Spectrum rises; Georgia-Pacific steady with repayment talk; Compass returning to market

By Sara Rosenberg

New York, Sept. 26 - Spectrum Brands Holdings Inc.'s term loan was a little stronger in trading on Monday as the company announced plans for a partial paydown, while Georgia-Pacific's institutional term loans were flat on its repayment buzz.

Moving to the primary, Compass Group Diversified Holdings LLC is re-approaching the market with a new credit facility after pulling a well-received deal early this year due to the chief executive officer taking a leave of absence.

Also, Baja Broadband began circulating some pricing guidance on its upcoming deal, and George Little Management upsized its term loan but left pricing in line with initial talk.

Spectrum gains ground

Spectrum Brands term loan headed to 98¼ bid, 99¼ offered in the secondary market on Monday from 98 bid, 99 offered last week, as the company disclosed a $50 million voluntary prepayment, according to a trader.

With this latest repayment, the term loan will be $525 million, and total paydowns in fiscal 2011 will be brought to $220 million, including previous prepayments of $50 million in November 2010, $20 million in December 2010, $20 million in May, $40 million in July and $40 million in August. Scheduled amortization accounts for an additional $5 million reduction.

The company is targeting a leverage ratio of 3.5 times or less by the end of fiscal 2011.

Spectrum Brands is a Madison, Wis.-based consumer products company and a supplier of batteries, shaving and grooming products, personal care products, small household appliances, specialty pet supplies, lawn & garden and home pest control products, personal insect repellents and portable lighting.

Georgia-Pacific holds steady

Georgia-Pacific also saw repayment chatter, but its term loan B and term loan C were unchanged at 99¾ bid, par offered, according to a trader.

Talk is that the company will be repaying the two term loans in full later this week.

Georgia-Pacific is an Atlanta-based manufacturer and marketer of building products, tissue, packaging, paper, cellulose and related chemicals.

Compass readies deal

Over in the primary, Compass Group Diversified Holdings is coming back to market with a refinancing credit facility after having to pull a similar transaction early this year and has set a bank meeting for Wednesday in New York to launch the new deal, according to a market source.

The original deal had been launched back in January but never closed since, in mid-February, the company announced that its chief executive officer, Joe Massoud, requested a leave of absence to focus his attention on an informal regulatory inquiry that he had received on matters unrelated to the company. Alan Offenberg took over the role of chief executive officer.

As was the case the first time around, TD Securities (USA) LLC is the bookrunner on the deal and a joint lead arranger with BMO Capital Markets Corp. and SunTrust Robinson Humphrey Inc.

In addition to refinancing debt, the company's new credit facility will be used for acquisitions, working capital and general corporate purposes.

Compass reveals structure

Compass Group's proposed $500 million first-lien secured facility consists of a $275 million five-year revolver and a $225 million six-year last-out term loan B, the source said, adding that price talk is expected to be announced at launch.

By comparison, the original deal consisted of $325 million five-year revolver talked at Libor plus 325 basis points with no Libor floor and a $235 million six-year last-out term loan B talked at Libor plus 425 bps with a 1.5% Libor floor and an original issue discount of 99.

Although it had to be pulled in the end, syndication of the first deal had gone well. In fact, prior to the withdrawal from market, the term loan B had been upsized from $200 million, pricing firmed at the tight end of the Libor plus 425 bps to 475 bps talk and the discount tightened from 981/2.

Compass Group is a Westport, Conn.-based investment firm specializing in acquiring controlling stakes in small- to middle-market companies.

Baja floats talk

Baja Broadband is holding a bank meeting on Wednesday afternoon to launch its credit facility, and in preparation for the event, price talk on the first-lien debt has been making its way around the market, according to a market source.

Both the $10 million five-year revolver and the $78 million five-year first-lien term loan are being guided at Libor plus 550 bps with a 1.5% Libor floor and an original issue discount of 98, the source said.

The company's $103 million credit facility also includes a $15 million six-year second-lien term loan with price talk still to be determined, the source added.

GE Capital Markets is leading the deal that will be used to refinance existing debt and fund the acquisition of U.S. Cable.

Baja Broadband is a Fort Mill, S.C.-based full service telecommunications company.

George Little ups loan

In more new deal happenings, George Little Management increased its term loan to $85 million from $78 million and firmed pricing at initial talk of Libor plus 550 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

The company's now $95 million six-year credit facility, up from $88 million, still includes a $10 million revolver that carries the same pricing as the term loan.

GE Capital Markets is leading the deal that will be used to help fund the buyout of the company by Providence Equity Partners from Daily Mail and General Trust plc for roughly $173 million in cash.

Closing is expected by the month's end, subject to customary conditions and regulatory approvals.

George Little Management is a creator of face-to-face and online buying, selling and networking platforms for designers, product developers, manufacturers, reps, retailers and operators.

Telx closes

In other news, Telx Group Inc., a New York-based provider of interconnection and colocation facilities, completed on Monday its $305 million senior secured credit facility (B1/B+) consisting of a $50 million five-year revolver and a $255 million six-year term loan B, according to a market source.

Pricing on the B loan B Libor plus 650 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 94. There is 101 soft call protection for one year.

During syndication, the term B was downsized from $290 million as the company's mezzanine debt was increased by $35 million, pricing was flexed up from talk of Libor plus 600 bps to 625 bps, the discount guidance moved to 94 to 95 from 96 to 97, before settling in at the wide end of that modified talk, and call protection was added.

Morgan Stanley Senior Funding Inc. and TD Securities (USA) LLC led the deal that is being used for the buyout of the company by ABRY Partners and Berkshire Partners LLC from GI Partners.

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