and in connection with the launch, price talk on the deal was announced, according to a market source.

The $300 million six-year super-priority revolver (B1/B+) was launched with talk of Libor plus 225 basis points and the $3.44 billion seven-year covenant-light term loan B (B1/B) was launched with talk of Libor plus 250 bps, the source said.

RBS Securities, JPMorgan, Citigroup and UBS are the lead arrangers on the deal, with RBS the administrative agent, JPMorgan as syndication agent, and Citi and UBS as co-documentation agents.

Proceeds will be used to help fund the acquisition of Thomas Learning, which is a division of Thomson Corp., by Apax Partners and Omers Capital Partners.

Other financing will come from $2.14 billion of bonds, consisting of a $1.35 billion senior unsecured toggle notes offering, a $250 million senior subordinated notes offering and a $540 million PIK holdco notes offering.

The Stamford, Conn.-based higher education, careers and library reference assets include Wadsworth, Delmar Learning, Gale, Heinle, Brooks/Cole and South-Western.

The transaction is expected to close in the third quarter, subject to regulatory approvals and other customary closing conditions.

American Axle price talk

American Axle also came out with price talk on its new loan as it too launched with a bank meeting during market hours, according to an informed source.

The $250 million unsecured term loan due 2012 (Ba3) was presented to lenders with opening price talk of Libor plus 250 bps, the source said.

JPMorgan and Bank of America are the lead banks on the deal that is being arranged on an uncommitted basis.

Proceeds will be used for general corporate purposes, including the prepayment of the company's existing $250 million term loan.

American Axle is a Detroit-based manufacturer of driveline systems and related powertrain components and chassis modules for light trucks, sport utility vehicles, passenger cars and crossover vehicles.

Dollar Thrifty cuts pricing

In more primary happenings, Dollar Thrifty Automotive reduced pricing on and added a ratings-based step down to its $250 million term loan B, according to a market source.

Under the changes, the term loan B is priced at Libor plus 200 bps, down from original talk at launch of Libor plus 225 bps, and pricing can now drop down to Libor plus 175 bps upon the company achieving certain ratings, the source said.

Dollar Thrifty's $600 million credit facility (B1/BB-) also includes a $350 million revolver that is priced at Libor plus 200 bps, in line with original talk.

Deutsche Bank and Bank of Nova Scotia are the lead banks on the deal, with Deutsche the left lead.

Proceeds from the revolver will be used to refinance the company's existing $300 million revolver, and proceeds from the term loan B will be used to repay asset-backed vehicle debt.

Dollar Thrifty is a Tulsa, Okla., vehicle rental company.

Citadel flexes

Citadel Broadcasting Corp. lowered pricing on its $1.85 billion seven-year term loan B to Libor plus 162.5 bps from original talk of Libor plus 175 bps, according to a market source.

In addition, a grid was added to the term loan B under which pricing can step up to Libor plus 175 bps at more than 7.25 times leverage and step down to Libor plus 150 bps at less than 5.5 times leverage, the source remarked.

Citadel's $2.65 billion senior secured credit facility (Ba3/B+) also includes a $600 million six-year term loan A and a $200 million six-year revolver, with both of these tranches priced at Libor plus 150 bps.

JPMorgan and Bank of America are the lead banks on the deal.

The credit facility is being obtained in connection with Citadel's merger with ABC Radio, as it is being spun off from the Walt Disney Co.

Proceeds will be used to refinance Citadel's existing credit facility, under which about $400 million was outstanding at Dec. 31, to potentially refinance all or a portion of Citadel's other existing debt, to pay to pre-merger Citadel stockholders an aggregate special distribution in an estimated amount equal to about $277 million and to refinance an initial term loan at ABC Radio.

Citadel is a Las Vegas-based radio broadcasting company.

Lear frees to trade

Moving to the secondary market, Lear's credit facility allocated and freed up for trading, with the $2.6 billion seven-year term loan B quoted at 99 5/8 bid, 99 7/8 offered, according to a trader.

The term loan B is priced at Libor plus 275 bps and was sold to investors with an original issue discount of 991/2.

During syndication, pricing on the term loan B was flexed up from original talk of Libor plus 225 bps to 250 bps and the original issue discount was added.

Lear's $3.6 billion senior secured deal (B2/B) also includes a $1 billion five-year revolver, with a 50 bps commitment fee.

Bank of America is the lead arranger and bookrunner on the deal that will be used to help fund American Real Estate Partners, LP's acquisition of Lear for $5.3 billion, including the assumption of debt. Lear shareholders will receive $36.00 per share in cash.

Lear is a Southfield, Mich.-based supplier of automotive seating, electronics and electrical distribution systems. American Real Estate Partners is a New York-based diversified holding company engaged in a variety of businesses and an affiliate of Carl C. Icahn.

OSI stronger as buyout approved

OSI Restaurant's term loan traded stronger on Tuesday as stockholders okayed the company's revised buyout agreement, erasing all previous doubt of the deal's ability to go through, according to a trader.

The term loan ended the day at par ¾ bid, 101 offered, up from previous levels of par 3/8 bid, par 5/8 offered, the trader said.

In May, OSI had to delay its special meeting of stockholders a couple of times to give the company more time to solicit additional votes in favor of the buyout.

Then, after delaying the vote twice, the decision was made to amend the buyout agreement to give OSI stockholders $41.15 per share in cash, up from $40.00 per share.

This revised agreement is what stockholders finally approved on Tuesday.

OSI is being bought by an investor group comprised of Bain Capital Partners, LLC, Catterton Partners and company founders Chris T. Sullivan, Robert D. Basham and J. Timothy Gannon, according to a trader.

OSI is a Tampa, Fla., casual dining restaurant company with a portfolio of brands, including Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill, Fleming's Prime Steakhouse & Wine Bar, Roy's, Lee Roy Selmon's, Blue Coral Seafood & Spirits and Cheeseburger in Paradise.

Asset Acceptance closes

Asset Acceptance Capital Corp. closed on its $250 million credit facility (B1/BB) consisting of a $100 million five-year revolver priced at Libor plus 200 bps and a $150 million term loan B due June 12, 2013 priced at Libor plus 225 bps, with a step down to Libor plus 200 bps based on leverage, according to an 8-K filed with the Securities and Exchange Commission Tuesday.

During syndication, pricing on the term loan B was reverse flexed from original talk of Libor plus 250 bps with the addition of the step.

JPMorgan acted as the lead bank on the deal.

Proceeds from the term loan are being used to help fund a recapitalization plan that includes returning $150 million to shareholders.

Asset Acceptance is a Warren, Mich., purchaser and collector of charged-off consumer debt.

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