Cengage Energy drops with earnings news; Alon USA breaks; Einstein Noah revises term loan

By Sara Rosenberg

New York, Nov. 9 - Cengage Learning Acquisitions Inc.'s extended and non-extended term loans took a massive hit in trading on Friday after the company came out with disappointing first-quarter fiscal 2013 numbers.

Also in the secondary market, Alon USA Energy Inc.'s term loan freed up, with the debt seen bid above its original issue discount price.

Over in the primary, Einstein Noah Restaurant Group Inc. reworked its term loan, reducing the size, increasing the coupon and sweetening call premiums.

In addition, Firth Rixson Ltd., NPC International Inc. and National CineMedia LLC disclosed price talk on their deals that were presented to lenders during the session, and Ardent Health Services and Equinox Holdings Inc. released guidance on their in market transaction.

Furthermore, Northern Tool + Equipment Co. Inc. came out with timing and tranching on its upcoming acquisition financing credit facility, and Metaldyne LLC set a launch date for its new deal.

Cengage plummets

Cengage's term loans experienced a heavy loss in the secondary market on Friday on the back of fiscal first quarters results being announced that showed a year-over-year decline in earnings, revenues and adjusted EBITDA, according to a trader.

The extended term loan was quoted at 76 bid, 78 offered, down from 88 bid, 88½ offered, and the non-extended term loan was quoted at 79½ bid, 81½ offered, down from 93 bid, 93½ offered, the trader said.

The debt was extremely volatile, especially in the morning, with the first levels of the day seen at 80 bid, 82 offered on the extended loan and 82 bid, 84 offered on the non-extended loan. From the open, those levels kept bouncing around with the extended loan getting as low as 72½ bid, 74½ offered and the non-extended loan getting as low as 75½ bid, 761/2, before coming back up, the trader added.

Cengage quarterly numbers

For the first quarter of fiscal 2013, Cengage reported net income of $13.2 million, compared to net income of $131.5 million in the prior year.

Revenues for the quarter were $538.3 million, down 22.2% from $691.9 million in the first quarter of fiscal 2012.

And, adjusted EBITDA for the quarter was $233.1 million, down 33.2% from $348.8 million in the previous year.

Cengage is a Stamford, Conn.-based provider of teaching, learning and research services for the academic, professional and library markets.

Alon frees up

In more trading news, Alon USA's $450 million six-year first-lien covenant-light secured term loan (B2/B+) broke, with levels quoted at 97 bid, according to a trader.

Pricing on the term loan is Libor plus 875 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 95. The tranche is non-callable for one year, then at 102 in year two and 101 in year three.

During syndication, pricing widened from revised talk of Libor plus 725 bps and initial talk of Libor plus 625 bps, and the discount was revised from 981/2.

Credit Suisse Securities (USA) LLC and Goldman Sachs Lending Partners LLC are leading the deal.

Proceeds will be used by the Dallas-based refiner and marketer to repay a roughly $422 million term loan and for general corporate purposes.

KeyPoint holds steady

KeyPoint Government Solutions Inc.'s $150 million five-year term loan B was quoted at 99 bid, par offered on Friday, in line with where it freed up for trading late in the previous session, a trader said.

Pricing on the term loan B is Libor plus 600 bps with a 1.25% Libor floor, and it was sold at a discount of 98. There is 101 soft call protection for one year.

The company's $160 million credit facility also includes a $10 million 41/2-year revolver priced at Libor plus 600 bps.

During syndication, the spread on the facility firmed at the wide end of the Libor plus 550 bps to 600 bps talk, the discount on the term loan B widened from 99, the revolver maturity was shortened from five years and the term loan B maturity was shortened from six years.

UBS Securities LLC is leading the deal that will refinance existing debt and fund a dividend.

Closing will take place on Tuesday.

KeyPoint is a Loveland, Colo.-based investigative and risk-mitigation services company.

Einstein tweaks deal

Moving to the primary, Einstein Noah Restaurant Group revised size, pricing and call protection on its six-year first-lien term loan, and is asking lenders to get recommitments in by 5 p.m. ET on Wednesday, according to a market source.

The term loan is now sized at $200 million, down from $240 million, priced at Libor plus 600 bps, up from Libor plus 550 bps, and includes call protection of 102 in year one and 101 in year two on all voluntary repayments versus prior talk of 101 soft call protection for one year, the source said. The 1.25% Libor floor and original issue discount of 99 were left intact.

The company's $225 million senior secured deal also includes a $25 million five-year revolver.

Credit Suisse Securities (USA) LLC and KeyBanc Capital Markets Inc. are the lead banks on the credit facility, with Credit Suisse the agent on the term loan and KeyBanc the agent on the revolver.

Einstein Noah, a Lakewood, Colo.-based operator of bagel bakery cafes, will use the credit facility proceeds to refinance existing debt and fund a dividend, the size of which was reduced because of the term loan downsizing.

Firth Rixson sets talk

Firth Rixson held a conference call on Friday to launch its credit facility, and with the event, price talk on the $680 million first-lien term loan due June 2017 was announced, according to a market source.

The U.S. portion of the term loan is talked at Libor plus 475 bps to 500 bps and the up to £150 million portion of the term loan is talked at Libor plus 500 bps to 525 bps, with both having a 1.25% floor, an original issue discount of 99 and 101 soft call protection for one year, the source said.

Also included in the company's $800 million credit facility (Ba3/B+) is a $120 million revolver due March 2017.

Lead banks, Deutsche Bank Securities Inc., Barclays, GE Capital Markets, HSBC and Lloyds Securities LLC, are asking for lender commitments by Nov. 20, the source added.

Proceeds will be used to refinance existing term loans.

Firth Rixson is a Sheffield, U.K.-based provider of seamless rolled rings, closed die forgings, open die forgings, extruded forgings and specialty metals primarily to the aerospace market.

NPC releases guidance

NPC International came out with talk of Libor plus 325 bps with a 1.25% Libor floor and a par offer price on its roughly $373 million term loan due December 2018 that was launched with a call in the morning, according to a market source.

As previously reported, the loan has 101 soft call protection for one year.

The company's $473 million senior secured credit facility, for which commitments are due on Nov. 16, also provides for a $100 million revolver.

Barclays Capital Inc. and Goldman Sachs & Co. are leading the deal that will be used to refinance/reprice an existing $100 million revolver due December 2016 and an existing $373 million term loan due December 2018. The term loan will be paid down at 101.

The existing revolver was done in 2011 at pricing of Libor plus 525 bps, subject to a grid, and the existing term loan was done in March 2012 at pricing of Libor plus 400 bps with a 1.25% Libor floor.

NPC is an Overland Park, Kan.-based Pizza Hut franchisee.

National CineMedia launches

National CineMedia disclosed that its $265 million seven-year term loan is talked at Libor plus 325 bps with no Libor floor, an original issue discount of 99 to 99½ and 101 soft call protection for one year, according to a market source.

Commitments for the loan that launched with a call on Friday afternoon are due on Nov. 16.

Barclays, J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Macquarie and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to refinance an existing $225 million term loan. Any remaining proceeds will be used to pay-off current interest rate swap arrangements, to make affiliate payments and for general corporate purposes.

With the term loan, the company is looking to increase its revolver by $5 million and extend the maturity by seven months.

National CineMedia is a Centennial, Colo.-based media company that provides advertising and events across theater circuits.

Ardent pricing surfaces

Ardent Health revealed talk on its first-and second-lien term loans that had been launched to investors with a bank meeting on Thursday, according to a market source.

The $725 million 51/2-year first-lien term loan (B1) is talked at Libor plus 500 bps to 525 bps with a 1.5% Libor floor and an original issue discount of 99, the source said. The debt has 101 soft call protection for one year.

As for the $175 million six-year second-lien term loan (Caa1), it is talked at Libor plus 875 bps to 900 bps with a 1.5% Libor floor and a discount of 98, the source continued. This debt has call protection of 103 in year one, 102 in year two and 101 in year three.

The company's $1.02 billion senior secured credit facility also includes a $120 million five-year revolver (B1).

Ardent buying BSA

Proceeds from Ardent's credit facility will be used to fund its portion of the purchase of Amarillo, Texas-based Baptist St. Anthony's Health System (BSA). Ardent and Baptist Community Services formed a joint venture to acquire BSA, with Ardent owning 80% of the joint venture and Baptist owning 20%.

Closing on the acquisition is expected in January 2013.

In addition, the new credit facility will be used to refinance Ardent's existing senior secured bank debt.

Bank of America Merrill Lynch, Barclays, GE Capital Markets and Nomura are leading the deal.

Ardent is a Nashville, Tenn.-based owner and operator of hospitals, a member health plan, multi-specialty physician groups and retail pharmacies.

Equinox talk comes out

Equinox announced talk on its $500 million seven-year first-lien term loan at Libor plus 425 bps to 450 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year as B1/B ratings were assigned to the debt, according to a market source.

Also, talk on the $200 million 71/2-year second-lien term loan, rated Caa2/CCC+, emerged at Libor plus 825 bps to 850 bps with a 1.25% Libor floor, a discount of 98 and call protection of 103 in year one, 102 in year two and 101 in year three, the source continued.

The company's $800 million credit facility also includes a $100 million five-year revolver (B1/B).

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., Goldman Sachs & Co. and Citigroup Global Markets Inc. are leading the deal that launched with a bank meeting this past Wednesday.

Equinox, a New York-based exercise and fitness company, will use the credit facility to refinance existing debt.

Northern Tool details emerge

Northern Tool + Equipment said in a news release on Thursday that it would be getting new financing arranged by J.P. Morgan Securities LLC, and on Friday, it was revealed that the debt would be a $300 million credit facility consisting of a $100 million five-year ABL revolver and a $200 million seven-year fixed-assets term loan, a source said.

Also, it was disclosed that a bank meeting for the new credit facility would be taking place at 10 a.m. ET in New York on Wednesday, the source continued.

Proceeds will be used to fund the $215 million acquisition of the Sportsman's Guide, a South St. Paul, Minn.-based supplier of outdoor goods sold via catalogs and online, and the Golf Warehouse, a Wichita, Kan.-based online golf equipment retailer, from Redcats USA.

Northern Tool is a Burnsville, Minn.-based supplier of tools and equipment.

Metaldyne reveals timing

Metaldyne nailed down timing on the launch of its $620 million credit facility as bank meetings have been set for Wednesday in London and Thursday in New York, according to a market source.

The facility consists of a $75 million five-year revolver and a $545 million six-year term loan B.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., RBC Capital Markets LLC and Barclays are leading the deal that will be used to help fund the purchase of the company by American Securities from Carlyle Group.

Metaldyne is a Plymouth, Mich.-based designer and supplier of metal-formed components and assemblies for powertrain applications.

Northfield wraps at talk

In other news, Northfield Park Associates completed syndication of its $195 million credit facility (B1/B) in line with initial terms, according to a market source.

The facility consists of a $150 million six-year term loan and $20 million six-year delayed-draw term loan, both priced at Libor plus 775 bps with a 1.25% Libor floor and an original issue discount of 98, and a $25 million five-year revolver that was sold at an original issue discount of 981/2.

The term loans are non-callable for 11/2-years, then at 102, 101 and par.

Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC are leading the deal that will be used fund the construction of the Hard Rock Casino.

Northfield Park Associates is a Cleveland-based casino operator.

Tomkins' Air closes

The acquisition of Tomkins' Air Distribution by Canada Pension Plan Investment Board and Onex Corp. from Tomkins (Pinafore Holdings BV) for about $1.1 billion has been completed, according to a news release.

For the transaction, Tomkins' Air got a new $760 million credit facility credit facility that consists of a $100 million five-year revolver (B1/B), a $525 million six-year covenant-light first-lien term loan (B1/B) and a $135 million 71/2-year covenant-light second-lien term loan (Caa1/CCC+).

Pricing on the first-lien term loan is Libor plus 375 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

And, aecond-lien term loan pricing is Libor plus 800 bps with a 1.25% Libor floor, and it was sold at a discount of 981/2. Call protection is 102 in year one and 101 in year two.

Tomkins' Air lead banks

RBC Capital Markets LLC, Barclays and UBS Securities LLC acted as the lead banks on Tomkins' Air's new credit facility.

During syndication, the deal underwent some changes, including first-lien pricing being lowered from Libor plus 400, and second-lien pricing firming at the tight end of the Libor plus 800 bps to 825 bps talk. Also, the discount on the second-lien term loan was tightened from 98 and call protection was revised from 103 in year one, 102 in year two and 101 in year three.

First-lien leverage is 4.5 times and total leverage is 5.7 times.

Tomkins' Air is a manufacturer of products that are used to distribute, recycle and vent air in non-residential and residential buildings.

Confie Seguros buyout done

ABRY Partners closed on its purchase of Confie Seguros, a New York-based personal insurance company, from Genstar Capital, according to a news release.

Funding for the transaction came from a $437 million credit facility that consists of a $75 million revolver (B2/B-), a $252 million first-lien term loan (B2/B-) and a $110 million second-lien term loan (Caa2/CCC).

The revolver is priced at Libor plus 525 bps.

Pricing on the first-lien term loan is Libor plus 525 bps with a 1.25% Libor floor, and it was sold at a discount of 981/2, after firming recently at the wide end of the 98½ to 99 guidance. There is 101 soft call protection for one year.

And, the second-lien term loan is priced at Libor plus 900 bps with a 1.25% floor, and was sold at a discount of 98. This debt has call protection of 103 in year one, 102 in year two and 101 in year three.

RBC Capital Markets and GE Capital Markets led the deal.

MRC completes loan

MRC Global Inc. (McJunkin Red Man Corp.) closed on Friday on its $650 million seven-year senior secured term loan B, according to an 8-K filed with the Securities and Exchange Commission.

Pricing on the loan is Libor plus 500 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 99. The debt includes 101 soft call protection for one year.

During syndication, term loan was cut from $750 million and pricing was raised from Libor plus 400 bps.

Goldman Sachs & Co., Bank of America Merrill Lynch, Barclays and Wells Fargo Securities LLC led the deal that is being used to refinance $861 million in outstanding 9½% senior secured notes due 2016.

As a result of the downsizing to the term loan, the company borrowed more funds under its ABL revolver for the refinancing.

MRC is a Houston-based distributor of pipe, valve, fittings and related products and services to the energy industry.

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