Sinclair Television breaks; Claire's up with preliminary results; Bryant & Stratton on hold

By Sara Rosenberg

New York, Aug. 19 - Sinclair Television Group Inc.'s term loan allocated and freed up for trading early on in the day on Thursday, with the tranche quoted above the discount price at which it was sold during syndication.

In more trading happenings, Claire's Stores Inc.'s term loan headed higher as the company released preliminary unaudited financial results for the second quarter that showed a year-over-year improvement in net sales and adjusted EBITDA.

Over in the primary market, Bryant & Stratton College has tabled its credit facility for now due to some industry issues, and Airvana Inc. is hoping to give out allocations on its term loan sometime next week now that the credit document has been posted.

Sinclair starts trading

Sinclair Television's $270 million term loan B (Ba1/BB) due Oct. 29, 2015 hit the secondary market, with levels quoted at par bid, par ½ offered on the open and then moving up to par 1/8 bid, par 5/8 offered, according to a trader.

Pricing on the term loan is Libor plus 400 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

During syndication, pricing on the oversubscribed loan was reverse flexed from Libor plus 425 bps.

JPMorgan acted as the lead bank on the deal that was completed on Thursday as well.

Sinclair repays loan

Proceeds from Sinclair Television's new term loan B, along with $35 million of cash on hand, were used to repay the company's existing $305 million term loan B that was also set to mature on Oct. 29, 2015.

Pricing on the previous term loan B, which was obtained last year, was Libor plus 450 bps with a 2% Libor floor. The tranche was sold at an original issue discount of 98.

Additionally, the company amended its existing credit agreement to provide for a $100 million term loan accordion feature and more flexibility in using its cash balances and the revolving credit facility.

Sinclair is a Hunt Valley, Md.-based television broadcasting company.

Claire's gains ground

Claire's Stores' term loan strengthened after the company came out with preliminary second-quarter numbers, according to traders.

The term loan was quoted by one trader at 86 bid, 87 offered, up from 85½ bid, 86½ offered, and by a second trader at 86 bid, 86½ offered, up from pre-news levels of 85½ bid, 86 offered.

The second trader said that he actually saw the paper jump up to 86 bid, 87 offered late Wednesday, immediately following the company's announcement, which came out around 4:30 p.m. ET, and that during Thursday's session, the offer backed off a little bit so that levels tightened up.

Claire's net sales, EBITDA grow

For the second quarter, Claire's expects to report net sales of $334 million, an increase of $20 million, or 6.4%, compared to the 2009 second quarter.

And, adjusted EBITDA for the quarter is expected to be between $54 million and $56 million, compared to $50.5 million last year.

Also, at July 31, cash and cash equivalents were $160 million, and $194 million continued to be drawn on the company's revolver.

Claire's is a Pembroke Pines, Fla.-based specialty retailer offering value-priced, fashion-right accessories and jewelry for kids, tweens, teens and young women.

Bryant & Stratton shelves facility

Switching to the primary, Bryant & Stratton College has put its entire $205 million credit facility on hold for now as a result of new Federal government guidelines and "stuff coming out on the industry," according to a market source.

The postponed 31/2-year facility, which was originally going to have a five-year maturity, consists of a $135 million term loan B, a $30 million term loan A and a $40 million revolver.

During syndication, the term loan B was downsized from $180 million and the term loan A was added to the capital structure.

Pricing on the term loan B was set at Libor plus 575 bps with a 1.5% Libor floor and an original issue discount of 98, and pricing on the term loan A was set at Libor plus 550 bps with a 1.5% Libor floor. The B loan included 101 soft call protection for one year.

The term loan B spread had been flexed from talk of Libor plus 500 bps to 525 bps.

Bryant & Stratton proceeds

Bryant & Stratton was going to use its credit facility to refinance existing senior and mezzanine debt associated with the company's buyout in February 2008 by Parthenon Capital Partners and to fund a dividend payment to the sponsor/co-investors.

The size of the proposed dividend payment had been reduced when the amount of term loan borrowings was downsized.

GE Capital and Bank of America were acting as the lead banks on the deal.

Pro forma leverage for the transaction was going to be 2.6 times, and under the original structure, it was going to be 2.92 times.

Bryant & Stratton College is a for-profit provider of post-secondary education with a network of 16 campuses in New York, Ohio, Virginia and Wisconsin, as well as online.

Airvana allocating soon

Airvana is expected to allocate its $360 million term loan next week, being that the credit agreement was posted on Wednesday night and all that's left is to get comments from lenders, according to a market source.

The term loan is priced at Libor plus 900 bps with a 2% Libor floor, and it was offered at an original issue discount of 98.

During syndication, the loan was upsized from $330 million and pricing was increased from official talk at launch of Libor plus 800 bps to 850 bps.

Prior to the deal's bank meeting, rumor was that the term loan was being whispered at Libor plus 700 bps with a 2% Libor floor and an original issue discount of 97 to 98, and it was said that the size was flexible, with the ability for an increase based on demand.

The loan includes amortization and a 100% excess cash flow sweep.

Airvana lead banks

Jefferies, Societe Generale and Macquarie are the lead banks on Airvana's term loan, with Jefferies the left lead.

Proceeds will be used to refinance existing debt and to pay a dividend. This dividend was increased as a result of the term loan upsizing.

However, leverage is actually lower than previously expected, even with the upsizing, since the company's LTM EBITDA increased as of July. Leverage will be just under 2.0 times, down modestly from the originally expected 2.0 times level.

Airvana is a Chelmsford, Mass.-based provider of mobile broadband network infrastructure products. In April, the company was acquired by 72 Mobile Holdings LLC, an entity that was formed by S.A.C. Private Capital Group LLC, GSO Capital Partners, Sankaty Advisors LLC and ZelnickMedia.

Global Brass closes

In other news, Global Brass and Copper Inc. closed on its $465 million credit facility, consisting of a $150 million asset-based revolver and a $315 million five-year term loan (B), according to a news release.

Pricing on the term loan is Libor plus 825 bps with a 2% Libor floor, and it was sold at an original issue discount of 97. There is call protection of 105 in year one, 103 in year two and 101 in year three.

During syndication, the term loan was downsized from $330 million, and the spread was increased from Libor plus 750 bps.

Goldman Sachs acted as the sole arranger and bookrunner on the term loan, and Wells Fargo and GE Capital acted as the joint lead arrangers on the revolver.

The revolver was syndicated to the company's existing bank group.

Global Brass refinancing debt

Proceeds from Global Brass' credit facility were used to refinance an existing $380 million ABL revolver and $60 million term loan.

In addition, proceeds were used to pay a $102 million cash distribution to stockholders and to fund the company's continued growth.

The downsizing to the new term loan was because the company generated excess cash that was not reflected in the original deal terms. This excess cash was also used to reduce the amount drawn on the new revolver at close to around $25 million from around $30 million. As a result, leverage at close is 3.7 times, down from the originally proposed 3.96 times.

Global Brass and Copper is an East Alton, Ill.-based manufacturer and distributor of copper and copper-alloy sheet, strip, plate, foil, rod and fabricated components.

Rite Aid wraps revolver

Rite Aid Corp. completed its new $1.175 billion revolving credit facility due 2015, according to a news release.

The revolver maturity can be accelerated to April 18, 2014 if the company does not repay, refinance or otherwise extend the remaining term loans under its senior credit facility prior to that time.

Proceeds were used to replace the company's existing $1.175 billion revolver that was set to mature in 2012.

The new revolver has lower pricing than the previous revolver carried.

Rite Aid amends facility

In addition, Rite Aid announced on Thursday that it closed on the amendment to its senior credit facility that revises covenants.

Specifically, the amendment loosened the fixed charge coverage ratio test and permits the mandatory repurchase of the company's existing 8.5% convertible notes due 2015, subject to the satisfaction of certain conditions.

Lastly, as expected, the company repaid and retired its $648 million tranche 4 term loan due 2015 with proceeds from its recent offering of $650 million of 8% senior secured notes and cash on hand.

Rite Aid is a Camp Hill, Pa.-based drugstore chain.

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