Genoa, Ozburn-Hessey trim pricing; Gables price talk; SunGard breaks; IPC tweaks deal

By Sara Rosenberg

New York, July 28 - Genoa Healthcare reduced pricing on its term loans and decided to upsize its first-lien term loan. Meanwhile, Ozburn-Hessey Logistics LLC also decided to reduce pricing on its credit facility and even added a step-down provision to its term loan B as it too was met with strong investor demand. And, Lion Gables Realty LP set price talk on its credit facility as the deal launched via a bank meeting Thursday.

In other happenings, SunGard Data Systems Inc.'s massive term loan B freed up for trading Thursday afternoon, with the paper quoted atop 101, and IPC Acquisition Corp. freed up for trading in the afternoon after making some modifications to its credit facility in the morning.

Genoa reverse flexed pricing on both its first- and second-lien term loans by 25 basis points while at the same time, increasing the size of the first-lien term loan by $10 million.

The $100 million first-lien term loan (B2/B), upsized from $90 million, is now priced with an interest rate of Libor plus 325 basis points compared to initial price talk at launch of Libor plus 350 basis points, according to a market source.

As for the $50 million second-lien term loan (Caa1/CCC+), pricing was reverse flexed to Libor plus 775 basis points compared to initial price talk at launch of Libor plus 800 basis points, the source said.

Call protection on the second-lien tranche of 102 in year one and 101 in year two remained intact.

Pricing on the $20 million revolver (B2/B) of Libor plus 350 basis points was left unchanged as well, the source added.

Accounts were being asked to recommit to the deal on Thursday.

Morgan Stanley and GE Capital Corp. are the lead banks on the now $170 million credit facility, with Morgan Stanley the left lead.

Proceeds from the credit facility will be used for a dividend recapitalization.

Genoa is a Tampa, Fla.-based manager of 61 skilled nursing facilities.

Ozburn-Hessey cuts spreads

Ozburn-Hessey reverse flexed pricing on both its $140 million seven-year term loan B and its $40 million five-year revolver to Libor plus 275 basis points from initial price talk at launch of Libor plus 300 basis points, according to a market source.

Furthermore, a step down was added to the term loan B credit agreement, under which pricing can drop to Libor plus 250 basis points at 2.5x leverage, the source added.

Recommitments are due from lenders on Friday.

The term loan is being offered to investors at par, and a $10 million revolver commitment gets an upfront fee of 75 basis points.

Morgan Stanley and Bear Stearns are joint lead arrangers and joint bookrunners on the $180 million credit facility (B2/B+), with Morgan Stanley the left lead.

Proceeds from the term loan will be used to help fund a leveraged buyout of the company by Welsh, Carson, Anderson & Stowe.

The revolver will be undrawn at closing and will be available for general corporate purposes.

Welsh, Carson, Anderson & Stowe is putting in 63% of the money for the LBO consisting of $80 million of holding company mezzanine debt and $157 million of equity.

Following the transaction, senior leverage will be 31/2x and total leverage through the holding company will be 51/2x.

Ozburn-Hessey is a Nashville-based third party logistics provider.

Gables sets talk

Lion Gables came out with opening price talk of Libor plus 225 basis points on both its $300 million three-year revolver and $1.825 billion one-year term loan that contains an extension option at its Thursday bank meeting, according to a market source.

Lehman Brothers is the lead arranger and bookrunner on the deal, with ING Real Estate acting as syndication agent.

The deal is being marketed to some banks who will be asked to commit to both the revolver and the term loan as a strip and institutional guys who will be asked to buy the term loan on a stand-alone basis.

Proceeds from the $2.125 billion credit facility (Ba2) will be used to fund the leveraged buyout of Gables Residential Trust by ING Clarion Partners for $43.50 per common stock share in cash. The total purchase price is about $2.8 billion, which includes the assumption and refinancing of about $1.2 billion of Gables' outstanding debt and outstanding series C-1, series D and series Z preferred shares, which have a liquidation preference of about $120 million.

Completion of the transaction, which is expected to occur by the end of the third quarter, is subject to shareholder approval and certain other customary closing conditions.

ING has agreed to contribute $400 million in equity for acquisition financing as well.

Gables is a Boca Raton, Fla.-based real estate investment trust focused on multifamily apartment communities.

Hanley Wood upsizes

Hanley Wood Inc. increased the size of its seven-year term loan to $270 million from $260 million, according to a syndicate document.

Furthermore, pricing on the tranche was reverse flexed to Libor plus 225 basis points from Libor plus 300 basis points (not to Libor plus 250 basis points as was previously reported), the document said.

Pricing on the $32 million seven-year delayed-draw term loan also came down to Libor plus 225 basis points from Libor plus 300 basis points (not to Libor plus 250 basis points as was previously reported), the document added.

The delayed-draw term loan has a commitment fee of 112.5 basis points.

Hanley Wood's now $362 million credit facility (B2/B) also contains a $60 million six-year revolver with an interest rate of Libor plus 300 basis points - that was left unchanged since launch - and a 50 basis point commitment fee.

Credit Suisse First Boston and JPMorgan are joint lead arrangers on the deal, with CSFB the left lead.

Proceeds will be used to help fund the leveraged buyout of the company by JPMorgan Partners, Wasserstein & Co., and current and former Hanley Wood management from Veronis Suhler Stevenson.

Hanley Wood is a Washington, D.C., business-to-business media company serving the residential and commercial construction industries.

SunGard tops 101

SunGard's $4 billion 71/2-year term loan B opened for trading Thursday in the 101½ bid, 101¾ offered context, according to a trader, and then came in a little bit to close out the session at 101 3/8 bid, 101 5/8 offered, according to a second trader.

The paper was said to have settled in slightly from opening levels because of some market heaviness in the name as allocations were heard to be "full," the first trader added.

The B loan, which has a $500 million carve-out for European investors, was originally issued to investors with a discount of an eighth.

The term loan is priced with an interest rate of Libor plus 250 basis points, after reverse flexing this past Tuesday from Libor plus 275 basis points, while at the same time seeing the addition of 101 soft call protection for one year.

Prior to launching, the term loan B was talked at Libor plus 250 basis points before being revised to Libor plus 250 to 275 basis points and then launching at Libor plus 275 basis points.

SunGard's $5 billion credit facility (B1/B+/BB-) also contains a $1 billion six-year revolver with an interest rate of Libor plus 275 basis points.

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 Citigroup are acting as co-syndication agents, and Goldman Sachs and Morgan Stanley are co-documentation agents.

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

The company also sold $3 billion in high-yield debt for LBO financing comprised of $1.6 billion of fixed-rate notes that priced at par to yield 9 1/8%, on the tight end of the 9¼% area price talk, $400 million of floating-rate notes that priced at par to yield six-month Libor plus 450 basis points, on the tight end of the Libor plus 450 to 475 basis point price talk, and $1 billion of 10-year senior subordinated notes that priced at par to yield 10¼%, on top of price talk.

SunGard's $250 million 3.75% senior notes due 2009 and $250 million 4.875% senior notes due 2014, which were issued under a single indenture in January 2004, will remain outstanding after completion of the 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 about $11.3 billion. SunGard stockholders will receive $36 in cash for each share of common stock.

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

IPC tweaks, breaks

IPC Acquisition made a round of changes to its $485 million senior credit facility on Thursday morning, including shifting some funds from its second-lien term loan into its first-lien term loan and increasing pricing and sweetening call protection on the second lien.

And, not too long after the changes were announced, allocations went out and the deal freed up for trading with the first-lien term loan quoted at 101 3/8 bid, 101 5/8 offered and the second-lien term loan quoted at 101¾ bid, 102¼ offered, according to a market source.

More specifically, IPC upsized its six-year first-lien term loan (B2/B+) to $310 million from $285 million, while keeping pricing at Libor plus 275 basis points but adding a step down to Libor plus 250 basis points if leverage is less than 41/2x, the source said.

On the flip side, the seven-year second-lien term loan (B3/B-) was downsized to $125 million from $150 million, pricing was flexed higher to Libor plus 725 basis points from original talk at launch of Libor plus 650 to 700 basis points, and call protection was sweetened to 103 in year one, 102 in year two, 101 in year three from 102 in year one and 101 in year two, the source added.

IPC's $50 million revolver due Dec. 31, 2010 (B2/B+) was left unchanged in terms of size and pricing, which is set at Libor plus 275 basis points.

Goldman Sachs is the lead bank on the deal that will be used to refinance the company's existing credit facility, which has about $47.5 million outstanding, finance the tender offer for the company's $150 million 11.5% senior subordinated notes due Dec. 15, 2009 and finance the repurchase of some equity securities.

The revolver is available for general corporate purposes.

IPC is a New York-based provider of mission-critical communications solutions to global enterprises.

Rexair levels surface in trading

Rexair Inc.'s $94 million first-lien term loan B (B1/B) was seen quoted Thursday morning at par ½ bid, for $2 million, 101 offered for $2 million, according to a fund manager. The deal had allocated and freed up for trading on Wednesday afternoon, but levels on the bank debt had not been seen by investors by the close of business.

"As far as I know they aren't really sending out markets on this one as often as they do on the bigger more liquid deals. I haven't seen anything else on it since [the morning]," the fund manager added.

The term loan, which was originally issued at par, is priced with an interest rate of Libor plus 425 basis points. Pricing on the first-lien term loan was flexed up from Libor plus 325 basis points during syndication. Furthermore, the tranche was downsized from $124 million due to the addition of a $30 million six-year second-lien term loan (B3/CCC+) with an interest rate of Libor plus 750 basis points. Amortization on the first-lien term loan was also tweaked during syndication, going to $7.5 million per year as opposed to the original amount of 1% per year.

Rexair's $144 million credit facility also contains a $20 million five-year revolver (B1/B).

Credit Suisse First Boston acted as the sole lead arranger on the deal that was used to fund Rhone Capital LLC's completed acquisition of the company from Jacuzzi Brands Inc. for about $170 million.

Following completion of the acquisition, Jacuzzi retained a 30% interest in Rexair.

Rexair is a Troy, Mich.-based manufacturer of the Rainbow vacuum cleaner system for the global direct sales market.

Omnicare funds, syndication soon

Omnicare Inc.'s credit facility was funded on Thursday as the company completed its acquisition of NeighborCare Inc., according to a market source.

Furthermore, syndication of the already funded facility is expected to commence shortly - potentially in early-August, the source added.

Omnicare received a commitment for a $2.9 billion credit facility to finance the acquisition consisting of a $700 million five-year term loan, an $800 million five-year revolver and a $1.4 billion 364-day loan facility with an interest rate of Libor plus 75 basis points, according to a commitment letter.

Pricing on the term loan and the revolver will be based on ratings. If ratings are Baa1 or better or BBB+ or better, then the spread is Libor plus 50 basis points. If ratings are Baa2 or BBB, the spread is Libor plus 62.5 basis points. If ratings are Baa3 or BBB-, the spread is Libor plus 75 basis points. If ratings are Ba1 or BB+, the spread is Libor plus 100 basis points. If ratings are Ba2 or BB, the spread is Libor plus 125 basis points. And, if ratings are below Ba2 or BB, the spread is Libor plus 175 basis points.

The commitment fee on the revolver and 364-day facility are also based on ratings and can range anywhere from 12.5 to 37.5 basis points.

JPMorgan, Lehman Brothers and SunTrust Capital Markets are joint lead arrangers and joint bookrunners on the deal. JPMorgan and Lehman Brothers are co-syndication agents, SunTrust is administrative agent, and CIBC World Markets, Merrill Lynch and Wachovia Securities are co-documentation agents.

The 364-day loan facility is available in three ways: if the merger is not completed on the loan closing date, in up to two drawings, one on the closing date and one on the date of completion of the merger; if the merger is completed on the loan closing date in a single drawing on that date; and, the date on which payment is due for the tender or redemption of the 6.875% notes.

The company also has the option to get an additional $500 million 364-day loan facility after closing on this new deal. Proceeds from the incremental debt can be used for strategic acquisitions.

Omnicare is a Covington, Ky.-based provider of pharmaceutical care for the elderly. NeighborCare is a Baltimore, Md.-based institutional pharmacy provider serving long-term care and skilled nursing facilities, specialty hospitals, assisted and independent living communities, and other assorted group settings.

Petrohawk closes

Petrohawk Energy Corp. completed its merger with Mission Resources Corp., according to a company news release.

To help fund the merger, Petrohawk got a new $550 million credit facility consisting of a $150 million secured second-lien term loan and a $400 million senior secured revolver, $280 million of which will be available at closing.

The second-lien facility will be 50% drawn at closing, with the remaining 50% available at the Petrohawk's discretion within 45 days of closing.

BNP Paribas acted as the lead bank on the Houston-based oil and gas company's deal.

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