AWAS cuts second-lien spread; John Maneely, National Renal overfill; Movie Gallery bounces around

By Sara Rosenberg

New York, March 14 - AWAS Aviation Holdings LLC reverse flexed pricing on its second-lien term loan as the tranche was well oversubscribed. Continuing on the theme of strong reception, John Maneely Co.'s term loan is way over the necessary amount of orders needed, creating an expectation of a future flex downward, and National Renal Institutes Inc.'s term loan has also surpassed its commitment mark.

In secondary happenings, Movie Gallery Inc.'s term loan rollercoastered between lower and higher levels throughout trading, only to end up unchanged on the day.

AWAS Aviation lowered pricing on its $250 million second-lien term loan - not a big surprise considering the tranche had already reached oversubscription within a few days of launching in mid-February.

The second-lien term loan is now priced with an interest rate of Libor plus 600 basis points, down 50 basis points from original price talk at launch of Libor plus 650 basis points, a market source told Prospect News on Tuesday.

Call protection on the second-lien loan of 102 in year one and 101 in year two was left unchanged, the source added.

AWAS Aviation's $2.05 billion credit facility also contains a $1.8 billion first-lien term loan that is priced with an interest rate of Libor plus 175 basis points.

Market sources have previously said that the first lien is mainly being looked at by banks as opposed to funds because the low spreads and the fact that it's not rated, basically took CLO buyers out of the mix.

JPMorgan is the lead bank on the deal that will be used to help fund Terra Firma's purchase of AWAS from Morgan Stanley for $2.5 billion.

AWAS Aviation is a Seattle-based aircraft leasing company.

John Maneely gets strong reception

John Maneely's $290 million seven-year term loan (B2/B) is already about two-and-a-half times oversubscribed, and with the commitment deadline still about a week away, some investors are anticipating a downward move in pricing before syndication is through, according to a market source.

In addition, there are some whispers about the commitment deadline potentially being moved up because of the level of demand, although nothing definitive has been announced, the source said.

The term loan is talked at Libor plus 350 basis points.

"I expect a flex on that one. [It] probably will come down to 300 or 325 [basis points over Libor]. I could see it getting done at 300," the source said regarding term loan pricing.

John Maneely's $490 million credit facility also contains a five-year asset-based revolver (Ba3/BB-) talked at Libor plus 150 basis points.

Goldman Sachs and Citigroup are the lead banks on the deal, with Goldman on the left.

Proceeds will be used to help fund The Carlyle Group's acquisition of Collingswood, N.J.-based John Maneely, parent company of Wheatland Tube Co., a manufacturer of steel pipe and tubular products, and Seminole Tubular Products Co., a manufacturer of plumbing and electrical fittings.

National Renal well received

National Renal Institutes' $218 million term loan B has also been extremely well received by the market since first launching into syndication last Tuesday as the deal is now two times oversubscribed, way ahead of next Monday's commitment deadline, according to a market source.

The term loan B is currently talked at Libor plus 300 basis points and is being offered to investors at par.

National Renal's $258 million senior credit facility also contains a $40 million revolver that is talked at Libor plus 300 basis points as well. The upfront fee on revolver commitments is 50 basis points.

RBC Capital Markets, Royal Bank of Scotland and Aries Management (who has agreed to provide the mezzanine financing and therefore was awarded a role in the loan) are the lead banks on the deal, with RBC the left lead.

Proceeds will be used to help fund the acquisition of more than 100 dialysis clinics from Fresenius Medical Care Holdings Inc. and Renal Care Group for about $450 million in cash.

National Renal Institutes is a wholly owned subsidiary of Nashville, Tenn.-based DSI Holding Co. Inc., which is being invested in by equity firm Centre Partners.

Fresenius tweaks deal

Fresenius Medical Care AG made some changes to its credit facility, including downsizing both the term loan A and term loan B tranches and reverse flexing term loan B pricing, according to a market source.

The five-year term loan A is now sized at $1.85 billion, down from a previous size of $2 billion, with pricing on the tranche remaining at Libor plus 137.5 basis points, the source said.

As for the term loan B, that was downsized to $1.75 billion from a previous size of $2 billion and pricing was cut to Libor plus 137.5 basis points from original price talk at launch of Libor plus 150 basis points to 175 basis points, the source added.

Fresenius' $4.6 billion credit facility also includes a $1 billion revolver priced at Libor plus 137.5 basis points.

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

Proceeds from the credit facility will be used to finance the acquisition of Renal Care Group Inc. for approximately $3.5 billion, plus the assumption of about $500 million of Renal debt.

In addition to funding the acquisition, Fresenius will also use the new loan to replace its existing $1.2 billion credit agreement.

The revolver and term loan A were actually syndicated in June of last year. Originally, the term loan A was sized at $1.5 billion, but during the 2005 syndication process, the company had shifted $500 million out of its not-yet-launched term loan B into its term loan A. In addition, during the pro rata syndication, pricing on both the revolver and the term loan A was reverse flexed from original price talk at launch of Libor plus 150 basis points.

Fresenius' acquisition of Renal Care has been under regulatory scrutiny since 2005 as the Federal Trade Commission has been making requests for additional information on the transaction.

In 2006, however, Fresenius and Renal Care announced that they have signed a definitive agreement to sell about 100 dialysis clinics to National Renal Institutes Inc. in connection with the FTC's review of the merger.

The divestiture of the clinics was labeled by the companies as an important step toward concluding the FTC's review of the transaction.

The merger is now targeted for completion on or before March 31, subject to meeting all closing conditions including final approval by the FTC.

Fresenius is a Bad Homburg, Germany-based dialysis products and services provider. Renal Care is a Nashville, Tenn.-based dialysis service provider.

Movie Gallery seesaws

In the secondary, Movie Gallery's term loan bounced around throughout the session, moving from losses of three quarters of a point to gains of a quarter of a point, before finally settling at unchanged levels, according to sources.

The term loan closed the day quoted at 92 bid, 92½ offered (same as Monday), sources said, but bids had fallen as low as 91¼ and as high as 92¼ during various points in trading.

Movie Gallery has been in the spotlight since the start of last week as lender calls were held to discuss necessary amendments to loan financial covenants.

The Dothan, Ala.-based operator of video retail stores is not currently in default under its covenants but is looking for relief going forward and in return, would likely give lenders an amendment fee and higher pricing on all loan tranches.

Lender consents on the amendment are due on Wednesday.

Infor, Extensity close

Infor Global Solutions AG and Extensity closed on their new credit facilities that were obtained in connection with Golden Gate Capital's now completed approximately $1 billion leveraged buyout of Geac Computer Corp. Ltd., according to a news release.

Infor's $970 million credit facility consists of a $50 million four-year revolver (B2/B) with an interest rate of Libor plus 275 basis points, a $605 million five-year first-lien term B (B2/B) with an interest rate of Libor plus 275 basis points, and a $315 million six-year second-lien term loan (Caa2/CCC+) of which $200 million is existing debt priced at Libor plus 725 basis points and $115 million is new debt priced at Libor plus 700 basis points.

During syndication, pricing on Infor's new second-lien term loan debt was raised from original price talk of Libor plus 675 basis points.

Extensity's $575 million credit facility consists of a $50 million revolver (B2/B), a $400 million first-lien term loan (B2/B) with an interest rate of Libor plus 250 basis points and a $125 million second-lien term loan with an interest rate of Libor plus 725 basis points.

During syndication, Extensity's first-lien term loan was upsized from $360 million and reverse flexed from Libor plus 275 basis points, and its second-lien term loan was downsized from $165 million.

JPMorgan and Credit Suisse acted as joint bookrunners and co-lead arrangers on Infor's first- and second-lien bank debt, and Wells Fargo Foothill Inc. and GE Commercial Finance acted as co-documentation agents on Infor's first-lien debt.

JPMorgan and Merrill Lynch acted as joint lead arrangers and joint bookrunners on Extensity's first- and second-lien debt, Wells Fargo Foothill and GE Commercial Finance acted as co-documentation agents for the first-lien debt, and D.B. Zwirn Finance LLC acted as administrative agent on the second-lien debt.

Proceeds from the Infor credit facility were used for the purchase of Geac's ERP software products - including System21, Runtime, RatioPlan, Streamline, and Management Data - and for the purchase of Greenville, S.C., asset management applications provider Datastream Systems Inc. for $10.26 per share in cash.

Proceeds from the Extensity facility were used for the purchase of Geac's financial applications and the Industry Specific Applications, which became two separate business groups under Extensity, a newly formed Golden Gate Capital funded company that targets the integrated financial applications software market.

Infor, a Golden Gate Capital funded company, is an Atlanta-based software provider. Geac is a Markham, Ont., enterprise software company that addresses the needs of the chief financial officer.

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