Activision, Biomet, Steinway, Capsugel break; Valeant tweaks deal; JBS books shut early

By Sara Rosenberg

New York, Sept. 12 - Activision Blizzard Inc.'s credit facility hit the secondary market on Thursday, as did new bank debt from Biomet Inc., Steinway Musical Instruments Inc. and Capsugel Holdings US Inc.

Over in the primary, Valeant Pharmaceuticals International Inc. added a pricing step-down to its term loans, JBS USA LLC moved up the commitment deadline on its loan, Cole Haan LLC launched a new deal, and Archroma, Hyperion Insurance Group Ltd. and Sabre Inc. surfaced with new loan plans.

Activison frees up

Activision's credit facility broke for trading on Thursday, with the $2.5 billion seven-year covenant-light term loan B quoted at par 1/8 bid, par 3/8 offered on the open and then it moved to par ¼ bid, par ½ offered, according to a trader.

Pricing on the B loan is Libor plus 250 basis points with a 0.75% Libor floor and it was sold at an original issue discount of 991/2. There is 101 soft call protection for six months.

Earlier this week, the term B was upsized from $2.25 billion and the coupon was reduced from talk of Libor plus 275 bps to 300 bps.

Along with the term loan B upsizing, the company canceled plans for a $1 billion senior secured notes offering, increased its eight-year senior notes offering to $1.5 billion from $1 billion and lifted its 10-year senior notes offering to $750 million from $500 million.

Activision getting revolver

In addition to the B loan, Activision's $2.75 billion senior secured credit facility (Baa3/BBB) includes a $250 million five-year revolver.

Bank of America Merrill Lynch and J.P. Morgan Securities LLC are leading Activision's new debt, which will be used with about $1.2 billion of cash on hand, to fund the acquisition of around 429 million company shares and certain tax attributes from Vivendi SA in exchange for roughly $5.83 billion in cash, or $13.60 per share.

The transaction will result in Activision becoming an independent company with the majority of its shares owned by the public. Vivendi will no longer be the majority shareholder, but will retain a stake of 83 million shares or about 12%.

ASAC II LP - the investor group that includes chief executive officer Bobby Kotick, co-chairman Brian Kelly Davis, Davis Advisors, Leonard Green & Partners LP, Tencent, as well as a large institutional investor - will own a stake of about 24.9%.

Closing is expected by the end of the month, subject to customary conditions.

Activision Blizzard is a Santa Monica, Calif.-based interactive entertainment publishing company.

Biomet tops OID

Biomet's $2,982,000,000 covenant-light term loan B-2 (B1/BB-) due July 25, 2017 emerged in the secondary market too, with levels quoted at par 1/8 bid, par 5/8 offered, a trader said.

Pricing on the loan is Libor plus 350 bps with a step-down to Libor plus 325 bps at less than 2.25 times net secured leverage. There is 101 soft call protection for six months and no Libor floor, and the debt was sold at an original issue discount of 993/4.

During syndication, the loan was upsized from $865 million, pricing was cut from Libor plus 375 bps, the step-down was added and the discount tightened from talk of 99¼ to 991/2.

Proceeds will be used to repay an extended euro term loan B, and as a result of the upsizing, to reprice the existing U.S. term loan B from Libor plus 375 bps.

Bank of America Merrill Lynch, Goldman Sachs Bank USA and J.P. Morgan Securities LLC are leading the deal for the Warsaw, Ind.-based manufacturer of musculoskeletal biomedical devices.

Steinway starts trading

Steinway Musical's credit facility also freed up, with the $200 million six-year first-lien term loan (B1) quoted at par ¼ bid, par ¾ offered and the $110 million seven-year second-lien term loan (Caa1) quoted at par bid, 101 offered, according to a trader.

Pricing on the first-lien term loan is Libor plus 375 bps with a 1% Libor floor and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

Meanwhile, the second-lien loan is priced at Libor plus 825 bps with a 1% Libor floor and it was sold at 99. This debt has call protection of 103 in year one, 102 in year two and 101 in year three.

During syndication, the first-lien term loan was upsized from $190 million and pricing was cut from Libor plus 425 bps, and the second-lien term loan was upsized from $100 million, the spread was trimmed from Libor plus 850 bps and the discount was tightened from 98.

Bank of America Merrill Lynch and Deutsche Bank Securities Inc. are leading the deal that will help fund the buyout of the company by Paulson & Co. Inc. for $40 per share, or about $512 million.

With the term loan upsizings, the equity being used for the buyout was reduced.

Steinway is a Waltham, Mass.-based musical instruments company.

Capsugel hits secondary

Capsugel's $100 million incremental senior secured term loan due Aug. 1, 2018 and repriced roughly $806 million term loan began trading as well, with levels quoted in the par 1/8 bid, par 3/8 offered context, a trader remarked.

Pricing on all of the term loan debt is Libor plus 250 bps with a 1% Libor floor and it was issued at par. There is 101 soft call protection for six months.

Recently, pricing on the incremental loan was reduced from Libor plus 300 bps and repricing of the existing debt from Libor plus 300 bps with a 1.25% Libor floor was added to the transaction.

UBS Securities LLC is leading the deal.

Proceeds from the incremental loan will be used to fund the acquisition of Bend Research Inc.

Capsugel is a Morristown, N.J.-based manufacturer of hard capsules and drug-delivery systems.

Valeant adds step

Moving to the primary market, Valeant Pharmaceuticals added a step-down based on leverage to Libor plus 275 bps to its $995 million term loan C due Dec. 11, 2019 and $1,294,000,000 term loan D due Feb. 13, 2019, according to sources.

Initial pricing on the term loans is still Libor plus 300 bps with a 0.75% Libor floor, and there is still 101 soft call protection for six months.

Proceeds will be used to reprice the existing term loan C and term loan D from Libor plus 362.5 bps with a 0.75% Libor floor.

Goldman Sachs Bank USA, J.P. Morgan Securities LLC and RBC Capital Markets are leading the deal for which commitments were due on Thursday and allocations are expected to go out on Friday.

Closing is targeted for Sept. 17, and the company said in a recent filing with the Securities and Exchange Commission that it will refinance with available cash or a revolver draw any term loan C and D debt that is not repaid or replaced with the new term loan debt.

Valeant is a specialty pharmaceutical company with U.S. headquarters in Bridgewater, N.J.

JBS moves deadline

JBS accelerated the commitment deadline on its $400 million seven-year term loan (Ba2/BB) to 5 p.m. ET on Thursday from Friday, according to a market source.

Talk on the term loan is still Libor plus 275 bps to 300 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

J.P. Morgan Securities LLC is the lead bank on the deal.

Proceeds from the loan, along with $400 million of notes, will be used to fund a tender offer for the company's 11 5/8% senior notes due 2014.

JBS is a Greeley, Colo.-based beef, pork and lamb processing company.

Cole Haan holds call

In more primary news, Cole Haan hosted a call on Thursday, launching a $350 million first-lien term loan due February 2020 with talk of Libor plus 400 bps with a 1% Libor floor, an original issue discount of 99¾ and 101 soft call protection for six months, according to a market source.

Commitments are due on Wednesday, the source said.

Jefferies Finance LLC is the leading the deal that will be used to refinance a roughly $290 million term loan priced at Libor plus 450 bps with a 1.25% Libor floor and fund a dividend.

Cole Haan is a New York-based designer and retailer of footwear, apparel and accessories.

Archroma on deck

Archroma set a bank meeting for Monday to launch a $360 million credit facility that is being led by Jefferies Finance LLC, according to a market source.

The facility consists of a euro equivalent $50 million 41/2-year revolver, and a $310 million five-year term loan B talked at Libor plus 825 bps with a 1.25% Libor floor and an original issue discount of 98, the source said, adding that the B loan is non-callable for one year, then at 101 in year two.

Proceeds will be used to help fund SK Capital Partners' acquisition of the textile chemicals, paper specialties and emulsions businesses (to be named Archroma) of Clariant International for about $500 million and the assumption of some pension liabilities.

Hyperion joins calendar

Hyperion Insurance scheduled a bank meeting for 10 a.m. ET in New York on Monday to launch a $250 million senior secured term loan B due 2019, according to a market source.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance existing debt and fund pipeline acquisitions.

Corporate ratings are expected at B2/B, the source said.

Hyperion is a London-based insurance intermediary business.

Sabre readies loan

Sabre will host a call on Friday to launch a $300 million covenant-light term loan B-2 that includes 101 soft call protection through February 2014, according to a market source.

Bank of America Merrill Lynch is leading the deal.

Proceeds will be used to help fund costs associated with a marketing agreement between Sabre's wholly-owned company, Travelocity, and Expedia Inc.

Sabre is a Southlake, Texas-based online travel company.

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