Bright Horizons breaks; FairPoint, Univision up on numbers; Berlin floats OID; McJunkin nets orders

By Sara Rosenberg

New York, May 16 - Bright Horizons Family Solutions, Inc.'s credit facility freed up for trading on Friday, and FairPoint Communications Inc. and Univision Communications Inc. both saw their term loan Bs head higher with first-quarter earnings results.

In other news, Berlin Packaging LLC came out with the original issue discount on its first-lien term loan as the deal was launched during the session, and McJunkin Red Man Corp.'s holdco term loan has seen lenders place a good amount of commitments within their desired price range; however, official discount talk has not been announced.

Also in the primary, syndication of LyondellBasell Industries' term loan B-2 is moving along but not exactly at blowout pace, and based on how it's going so far, rumor has it that the commitment deadline may be extended.

Bright Horizons' credit facility allocated and broke for trading on Friday, with the term loan B seen bid above its original issue discount price, according to a market source.

The $365 million seven-year term loan B was quoted at 97 bid, the source said.

Pricing on the term loan B is Libor plus 400 bps with a 3.5% Libor floor, and the paper was sold at an original issue discount of 96.

During syndication, the term loan B was upsized from $265 million as a $100 million term loan A was removed from the capital structure, and the original issue discount firmed from most recent guidance of 95 to 96 and initial guidance at launch in the mid-90s context.

The $100 million six-year term loan A that was eliminated from the deal was being talked at Libor plus 350 bps. It was removed because the lack of amortization on the B loan, compared to the A loan, was better for the company and there was enough market interest to warrant the change.

By making this change, the deal actually reverted back to its original structure. Based on filings with the Securities and Exchange Commission, the term loan B had been expected to be sized at $365 million, but prior to launch, the company carved out $100 million to create the term loan A.

Bright Horizons' $440 million senior secured credit facility (Ba3) also includes a $75 million six-year revolver that is priced at Libor plus 350 bps.

Financial covenants include a minimum cash interest coverage ratio and a maximum total leverage ratio.

Goldman Sachs is the lead arranger and bookrunner on the deal that will be used to help fund the buyout of the company by Bain Capital Partners LLC for $48.25 in cash per share. The transaction is valued at $1.3 billion.

Other financing will come from $300 million of senior subordinated mezzanine notes and $110 million of PIK holdco notes provided by GS Mezzanine Partners V LP, and $640 million in equity.

The deal is expected to close and fund in the next week to week and a half.

Bright Horizons is a Watertown, Mass., provider of employer-sponsored child care, early education and work/life services.

FairPoint inches higher

FairPoint Communications' term loan B traded up and was fairly active on Friday as the company announced earnings results for the quarter ended March 31, according to a trader.

The term loan B was quoted at 90½ bid, 91 offered, up from 90¼ bid, 90¾ offered on Thursday, the trader said.

For the first quarter, on a pro forma combined basis, the company reported adjusted EBITDA of $162 million, compared with adjusted EBITDA of $179 million for the same period in the prior year. Excluding the non-recurring revenue credits in the quarter, adjusted EBITDA would have been $164 million. The decrease in adjusted EBITDA was attributed to a decline in revenues, particularly in the Northern New England business.

FairPoint completed its merger with Northern New England Spinco Inc., an entity that held Verizon Communications' landline and certain related operations in Maine, New Hampshire and Vermont on March 31.

From an accounting perspective, Spinco was deemed to have acquired FairPoint and, accordingly, the financial statements of the local exchange business of Verizon New England Inc. in Maine, New Hampshire and Vermont and the customers of Verizon's related long distance and internet service provider businesses in those states (the Northern New England business) are the relevant financial statements for the company under GAAP following the merger.

Results for the Northern New England business for the quarter included revenues of $282.4 million, down 5.2% from $298 million in the first quarter of 2007. The company said that the primary driver of the revenue decline was a reduction in local revenue due to increased competition, partially offset by increases in intrastate and data and internet services revenues.

Other results for the Northern New England business were net income of $9.5 million, or $0.18 per share, compared with $14.4 million, or $0.27 per share, last year, and total operating expenses of $252.9 million, down $4.8 million compared with last year.

FairPoint is a Charlotte, N.C.-based provider of communications services to urban communities.

Univision rises

Univision Communications' term loan B also headed higher on the back of the company's earnings announcement on Thursday night, according to a trader.

The term loan B was quoted at 83¾ bid, 84¾ offered, up from 83½ bid, 84½ offered, the trader said.

For the first quarter, Univision reported net revenue of $458.8 million, up 5.8% from $433.7 million in 2007.

Adjusted operating income before depreciation and amortization was $150.9 million, up 2.8% from $146.8 million last year.

And, net loss for the quarter was $166.2 million, compared to net loss of $67 million last year.

"I am pleased that Univision achieved another period of positive results with both our television and radio businesses substantially outperforming the broadcast industry," said Joe Uva, chief executive officer, in a news release.

"Looking to the 2008-2009 upfront, we feel confident in our competitive position. We are excited to bring the new ROI tool developed with Nielsen to the market, which will provide marketers with valuable television viewing data fused with purchase information to help accurately target consumers, maximize their advertising spending and grow their businesses," Uva added.

Univision Communications is a Los Angeles-based Spanish-language media company.

Berlin Packaging OID emerges

Moving to the primary market, Berlin Packaging came out with an original issue discount of 94 on its first-lien term loan B that was launched with a conference call on Friday, according to a market source.

As of March 31, the first-lien term loan was fully drawn at a size of $115 million.

Bank of America, the lead bank on the deal, has indicated that they are just trying to sell their remaining exposure to the name, which is about $25 million, the source said.

The first-lien term loan B is part of a $220 million credit facility that also includes a $40 million revolver and a $65 million second-lien term loan that is priced at Libor plus 650 bps.

The deal that was first launched in July 2007 and then launched again in September 2007.

When the deal was first launched, the first-lien term loan was talked at Libor plus 300 bps to 325 bps, and the second-lien term loan was being talked at Libor plus 600 bps.

During the September syndication attempt, the institutional bank debt was being offered with an original issue discount in the 98 area.

Previously, sources have said that about half the deal was placed during the initial syndication round.

Proceeds were used to help fund Investcorp's acquisition of a majority ownership interest in the company from Andrew T. Berlin, president and chief executive officer, and Melvin Berlin, co-owner and chairman.

Berlin Packaging is a Chicago-based supplier of glass, plastic and metal containers and closures.

McJunkin catches interest

Lenders have shown a significant amount of interest towards McJunkin Red Man's $450 million holdco term loan (B3/B-) within a certain original discount range, but official guidance on the price has not come out, according to a market source.

The trend appears to be that investors are willing to throw in orders in the mid-to-high 80s context, the source said.

Pricing on the term loan is Libor plus 325 basis points.

Goldman Sachs and Lehman are the lead banks on the deal that was launched with a conference call on May 13, with Goldman the left lead.

In addition to the term loan, the company is planning on getting a $50 million upsizing to its ABL revolver (Baa3/BB) that would bring the total revolver size to $700 million.

The revolver add-on is priced in line with the company's existing revolver, which is at Libor plus 150 bps.

Proceeds from the term loan, along with a $25 million revolver draw, will be used to fund a $475 million dividend to Goldman Sachs Partners.

The deal is expected to close in the second quarter.

McJunkin Red Man is a Charleston, W.Va., distributor of pipe, valves and fittings.

Lyondell chugging along

LyondellBasell's term loan B-2 is moving in the right direction in terms of being fully syndicated, but since orders are coming in slower than hoped, chatter is that the Wednesday commitment deadline could possibly be extended, according to a buyside source.

As of early Friday, it was heard that there was about $1.5 billion in the book towards the roughly $1.9 billion of B-2 debt that is up for sale, the source said.

This is an improvement from this past Tuesday, when it was said that the book had around $1.1 billion to $1.2 billion in commitments.

Of the total amount of orders in on the B-2, sources have said that about $1 billion was placed before the deal officially launched on May 6.

Previously, sources told Prospect News that the syndication process may have slowed down as a result of the loan market weakening since the launch took place, Clear Channel Communication Inc. coming to a new agreement on its leveraged buyout, and Moody's Investors Service downgrading the senior second-lien guaranteed facility raised at BIL Holdings to B3 from B2 and changing the outlook on all LyondellBasell ratings to negative.

LyondellBasell's term loan B-2, comprised of roughly $2.5 billion plus €433 million term loan B-2, is initially priced at Libor plus 375 bps, with a 3.25% Libor floor, and the paper carries call protection of 103 in year one and 101½ in year two.

Guidance on the original issue discount on the B-2 is in the low-to-mid 90s context. According to the buyside source, orders have been coming in between 92 and 94, and his guess is that pricing will end up at 92.

Goldman Sachs, Merrill Lynch, ABN Amro and UBS are the joint lead arrangers and joint bookrunners on the already funded deal, with Goldman the left lead.

Originally, Citigroup was the left lead bank on the deal, but the bank sold off its 20% share already and, therefore, is no longer involved.

The term loan B-2 is part of about $9.5 billion in total term loan B debt that is currently in the company's possession.

The rest of the term loan B debt is divided between a term loan B-1 with no call protection and a term loan B-3 that is non-callable for two years, with each of these tranches also sized at roughly $2.5 billion plus €433 million and carrying pricing of Libor plus 375 bps, with a 3.25% Libor floor.

The term loan B-1 and term loan B-3 have yet to be launched into syndication. The assumption is that Citi's 20% was taken equally out of each B loan tranche.

Pricing on all three term loan B tranches can step down to Libor plus 350 bps if first-lien senior secured leverage is less than or equal to 1.625:1, according to a recent filing with the SEC.

The term loan B is part of a senior secured credit facility that funded in December and includes a cash flow revolver, a term loan A, an ABL receivables purchase program facility and an ABL inventory-based facility.

When the term loan B first funded, it was sized at $9.45 billion and was priced at Libor plus 325 bps.

In order for the term loan B debt to have a Libor floor, a three-tranche structure and a 50 bps increase in pricing from when it funded, the company agreed to amend and restate the credit agreement, effective April 30.

The amendment and restatement also modified certain debt covenants - including increasing the debt basket, eliminating an interest rate hedging requirement and adding a covenant prohibiting any reduction of aggregate commitments under the $750 million access group revolver before its initial maturity - upsized the company's ABL inventory-based facility to $1.6 billion from $1 billion by using the accordion feature and increased that accordion feature to $1.1 billion from $600 million, and raised pricing on the term loan A and cash flow revolver to Libor plus 350 bps.

Proceeds from the credit facility were used to help fund Basell AF SCA's acquisition of Lyondell Chemical Co. for $48 per common share in an all-cash transaction with a total enterprise value of about $19 billion, including the assumption of debt.

LyondellBasell is a Netherlands-based polymers, petrochemicals and fuels company.

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