Skilled Healthcare up with improved estimates; EquiPower sets guidance; Houghton firms launch

By Sara Rosenberg

New York, Jan. 6 - Skilled Healthcare Group Inc.'s term loan headed higher on Thursday after the company announced that it lifted earnings estimates for 2010, and Constellation Brands Inc.'s term loans were steady on its earnings news.

Over in the primary market, EquiPower Resources Holdings released price talk on its bank deal as the transaction was presented to lenders during the session, and UCI International Inc. launched its facility as well.

Also, Houghton International Inc. determined timing on the launch of its credit facility, and lead banks and potential timing on AccentCare Inc.'s upcoming deal surfaced.

Skilled Healthcare rises

Skilled Healthcare's term loan gained some ground in trading as the company increased its full-year 2010 guidance for adjusted earnings per diluted share to $1.01 and $1.04 from previous guidance of between $0.92 and $0.97 per diluted share, according to a trader.

Also, consolidated revenue guidance was changed to about $816 million to $819 million from between $805 million and $812 million.

And, adjusted EBITDAR is now expected to be between $138.9 million to $140.7 million, compared to prior guidance of $135 million to $139 million, while adjusted EBITDA guidance was raised to $119.7 million to $121.5 million from $116 million to $120 million.

Following the news, the company's term loan was quoted at par bid, par ½ offered, up from 99 bid, 99½ offered, the trader said.

Skilled Healthcare outlook

Additionally on Thursday, Skilled Healthcare released its initial earnings guidance for 2011, including expected net income per common share of between $1.22 and $1.32.

Full-year 2011 consolidated revenue is anticipated to be between $880 million and $900 million.

Furthermore, EBITDAR is expected to be in the range of $156.2 million to $163.5 million, and EBITDA is expected to be in the range of $137.2 million to $144.5 million.

The company also disclosed that if free cash flow continues to be strong, a portion of that money will be used to pay down debt to reduce its leverage ratio to roughly 3.5 by the end of 2011.

Skilled Healthcare is a Foothill Ranch, Calif.-based operator of long-term care facilities and provider of post-acute care services, with a strategic emphasis on sub-acute specialty health care.

Constellation holds firm

Constellation Brands' non-extended term loan was quoted at 99¾ bid, par ¼ offered, and its extended loan was quoted at par ¾ bid, 101½ offered, with both tranches unchanged on the day after earnings were announced, according to trader.

For the third quarter of fiscal 2011, the Victor, N.Y.-based wine company reported net income of $139.3 million, or $0.65 per diluted share, compared to net income of $44.1 million, or $0.20 per diluted share, in the previous year.

Operating income was $170.1 million versus $136.1 million in the third quarter of fiscal 2010.

And, net sales for the quarter were $966.4 million, compared to $987.7 million in the prior year.

Additionally, the company increased its fiscal 2011 free cash flow target to a record level in the range of $475 million to $525 million.

Constellation reducing debt

Constellation Brands also said on Thursday that it decreased debt by more than $100 million and that it expects to be able to continue to bring down leverage.

One such way is by using proceeds from the recently announced sale of its Australian and U.K. business to Champ Private Equity to reduce borrowings. The sale, which should close by the end of the month, is expected to generate cash proceeds of about $230 million.

"Our strong free cash flow generation has enabled the company to fund [a] stock buyback transaction and to repay debt," said Bob Ryder, chief financial officer, in a news release.

"Additionally, the combination of strong free cash flow and expected proceeds from the sale of the Australian and U.K. business targets us to reduce our debt to comparable basis EBITDA ratio to the high 3 times range by the end of the fiscal year."

EquiPower talk emerges

Moving to the primary, EquiPower Resources held a bank meeting on Thursday afternoon to kick off syndication on its proposed $525 million secured credit facility (Ba3), and in connection with the launch, price talk was announced, according to a market source.

Both the $100 million revolver and the $425 million seven-year term loan were presented to lenders with talk of Libor plus 450 basis points to 475 bps, the source said.

In addition, the term loan has a 1.5% Libor floor and an original issue discount of 981/2, the source continued, adding that there is no floor on the revolver.

Security for the facility is four combined cycle gas turbine power plants located in New England.

EquiPower lead banks

Barclays is the left lead bank on the EquiPower Resources' credit facility, and Credit Agricole and Union Bank have signed on as leads as well.

Proceeds will be used to fund the acquisition of Milford Power, the owner of a 548 megawatt combined cycle gas turbine power plant located in Milford, Conn., and to fund a distribution to the sponsor.

The transaction is expected to close early in the first quarter following receipt of all necessary approvals.

EquiPower is a Hartford, Conn.-based competitive power generation company that is owned by Energy Capital Partners LLC.

UCI launches

Another deal to launch with a bank meeting on Thursday was UCI International's $525 million senior secured credit facility (Ba3/B) that consists of a $75 million revolver and a $450 million term loan.

As was previously reported, price talk on the term loan is Libor plus 450 bps with a 1.75% Libor floor and an original issue discount of 99. There is 101 soft call protection for one year.

Credit Suisse, HSBC and Nomura are the lead banks on the deal that will be used, along with $250 million of new senior unsecured debt, $320 million of equity and cash on hand, to fund the acquisition of the company by Rank Group Ltd.

The acquisition is expected to close in the first quarter, subject to regulatory approvals.

UCI is an Evansville, Ind.-based supplier of replacement parts to the light- and heavy-duty vehicle aftermarket.

Houghton firms timing

Houghton International nailed down timing on the launch of its proposed $365 million senior secured credit facility (B+), with the scheduling of a bank meeting for Tuesday, according to a market source.

Previously, it was known that the deal would come next week but a specific date had been unavailable.

The facility consists of a $50 million revolver and a $315 million term loan B. Price talk is not yet being disclosed.

Deutsche Bank, Bank of Ireland and GE Capital are the joint lead arrangers on the deal, with Deutsche the left lead.

Houghton funding acquisition

Proceeds from Houghton International's credit facility will be used to fund the acquisition of Royal Dutch Shell plc's Metalworking and Metal Rolling Oils business, a specialty fluid manufacturer in the metal working and metal rolling fluids marketplace, and to refinance existing senior secured debt.

The transaction is anticipated to close early this year, subject to regulatory approval.

Senior leverage will be around the mid-2 times, and total leverage will be in the high 3 times - without synergy adjustments,.

Houghton International is a Valley Forge, Pa.-based developer and producer of specialty chemicals, oils and lubricants for the metalworking, automotive, steel and aluminum industries.

AccentCare banks revealed

Joint lead arrangers on AccentCare's proposed credit facility have emerged, and possible timing came out too, but size and structure are still not being disclosed, according to a market source.

The deal is being led by GE Capital, Bank of Ireland and CIT, with GE the left lead, and a bank meeting is expected to take place during the week of Jan. 31, the source said.

Proceeds will be used to help fund Oak Hill Capital Partners' buyout by of the Irvine, Calif.-based provider of home health care services.

Following completion of the acquisition, Oak Hill will merge AccentCare with Guardian Home Care Holdings Inc., a Brentwood, Tenn.-based provider of homecare and hospice services that was recently acquired from Friedman Fleischer & Lowe.

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