Emerald, Houghton Mifflin break; Community Health, Extreme Reach, Epicor updates emerge

By Sara Rosenberg

New York, Jan. 14 - Emerald Expositions Holding Inc.'s term loan made its way into the secondary market on Tuesday with the debt seen bid above par, and Houghton Mifflin Harcourt Publishers Inc. (HMH Holdings Inc.) began trading, too.

Switching to the primary, Community Health Systems Inc. increased the size of its term loan D and tightened spreads and discounts on its term debt, Extreme Reach Inc. revised pricing on its first-lien term loan, Epicor Software Corp. firmed its offer price at the low end of guidance and Mitel Networks Corp. accelerated the commitment deadline on its credit facility.

Additionally, Atrium Innovations, 1-800 Contacts Inc. and Phillips Pet Food & Supplies set price talk with launch, Atlantic Aviation FBO Inc. disclosed original issue discount guidance, Harland Clarke Holdings Corp. released terms on its asset-based revolver, and nTelos Inc. joined this week's calendar.

Emerald starts trading

Emerald Expositions' fungible $200 million covenant-light incremental term loan B (BB-) due June 2020 freed up for trading on Tuesday, with levels quoted at par ¼ bid, a trader remarked.

Pricing on the loan is Libor plus 425 basis points with a 1.25% Libor floor and there is 101 soft call protection until June 16, 2014, just like the existing term loan B. The incremental debt was sold at an original issue discount of 993/4, after tightening the other day from 99.

Bank of America Merrill Lynch and Morgan Stanley Senior Funding Inc. are leading the deal that will be used with a $140 million equity investment from Onex Partners III to fund the $335 million acquisition of George Little Management LLC.

Closing is expected this month, subject to customary regulatory approvals.

Emerald is a San Juan Capistrano, Calif.-based operator of large business-to-business tradeshows. George Little Management is a White Plains, N.Y.-based operator of tradeshows, consumer events and digital platforms.

Houghton Mifflin breaks

Houghton Mifflin's $246 million senior secured term loan (B1) due May 22, 2018 also began trading, with levels seen at par bid, 101 offered, according to a trader.

Pricing on the loan is Libor plus 325 bps with a 1% Libor floor and it was issued at par. There is 101 soft call protection for six months.

During syndication, the spread on the term loan was reduced from Libor plus 350 bps.

Citigroup Global Markets Inc. is the lead bank on the deal that will be used to reprice an existing term loan from Libor plus 425 bps with a 1% Libor floor.

Closing is targeted for Wednesday.

Houghton Mifflin is a Boston-based publishing company.

BWIC surfaces

In more secondary news, a roughly $62.3 million Bid-Wanted-In-Competition was announced, with market players asked to get their bids in by 11 a.m. ET on Wednesday, according to a trader.

Some of the larger pieces of debt offered in the portfolio include Community Health Systems Inc.'s extended term loan B, First Data Corp.'s term loan, Mediacom Communications Corp.'s term loan C, Nice-Pak Products Inc.'s term loan and Nielsen Finance's term loan E.

There are about 47 issuers in the BWIC, the trader added.

Community Health reworked

Over in the primary, Community Health Systems lifted its seven-year term loan D to $2,925,000,000 from $2.26 billion and revised the original issue discount to 99½ from 99, according to a market source.

Also, pricing on the term loan D and the extension of up to 50% of the company's term loan C, which would be around $1.7 billion of the currently $3.53 billion tranche, was lowered to Libor plus 325 bps from Libor plus 375 bps, the source said.

In addition, the discount on the extended term debt was changed to 99¾ from 991/2, and all of the term loan debt will now be covenant-light instead of having maximum leverage and minimum interest coverage ratios, and a maximum capital expenditures requirement.

The term C extension will push out the maturity on the debt to 2021 from 2017, and that extended amount will be fungible with the term loan D. Non-extending term C lenders can exchange their debt into a new covenant-light term E due January 2017 priced at Libor plus 325 bps with no floor and a par offer price, or be paid out at par.

The D loan and the extended term C still have a 1% Libor floor and 101 soft call protection for six months.

Community shutting early

With the changes to structure, Community Health moved the commitment deadline for its term loans to noon ET on Thursday from Friday, the source continued.

The company's credit facility (Ba2/BB) also includes a $1 billion five-year revolver and a $1 billion five-year term loan A.

Credit Suisse Securities (USA) LLC and Bank of America Merrill Lynch are the joint physical bookrunners on the deal, and Citigroup Global Markets Inc., Goldman Sachs Bank USA, J.P. Morgan Securities LLC, RBC Capital Markets, SunTrust Robinson Humphrey Inc., UBS Securities LLC and Wells Fargo Securities LLC are bookrunners too.

As a result of the term loan D upsizing, the company downsized its bond offering to $4 billion from $4.58 billion.

Community buying HMA

Proceeds from Community Health's new loans will be used to help fund the acquisition of Health Management Associates Inc. for $13.78 per share, consisting of $10.50 per share in cash plus 0.06942 of a share of Community Health common stock for each Health Management share, and to refinance existing debt.

The transaction is valued at about $7.6 billion, including the assumption of around $3.7 billion of debt.

Closing is expected by the end of January, subject to customary conditions, the receipt of regulatory approvals and the absence of certain adverse developments. Health Management stockholder approval has already been received.

Community Health is a Nashville, Tenn.-based hospital company. Health Management is a Naples, Fla.-based owner and manager of hospitals and ambulatory surgery centers.

Extreme Reach flexes

Extreme Reach changed pricing on its $300 million six-year first-lien term loan B (BB-) to Libor plus 575 bps from revised talk of Libor plus 600 bps, a market source said. The spread is still wide of initial talk of Libor plus 500 bps to 525 bps.

As before, the first-lien loan has a 1% Libor floor, 101 soft call protection for one year and an original issue discount of 981/2.

The company is also getting a $165 million seven-year second-lien term loan priced at Libor plus 950 bps with a 1% Libor floor and a discount of 98. This tranche is non-callable for one year, then at 102 in year two and 101 in year three.

Earlier in syndication, the first-lien term loan was downsized from $350 million and the discount widened from 99, and the second-lien loan was upsized from $115 million, the coupon was lifted from talk of Libor plus 900 bps to 925 bps and the discount was changed from 981/2.

Extreme funding acquisition

Proceeds from Extreme Reach's $495 million credit facility, which also includes a $30 million five-year revolver, will be used to help fund the $485 million purchase of the TV business of Digital Generation Inc.

Other funds for the transaction will come from equity.

J.P. Morgan Securities LLC and SunTrust Robinson Humphrey Inc. are leading the deal.

Closing is expected this quarter, subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and Digital Generation stockholder approval.

Extreme Reach is a Needham, Mass.-based video platform for integrated TV, online and mobile advertising.

Epicor firms offer price

Epicor Software set the offer price on its roughly $840 million term loan due May 16, 2018 at par, the tight end of the 99¾ to par talk, according to a market source.

The loan is still priced at Libor plus 300 bps with a 1% Libor floor and has 101 soft call protection for six months.

Bank of America Merrill Lynch is leading the deal that will be used to reprice the company's existing term loan from Libor plus 325 bps with a 1.25% Libor floor.

Epicor is a Dublin, Calif.-based provider of enterprise business software services.

Mitel moves deadline

Mitel Networks changed the commitment deadline on its $405 million senior secured credit facility (Ba3/B+) to noon ET on Wednesday from Friday, according to a market source.

The facility consists of a $355 million six-year term loan talked at Libor plus 475 bps to 500 bps with a 1% Libor floor, an original issue discount of 99 to 99½ and 101 soft call protection for six months, and a $50 million five-year revolver.

Jefferies Finance LLC and TD Securities (USA) LLC are leading the deal that will help fund the acquisition of Aastra Technologies Ltd. for $6.52 in cash plus 3.6 Mitel common shares per each Aastra common share and refinance an existing credit facility.

Closing is targeted for this quarter, subject to Aastra shareholder approval, court approval, compliance with the Investment Canada Act and other customary conditions.

Mitel is a Kanata, Ont.-based provider of cloud- and premises-based unified communications software products. Aastra is a Concord, Ont.-based enterprise communications company.

Atrium releases talk

Also on the primary front, Atrium Innovations held its bank meeting on Tuesday, and with the event, talk on its first- and second-lien term loans was announced, according to a market source.

The $300 million seven-year covenant-light first-lien term loan is talked at Libor plus 350 bps to 375 bps, the $125 million equivalent seven-year covenant-light euro first-lien term loan is talked at Euribor plus 375 bps to 400 bps and the $200 million 71/2-year covenant-light second-lien term loan is talked at Libor plus 750 bps to 775 bps, with all tranches having a 1% floor and an original issue discount of 99, the source said.

Included in the first-lien term loans is 101 soft call protection for six months, and the second-lien term loan has call protection of 102 in year one and 101 in year two.

Commitments for the $700 million credit facility, which also provides for a $75 million five-year revolver, are due on Jan. 28.

Atrium lead banks

RBC Capital Markets, Deutsche Bank Securities Inc., National Bank Financial Markets and Toronto-Dominion Bank are leading Atrium's credit facility that will be used to help fund its buyout by Permira Advisers for C$24 in cash per share.

Closing is expected this quarter, subject to court approval pursuant to the Canada Business Corporations Act, the approval of Atrium's shareholders and regulatory approvals.

Atrium is a Quebec-based dietary supplements developer and manufacturer.

1-800 Contacts launches

1-800 Contacts came out with talk of Libor plus 350 bps to 375 bps with a 1% Libor floor, an original issue discount of 99½ and 101 soft call protection for six months on its $400 million first-lien covenant-light term loan that launched with a bank meeting, according to a market source.

The company is also getting a $60 million revolver and a $125 million second-lien financing that has already been placed.

Goldman Sachs Bank USA and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to help fund the buyout of the company by Thomas H. Lee Partners from WellPoint

Closing is expected this quarter, subject to customary conditions.

1-800 Contacts is an Orem, Utah-based online contact lens retailer.

Phillips Pet guidance

Phillips Pet Food launched during the session its $260 million first-lien term loan with talk of Libor plus 375 bps to 400 bps with a 1% Libor floor and an original issue discount of 991/2, a market source said.

And, the company's $130 million second-lien term loan was launched with talk of Libor plus 750 bps to 775 bps with a 1% Libor floor, a discount of 99 and call protection of 102 in year one and 101 in year two, the source continued.

The company's $450 million credit facility also includes a $60 million ABL revolver.

Commitments are due on Jan. 27, the source added.

Jefferies Finance LLC, Goldman Sachs Bank USA and BMO Capital Markets are leading the deal that will be used to help fund the buyout of the company by Thomas H. Lee Partners from AEA Investors.

Phillips Pet is an Easton, Pa.-based distributor of pet food and supplies.

Atlantic Aviation discount

Atlantic Aviation held its call, launching its $100 million incremental term B (Ba3/BB-) due June 1, 2020 on Tuesday with original issue discount talk of 99½ and a ticking fee of 50 bps from Feb. 1 until closing, according to a market source.

Pricing on the incremental is Libor plus 250 bps with a 0.75% Libor floor, and there is 101 soft call protection until May 31, 2014, which matches the existing term loan B.

Barclays and Macquarie Capital (USA) Inc. are leading the deal, of which about $65 million will be used to fund the acquisition of five fixed base operations from Galaxy Aviation and the remainder will add cash to the balance sheet

In connection with this transaction, the company is looking to amend its existing credit facility to allow for the incremental loan, and lenders are being offered a 10 bps amendment fee, the source added.

Atlantic Aviation, a New York-based fixed base operator, is asking for loan commitments by Friday.

Harland Clarke revolver

Harland Clarke launched at its bank meeting a $150 million asset-based revolver due Feb. 20, 2018 that has pricing ranging from Libor plus 175 bps to 225 bps, based on availability, and an unused fee ranging from 37.5 bps to 50 bps based on usage, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

As previously disclosed, the company also launched at its bank meeting a fungible $500 million first-lien covenant-light incremental term loan B-3 (B1/B+) due May 2018 that is talked at Libor plus 550 bps with a 1.5% Libor floor, in line with the existing term loan B-3, an original issue discount of 99 and call protection of 102 through April 2014, then 101 for a year.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Jefferies Finance LLC are leading the deal.

Proceeds, along with $275 million of senior secured notes and $590 million of unsecured notes, will be used to fund the acquisition of Valassis for $34.04 per share in cash, representing a transaction value of about $1.84 billion, to refinance existing debt and for general corporate purposes.

Harland seeks amendment

In addition to launching the new debt, the company presented investors with an amendment request that would revise certain baskets in its existing credit agreement, increase the term loan accordion to $250 million with unlimited amounts up to 3.3 times senior secured leverage and 50 bps of MFN from just $250 million, modify the cash cap to $75 million from $40 million, provide for add-back adjustments to EBITDA and change the collateral sharing lien, the filing said.

Commitments and consents are due on Jan. 28. Lenders are being offered a 12.5 bps amendment fee.

Total senior secured debt is 3.1 times, net senior secured debt is 2.9 times, total debt is 4 times and net debt is 3.8 times.

Closing on the acquisition is expected this quarter, subject to the tender of the majority of Valassis' shares, expiration of the applicable waiting period under Hart-Scott-Rodino and customary conditions.

Harland Clarke is a San Antonio-based provider of payment, marketing and security services. Valassis is a Livonia, Mich.-based provider of media services.

nTelos on deck

nTelos set a call for Wednesday to launch an up to $148,125,000 add-on term loan B (B1) talked at Libor plus 475 bps with a 1% Libor floor, in line with the existing term loan B, according to a market source. Original issue discount guidance is not yet available.

J.P. Morgan Securities LLC, UBS Securities LLC, Deutsche Bank Securities Inc. and Union Bank are leading the deal.

nTelos, a Waynesboro, Va.-based provider of wireless and wireline communications services, will use the add-on term loan B to refinance existing term loan A borrowings.

© 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.