Novelis, Smile Brands, HarbourVest break; Nuveen rises; Mirion pulls deal; CNO tweaks loan

By Sara Rosenberg

New York, Dec. 13 - Novelis Inc.'s term loan B freed up for trading during Monday's market hours, with levels quoted above its original issue discount price, and Smile Brands Group Inc. and HarbourVest Partners LLC broke as well.

In more secondary happenings, Nuveen Investments Inc.'s first-lien term loan B was stronger as the company held a lender call to launch an amendment and extension proposal that would push out some of the debt's maturity at higher pricing.

Over in the primary market, Mirion Technologies Inc. removed its credit facility from the market, and CNO Financial Group Inc. made changes to its term loan, including reducing the spread and Libor floor and narrowing down the original issue discount price.

Also, the Great Atlantic & Pacific Tea Co. Inc. (A&P) emerged with plans to bring a new debtor-in-possession financing facility to market this week and started circulating price talk on the transaction.

Novelis frees up

Novelis' $1.5 billion senior secured six-year term loan B (Ba2/BB-) hit the secondary market on Monday afternoon, with levels quoted by one trader at par ¾ bid, 101¼ offered on the open and then he saw it move to 101 bid, 101¼ offered.

A second trader said the loan actually opened up at par bid, par 3/8 offered, got as high as 101 bid, 101¼ offered and then settled in at par ¾ bid, 101 1/8 offered.

And a third trader first saw the B loan at par ¾ bid, 101¼ offered before moving to 101 bid, 101 3/8 offered.

Pricing on the term loan B is Libor plus 375 basis points with a step-down to Libor plus 350 bps at less than 3.5 times leverage. There is a 1.5% Libor floor and 101 soft call protection for one year, and the debt was sold at an original issue discount of 99.

Novelis getting revolver

Novelis' $2.3 billion credit facility also includes an $800 million asset-based loan, and proceeds from the entire deal, along with $2.5 billion of notes, will be used to refinance debt and fund a distribution.

Specifically, the company will refinance a $1.125 billion term loan and an $800 million asset-based loan, tender for notes and fund a $1.7 billion distribution to its parent company.

Bank of America, Citigroup, JPMorgan, RBS and UBS are the lead banks on the credit facility, with Bank of America the left lead.

During syndication, pricing on the term loan B was reverse flexed from talk of Libor plus 400 bps to 425 bps, the step-down was added and the discount firmed at the low end of the 98½ to 99 guidance.

Novelis is an Atlanta-based aluminum-rolled products and beverage can recycling company.

Smile Brands breaks

Another deal to start trading was Smile Brands, with its $240 million term loan quoted at 99 bid, par offered, according to traders.

Pricing on the term loan, as well as on a $35 million revolver, is Libor plus 525 bps with a 1.75% Libor floor, and the tranches were sold at a discount of 981/2. There is 101 soft call protection for one year on the term loan.

During syndication, pricing on the facility was flexed up from Libor plus 500 bps and the term loan saw the addition of the call protection.

Smile Brands being acquired

Proceeds from Smile Brands' $275 million senior secured credit facility (Ba3/B) will be used to help fund Welsh, Carson, Anderson & Stowe's purchase of a majority interest in the company from Freeman Spogli & Co.

The transaction is expected to be completed this month.

Credit Suisse, Wells Fargo and SunTrust are the lead banks on the credit facility, with Credit Suisse the left lead.

Smile Brands is an Irvine, Calif.-based dental support services organization.

HarbourVest bid atop OID

HarbourVest Partners' $400 million term loan also began being quoted in the secondary market, with traders seeing the paper at 99½ bid, no offers.

Pricing on the term loan is Libor plus 475 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99.

During syndication, the term loan was downsized from $550 million, pricing was increased from Libor plus 425 bps, amortization was changed to 10% per year and the excess cash flow sweep was set at 100%.

Credit Suisse is the lead bank on the deal that will be used for a recapitalization.

HarbourVest is a Boston-based investment firm that provides private equity services to institutional clients.

Nuveen up with amendment

Nuveen Investments' first-lien term loan B was better by a few points in trading as the company approached lenders with an amendment and extension of its credit facility, according to traders.

The term loan B was quoted by one trader at 94¾ bid, 95¾ offered, up from 92¾ bid, 93½ offered, and by a second trader at 94 7/8 bid, 95 3/8 offered, up from 92¾ bid, 93¼ offered.

Under the proposal, the company is looking to push out the maturity on $1 billion of the existing $2.1 billion first-lien term loan B by 2½ years to May 2017, and pricing on the extended debt would be Libor plus 550 bps, up from Libor plus 300 bps on the non-extended debt.

The extended term loan would have 101 soft call protection for one year.

Nuveen extending revolver

In addition, Nuveen is asking lenders to extend its $250 million revolver in full by two years to November 2015, also at pricing of Libor plus 550 bps, up from Libor plus 300 bps currently.

Of the total revolver amount, 25% of extended lenders would be converted into first-lien term loan borrowings, so the extended term loan tranche would actually be sized at roughly $1.05 billion.

Lastly, the amendment would revise the first-lien leverage covenant to 5.75 times for the life of the loan.

Deutsche Bank is leading the transaction and is asking for commitments by noon ET on Friday.

Lenders are being offered a 25 bps consent fee.

Nuveen is a Chicago-based provider of investment services to institutions and high net worth investors.

Mirion cancels facility plans

Moving to the primary, Mirion Technologies pulled its $235 million credit facility from market, and rumor is that the focus has now turned to a sale of the company, according to a market source.

The facility consisted of a $30 million revolver, a $145 million first-lien term loan talked at Libor plus 475 bps with a 1.75% Libor floor and an original issue discount of 981/2, and a $60 million second-lien term loan talked at Libor plus 900 bps with a 1.75% Libor floor and an original issue discount of 98.

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

Credit Suisse was acting as the lead bank on the refinancing deal.

Mirion is a San Ramon, Calif.-based provider of products to detect, monitor and identify radiation.

CNO reworks loan

CNO Financial Group reduced pricing on its $325 million senior secured term loan, as well as the Libor floor, and revised original issue discount talk, according to a market source.

Pricing on the term loan due in September 2016 is now set at Libor plus 600 bps, down from talk in the Libor plus 625 bps area, the Libor floor was reduced to 1.5% from 1.75%, and the original issue discount is now described as 983/4, compared to prior guidance of 98 to 99, the source said.

In addition, with the changes, the commitment deadline was moved to Tuesday from Thursday, the source remarked.

Morgan Stanley and Barclays are the lead banks on the deal, with Morgan Stanley the left lead. FBR Capital Markets is the documentation agent.

CNO refinancing debt

Proceeds from CNO's term loan will be used to help refinance an existing $652.1 million senior secured term loan that matures in October 2013.

Other funds for the refinancing will come from $300 million of senior secured notes and cash on hand.

Price talk on the notes emerged on Monday at around 9%.

CNO is a Carmel, Ind.-based holding company for insurance companies - principally Bankers Life and Casualty Co., Colonial Penn Life Insurance Co. and Washington National Insurance Co.

A&P readies deal

Great Atlantic & Pacific Tea has set a bank meeting for 2:30 p.m. ET on Tuesday to launch a proposed $800 million 18-month debtor-in-possession financing facility that consists of a $350 million term loan and a $450 million revolver, a market source told Prospect News.

Price talk on the term loan is Libor plus 750 bps with a 1.75% Libor floor and an original issue discount of 98, the source said, and there is 101 soft call protection.

Pricing on the revolver is expected at Libor plus 300 bps with a 50 bps unused fee, according to court documents.

JPMorgan is the lead on the Montvale, N.J.-based supermarket chain's deal that will be used to refinance pre-petition senior secured bank debt, provide incremental liquidity, and for working capital and general corporate purposes.

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