Community Health rises with amend/extend; Genesys, Kabel Deutschland, Taminco tweak deals

By Sara Rosenberg

New York, Jan. 19 - Community Health Systems Inc.'s extended and non-extended term loans headed higher during Thursday's trading session as the company launched an amendment and extension proposal.

Over in the primary, Genesys revised its term loan B to a covenant-light structure as a result of strong demand, Kabel Deutschland Holding AG's term loan is expected to be upsized and see the Libor floor firm at the low end of talk, and Taminco Group Holdings lifted the size of its B loan while cutting pricing.

Also, CKx Inc. updated price talk on its first-lien term loan to show what type of yield investors could be looking at with original issue discount, and Safety-Kleen Systems Inc. released guidance on its term loan B.

Additionally, Rocket Software Inc. and Eastman Kodak Co. began circulating price talk on their loans in preparation for upcoming bank meetings, and talk is that Kodak has already generated a lot of investor interest.

And, in more happenings, Nielsen Co.'s credit facility amendment passed, paving the way for the company to enter into the new term loan A that is being shopped to lenders, and DS Waters of America Inc. announced new deal plans.

Community Health trades up

Community Health Systems' term loans were stronger on Thursday following news that the company is looking to amend its credit facility and extend a portion of its non-extended term loan B, according to a trader.

The extended term loan was quoted at 98½ bid, 99½ offered, up from 97¾ bid, 98¾ offered, and the non-extended term loan was quoted at 98½ bid, 99½ offered, up from 98¼ bid, 99¼ offered, the trader said.

Under the amend and extend, the company is looking to push out the maturity on a minimum of $2 billion of its term loan B to January 2017 from June 2014 at pricing of Libor plus 350 basis points, up from non-extended pricing of Libor plus 225 bps.

Credit Suisse Securities (USA) LLC is the lead arranger on the deal that is hoped to close by the end of January or shortly thereafter.

Community Health is a Nashville, Tenn.-based operator of hospitals.

Genesys covenant light

Moving to the primary, Genesys changed its $550 million seven-year term loan B to covenant light being that the tranche is oversubscribed with lenders still having until Friday to place their orders, a source told Prospect News.

Price talk on the loan was left unchanged at Libor plus 525 bps to 550 bps with a 1.5% Libor floor and an original issue discount of 98 and there is 101 soft call protection for one year.

Goldman Sachs & Co., Citigroup Global Markets Inc., RBC Capital Markets LLC and Macquarie Capital are leading the $600 million facility (Ba3) that also provides for a $50 million five-year revolver and will be used, along with about $225 million of mezzanine debt and over 50% equity, to fund the company's roughly $1.5 billion buyout by Permira from Alcatel-Lucent.

Closing is expected early this year, subject to review by the Committee of Foreign Investment in the United States and other customary regulatory approvals and consultations in various countries.

Genesys, a Daly City, Calif.-based supplier of contact center technology software, will have senior leverage in the mid 3.0 times area and total leverage in the low 5.0 times area.

Kabel upsizing loan

Kabel Deutschland is expected to increase its seven-year senior secured term loan (NA/NA/BB+) to $750 million from $500 million and set the Libor floor at 1%, the tight end of the 1% to 1.25% talk, according to a market source.

As before, the loan is priced at Libor plus 325 bps with an original issue discount of 98½ and includes 101 soft call protection for one year.

Commitments were due on Thursday.

Goldman Sachs & Co., BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and RBS Securities Inc. are the mandated lead arrangers on the deal for the Unterfoehring, Germany-based cable operator.

Proceeds will be used to pay down some of the existing term loan A due in March 2012, term loan C due in March 2013, term loan A-1 due in March 2014, term loan A-2 due in March 2014 and term loan C-1 due in March 2014.

Taminco reworks deal

Taminco upsized its seven-year covenant-light term loan B to $505 million from $452 million and split the loan into a $350 million U.S. tranche and a €120 million tranche ($155 million equivalent), according to a market source.

Additionally, pricing was changed to Libor plus 500 bps with a 1.25% Libor floor and an original issue discount of 98, from the Libor plus 525 bps area with a 1.25% Libor floor and an original issue discount of 97, the source said.

In return for the tighter pricing, 101 soft call protection for six months was added to the loan.

The well oversubscribed $703 million senior secured credit facility, up from $650 million, also includes a $198 million five-year U.S./euro revolver that has a 50 bps unused fee and a maximum net first-lien leverage covenant.

Taminco being acquired

Proceeds from Taminco's credit facility, about $400 million of high-yield notes and roughly 40% equity will be used to fund the purchase of the company by Apollo Global Management LLC from CVC Capital Partners for roughly €1.1 billion.

The bond offering was downsized from $452 million because of the term loan upsizing.

Citigroup Global Markets Inc., Nomura, Credit Suisse Securities (USA) LLC, UBS Securities LLC, Deutsche Bank Securities Inc. and Goldman Sachs & Co. are leading the credit facility.

Commitments are due at 1 p.m. ET on Friday, accelerated from the original Tuesday deadline, and allocations are expected early next week.

Closing on the transaction is expected in mid-February, subject to customary conditions.

Taminco is a Belgium-based producer of alkylamines and their derivatives.

CKx looking at big OID

CKx's $200 million first-lien 51/2-year term loan (B1/B+) was launched this week with price talk of 9% fixed-rate and an original issue discount that was still to be determined. However, now lenders are hearing that with original issue discount, talk on the loan is in the 14% to 15% area, according to a market source.

The loan is non-callable for 2½ years.

Lead banks, Goldman Sachs & Co. and Macquarie Capital, are seeking commitments towards the loan by Jan. 31.

Proceeds will be used to help replace a portion of the $360 million bridge loan that was used to fund the purchase of the company by Apollo Global Management in 2011. The remaining debt is expected to be replaced with a $160 million second-lien financing.

CKx is a New York-based owner of entertainment content.

Safety-Kleen pricing

Safety-Kleen held a conference call on Thursday morning to launch its credit facility, and shortly before the vent took place, price talk on the $250 million term loan B emerged at Libor plus 450 bps with a 1.25% Libor floor, according to a market source.

The company's $400 million five-year credit facility (BB-) also includes a $150 million revolver.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to refinance an existing senior secured credit facility, including a revolver due in August 2012, fund share repurchases and for general corporate purposes.

Closing is targeted by mid-February.

Safety-Kleen is a Plano, Texas-based used oil recycling and re-refining, parts cleaning and environmental services company.

Rocket talk emerges

Rocket Software started going out with price talk on its $300 million six-year first-lien term loan B and $105 million seven-year second-lien term loan ahead of its Friday morning bank meeting, according to a market source.

The term loan B is talked at Libor plus 575 bps to 600 bps and the second-lien loan is talked at Libor plus 925 bps to 950 bps, with both tranches having a 1.5% Libor floor and an original issue discount of 971/2, the source remarked.

Call protection on the term loan B is 101 soft call for one year, and the second-lien loan is non-callable for one year, then at 103 in year two and 101 in year three.

Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC and Jefferies & Co. are leading the $430 million credit facility, which also includes a $25 million five-year revolver. Proceeds will be used to refinance existing debt and fund a dividend.

As a result of this transaction, the Newton, Mass.-based software development firm's total leverage will increase to 3.9 times from 1.0 times. Leverage through the first-lien loan will be 2.9 times.

Kodak floats guidance

Eastman Kodak has set a conference call for Monday to launch a proposed $950 million 18-month debtor-in-possession credit facility that consists of a $250 million revolver and a $700 million term loan, according to a source, who said that price talk has begun to make its way around the market.

The revolver is talked at Libor plus 325 bps and the term loan is talked at Libor plus 850 bps with a 1.5% Libor floor and an original issue discount of 97, the source added.

Citigroup Global Markets Inc. is the lead bank on the deal that will be used to enhance liquidity and for working capital.

The company said on Thursday that it filed for Chapter 11 bankruptcy protection to bolster liquidity in the U.S. and abroad, monetize non-strategic intellectual property, fairly resolve legacy liabilities, and enable it to focus on its most valuable business lines.

Kodak, a Rochester, N.Y.-based provider of imaging technology products and services to the photographic and graphic communications markets, expects to exit bankruptcy in 2013.

Nielsen amendment passes

In other news, Nielsen got enough consents from existing lenders to get its credit facility amendment approved that allows for the obtainment of a new term loan A, according to a market source.

Under the Citigroup Global Markets Inc.-led amendment, lenders were offered 5 bps for consents.

The company is in the process of syndicating the new $1.25 billion five-year term loan A (BB+) that is talked at Libor plus 225 bps, with commitments due on Friday.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC, RBC Capital Markets LLC and Wells Fargo Securities LLC are leading the new loan.

Proceeds will be used to refinance a portion of the company's non-extended term loan A due in 2013, which, as of Sept. 30, had a carrying amount of $1.395 billion under the U.S. tranche and a carrying amount of $247 million under the euro tranche.

Nielsen is a New York-based information and media company.

DS Waters coming soon

DS Waters will be holding a bank meeting on Monday to launch a proposed $535 million credit facility that is being led by Credit Suisse Securities (USA) LLC, GE Capital Markets and Jefferies & Co., according to a market source.

The facility consists of a $390 million 51/2-year funded term loan (B1) and a $75 million 51/2-year delayed-draw term loan (B1), both talked at Libor plus 675 bps to 700 bps with a 1.5% Libor floor and an original issue discount of 98, and a $70 million five-year ABL revolver, the source said.

Proceeds will be used to refinance existing debt and the delayed-draw term loan is available for acquisition funding.

Pro forma for the transaction, DS Waters, an Atlanta-based bottled water, water filtration and coffee service company, will have leverage of 3.2 times.

Prestige fills out

Within one day of its Wednesday launch, Prestige Brands Holdings Inc.'s $620 million seven-year term loan B (Ba3/BB-) was already subscribed at talk of Libor plus 450 bps with a 1.25% Libor floor and an original issue discount of 98, according to a market source. The loan has 101 soft call protection for one year.

Commitments towards the loan are due at 5 p.m. ET on Jan. 26.

Financial covenants include a maximum consolidated total net leverage ratio and a minimum consolidated net cash interest coverage ratio, and amortization is 1% per annum, with the remainder due at maturity.

By comparison, when the deal was announced last year, the company had said in filings with the Securities and Exchange Commission that the term loan B would be covenant-light and priced at Libor plus 500 bps with a 1.25% floor.

Prestige lead banks

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and RBC Capital Markets LLC are the lead banks on Prestige Brands' $670 million senior secured credit facility, which also includes a $50 million five-year asset-based revolver that is expected to be undrawn at closing.

Proceeds, along with $290 million of senior notes backed by a commitment for a one-year senior unsecured bridge loan priced at Libor plus 800 bps with a 1.25% Libor floor, will be used to fund the $660 million purchase of 17 over-the-counter GlaxoSmithKline plc brands and to refinance existing bank debt.

Closing is expected to occur in the first half of the year, subject clearance under the Hart-Scott Rodino Antitrust Improvements Act of 1976 and financing.

Prestige is an Irvington, N.Y.-based marketer of branded consumer products in the over-the-counter health care and household cleaning industries.

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