U.S. Foodservice shelved; Chrysler Financial, Atlas, Vistar set talk; Inverness, Concentra, Viant break

By Sara Rosenberg

New York, June 26 - U.S. Foodservice Inc. shelved its $3.365 billion credit facility for now due to rough market conditions on both the bank and the high-yield side.

In other primary news, Chrysler Financial Services LLC first-lien spread guidance emerged since that was the debt being marketed to senior managing agents, and talk on the rest of the financing is expected to come out with the upcoming retail launch.

Also on the price talk front, Atlas Pipeline Partners LP released talk on its credit facility as the deal is gearing up for its Wednesday bank meeting and Vistar Corp. set price talk on its term loan as it launched with a bank meeting on Tuesday.

Moving to the secondary, Inverness Medical Innovations Inc., Concentra Inc. and Viant Holdings Inc. all saw their credit facilities free up for trading during the session, and Huntsman International LLC traded lower as news of a buyout hit the market.

U.S. Foodservice announced on Tuesday that it was tabling its $3.365 billion credit facility (B2) as a result of poor market conditions on the loan and the high-yield bond side, according to a market source.

The credit facility consisted of a $2.065 billion term loan B priced at Libor plus 275 basis points, with 101 soft call protection and an original issue discount of 991/2, a $1.2 billion ABL revolver priced at Libor plus 150 bps and a $100 million cash flow revolver priced at Libor plus 275 bps.

During syndication of the deal, pricing on the term loan B and the cash revolver was lifted from original talk at launch of Libor plus 250 bps, the soft call and the original issue discount were added to the term loan B, and the term loan B was upsized from $1.565 billion after the elimination of a $500 million synthetic letter-of-credit facility tranche.

Citigroup, Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley and Royal Bank of Scotland were the lead banks on the deal.

The company was also planning on an issue of high-yield bonds, which originally carried a size of $1.55 billion but was then downsized to $650 million before being postponed as well.

Proceeds were going to be used to help fund the buyout of the company by Clayton, Dubilier & Rice, Inc. and Kohlberg Kravis Roberts & Co. LP from Royal Ahold NV in a transaction valued at $7.1 billion.

U.S. Foodservice is a Columbia, Md., broadline foodservice distributor.

Chrysler Financial first-lien talk surfaces

Price talk on Chrysler Financial's ABL revolver and first-lien term loan B surfaced as those tranches have been going through the senior managing agent process; however, price talk on the company's second-lien term loan is not anticipated to emerge until Thursday's retail bank meeting, according to a market source.

Both the $2 billion ABL revolver and the $4 billion first-lien term loan B are being talked at Libor plus 250 bps to 275 bps, the source said, explaining that both tranches share the same collateral and the same covenants.

During the senior managing agent round, banks were offered $100 million of the revolver "for buy and hold" and $125 million of the first-lien term loan B "for underwriting," the source said.

Chrysler Financial's $8 billion credit facility also includes a $2 billion second-lien term loan, with price talk still to be determined.

JPMorgan, Citigroup, Goldman Sachs, Bear Stearns and Morgan Stanley are the joint bookrunners on the deal, with JPMorgan, Citigroup and Goldman Sachs the joint lead arrangers.

Proceeds will be used to help fund Cerberus Capital Management, LP's acquisition of an 80.1% equity interest in Chrysler Holding LLC, a new holding company for Chrysler Financial and Chrysler Corp. LLC, from DaimlerChrysler AG for $7.4 billion. DaimlerChrysler will retain a 19.9% interest in Chrysler Holding.

As was previously reported, Chrysler Corp. will also be holding its own bank meeting on Thursday to launch its buyout financing deal that is sized at $12 billion and consists of a $10 billion first-lien term loan B and a $2 billion second-lien term loan.

Price talk on the Chrysler Corp. credit facility is not yet available, the source added.

JPMorgan, Goldman Sachs, Citigroup, Bear Stearns and Morgan Stanley are the joint bookrunners on the Chrysler Corp. deal, with JPMorgan, Goldman Sachs and Citigroup the joint lead arrangers.

Chrysler Corp. produces and sells Chrysler, Dodge and Jeep vehicles, and Chrysler Financial provides financial services for the vehicles in the NAFTA region.

Atlas Pipeline price talk

Atlas Pipeline Partners revealed price talk on its $1.055 billion credit facility as the transaction is getting ready to launch into syndication with a bank meeting in New York on Wednesday, a company spokesman told Prospect News.

The $805 million seven-year term loan is being talked at Libor plus 250 bps, with a step down to Libor plus 225 bps when corporate ratings of B1/B+ are achieved, and the $250 million revolver can carry pricing ranging from Libor plus 125 bps to 225 bps, based on a leverage grid, the spokesman said.

When the deal was first announced early this month, the company said that spreads on the term loan were expected to range anywhere from Libor plus 200 bps to 250 bps, but specifics had not been available until now.

Wachovia is the lead bank on the deal.

Proceeds will be used to help fund the acquisition of Anadarko Petroleum Corp.'s interests in the Chaney Dell and Midkiff/Benedum natural gas gathering and processing systems for $1.85 billion, subject to customary closing conditions and other adjustments, and to repay existing revolver borrowings.

Other acquisition financing will come from a private placement to institutional investors of $1.125 billion, consisting of 25.6 million limited partner units of Atlas Pipeline at $44.00 per unit.

Under the credit facility commitment letter, the term loan could have been sized at up to $900 million; however, because of the success of the equity offering, the company decided to go ahead with a smaller term loan.

The transaction is expected to close on July 11, subject to certain approvals.

Atlas Pipeline is a Moon Township, Pa., midstream energy services provider.

Vistar guidance emerges

Vistar came out with price talk of Libor plus 400 bps on its $90 million term loan (B) as the deal was launched to investors with a bank meeting on Tuesday, according to a market source.

The company's $440 million credit facility also includes a $350 million ABL revolver.

Wachovia, Credit Suisse and General Electric Capital Corp. are the lead banks on the deal.

Proceeds will be used to fund the acquisition of the company by the Blackstone Group from Wellspring Capital Management.

Vistar is a Centennial, Colo., distributor of food and other products to the foodservice and vending industries.

Thomson OID expected at 99

Thomson Learning is likely to firm up the original issue discount on its term loan B at 99, from current guidance of 99 to 991/4, although no official word has come out on this yet, according to a market source.

The $3.44 billion seven-year term loan B is priced at Libor plus 275 bps, after being flexed up last week from Libor plus 250 bps, and carries 101 soft call protection for one year, which was added last week as well.

Thomson Learning's $3.74 billion senior secured credit facility also includes a $300 million six-year revolver priced at Libor plus 275 bps, after flexing up last week from Libor plus 225 bps when its super-priority status was removed.

The facility has a senior secured leverage ratio covenant of 8.25 times, which was added during syndication as well.

Prior to the changes, the revolver was rated B1/B+ and the term loan was rated B1/B.

RBS Securities, JPMorgan, Citigroup and UBS are the lead arrangers on the deal, with RBS as administrative agent, JPMorgan as syndication agent, and Citi and UBS as co-documentation agents.

Proceeds will be used to help fund the acquisition of Thomas Learning, which is a division of Thomson Corp., by Apax Partners and Omers Capital Partners.

The Stamford, Conn.-based higher education, careers and library reference assets include Wadsworth, Delmar Learning, Gale, Heinle, Brooks/Cole and South-Western.

Community Health flex expected

Community Health Systems Inc. is anticipated by some to flex pricing lower on its $5.7 billion seven-year term loan and $500 million seven-year delayed-draw term loan to Libor plus 200 bps from current price talk of Libor plus 225 bps, according to a market source.

However, no official word on the flex has been announced as of yet, the source added.

The company's $6.95 billion credit facility (Ba3/BB-) also includes a $750 million six-year revolver that is being talked at Libor plus 225 bps as well.

Credit Suisse and Wachovia are the lead banks on the deal that will be used to help fund the acquisition of Triad Hospitals Inc. for $54.00 per share in cash, or $6.8 billion, including $1.7 billion of existing debt.

The funded term loan will be used to help finance the acquisition and to refinance existing debt, and the delayed-draw term loan and revolver will be used for working capital and general corporate purposes.

Other acquisition financing will come from $3.365 billion of senior unsecured notes.

Total debt to last-12-month adjusted EBITDA is expected to be 6.3 times.

Community Health is a Nashville, Tenn., operator of general acute care hospitals in non-urban communities. Triad is a Plano, Texas, owner and manager of hospitals and ambulatory surgery centers.

Inverness frees to trade

Switching to trading news, Inverness' credit facility allocated and broke for trading, with the $900 million seven-year first-lien term loan B (B1/BB) quoted at par ¼ bid, par ½ offered and the $200 million eight-year second-lien term loan (Caa1/B-) quoted at par ¾ bid, 101 offered, according to a trader.

The first-lien term loan B is priced at Libor plus 200 bps and the second-lien term loan is priced at Libor plus 425 bps, with call protection of 102 in year one and 101 in year two.

During syndication, pricing on the first-lien term loan B was reduced from original talk of Libor plus 225 bps and pricing on the second-lien loan was reduced from original talk of Libor plus 500 bps.

And, prior to the deal's launch, the credit facility was revised to increase the term loan B size from $850 million and to add the second-lien term loan to the capital structure as the company opted to do away with its proposed $300 million unsecured senior subordinated notes offering.

Inverness' $1.25 billion senior secured credit facility, which closed on Tuesday as well, also includes a $150 million six-year revolver (B1/BB) that is priced at Libor plus 225 bps.

General Electric Capital Corp. and UBS acted as the joint lead arrangers on the deal, with General Electric Capital the left lead on the first-lien debt and UBS the left lead on the second-lien debt.

Proceeds from the credit facility are being used to help fund the acquisition of Biosite Inc. in a cash tender offer for $92.50 per share, which expired on Monday.

By the offer deadline, shares representing 87.6% of Biosite's outstanding common stock were tendered. The tendered shares, together with the 750,000 shares that Inverness currently owns, represent approximately 91.7% of Biosite common stock.

Inverness is providing a subsequent offering period that will expire on Thursday so that stockholders who did not previously tender their shares into the offer may do so to receive the same $92.50-per-share cash consideration.

After expiration of the subsequent offering period, Inverness expects to complete the acquisition of Biosite through a short-form merger.

Inverness is a Waltham, Mass.-based developer of advanced diagnostic devices. Biosite is a San Diego-based biomedical company.

Concentra breaks

Concentra was another deal to hit the secondary on Tuesday, with its $330 million seven-year first-lien term loan B (B1) quoted at par ¼ bid, par 5/8 offered on the open and then moving down to par 1/8 bid, par ½ offered, where it closed out the day, according to a trader.

The company's $155 million eight-year second-lien PIK toggle term loan (Caa1) was quoted at par ¼ bid, par ¾ offered on the break and then it moved down to par bid, par ½ offered, where it closed out the day, the trader added.

The first-lien term loan B is priced at Libor plus 225 bps and the second-lien term loan is priced at Libor plus 550 bps, with a step up by 75 bps if PIK is elected, and call premiums of non-callable for one year, then at 102 in year two and 101 in year three.

During syndication, pricing on the first-lien term loan B was reverse flexed from original talk of Libor plus 250 bps.

Concentra's $560 million credit facility also includes a $75 million six-year revolver (B1) priced at Libor plus 225 bps.

The credit facility is covenant-light, with the revolver having a total leverage covenant when it's drawn or letters of credit are issued.

Citigroup, UBS, Bank of America and JPMorgan acted as the lead banks on the deal, with Citi the left lead.

Proceeds from the facility, which was obtained in connection with the recently completed spinoff of Viant, were used to refinance existing debt and to pay a cash dividend to its stockholders of about $350 million.

Concentra is a Dallas-based provider of occupational health-care services and specialized cost management services.

Viant trades atop par

Also freeing up for trading was Viant, with its $275 million seven-year term loan B quoted at par 1/8 bid, par ½ offered on the open and then moving down to par bid, par 3/8 offered, where it closed out the day, according to a trader.

The term loan B is priced at Libor plus 225 bps.

During syndication, pricing on the term loan B was reverse flexed from original talk of Libor plus 250 bps.

Viant's $325 million (B) credit facility also includes a $50 million six-year revolver priced at Libor plus 225 bps.

The credit facility is covenant-light, with the revolver having a total leverage covenant when it's drawn or letters of credit are issued.

Citigroup, UBS, Bank of America and JPMorgan acted as the lead banks on the deal, with Citi the left lead.

Proceeds were used to fund the company's spinoff from Concentra, under which Concentra contributed its network services business to Viant in exchange for additional shares of Viant common stock, $185 million of Viant notes and about $260 million in cash.

Viant is a Naperville, Ill., health-care payment and cost management services company.

Huntsman dips with buyout news

Huntsman's term loan headed lower during trading hours after news emerged that the company is being bought by Basell in a transaction valued at approximately $9.6 billion, including the assumption of debt, according to a trader.

The term loan ended the day at par 1/8 bid, par ½ offered, down from par 3/8 bid, par 5/8 offered, the trader said.

Under the terms of the agreement, Basell will acquire all of the outstanding common stock of Huntsman for $25.25 per share in cash.

Closing is expected in the fourth quarter, subject to customary closing conditions, including regulatory approval in the U.S. and in Europe, as well as the approval of Huntsman shareholders.

Huntsman is a Salt Lake City-based manufacturer and marketer of commodity and differentiated chemicals. Basell is a Hoofddorp, the Netherlands-based producer of polypropylene and polyethylene.

LCDX, cash market soften

LCDX was once again weaker on Tuesday and the cash market followed suit, according to a trader.

The index went out at 98.00 bid, 98.10 offered, down from Monday's levels of 98.25 bid, 98.35 offered, the trader said.

Meanwhile, the cash market was down about an eighth to a quarter of a point across the board, the trader added.

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