BA Energy sets institutional talk; Telesat, Misys firm OIDs; NV Broadcasting overfills; LCDX stronger

By Sara Rosenberg

New York, Oct. 9 - BA Energy Inc. came out with pricing details on its recently added institutional term loan, Telesat narrowed in on its original issue discount and Misys Diagnostic Systems finalized pricing on its credit facility at the high end of guidance while modifying the original issue discount on the term loan.

In other primary news, NV Broadcasting LLC's first-lien term loan is oversubscribed and the second-lien is coming along as well.

Moving to the secondary, LCDX series 9 actually broke par on Tuesday and the cash market in general felt stronger as there seems to be some money floating around.

BA Energy revealed price talk on the $100 million to $150 million institutional term loan that was recently carved out of its pro rata loan tranche, according to a market source.

The institutional term loan is being talked at Libor plus 550 basis points, with an original issue discount of 98, the source said.

Meanwhile, the company's $350 million to $400 million in pro rata financing is still being talked at Libor plus 400 bps, with a 150 bps upfront fee.

The total size of the project financing credit facility is $500 million - so if the institutional term loan ends up at $100 million, the pro rata will be $400 million, and if the institutional ends up at $150 million, the pro rata will be $350 million.

Originally, the entire facility was being marketed as an all pro rata tranche, but because some institutional guys showed interest in the deal, the decision was made to create a tranche for those investors.

TD Securities and Lehman Brothers are the lead banks on the deal.

Proceeds will be used to help fund the company's Heartland Upgrader project.

BA Energy is a Calgary, Alta.-based company involved in upgrading bitumen and heavy oil feedstock into high-quality crude oils.

Telesat sets OID

Telesat firmed up the original issue discount on its term loan B debt at 98, compared with previous guidance in the 97½ to 98 range, according to a market source.

The term loan B debt is comprised of a $1.44 billion seven-year term loan B and a $150 million delayed-draw term loan B, with the tranches talked at Libor plus 300 bps.

The company's roughly $2.25 billion credit facility (B1/BB-) also includes a C$160 million five-year revolver and a C$500 million five-year term loan A.

There are maintenance covenants under the facility.

Morgan Stanley, UBS and JPMorgan are the lead arrangers and bookrunners on the deal, with Morgan Stanley and UBS as senior lead arrangers and Morgan Stanley on the left. Morgan Stanley is administrative agent on the credit facility, UBS is syndication agent and Bank of Nova Scotia, JPMorgan and Citigroup are joint documentation agents.

Proceeds from the credit facility, along with $910 million of high-yield senior notes and $761 million of equity, will be used to help fund the acquisition of Telesat Canada by a joint venture company formed by Loral Space & Communications Inc. and the Public Sector Pension Investment Board.

The newly formed joint venture is buying Telesat Canada from BCE Inc. for about $2.8 billion, plus the assumption of $148 million of debt.

In connection with this transaction, Loral will transfer the fixed satellite services and network services assets of Loral Skynet to the joint venture, which will be known as Telesat and be based in Ottawa.

Misys finalizes pricing, OID

Misys Diagnostic firmed up pricing on its $225 million senior secured credit facility (B1/B+) at the wide end of initial talk, while revising the term loan discount, according to a market source.

Both the $25 million six-year revolver and the $200 million seven-year first-lien term loan are now priced at Libor plus 325 bps, compared with original talk at launch of Libor plus 300 bps to 325 bps, the source said.

In addition, the original issue discount on the term loan ended up at 981/4, as opposed to the 98 level that was presented to lenders at launch, the source remarked.

The books on the "multiply oversubscribed" deal closed on Friday and allocations are expected to go out on Wednesday, the source added.

UBS Investment Bank and Jefferies are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by Vista Equity Partners, LLC from Misys Healthcare Systems.

Misys Diagnostic is a provider of technology solutions for hospitals.

NV Broadcasting sees good momentum

NV Broadcasting (New Vision Television) has been met with strong investor interest since launching only a week ago, enough so that the first-lien term loan B is oversubscribed and the second-lien term loan is about halfway done, according to a market source.

"It's such an easy sector for people," the source said.

The $215 million six-year first-lien term loan B is being talked at Libor plus 300 bps and the $120 million seven-year second-lien term loan is being talked at Libor plus 650 bps.

Both the first- and the second-lien term loans are being offered with an original issue discount of 98.

The first-lien term loan has 101 soft call protection for one year and the second-lien term loan is non-callable for one year, then at 102 in year two and 101 in year three.

NV Broadcasting's $390 million credit facility also includes a $25 million six-year revolver that is being talked at Libor plus 300 bps and a $30 million senior unsecured holdco loan.

The first- and second-lien debt contain total leverage and minimum interest coverage covenants.

UBS Investment Bank is the lead bank on the deal.

Commitments are due on Oct. 16.

Proceeds will be used to help fund New Vision's acquisition of Montecito Broadcast Group, LLC and to refinance existing debt.

Upon completion of the acquisition, Los Angeles-based New Vision Television will own and operate nine major affiliated television stations and through joint sales or local market agreements will provide sales and other services to two other stations. These stations are in eight markets across the southern, midwestern and northwestern United States.

Metavante expected at a discount

Metavante Corp.'s $1.75 billion seven-year term loan is expected to be sold at a discount, although that discount level is still to be determined, according to a market source.

As was previously reported, price talk on the term loan is Libor plus 175 bps, with a single step down based on the company meeting a leverage test.

Metavante's $2 billion senior secured credit facility (Ba2/BB), which launched with a bank meeting on Tuesday, also includes a $250 million six-year revolver talked at Libor plus 162.5 bps, with a 50 bps commitment fee.

There is no market flex provision applicable to the interest rates on the term loan or the revolver, according to an 8-K filed with the Securities and Exchange Commission.

There is a $350 million accordion feature. If the interest rate applicable to any incremental facility is more than 25 bps higher than the term loan pricing, then the term loan pricing will be increased so that it is 25 bps lower than the incremental pricing.

The credit facility contains a consolidated leverage ratio that opens at 5 to 1 and slides down to 3.5 to 1 over time. The covenant will apply starting with the fiscal quarter ending March 31, 2008.

JPMorgan, Morgan Stanley, Lehman Brothers and Robert W. Baird & Co. are the lead banks on the deal.

Proceeds will be used to help fund the company's spinoff from Marshall & Ilsley Corp.

Under the spinoff, Marshall & Ilsley shareholders will receive one share of Marshall & Ilsley stock as well as one share of Metavante stock for every three shares of Marshall & Ilsley stock held.

In addition, Warburg Pincus, a private equity investor, will invest $625 million to obtain a 25% equity stake in Metavante.

Metavante is a provider of banking and payments technologies.

Guitar Center sets talk

Guitar Center Inc. released price talk on its institutional term loan now that the deal was presented to lenders with a bank meeting on Friday, according to a buyside source.

The $650 million seven-year term loan B is being talked at Libor plus 350 bps and is being offered with an original issue discount of 98, the source said.

Guitar Center's $1.025 billion senior secured credit facility also includes a $375 million ABL revolver.

Previously, based on filings with the Securities and Exchange Commission, it was thought that the term loan B would carry a size of $800 million, which would have brought the total credit facility size to $1.175 billion.

JPMorgan is the lead bank on the deal.

Proceeds will be used to help fund the leveraged buyout of the company by Bain Capital Partners LLC for $63 in cash per share. The total transaction value, including assumed debt, is $2.1 billion.

Other financing will come from bonds, which are backed by bridge loans, and from equity.

Guitar Center is a Westlake Village, Calif., retailer of guitars, amplifiers, percussion instruments, keyboards and pro-audio and recording equipment.

Hologic shifts funds

Hologic Inc. moved some funds out of its term loan B and into its term loan A, according to a market source.

The five-year term loan A is now sized at $600 million, up from $250 million, and the 51/2-year term loan B is now sized at $500 million, down from $850 million, the source said.

The company's $2.55 billion senior secured credit facility (Ba3/BB) also includes a $200 million five-year revolver and a $1.25 billion 18-month term loan X.

Pricing on all tranches ended up in line with initial talk, so the revolver and term loan A are priced at Libor plus 225 bps, the term loan B is priced at Libor plus 250 bps and the term loan X is priced at Libor plus 175 bps, the source added.

The capital markets term loan X is expected to be refinanced with convertible debt or other equity or equity-linked financing.

Goldman Sachs, Bank of America, Citigroup and JPMorgan are the joint lead arrangers on the deal, with Goldman Sachs and Bank of America the joint bookrunners and Goldman Sachs the left lead.

Proceeds from the term loans will be used to help fund the acquisition of Cytyc Corp. and to repay bank debt at both companies if any is outstanding.

The revolver is expected to be undrawn at close.

Under the terms of the agreement, Cytyc shareholders will receive 0.52 of a share of Hologic common stock and $16.50 in cash for each share of Cytyc common stock they own. The cash consideration totals about $2.1 billion.

Hologic is a Bedford, Mass., developer, manufacturer and supplier of diagnostic and medical imaging systems with a focus on the health-care needs of women. Cytyc is a Marlborough, Mass., diversified diagnostic and medical device company.

LCDX, cash gain ground

Switching to trading news, LCDX and the cash market were higher on Tuesday with a noticeably positive tone as the market seems to be opening up and CLOs are rumored to be more active, according to traders.

The series 9 LCDX ended the day at 100.10 bid, 100.20 offered, up from Friday's levels of 99.75 bid, 99.85 offered, traders said.

The series 8 LCDX ended the day at 97.70 bid, 97.80 offered, up from Friday's levels of 97.35 bid, 97.45 offered, although not much activity was seen, traders remarked.

The cash market was stronger by about an eighth to a quarter of a point across the board, traders continued.

One name in particular that stood out on the cash side was Delta Air Lines Inc. Its second-lien term loan moved up to 99 bid, par offered from 98¼ bid on Friday, one trader pointed out.

The trader went on to say that the Atlanta-based airline company's second-lien paper has gained about three points in the last week-and-a-half on no real news.

"There must be a buyer out there," the trader added regarding Delta's momentum.

Movie Gallery drifts down

Movie Gallery Inc.'s first-lien term loan headed lower on Tuesday as rumors continued to swirl about the company working on a prepackaged Chapter 11 filing, according to a trader.

The first-lien term loan ended the day around 89½ bid, 91½ offered, down about a point and a half on the day, the trader said.

Talk is that the company is putting together a bankruptcy plan and lining up a debtor-in-possession financing facility.

Because investors don't know how big the potential DIP will be, they're starting to get a little a nervous over the status of their first-lien paper, the trader explained.

Movie Gallery is a Dothan, Ala.-based video rental company.

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