Ford rises with numbers; Green Mountain, Gateway rework tranching; Vertafore tweaks pricing

By Sara Rosenberg

New York, Oct. 26 - Ford Motor Co.'s term loans were better in trading on Tuesday after the company released positive quarterly results, and Celanese Corp.'s loans bounced around with its earnings news.

Continuing on the trading front, Omnova Solutions Inc.'s term loan was a little softer from its recent breaking levels.

Over in the primary market, Green Mountain Coffee Roasters Inc. and Gateway Casinos & Entertainment came out with changes to tranching on their credit facilities that resulted in upsizings to the total deal sizes, and Vertafore firmed the spread on its loan at the midpoint of talk, while cutting the Libor floor and discount.

Also, Cleveland Unlimited Inc., Language Line Services and BHI Energy began circulating price talk as their deals are gearing up to come to market this week, Dunkin' Brands Inc. revealed tranching on its upcoming loan, and Gymboree Corp. nailed down timing on the launch of its facility.

Furthermore, Rural/Metro Corp.'s credit facility is going really well, with the term loan reaching oversubscription levels in the few days it has been in market, and SoftLayer Technologies' transaction is heard to be coming along.

Ford heads higher

Ford's term loans gained some ground in trading after the company announced third-quarter numbers that showed a year-over-year improvement in earnings and revenue, according to traders.

The term loan B-1 was quoted by one trader at 99 bid, 99 3/8 offered, up from 98 3/8 bid, 98 7/8 offered, by a second trader at 98¾ bid, 99 1/8 offered, up from 98½ bid, 99 offered, and by a third trader at 98¾ bid, 99¼ offered, up from 98½ bid, 99 offered.

Meanwhile, the term loan B-2 was quoted by one trader at 98¾ bid, 99¼ offered, up from 98½ bid, 98¾ offered, and by a second trader at 98¼ bid, 99 offered, up from 98 bid, 98¾ offered.

For the third quarter, Ford reported net income of $1.69 billion, or $0.43 per share, compared to net income of $997 million, or $0.29 per share, in the prior year.

And, revenue for the quarter was $29 billion, a decline of $1.3 billion from $30.3 billion in the third quarter of 2009.

Ford paying down debt

Ford also said on Tuesday that it repaid $2 billion of its revolving credit facility borrowings on Sept. 9, and it plans to use cash to fully prepay the remaining $3.6 billion of debt owed to the VEBA retiree health care trust on Friday.

Including the VEBA payment, the company will have reduced its total automotive debt by $10.8 billion from year-end 2009.

The company generated automotive gross cash of $23.8 billion in the third quarter, compared to $23.2 billion last year. And, it now expects automotive cash to be about equal to its debt by year-end, earlier than previously expected. This will be an improvement of $8 billion to $9 billion from the end of last year.

Ford is a Dearborn, Mich.-based manufacturer and distributor of automobiles.

Celanese bounces around

Celanese's term loans had a mixed reaction to the company's earnings results, with the extended loan softer to unchanged and the non-extended loan stronger, according to traders.

The company's extended term loan was quoted by one trader at par ¼ bid, par ½ offered, down from par 3/8 bid, par ¾ offered, and by a second trader at par 3/8 bid, par ¾ offered, flat on the day.

And, the non-extended term loan was quoted by the first trader at 98 5/8 bid, 99 1/8 offered, up from 98 3/8 bid, and by the second trader at 98½ bid, 98¾ offered, up from 98 bid, 98½ offered.

For the third quarter, the company posted net earnings of $145 million, or $0.92 per diluted share, compared to net earnings of $398 million, or $2.53 per diluted share, in the prior-year period.

Net sales for the quarter were $1.51 billion, up 15% from $1.3 billion in the third quarter of 2009.

Also, operating EBITDA for the quarter was $286 million, versus $240 million in the previous year.

Celanese revises outlook

Furthermore, Celanese announced that it raised its full year 2010 outlook as a result of the strength of its year-to-date performance, its expectations for continued healthy yet seasonal demand in the fourth quarter and its confidence in its earnings growth programs.

The company now expects full-year adjusted earnings per share to be at least $1.55 higher instead of $1.40 higher, from 2009 results.

And, operating EBITDA is now expected to be at least $270 million higher, instead of $260 million higher, than last year.

Additionally, the Dallas-based chemical company expects its full-year 2011 adjusted earnings per share to be at least $0.60 per share higher than its revised outlook for 2010.

Omnova retreats

Omnova Solutions' $200 million term loan B (Ba2/B+) moved down to par ¼ bid, par ¾ offered on Tuesday, after breaking late Monday at par ½ bid, 101 offered, according to a trader.

Pricing on the term loan is Libor plus 400 basis points with a step-down to Libor plus 375 bps at 2.75 times net total leverage. There is a 1.75% Libor floor and 101 soft call protection for one year, and the paper was sold at an original issue discount of 99.

During syndication, pricing on the loan was lowered from Libor plus 450 bps, the step-down and the call protection were added, and the discount was tightened from 981/2.

Deutsche Bank and JPMorgan are the lead banks on the deal that will be used to help fund the acquisition of Eliokem International SAS and to repay an existing term loan.

Omnova is a Fairlawn, Ohio-based provider of emulsion polymers, specialty chemicals, and decorative and functional surfaces.

Green Mountain tweaks deal

Switching to the primary, Green Mountain Coffee Roasters revised the structure on its senior secured credit facility (Ba3/B+), and as a result, the total deal size moved to $1.45 billion from $1.35 billion, according to a market source.

The facility now consists of a $650 million five-year revolver, a $250 million five-year term loan A and a $550 million six-year term loan B, the source said. Previously, the revolver was expected at $750 million and the term loan B was expected at $350 million.

Bank of America and SunTrust are the lead banks on the deal that is set to launch with a bank meeting on Wednesday.

Green Mountain acquisition

Proceeds from Green Mountain's credit facility will be used to help fund the acquisition of LJVH Holdings Inc. (Van Houtte) and refinance existing debt.

Green Mountain is buying Van Houtte, a Montreal-based gourmet coffee brand, from Littlejohn & Co. LLC for about $890 million.

The transaction is expected to close by the end of the year, subject to customary conditions, including certain regulatory approvals.

Leverage at closing is expected to be around 3.5 times. In the long term, the company is targeting leverage of less than 3.0 times.

Green Mountain is a Waterbury, Vt.-based specialty coffee company.

Gateway Casinos retranches

Gateway Casinos & Entertainment added a term loan A to its credit facility, which was a move that had been anticipated since launch as a result of significant early interest from Canadian banks, according to a market source.

As a result of the new tranching, the Burnaby, B.C.-based casino and entertainment company's credit facility was upsized to C$375 million from C$285 million.

The deal is now comprised of a C$35 million revolver, a C$170 million term loan A and a C$170 million term loan B, the source said, compared to the original structure of a C$35 million revolver and a C$250 million five-year first-lien term loan B.

Gateway Casinos price talk

Prior to launch, price talk on Gateway Casino's term loan B had been circulating at Libor plus 525 bps to 550 bps with a 1.75% Libor floor and an original issue discount of 981/2.

Then, at launch, talk on the B loan was being described as being in the low 7% range, with spread, floor and discount to be determined.

Now, there is no price talk out on the deal, the source added.

Jefferies, RBS, Goldman Sachs, JPMorgan and Morgan Stanley are the lead banks on the deal that will be used to refinance an exit financing term loan.

With the original credit facility structure, the company was expected to get C$250 million of seven-year second-lien notes to help with the refinancing. It is unclear as to whether the bonds have been downsized as a result of the facility upsizing.

Vertafore revises pricing

Vertafore set pricing on its $260 million seven-year second-lien term loan (Caa1/CCC+) at Libor plus 825 bps, the middle of the initial Libor plus 800 bps to 850 bps talk, reduced the Libor floor to 1.5% from 1.75% and cut the original issue discount to 99 from talk of 98 to 981/2, according to a market source.

Unchanged was the tranche's call protection of 103 in year one, 102 in year two and 101 in year three.

Bank of America, Credit Suisse, Barclays and RBC Capital are the lead banks on the deal that will be used to refinance an unsecured term loan.

Vertafore is Bothell, Wash.-based provider of software and information to the insurance industry.

Cleveland Unlimited talk

Cleveland Unlimited revealed pricing guidance on its proposed $200 million senior secured credit facility ahead of the Thursday bank meeting that will officially kick off syndication, according to a market source.

The $20 million four-year revolver is being guided at Libor plus 600 bps to 650 bps with a 75 bps unused fee, the source said.

And, the $180 million six-year term loan is being guided at Libor plus 650 bps to 700 bps with a 1.75% Libor floor and an original issue discount of 97 to 98, the source cotninued.

Cleveland, Coral merge

Cleveland Unlimited is getting the new credit facility in connection with its merger with Coral Wireless LLC, and it will use the proceeds to refinance existing debt at both companies and to fund working capital.

SunTrust Robinson Humphrey and Moelis & Co. LLC are leading the deal.

Pro forma total leverage will be 3.25 times.

Post-merger, Cleveland-based Cleveland Unlimited will 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.

Language Line talk

Language Line Services is floating early guidance in the Libor plus 850 bps to 900 bps area on its $250 million second-lien term loan that is set to launch with a conference call on Wednesday, according to a market source.

Credit Suisse, Bank of America and Morgan Stanley are the lead banks on the deal that will be used to redeem preferred stock, repay debt and fund a dividend.

In connection with the transaction, the company is looking to amend its existing facility to allow for the second-lien loan and revise covenants.

Language Line is a Monterey, Calif.-based provider of telephone interpreting and language solutions.

BHI reveals guidance

BHI Energy came out with price talk of Libor plus 500 bps with a 1.75% Libor floor and an original issue discount of 98½ on its $137 million credit facility that is set to launch with a bank meeting on Wednesday, according to a market source.

The deal consists of a $40 million five-year revolver and a $97 million six-year term loan.

GE Capital and BNP Paribas are the lead banks on the facility that will be used to help fund the buyout of the company by Harvest Partners from Berkshire Partners LLC and Summit Partners LLC.

BHI Energy is a Plymouth, Mass.-based provider of technical and professional project and staffing solutions to the nuclear, wind, hydroelectric, fossil, industrial and government energy markets.

Dunkin' structure emerges

A structure on Dunkin' Brands' $1.35 billion senior credit facility surfaced as expected timing for the bank meeting has been narrowed down to late next week from the previous description of November business, according to a market source.

The facility consists of a $100 million revolver and a $1.25 billion term loan B, the source said. Price talk is not yet available.

Barclays, JPMorgan, Bank of America and Goldman Sachs are the joint lead arrangers and joint bookrunners on the deal that will be used, along with $625 million of senior notes, to repay in full the company's outstanding securitization debt and to pay a cash dividend to stockholders.

Canton, Mass.-based Dunkin' Brands is the parent company of Dunkin' Donuts, a coffee and baked goods restaurant chain, and Baskin-Robbins, an ice cream specialty store chain.

Gymboree sets launch

Gymboree firmed up timing on the launch of its proposed $945 million senior secured credit facility with the scheduling of a bank meeting for Monday, according to a market source. Previously, it was known that the deal would come next week and that Monday was the targeted date, but timing was still fluid.

The facility consists of a $225 million five-year asset-based revolver - split into a $213 million A tranche and a $12 million first-in, last-out A-1 tranche - and a $720 million seven-year term loan B.

Price talk on the term loan B is Libor plus 450 bps with a 1.75% Libor floor and an original issue discount of 981/2.

And, based on the commitment letter, pricing on the tranche A revolver is expected at Libor plus 250 bps, pricing on the tranche A-1 revolver is expected at Libor plus 400 bps, and the commitment fee is expected at 62.5 bps.

Gymboree lead banks

Credit Suisse and Morgan Stanley are the joint lead arrangers and bookrunners on Gymboree's term loan B, with Credit Suisse the left lead. Bank of America is the lead arranger and bookrunner on the asset-based revolver.

Proceeds from the facility, along with up to $524 million of equity and $520 million of senior unsecured notes, will be used to fund the acquisition of the company by Bain Capital Partners LLC for $65.40 per share, or $1.8 billion. Bain started a tender offer for Gymboree's shares this past Monday.

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.

Rural/Metro nets interest

Rural/Metro's credit facility has attracted a good amount of attention from investors since its launch on Oct. 20, with the term loan "already oversubscribed" and the revolver "filling up," according to a market source.

The $75 million term loan and a $100 million revolver are both being talked at Libor plus 425 bps to 450 bps.

The term loan talk includes a 1.75% Libor floor and an original issue discount of 99 to 991/2, and the revolver is being offered with a 75 bps upfront fee and a 75 bps commitment fee.

It is expected that pricing on the $175 million secured credit facility (Ba1/BB) will firm up early next week, the source added.

Rural/Metro refinancing

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.

Additionally, remaining proceeds will be used for working capital and general corporate purposes.

RBC Capital Markets is the lead bank on the bank deal.

Other funds for the refinancing will come from a planned $200 million senior notes offering.

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

SoftLayer making progress

SoftLayer Technologies' $275 million credit facility is "moving along" in syndication with "accounts happy it got the B+/B1 rating," according to a market source.

The facility consists of a $20 million five-year revolver and a $255 million six-year term loan, with both tranches talked at Libor plus 450 bps to 500 bps with an original issue discount of 98 to 981/2. The term loan has a 1.75% Libor floor, while the revolver has no floor.

SunTrust and RBC Capital are the lead banks on the deal that will be used to help fund a merger with ThePlanet.com Internet Services, a Houston-based provider of internet infrastructure services that is owned by GI Partners.

Net leverage will be under 2.5 times.

SoftLayer is a Dallas-based provider of on-demand data center and hosting services that is also owned by GI Partners.

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