SunGard launches at high end of talk; Newkirk sees good momentum; Psychiatric Solutions, Helm break

By Sara Rosenberg

New York, July 7 - SunGard Data Systems Inc. launched its enormous term loan at the high-end of previously revised pricing guidance, as some had expected, and Newkirk Master Ltd. Partnership's term loan was already about a third of the way full shortly after launching Thursday, mainly due to interest from existing lenders.

In the secondary, Psychiatric Solutions Inc. and Helm Holding Corp. freed up for trading during the session, with both deals' term loan Bs quoted in the 101s.

SunGard decided to launch its $4 billion 71/2-year term loan to retail investors on Thursday with opening price talk of Libor plus 275 basis points as opposed to original talk of Libor plus 250 basis points and then revised talk of Libor plus 250 to 275 basis points, according to sources.

The syndicate had been talking to some institutional investors ahead of the launch about the deal and was heard by sources to be saying that institutional investors should expect pricing to come at the higher end of guidance - an expectation that obviously proved true with Thursday's move.

The term loan has a $500 million carve-out for European investors.

SunGard's $1 billion six-year revolver is talked around the Libor plus 250 to 275 basis points, with many expecting the tranche to end up at the higher end of price talk based on term loan pricing.

As for the meeting itself, "I heard it was pretty packed. I think everyone and their brother was there," one source said.

"There's a ton of demand in the market. Trying to see where that goes," another source added.

JPMorgan and Citigroup are joint lead arrangers on the deal, and JPMorgan, Citigroup and Deutsche Bank are joint bookrunners. JPMorgan is also acting as administrative agent, Deutsche and Citi are acting as co-syndication agents, and Goldman Sachs and Morgan Stanley are co-documentation agents.

SunGard has already gotten commitments from around seven or eight banks, in addition to the five banks leading the deal, through the senior managing agents process that began with a launch in May.

Proceeds from the $5 billion credit facility will be used to help fund Solar Capital Corp.'s leveraged buyout of SunGard.

In addition to the credit facility, the company is looking to issue $3 billion of senior unsecured and/or senior subordinated notes in a Rule 144A offering or get a $3 billion bridge loan, a $500 million six-year receivables facility and $3.5 billion in equity financing.

SunGard's $250 million 3.75% senior notes due 2009 and $250 4.875% senior notes due 2014, which were issued in January 2004, will remain outstanding after completion of the leveraged buyout.

The seven private equity investment firms that joined together to form Solar Capital to execute the purchase includes Silver Lake Partners, Bain Capital, The Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. LP, Providence Equity Partners and Texas Pacific Group.

Under the acquisition agreement, the consortium agreed to purchase SunGard in a transaction valued at approximately $11.3 billion. SunGard stockholders will receive $36 in cash for each share of common stock.

On Thursday, Standard & Poor's assigned its B+ rating to SunGard's proposed credit facility with a stable outlook.

"The ratings on SunGard Data Systems reflect its highly leveraged financial profile following its acquisition by a group of seven equity sponsors in a leveraged buyout for about $11.4 billion," said S&P credit analyst Philip Schrank, in the ratings release.

According to S&P, pro forma total debt to EBITDA will exceed 7x at closing.

Sungard is a Wayne, Pa., provider of integrated software and processing solutions, primarily for financial services.

Newkirk filling up

Newkirk had about $275 million in commitments on the book for its $760 million senior secured term loan (Ba2) by late afternoon, primarily from existing lenders who had quickly opted to rollover their positions into this new deal, according to a market source.

The term loan, which is being offered to investors at par, has a tenor of three years but contains two one-year extension options.

Initial pricing on the tranche is set at Libor plus 200 basis points and there is a 25 basis points fee upon the exercise of each one-year extension.

There is a 1% prepayment penalty for the first year, the source added.

Key Bank and Bank of America are the lead banks on the deal, with Key Bank listed on the left.

Proceeds will be used to refinance most of the company's existing mortgage debt and refinance its existing bank debt as well.

Newkirk owns office, retail and industrial properties.

Carrizo upsizes, cuts spread

Carrizo Oil & Gas Inc. increased the size of its six-year second-lien term loan to $150 million from $125 million, while at the same time decreasing pricing on the tranche to Libor plus 600 basis points from Libor plus 700 basis points, according to a syndicate document.

Credit Suisse First Boston is the lead bank on the deal that will be used for working capital.

Carrizo is a Houston-based explorer, developer, and producer of natural gas and oil.

Burger King cuts spread

Burger King Corp. reverse flexed pricing on its $750 million seven-year term loan B to Libor plus 175 basis points from Libor plus 200 basis points, according to a market source.

Pricing on the $150 million revolver and $250 million six-year term loan A was left unchanged at Libor plus 175 basis points, the source added.

JPMorgan and Citigroup are the lead banks on the $1.15 billion (Ba2/B+) deal, with JPMorgan left lead.

The term loan B is being offered to investors at par.

Proceeds will be used by the Miami-based fast food hamburger chain to refinance existing debt.

Psychiatric Solutions heads to low 101s

Psychiatric Solutions allocated its new credit facility on Thursday and the $325 million term loan freed up for trading with opening levels seen wrapped around 101 before heading up to the 101 bid, 101½ offered context by day's end, according to a trader.

The term loan due 2012 is priced with an interest rate of Libor plus 200 basis points and contains a step down to Libor plus 175 basis points when leverage is 4.75x. The deal was originally launched with price talk of Libor plus 250 basis points but was reverse flexed with the addition of the step down during syndication.

The term loan was offered to investors at par.

Psychiatric Solutions' $475 million credit facility (B1/B+) also contains a $150 million amended and restated revolver due 2009 with an interest rate of Libor plus 250 basis points that was left unchanged throughout syndication.

There were no upfront fees offered on the revolver during syndication because it is an amendment and restatement of the existing $150 million revolver. As part of the changes, the company is seeking permission to add the new term loan into the capital structure.

Proceeds from the term loan, along with the funds from an upsized $220 million 7¾% senior subordinated notes issue, will be used to help fund the acquisition of 20 inpatient psychiatric facilities from Ardent Health Services and for general corporate purposes.

Citigroup is the sole lead bank on the deal.

Psychiatric Solutions is a Franklin, Tenn.-based provider of inpatient behavioral health care services.

Helm B loan around mid-101

Helm Holding allocated its new deal as well, with the $235 million six-year first-lien term loan B opening for trading around 101 bid, 101 3/8 offered and then moving up to 101 3/8 bid, 101 5/8 offered by the end of its first session, according to market sources.

As for the $70 million seven-year second-lien term loan, that was seen bid north of 101 with no offers, one source added.

The term loan B is priced with an interest rate of Libor plus 250 basis points. Original price talk on the tranche had been Libor plus 275 basis points but it was reverse flexed during syndication.

The second-lien term loan is priced with an interest rate of Libor plus 650 basis points. The tranche was originally sized at $100 million and priced at Libor plus 700 basis points but was tweaked during syndication as well.

Helm Holding's $385 million credit facility also contains an $80 million six-year revolver that was upsized from $50 million during syndication. The revolver has a commitment fee of 50 basis points.

Credit Suisse First Boston is the lead bank on the deal.

Proceeds will be used to help fund K-1 Ventures acquisition of Helm, a San Francisco-based locomotive and railcar leasing company.

Northwest lower on London explosions

Northwest Airlines Corp.'s bank debt slid lower as news of four bombings in London rocked the headlines, bringing with it some nervousness over the near-term fate of trans-Atlantic airline travel, according to market source.

According to a fund manager, Northwest's bank debt was only down about half a point with the term loan A quoted at 93½ bid, 94½ offered for $2 million, the term loan B quoted at 96½ bid, 97½ offered for $2 million and the term loan C quoted at 94½ bid, 95½ offered for $2 million.

A trader, however, placed the paper even lower than that, saying that levels fell a full point to 96 bid, 97 offered on the term loan B and 93 bid, 95 offered on the term loan A.

In the wake of the news, Standard and Poor's said that the apparent terrorist attacks on the London subway and bus system will likely hurt the trans-Atlantic business of some airlines, but, barring further incidents, is not expected to affect ratings or outlooks of those companies.

Northwest is an Eagan, Minn.-based airline company.

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