CB Richard, Tekni, Community Health break; CUI postponed; Rural/Metro, Gateway tweak deals

By Sara Rosenberg

New York, Nov. 8 - CB Richard Ellis Group Inc.'s credit facility freed up for trading during Monday's session, with the term loan B quoted above its original issue discount price, and Tekni-Plex Inc. and Community Health Systems Inc. broke as well.

In more trading happenings, Cincinnati Bell Inc.'s term loan was softer on news that the debt will be repaid, and Clear Channel Communications Inc.'s term loan B was better following the release of earnings.

Over in the primary market, Cleveland Unlimited Inc.'s (CUI) credit facility has now been postponed indefinitely as the company continues to deal with merger related issues, with the future of the deal and merger unknown.

Also, Rural/Metro Corp. came out with changes to its credit facility, increasing the size of the term loan as it opted to eliminate plans for a bond offering and providing for the possibility of a smaller revolver, and Gateway Casinos & Entertainment played around with tranche sizes again.

Additionally, Gymboree Corp.'s term loan has seen a strong amount of demand, creating the expectation that there will be a pricing flex, and Sheridan Holdings Inc.'s term loan has filled out ahead of its commitment deadline.

Furthermore, Ascend Learning released talk on its facility as the deal was presented to lenders, MailSouth, American Gilsonite Co. and Pelican Products Inc. revealed structure on their upcoming loans, and GT Solar International Inc. announced plans to come to market with a pro rata deal.

CB Richard frees up

CB Richard Ellis' credit facility started trading on Monday, with the $300 million six-year term loan B quoted at par 1/8 bid, par 5/8 offered and the $350 million five-year term loan A quoted at 99¼ bid, according to traders.

Pricing on the term loan B is Libor plus 325 basis points with no Libor floor, and it was sold at an original issue discount of 991/2, and pricing on the term loan A, as well as on a $700 million 41/2-year revolver, is Libor plus 225 bps.

During syndication, pricing on the B loan was lowered from Libor plus 350 bps and the discount was cut from 99.

Credit Suisse, Bank of America and HSBC Securities are the lead banks on the $1.35 billion senior secured credit facility (Ba1/BB) for the Los Angeles-based commercial real estate services firm that will be used to help refinance $1.5 billion of existing bank debt.

Tekni-Plex trades

Also freeing up for trading was Tekni-Plex's $285 million six-year term loan B (B1/B), with levels quoted at 99 bid, par offered, according to a market source.

Pricing on the B loan is Libor plus 700 bps with a 2% Libor floor, and it was sold at an original issue discount of 98.

During syndication, pricing was increased from Libor plus 600 bps.

Deutsche Bank and Bank of America are the lead banks on the deal that will be used to refinance existing debt.

Tekni-Plex is a King of Prussia, Pa.-based manufacturer of packaging, products and materials for the health care, consumer and food packaging industries.

Community Health breaks

Yet another deal to start trading was Community Health Systems' $1.5 billion extended term loan, with one trader quoting it at 99 bid, 99½ offered, a second trader quoting it at 99 bid, 99¾ offered and a third trader quoting it at 98¾ bid, 99½ offered.

Meanwhile, the Nashville, Tenn.-based hospital company's non-extended term loan was lower, with one trader quoting it at 97½ bid, 98¼ offered, down from 98 5/8 bid, 99 offered, and by a second trader at 97¾ bid, 98¼ offered, down from 98½ bid, 98¾ offered.

Pricing on the extended term loan due Jan. 25, 2017 is Libor plus 350 bps, after flexing up from initial talk of Libor plus 325 bps. Pricing on the non-extended debt due July 25, 2014 is Libor plus 225 bps.

The extended term loan includes a springing maturity if the company's senior notes are not refinanced by April 2015.

Cincinnati Bell slides

Cincinnati Bell's term loan headed lower after the company announced that it will repay the remaining outstanding borrowings under the tranche, according to a trader.

The term loan was quoted at par bid, par ½ offered, down from par 7/8 bid, 101 3/8 offered, the trader said.

Funds for the repayment will come from the sale of $275 million of 8 3/8% senior notes.

Cincinnati Bell is a Cincinnati-based provider of integrated communications solutions.

Clear Channel strengthens

Clear Channel's term loan B gained some ground in the secondary market as parent company CC Media Holdings Inc. released third-quarter numbers, according to traders.

The term loan B was quoted by one trader at 81¾ bid, 82¼ offered, up from 81 1/8 bid, 81 5/8 offered, and by a second trader at 82 bid, 83 offered, up from 81 1/8 bid, 81 5/8 offered.

"Great numbers and a land rush for risk," one trader remarked regarding the positive momentum.

For the quarter, the CC Media reported a net loss of $150.4 million, compared to a net loss of $92.7 million in the prior year.

Revenues for the quarter were $1.48 billion, an increase of 6% from $1.39 billion in the third quarter of 2009.

And, OIBDAN was $443.1 million in the quarter, a 25% increase from 353.6 million last year.

Clear Channel is a San Antonio, Texas-based media and entertainment company.

CUI fate unclear

Moving to the primary, Cleveland Unlimited has updated investors on the timing of its proposed $200 million senior secured credit facility by telling them that the deal is now postponed with no idea of when or if it will come to market, according to an informed source.

Initially, the deal was going to be launched with a bank meeting on Oct. 28. However, it was then pushed off from that date with the hope being that it would come back in a week or so, or at the very least be November business.

The facility is supposed to be done in connection with the merger of Cleveland Unlimited with Coral Wireless LLC and would be used to refinance existing debt at both companies and fund working capital.

However, the companies are dealing with some issues regarding the merger, which is why the credit facility has been delayed, the source explained. It is uncertain whether these issues will be able to be fixed.

CUI structure

Upon being announced, Cleveland Unlimited's credit facility was expected to consist of a $20 million four-year revolver and a $180 million six-year term loan.

Pricing guidance on the revolver had been Libor plus 600 bps to 650 bps, with a 75 bps unused fee, and on the term loan Libor plus 650 bps to 700 bps with a 1.75% Libor floor and an original issue discount of 97 to 98.

SunTrust Robinson Humphrey Inc. and Moelis & Co. LLC are the leads on the deal.

Pro forma total leverage was expected to be 3.25 times.

Post merger, Cleveland-based Cleveland Unlimited would be a provider of unlimited, national wireless voice and data services for a flat monthly rate serving the Hawaiian Islands plus the Greater Cleveland, Columbus and Indianapolis markets.

Rural/Metro upsizes

Rural/Metro increased the size of its heavily oversubscribed term loan to $270 million from $75 million as the decision was made not to move forward with a $200 million senior notes offering, according to a market source.

In addition, the revolver is now being talked at a size of $75 million to $100 million, as opposed to just at $100 million, the source said.

Pricing on the term loan is still being guided at Libor plus 425 bps to 450 bps with a 1.75% Libor floor and an original issue discount of 99 to 991/2.

However, pricing on the revolver firmed up at Libor plus 450 bps with a 75 bps unused fee and a 100 bps upfront fee, the source remarked. Previously, the revolver was talked at Libor plus 425 bps to 450 bps with a 75 bps upfront fee.

Rural/Metro leverage

As a result of the credit facility revisions and the cancellation of the bond offering, Rural/Metro's total and senior leverage will now be 3.75 times, or 3.25 times net, the source continued.

By comparison, under the original financing plans, senior leverage would have been 1.1 times and total leverage would have been 3.9 times.

Recommitments towards the revolver and the term loan are due on Friday.

"Institutions will come back quickly. People are just piling in already. Mainly for the banks," the source said in explanation of why lenders were given till the end of the week to recommit.

RBC Capital Markets is the lead bank on the now up to $370 million secured credit facility, up from $175 million. Ratings on the deal under the original structure were Ba1/BB.

Rural/Metro replacing debt

Proceeds from Rural/Metro's credit facility will be used to refinance its existing senior secured revolver, term loan and letter-of-credit facilities, to fund a tender offer for its senior discount notes and to pay off cash collateralized letters of credit.

Remaining proceeds from the facility will be used for working capital and general corporate purposes.

"We expect the refinancing to create substantial savings in interest expense for the company, and the shift away from financing the company's long-term debt from notes to an increased amount of debt under the company's senior credit facility will permit the company to have the flexibility to carry out its business objectives, including to support organic growth and pursue potential acquisitions, while securing a lower interest rate," Michael P. DiMino, president and chief executive officer, said in a news release.

Rural/Metro is a Scottsdale, Ariz.-based provider of medical ambulance response services.

Gateway sizes shift again

Gateway Casinos made another round of changes to its term loan sizes, this time increasing the term loan B to C$240 million from C$200 million and decreasing the term loan A to C$115 million from C$150 million, according to a market source.

Initially, the deal was expected to include a C$250 million five-year first-lien term loan B and no term loan A, but at launch it was said that a term loan A might be added as a result of significant early interest from Canadian banks.

Later on, it was disclosed that the term loan B and the term loan A would each carry a size of C$170 million, and after that, the sizes moved to C$200 million on the B and C$150 million on the A.

Unchanged in size from the very beginning has been the C$35 million revolver.

As a result of the new tranching, the credit facility was upsized to C$390 million from its most recent amount of C$385 million and from an initial amount at launch of C$285 million.

Gateway pricing details

As was previously reported, pricing on the term loan B is set at Libor plus 475 bps with a 1.75% floor and an original issue discount of 99. By comparison, prior to launch, price talk on the loan had been Libor plus 525 bps to 550 bps with a 1.75% Libor floor and an original issue discount of 981/2.

Meanwhile, pricing on the term loan A and on the revolver is BA plus 350 bps with no Libor floor and an original issue discount of 99.

Allocations are expected to go out this week.

Jefferies, RBS, Goldman Sachs, JPMorgan and Morgan Stanley are the lead banks on the deal that will be used, along with C$170 million of second-lien notes, to refinance an exit financing term loan.

The notes were originally expected at C$250, but were downsized when the amount of term loans being borrowed was increased.

Gateway Casinos is a Burnaby, B.C.-based casino and entertainment company.

Gymboree flex expected

Gymboree's $720 million seven-year term loan B (B1/BB-) is being described as a "blowout" and, as a result, talk is that pricing on the deal will be flexed lower, according to a market source.

Currently, the term loan B is being talked at Libor plus 450 bps with a 1.75% Libor floor and an original issue discount of 981/2.

Credit Suisse and Morgan Stanley are the joint lead arrangers and bookrunners on the loan, with Credit Suisse the left lead.

Proceeds will be used to help fund the acquisition of the company by Bain Capital Partners LLC for $65.40 per share, or $1.8 billion. Bain is in the process of tendering for Gymboree's shares.

Gymboree getting revolver

In addition to the term loan B, Gymboree plans on getting a $225 million five-year asset-based revolver that is being led by Bank of America.

Based on a commitment letter filed with the Securities and Exchange Commission, the revolver is expected to be split into a $213 million A tranche and a $12 million first-in, last-out A-1 tranche. If the company opts to reduce or terminate the A-1 tranche, those commitments can be added to the A tranche.

Initial pricing on the tranche A revolver is expected to be Libor plus 250 bps, and initial pricing on the tranche A-1 revolver is expected to Libor plus 400 bps, the filing said. Pricing on the tranche A can range from Libor plus 225 bps to 275 bps, and pricing on the A-1 can range from Libor plus 375 bps to 425 bps, based on average daily excess availability.

The initial commitment fee on the revolver is expected to be 62.5 bps. This fee can range from 37.5 bps to 62.5 bps based on average daily used percentage.

Gymboree plans notes

Other funds for the buyout of Gymboree will come from up to $524 million of equity and the issuance of $520 million of senior unsecured notes.

The notes are backed by a commitment for a $520 million one-year senior unsecured bridge loan that is priced at Libor plus 800 bps, increasing by 50 bps every three months, with a 1.75% Libor floor.

Completion of the transaction is subject to, among other things, the satisfaction of the minimum tender condition of at least 66% of the company's common shares, the receipt of the Federal Trade Commission's approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

Gymboree is a San Francisco-based specialty retailer.

Sheridan nets interest

Sheridan Holdings' $160 million incremental first-lien term loan (B1/B) is fully subscribed with investors still having until Wednesday to get place their orders, according to a market source.

The term loan is talked at Libor plus 350 bps with no Libor floor and an original issue discount of 931/2.

Credit Suisse and Jefferies are the lead banks on the deal that will be used to fund acquisitions and to repay revolver borrowings.

Sheridan is a Sunrise, Fla.-based provider of physician services to hospitals and ambulatory surgical facilities.

Ascend discloses talk

Ascend Learning held a bank meeting on Monday to kick off syndication on its proposed credit facility, and in connection with the launch, price talk on the term loans was announced, according to a market source.

The $260 million first-lien term loan B is being talked at Libor plus 475 bps with a 1.5% Libor floor and an original issue discount of 981/2.

And, the $100 million second-lien term loan is being talked at Libor plus 850 bps to 900 bps with a 1.5% Libor floor and an original issue discount of 98, the source remarked.

Call protection on the second-lien term loan is 103 in year one, 102 in year two and 101 in year three.

Ascend refinancing debt

Proceeds from Ascend Learning's credit facility will be used to refinance existing debt and replace some equity with debt.

The $400 million facility also includes a $40 million revolver.

Bank of America, GE Capital and Barclays are the lead banks on the deal, with Bank of America the left lead.

Ascend Learning is a Stilwell, Kan.-based provider of technology-based learning services focused on student training and testing results in health care and other vocational fields.

Piper Jaffray launches

Another company to hold a bank meeting on Monday was Piper Jaffray Cos., who launched a $150 million three-year credit facility, according to a market source.

As was previously reported, the facility consists of a $50 million revolver and a $100 million term loan, with both tranches talked at Libor plus 275 bps. The revolver has a 50 bps unused fee.

SunTrust and U.S. Bank are the joint lead arrangers on the deal.

Piper Jaffray is a Minneapolis-based investment bank and institutional securities firm.

MailSouth details emerge

Structure and price talk came out on MailSouth's proposed $130 million credit facility as the deal is getting ready to launch with a bank meeting on Wednesday, according to a market source.

The facility consists of a $20 million revolver and a $110 million term loan, with both tranches talked at Libor plus 500 bps with a 1.75% floor and an original issue discount of 981/2, the source said.

GE Capital is the lead bank on the deal that will be used to help fund the buyout of the company by Court Square Capital Partners from New Mountain Capital.

Closing leverage is 3.5 times senior and 5.0 times total.

MailSouth is a Helena, Ala.-based marketer of shared-pack coupons.

American Gilsonite deal

American Gilsonite has set a bank meeting for Wednesday to launch a $102 million credit facility, consisting of $6 million revolver and a $96 million term loan, according to a market source.

Both the revolver and the term loan are talked at Libor plus 550 bps with a 1.75% floor and an original issue discount 98, the source said.

GE Capital and KeyBank are the lead banks on the deal that will be used for a dividend recapitalization.

Closing leverage is 3.25 times senior and 4.25 times total.

American Gilsonite is a Bonanza, Utah-based miner and processor of Gilsonite.

Pelican structure surfaces

Details on Pelican Products' proposed credit facility were revealed, with the deal sized at $435 million and comprised of a $30 million revolver and a $405 million term loan, according to a market source.

Also, it is now known that the facility will launch with a bank meeting on Wednesday, whereas previously, the transaction was simply labeled as this week's business, the source said.

Credit Suisse and GE Capital are the lead banks on the deal that will be used to refinance existing debt.

Pelican Products is a Torrance, Calif.-based designer and manufacturer of advanced lighting systems and virtually indestructible cases.

GT Solar sets launch

GT Solar has scheduled a bank meeting for Nov. 15 to launch its proposed $200 million pro rata senior secured credit facility that consists of a $75 million revolver and a $125 million term loan, according to a market source.

Credit Suisse is the lead bank on the deal and has not yet disclosed price talk, the source said.

Proceeds will be used to purchase 26.5 million shares of the company's common stock from private equity investors for a total purchase price of roughly $203 million.

The share repurchase is expected to close on Nov. 12 and will initially be funded with cash on hand. Closing on the credit facility is expected before the end of the quarter.

GT Solar is a Merrimack, N.H.-based provider of polysilicon production technology, and sapphire and silicon crystalline growth systems and materials for the solar, LED and other specialty markets.

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