United Agri, Univar set talk; GXS shifts funds, tweaks second-lien OID; Technical Olympic dips

By Sara Rosenberg

New York, Sept. 7 - United Agri Products Inc. and Univar NV released price talk on their new deals as both transactions were launched to investors with bank meetings on Friday.

In other primary news, GXS Worldwide Inc. came out with final changes to the structure of its credit facility that included moving some funds into the second-lien term loan from the first-lien term loan and revising the second-lien original issue discount.

Over in trading, Technical Olympic USA Inc.'s revolver was softer in sympathy with the bonds and on overall sector volatility, and LCDX was weaker as disappointing job numbers came out.

United Agri held a bank meeting on Friday morning to kick off syndication on its proposed $150 million senior secured term loan add-on (BB-), and in connection with the launch, price talk was announced, according to a market source.

The add-on is being talked at Libor plus 275 basis points and is being offered to investors with an original issue discount of 991/2, the source said.

In addition, pricing on the company's existing term loan debt will be raised to match the add-on pricing - so it's talked at Libor plus 275 bps, up from current pricing of Libor plus 200 bps, the source remarked.

In connection with this transaction, the company is adding a total leverage maintenance covenant to the term loan.

"The turnout was good," the source said about the bank meeting in which the transaction was presented to new and existing lenders.

"This company has performed fantastically well. People in the deal view it as a bit of a self-help deal. They're getting existing exposure priced up and going from covenant-light to now a covenant deal," the source added.

On Thursday, Standard & Poor's raised the company's corporate credit rating to BB- from B+ to reflect ongoing improvements in financial credit measures and operating performance within the agriculture sector.

The company's asset-based revolving credit facility was upgraded to BB+ from BB, while the term loan was downgraded to BB- from BB.

Moody's Investors Service, on the other hand, affirmed United Agri's Ba3 corporate credit rating, Ba1 revolver rating and Ba3 term loan rating on Friday.

Proceeds from the term loan add-on will be used to repay borrowings under the revolver.

Pricing on the revolver will be left unchanged at Libor plus 125 bps.

GE Capital is the lead bank on the deal.

United Agri is a Greeley, Colo., distributor of agricultural inputs and professional non-crop products.

Univar guidance emerges

Also coming out with price talk was Univar, as it launched its proposed $1.375 billion credit facility with a bank meeting in New York on Friday, according to a market source.

The $1 billion asset-based revolver is being talked at Libor plus 150 bps, and the $100 million first-in, last-out asset-based term loan and the $275 million term loan A are both being talked at Libor plus 275 bps, the source said.

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

The deal was already launched to European investors with a bank meeting this past Wednesday.

Proceeds will be used to help fund the acquisition of Univar by a wholly owned Dutch subsidiary of Ulysses Luxembourg Sarl, a portfolio company of CVC Capital Partners, for €53.50 in cash per share.

Univar will also be getting an institutional term loan that is sized at roughly $1 billion for LBO financing, but that tranche is not being syndicated right now.

Univar is a Netherlands-based distributor of industrial chemicals and provider of related specialty services.

GXS fine tunes structure

GXS announced what is expected to be the final changes on its proposed $560 million senior secured credit facility, including a downsizing of the first-lien term loan, an upsizing of the second-lien term loan, a modification to the second-lien discount and revised tenors, according to a market source.

The first-lien term loan (Ba3/B+) is now sized at $335 million, down from an original size of $378.5 million, and the maturity was changed to 51/2-years from six years, the source said.

Pricing on the first-lien term loan is set at Libor plus 400 bps, and the paper was sold at an original issue discount of 981/2. Earlier in syndication, pricing was flexed up from initial guidance of Libor plus 325 bps and the discount was added.

On the flip side, the second-lien term loan (Caa1/B-) is now sized at $175 million, up from an original size of $131.5 million, and the maturity was changed to six years from seven years, the source continued.

Pricing on the second-lien term loan is set at Libor plus 750 bps, the paper was sold at an original issue discount of 99 and there is call protection of 102 in year one and 101 in year two. Earlier in syndication, pricing was flexed up from initial guidance of Libor plus 675 bps and a discount of 98½ was added before being revised to the 99 level.

The company's $50 million five-year revolver (Ba3/B+) was left unchanged in terms of size and tenor.

Pricing on the revolver is Libor plus 400 bps. Earlier in syndication, pricing on this tranche was also flexed up from initial guidance of Libor plus 325 bps.

With the changes to first- and second-lien tranche sizes, which were done because the second-lien loan was oversubscribed, debt to EBITDA for the first-lien moved to 2.39 times, as opposed to 2.70 times, and debt to EBITDA for the second-lien moved to 1.25 times, as opposed to 0.90 times. Total debt to EBITDA is unchanged at 3.60 times.

GE Capital and Societe Generale are the lead banks on the deal.

Proceeds from the facility, along with a $55 million unsecured holding company payment-in-kind note, will be used to refinance existing debt.

GXS is a Gaithersburg, Md., business-to-business e-commerce services provider.

Technical Olympic trades down

Moving to the secondary market, Technical Olympic USA's revolver headed lower in trading on Friday with a number of reasons contributing to the drop, according to a trader.

The Hollywood, Fla.-based homebuilder's revolver ended the day at 92 bid, 94 offered, down about a point from previous levels, the trader said.

"There's been a lot of movement in the bonds. The environment. Rumors there may be a draw on the revolver. It's a very volatile time," the trader explained.

The latest example of volatility in the homebuilding sector came on Friday when Beazer Homes USA, Inc. announced that it received default notices from U.S. Bank, the trustee under the indentures governing its 8 5/8% senior notes due May 2011, 8 3/8% senior notes due April 2012, 6½% senior notes due November 2013, 6 7/8% senior notes due July 2015 and 8 1/8% senior notes due June 2016.

Beazer said that the notices allege that it is in default under the bonds because it has not yet filed a 10-Q for the quarter ended June 30 with the Securities and Exchange Commission and has not yet given a copy to the trustee and that this will become events of default if not remedied within 60 days.

Beazer, however, does not believe that it is in default because the indentures require only that copies are delivered to the trustee within 15 days after such reports are actually filed with the SEC.

Atlanta-based Beazer has filed an action in United States District Court in Atlanta against the trustee seeking, among other relief, a declaration from the court that this does not constitute a default.

LCDX weakens

LCDX lost some ground on Friday as unemployment numbers were released, according to a trader.

The index went out at 94.95 bid, 95.05 offered, down from Thursday's closing levels of 95.25 bid, 95.30 offered, the trader said.

In August, U.S. nonfarm payrolls fell by about 4,000, while the unemployment rate remained at 4.6%.

Stocks also traded off, with Nasdaq down 48.62 points, or 1.86%, Dow Jones Industrial Average down 249.97 points, or 1.87%, S&P 500 down 25.00 points, or 1.69%, and NYSE down 151.11 points, or 1.57%.

Barneys closes

Barneys New York closed on its new $480 million credit facility, according to a market source.

Citigroup acted as the lead bank on the deal, which was syndicated through some calls and one-on-one talks. No formal bank meeting was held.

The facility consists of a $280 million term loan (B3/B) priced at Libor plus 500 bps and a $200 million ABL revolver priced at Libor plus 125 bps.

The term loan was sold with an original issue discount of 99 and is non-callable for one year, then at 102 in year two and 101 in year three.

Proceeds were used to fund the acquisition of the company by Istithmar for $942.3 million.

Barneys is a New York-based luxury retailer with flagship stores in New York, Beverly Hills, Chicago, Boston and Dallas.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.