Ozburn breaks; Freescale rises; Scotsman sets talk; Affinion firms pricing; RE/MAX tweaks deal

By Sara Rosenberg

New York, April 7 - Ozburn-Hessey Holding Co. LLC's credit facility allocated and freed up for trading during Wednesday's market hours, with the first- and second-lien term loans bid above their original issue discount prices.

Also in trading, Freescale Semiconductor Inc.'s term loans were stronger after the company announced plans to repay some of the debt using proceeds from a new bond offering.

Over in the primary market, Scotsman Industries Inc. came out with price talk on its credit facility as the deal was presented to lenders in the afternoon, Affinion Group Inc. finalized pricing on its credit facility, and RE/MAX International Inc. trimmed the spread on its term loan B.

In more primary happenings, Phillips-Van Heusen Corp. (PVH) set timing for the retail launch of its proposed credit facility with the scheduling of bank meetings in New York and London next week, and Willbros Group Inc., has scheduled a bank meeting for its deal at the end of this week.

Ozburn-Hessey frees to trade

Ozburn-Hessey's credit facility hit the secondary market on Wednesday, with the first-lien term loan bid at par and the second-lien term loan bid at 981/4, according to a trader, who said that there weren't a lot of sellers in the name.

Pricing on the $275 million first-lien term loan (Ba3/B) is Libor plus 550 basis points with a 2% Libor floor, and it was sold at an original issue discount of 983/4. There is 101 soft call protection for one year.

And, pricing on the $75 million second-lien term loan (B3/CCC+) is Libor plus 850 bps with a 2% Libor floor, and it was sold at an original issue discount of 973/4. There is call protection of 103 in year one, 102 in year two and 101 in year three.

During syndication, the discount on the first-lien term loan was reduced from 98 and the discount on the second-lien loan was reduced from 97.

Ozburn-Hessey getting revolver

Ozburn-Hessey's $385 million credit facility also includes a $35 million revolver (Ba3/B) that is priced at Libor plus 525 bps.

Bank of America is the lead bank on the deal that will be used to refinance existing debt.

When news of the deal first emerged, it was rumored that the facility would be an all first-lien structure comprised of a $35 million revolver and a $345 million term loan B. That structure, however, was fluid.

Ozburn-Hessey is a Brentwood, Tenn.-based third-party logistics provider.

Freescale up with repayment news

Freescale Semiconductor's term loan gained some ground in trading following the announcement of a paydown with proceeds from a bond offering, according to traders.

The extended term loan was quoted by some traders at 95½ bid, 96 offered, up from 94 3/8 bid, 94 7/8 offered. One trader had the loan at 95½ bid, 95 7/8 offered.

And, the non-extended term loan was quoted by one trader at 99½ bid, par offered, up from 95 bid, 96 offered, and by a second trader at 99¼ bid, 99¾ offered, up from 94¼ bid, 94¾ offered.

On Wednesday morning, Freescale said that it will be selling $750 million of secured notes for the bank debt repayment. By afternoon, talk was that the notes were upsized to $1.38 billion and that, as a result, all of the company's non-extended term loan and incremental term loan debt would be retired.

Freescale is an Austin, Texas-based designer and manufacturer of embedded semiconductors for the automotive, consumer, industrial and networking markets.

Scotsman talk emerges

Switching to the new deal front, Scotsman Industries held a bank meeting at 2 p.m. ET on Wednesday to launch its proposed credit facility, and in connection with the launch, price talk surfaced, according to a market source.

The $115 million term loan is being talked at Libor plus 450 basis points with a 1.75% Libor floor and an original issue discount of 99, the source said.

GE Capital and UBS are the lead banks on the $145 million deal, which also includes a $30 million revolver.

Proceeds will be used refinance existing debt and fund a dividend.

Scotsman Industries, a portfolio company of Warburg Pincus, is a Vernon Hills, Ill.-based manufacturer of commercial ice machines and related products.

Affinion finalizes pricing

Affinion Group set the Libor floor and the original issue discount on its $875 million 61/2-year term loan B at the low end of initial guidance, while leaving the spread unchanged at Libor plus 350 bps, according to a market source.

The Libor floor firmed at 1.5%, compared to talk of 1.5% to 1.75%, and the discount firmed at 99, compared to talk of 98½ to 99, the source said.

The $125 million five-year revolver remained priced at Libor plus 350 bps.

Allocations on the deal are expected to go out on Thursday morning.

Affinion lead banks

Bank of America and Credit Suisse are the lead banks on Affinion's $1 billion credit facility (Ba2) that will be used to refinance existing debt and for general corporate purposes, including acquisitions.

Earlier in the syndication process, a springing maturity was added to the credit agreement under which the bank debt will mature 90 days prior to the company's senior subordinated notes due in 2015, if those notes are not refinanced.

In addition, during syndication, the $455 million refinancing accordion feature was revised so that it could only be used to refinance the company's senior secured notes, whereas it was originally permitted for any refinancing.

Affinion is a Norwalk, Conn.-based provider of marketing services and loyalty programs.

RE/MAX flexes

RE/MAX reduced pricing on its $215 million term loan B to Libor plus 375 bps from Libor plus 400 bps and added one year of 101 call protection, according to a market source.

As before, the term loan B carries a 1.75% Libor floor and is being offered at an original issue discount of 99.

JPMorgan is the lead bank on the $225 million deal that also includes $10 million revolver.

Proceeds will be used to refinance existing debt and fund a dividend payment.

RE/MAX is a Denver-based real estate company.

PVH sets launch

Phillips-Van Heusen has scheduled a bank meeting in New York for April 14 and one in London for April 16 to kick off the retail syndication of its proposed $2.45 billion senior secured credit facility (BBB), according to a market source.

Previously, the retail launch was being labeled as expected mid-April business with no firm dates available.

Tranching on the deal is comprised of a $450 million revolver, a $500 million term loan A and a $1.5 billion term loan B.

The revolver and term loan A were already launched to senior managing agents in March and that process is hoped to wrap up next week. The tranches will also be presented to retail investors at next week's meetings.

Barclays Capital and Deutsche Bank are the global debt coordinators and bookrunners on the deal, with Barclays the left lead. Other bookrunners include Bank of America, Credit Suisse and RBC Capital Markets.

PVH buying Hilfiger

Proceeds from Phillips-Van Heusen's credit facility will be used to help fund the acquisition of Tommy Hilfiger BV from Apax Partners LP for €2.2 billion, or about $3 billion, plus the assumption of €100 million in liabilities, and to refinance Phillips-Van Heusen's $300 million of existing senior unsecured notes due in 2011 and 2013.

The consideration to be paid to Apax includes €1.924 billion in cash and €276 million in Phillips-Van Heusen common stock.

Other funding for the acquisition and the refinancing will come from $600 million of senior unsecured notes that could be issued in both dollar and euro tranches.

Also, the company will issue $200 million in perpetual convertible preferred stock and roughly $200 million in common stock as well as use $385 million of cash on hand.

PVH expects to delever

Phillips-Van Heusen anticipates generating a minimum of $300 million annually in free cash flow to pay down debt.

At close, the pro forma debt to EBITDA ratio is anticipated to be 3.6 times. However, based on the free cash flow estimate, the company expects debt to EBITDA to drop to 2.0 times at the end of fiscal 2012 due to deleveraging.

Pro forma for the transaction, 2010 revenue is estimated to be $4.8 billion, and 2010 EBITDA is estimated at $755 million.

Closing of the transaction is anticipated for the company's second fiscal quarter, subject to receipt of financing and other customary conditions, including receipt of required regulatory approvals.

On April 2, the U.S. Department of Justice and Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act for the acquisition. Certain required foreign regulatory approvals are still needed.

New York-based Phillips-Van Heusen and Tommy Hilfiger are apparel companies.

Willbros launching Friday

Willbros Group has set a bank meeting at 10 a.m. ET on Friday at the offices of Crédit Agricole Corporate and Investment Bank (formerly Calyon) to launch its proposed $475 million senior credit facility, according to a market source.

Previously, timing on the deal was described as being in the early April timeframe, with closing targeted for late April/early May

Crédit Agricole and UBS Securities are leading the credit facility, which consists of a $175 million three-year revolver and a $300 million four-year term loan.

Official price talk is not yet available, the source said.

Willbros buying InfrastruX

Proceeds from Willbros' credit facility will be used to help fund the acquisition of InfrastruX Group Inc., the completion of which is subject to regulatory approvals and customary conditions.

Under the agreement, stockholders of privately held InfrastruX will receive cash of $360 million and 7.9 million of new Willbros shares. In addition, InfrastruX stockholders will be eligible for contingent earn-out payments of up to $125 million. Those earn-out payments begin as EBITDA for the InfrastruX business exceeds $69.8 million in 2010 and $80 million in 2011.

Estimated total debt to EBITDA in 2010 is 2.6 times and estimated net debt to EBITDA is 1.7 times.

Willbros is a Houston-based independent contractor for the oil, gas, power, refining and petrochemical industries. InfrastruX is a Seattle, Wash.-based provider of electric power and natural gas transmission and distribution infrastructure services.

Advantage Sales call protection

Advantage Sales & Marketing's $275 million second-lien term loan carries call protection of 103 in year one, 102 in year two and 101 in year three, according to a market source.

As was already reported, the second-lien loan is being talked at Libor plus 750 bps with a 2% Libor floor and an original issue discount of 981/2.

The company's $975 million credit facility, which launched with a bank meeting on Wednesday, also includes a $625 million first-lien term loan talked at Libor plus 375 bps with a 2% Libor floor and a discount of 99, and a $75 million revolver talked at Libor plus 375 bps with a 2% Libor floor and a discount of 98.

Credit Suisse, Bank of America and UBS are the lead banks on the deal that will be used to refinance existing debt and fund a dividend.

Advantage Sales is an Irvine, Calif.-based consumer packaged goods sales and marketing agency.

CF accelerates deadline

CF Industries Holdings Inc. closed the books early on its term loan B due to heavy oversubscription, while the commercial bank syndication process is continuing with commitments due next Wednesday, according to a market source.

Tranching on the deal is comprised of a $2 billion five-year term loan B and a $300 million five-year revolver. Only about $1.2 billion of the term loan B is being syndicated as the two lead banks have opted to hold onto the other $800 million.

Pricing on the $2.3 billion credit facility (Ba1/BBB) is talked at Libor plus 350 bps with a 1.5% Libor floor. Both tranches include a step-down to Libor plus 300 bps upon the issuance of at least $750 million of equity to repay debt. The company is expected to tap the capital markets as soon as possible, meaning probably sometime in the next couple weeks.

The revolver pricing will also be based on a leverage grid.

The term loan B is being offered at an original issue discount of 991/2, while the revolver is being offered with upfront fees.

CF already draws funds

CF Industries completed the first drawdown under its credit facility on Monday to finance the purchase of roughly 86% of Terra Industries Inc.'s shares that were tendered under an acquisition agreement.

A subsequent offering period for all remaining shares of Terra common stock has been started and will expire on April 9. The full merger is expected to close next week.

Following completion of the exchange offer, the company plans to do an about $1 billion common stock offering and a $1.6 billion senior notes offering, with proceeds being used to reduce borrowings under the bridge loan and the term loan B, according to SC TO-T/A filed with the Securities and Exchange Commission on Monday.

Morgan Stanley and the Bank of Tokyo-Mitsubishi UFJ are the lead banks on the credit facility, with Morgan Stanley the administrative agent.

CF Industries is a Deerfield, Ill.-based producer and distributor of nitrogen and phosphate fertilizer products. Terra is a Sioux City, Iowa-based producer and marketer of nitrogen and methanol products.

CKE may find new buyer

CKE Restaurants Inc. has received an alternative takeover proposal that is "reasonably expected" by the company to lead to a superior proposal than the one that was entered into with Thomas H. Lee Partners LP for $11.05 in cash per share, according to a news release.

Since this new offer could result in the termination of the Thomas H. Lee buyout agreement, the $450 million senior secured facility that was committed for that deal is in jeopardy.

Under the Thomas H. Lee proposal, CKE would get a $75 million revolver and a $375 million term loan led by Bank of America and Barclays to fund the acquisition.

In addition, the company was planning to issue at least $150 million of senior unsecured notes for the Thomas H. Lee buyout in addition to using $440 million in equity.

The party that has submitted the new takeover proposal has been qualified as an excluded party by CKE so that discussions and negotiations can take place until April 27.

CKE Restaurants is a Carpinteria, Calif.-based owner of Carl's Jr. and Hardee's quick-service restaurant chains.

Talbots closes

Talbots Inc. closed on its $200 million 31/2-year senior secured asset-based revolving credit facility, according to a news release.

GE Capital acted as the lead arranger and bookrunner on the deal that is being used for working to help repay debt.

Pricing on the revolver was expected to be Libor plus 450 bps with a 100 bps unused fee.

The revolver was done in connection with the retirement of all equity held by the company's majority stockholder, Aeon Inc., and the repayment of all existing debt.

Also, the company acquired BPW Acquisition Corp. for common stock. As part of the acquisition, Talbots received gross cash proceeds of around $333.1 million.

Talbots is a Hingham, Mass.-based retailer and direct marketer of women's apparel, shoes and accessories.

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