Momentive, U.S. Foodservice lower; Misys revises deadline; Lord & Taylor cancels repricing

By Sara Rosenberg

New York, May 17 - Momentive Performance Materials Inc.'s term loans weakened in a softer secondary on Thursday as the company relaunched its bond offering, and U.S. Foodservice Inc.'s term loan B was down even with amend and extend news.

Over in the primary, Misys plc has set a conference call to update lenders about its financial performance and has extended the commitment deadline on its credit facility by a few days, and Lord & Taylor cancelled its repricing plans.

Also, Constellium Holdco BV reworked its term loan B, reducing the size, raising the coupon, widening the original issue discount and sweetening call premiums.

Furthermore, Residential Capital LLC (ResCap) and Royalty Pharma came out with pricing guidance as the deals were presented to lenders during market hours, and Bausch & Lomb Inc. revealed the original issue discount on its delayed-draw term loan.

Momentive softens

Momentive Performance Materials' term loans were lower on Thursday as the market in general was down and the company relaunched its bond offering with a reduced size, according to a trader.

The extended loan was quoted at 96 bid, 97 offered, down from 97 bid, 98 offered, and the term loan B-3 was quoted at 95¼ bid, 96¼ offered, down from 96 bid, 97 offered, the trader said. On Tuesday, before any news of a bond deal had come out, the extended loan was seen at 95 bid, 96 offered and the term loan B-3 was seen at 95 bid, 96 offered.

The bonds were initially launched on Wednesday with a size of $450 million, and then upsized in the afternoon to $500 million with price talk coming out in the 9¼% area. Then on Thursday, the deal was relaunched at $250 million and priced at 10%.

Proceeds from the offering will be used to repay term loans due in 2015 that are priced at Libor plus 350 bps. With the downsizing, the company cancelled its plans to buy back 12½% second-lien notes.

Momentive is a Columbus, Ohio-based producer of thermoset resins.

U.S. Foodservice retreats

U.S. Foodservice's term loan B dropped to 96½ bid, 97½ offered, from 97¾ bid, 98½ offered as a result of the heavier market tone, a trader said, remarking that the general conditions outweighed the news of an amendment and extension transaction.

Under the proposal, the company wants to extend at least $972 million of its roughly $1.94 billion term loan to 2017 from 2014 at pricing of Libor plus 450 basis points, versus non-extended pricing of Libor plus 250 bps.

Lenders are being offered a 10 bps amendment fee as well as a 15 bps extension fee, and commitments are due on May 24.

Citigroup Global Markets Inc. and KKR Capital Markets are the joint lead arrangers on the deal.

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

Misys moves deadline

Switching to the primary, Misys revised the commitment deadline on its roughly $1.18 billion credit facility (Ba3) to May 22 from May 18 and has scheduled a conference call for Friday to discuss its recent financial performance with investors, according to a market source.

The facility includes a $125 million five-year revolver talked at Libor plus 500 bps to 525 bps with a 50 bps unused fee and a 100 bps upfront fee.

Also, there is a $730 million seven-year first-lien term loan talked at Libor plus 500 bps to 525 bps and a €250 million seven-year first-lien term loan talked at Euribor plus 550 bps to 575 bps, with both tranches having a 1.25% floor, an original issue discount of 99 and 101 repricing protection for one year.

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

Misys being acquired

Proceeds from Misys' credit facility will be used to help fund its buyout by Vista Equity Partners for 350p per share and refinance certain debt. The acquisition values the entire existing and to-be-issued ordinary share capital of the company at around £1.27 billion.

As part of the financing package, the company has also received a commitment for a $615 million 71/2-year unsecured term loan with expected pricing of 9%. This tranche would be non-callable for three years, then at 106¾ in 2015, 104½ in 2016 and 102¼ in 2017.

Other funds for the transaction will come from equity.

Misys is a London-based application software and services provider for the financial services industry.

Lord & Taylor withdrawn

Lord & Taylor pulled its roughly $450 million term loan repricing as the book filled out at Libor plus 375 bps, wide of the targeted Libor plus 350 bps pricing, according to a market source.

The loan had a 1.25% Libor floor and was being offered par, and existing lenders were going to get paid down at 101 as a result of existing call protection.

By comparison, current pricing on the term loan is Libor plus 450 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 99 in December 2011.

Credit Suisse Securities (USA) LLC was the lead bank on the deal.

Lord & Taylor is a New York-based upscale specialty-retail department store chain.

Constellium revises loan

Constellium tweaked its deal, cutting the six-year term loan B to $250 million from $350 million, raising pricing to Libor plus 725 bps from talk of Libor plus 625 bps to 650 bps and moving the original issue discount to 97 from 98, according to sources. The 1.25% Libor floor was left intact.

Also, the loan is now non-callable for one year, then at 102 in year two and 101 in year three, versus having call protection of 103 in year one, 102 in year two and 101 in year three, sources said.

Lead banks Deutsche Bank Securities Inc., Barclays Capital Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC are seeking recommitments by 2 p.m. ET on Friday.

Proceeds will be used to refinance existing debt, to add cash to the balance sheet and for general corporate purposes. As a result of the downsizing, plans to pay a dividend were cancelled, sources added.

Constellium is a Paris-based designer and manufacturer of aluminum products and components.

ResCap talk emerges

Also on the new deal front, Residential Capital held a bank meeting on Thursday morning to launch its $1.45 billion 18-month debtor-in-possession financing facility to investors, and with the event, price talk was announced, according to a market source.

The $200 million revolver is talked at Libor plus 400 bps, the $1.05 billion first-out term loan A-1 is talked at Libor plus 400 bps to 425 bps, and the $200 million last-out term loan A-2 is talked at Libor plus 600 bps, the source said. Both terms loans have a 1.25% Libor floor.

Also, the term loan A-1 is being offered at an original issue discount of 99, while the term loan A-2 is being offered at a discount of 98, the source continued.

Lead bank Barclays Capital Inc. is seeking commitments toward the deal by May 31.

ResCap selling assets

Proceeds from Residential Capital's DIP loan will be used to provide liquidity while the company sells basically all of its assets for about $4 billion of proceeds.

The company has already agreed to sell its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial Inc.

The sale of the assets is hoped to be facilitated by the company's recent decision to file for Chapter 11 bankruptcy protection, and the expectation is that the restructuring plan will be approved by the fourth quarter.

Residential Capital is a New York-based mortgage originator and servicer.

Royalty Pharma guidance

Another deal to launch was Royalty Pharma's $500 million add-on term loan (BBB-) due 2018, which is being talked at Libor plus 300 bps with a 1% Libor floor and original issue discount talk of 99 to 991/2, according to a market source.

Pricing on the add-on matches the existing 2018 term loan that sold at a discount of 99½ last year.

Bank of America Merrill Lynch, Goldman Sachs & Co. and Citigroup Global Markets Inc. are the lead banks on the deal that will be used to back the already completed $761 million acquisition of an interest in the earn-out payable to the former shareholders of Fumapharm AG.

The borrower of the loan is RPI Finance Trust.

Royalty Pharma is a New York-based acquirer of royalty interests in marketed and late-stage biopharmaceutical products.

Bausch delayed-draw OID

Bausch & Lomb finalized the original issue discount on its $400 million covenant-light delayed-draw term loan due Sept. 30, 2015 at 99 and then allocated the debt, according to a market source.

Pricing on the loan is Libor plus 375 bps with a 1% Libor floor, and the commitment fee is 100 bps through June 30, 187.5 bps from July 1 through Aug. 15, and 475 bps from Aug. 16 through Oct. 31.

Earlier, when the Rochester, N.Y.-based eye health company was syndicating the other components of its roughly $3.43 billion credit facility (B1/B+), the delayed-draw loan was upsized from $350 million, pricing firmed at the tight end of the Libor plus 375 bps to 400 bps guidance and the maturity of the delayed-draw loan was shortened from seven years.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and Bank of America Merrill Lynch are leading the deal.

Bausch tranching details

In addition to the delayed-draw loan, Bausch & Lomb's credit facility provides for a $500 million five year revolver, a $1,935,000,000 seven-year term loan B and a €460 million seven-year term loan B.

Pricing on the U.S. term loan B is Libor plus 425 bps and pricing on the euro loan is Euribor plus 475 bps, with both pieces having a 1% Libor floor and 101 soft call protection for one year. The covenant-light term loan B's were sold at an original issue discount of 99.

During syndication, which wrapped last week, the U.S. term loan B was downsized from $2,035,000,000 and pricing was increased from talk of Libor plus 375 bps to 400 bps. Also, pricing on the euro B loan was lifted from talk of Euribor plus 400 bps to 425 bps.

Proceeds will fund the purchase of ISTA Pharmaceuticals Inc., an Irvine, Calif.-based prescription eye care business, for $9.10 per share in cash, or a total of about $500 million, and refinance existing debt.

Closing is expected this quarter, subject to regulatory and shareholder approval.

Ascend hits secondary

In other news, Ascend Learning's $330 million term loan (B) allocated on Thursday, according to a market source.

Pricing on the loan is Libor plus 450 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

Proceeds are being used to repay existing first-lien debt that is priced at Libor plus 550 bps with a 1.5% Libor floor.

Bank of America Merrill Lynch and GE Capital Markets acted as the lead banks on the deal.

Ascend Learning is a Stilwell, Kan.-based provider of technology-based learning services focused on student training and testing results in health care and other vocational fields.

Burlington Coat closes

Burlington Coat Factory Warehouse Corp. completed its $950.5 million term loan B (B3/B) due February 2017 that is priced at Libor plus 425 bps, according to an 8-K filed with the Securities and Exchange Commission on Thursday.

The loan, which saw pricing firm at the wide end of the Libor plus 400 bps to 425 bps talk, has a 1.25% Libor floor and 101 soft call protection for one year and was sold at a discount of 993/4.

Proceeds were used to refinance an existing $950.5 million term loan B due February 2017 that was priced at Libor plus 475 bps with a 1.5% Libor floor, and was sold at an original issue discount of 99 in February 2011.

J.P. Morgan Securities LLC, Goldman Sachs & Co., Bank of America Merrill Lynch and Wells Fargo Securities LLC led the deal.

Burlington Coat Factory is a Burlington, N.J.-based discount retailer.

Plato closes

Plato Learning completed on Thursday its acquisition of Archipelago Learning for $11.10 per share in cash, according to an 8-K filed with the Securities and Exchange Commission.

For the transaction, Plato got a new $390 million credit facility that consists of a $25 million five-year revolver (Ba3/B+), a $225 million six-year first-lien term loan (Ba3/B+) and a $140 million seven-year second-lien term loan (Caa1/CCC+).

Pricing on the revolver is Libor plus 600 bps with a 1.5% floor and it was sold at a discount of 981/2, pricing on the first-lien loan is Libor plus 600 bps with a 1.5% Libor floor and it was sold at a discount of 97, and pricing on the second-lien loan is Libor plus 975 bps with a 1.5% floor and it was sold at a discount of 98.

The first-lien term loan has 101 soft call protection 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.

Plato lead banks

Credit Suisse Securities (USA) LLC and Jefferies & Co. led Plato's credit facility, which underwent a number of changes during syndication.

Specifically, the first-lien term loan was downsized from $240 million, the coupon was increased from talk of Libor plus 450 bps to 475 bps and the discount widened from 981/2. The second-lien term loan was upsized from $125 million with pricing flexing from talk of Libor plus 875 bps to 900 bps. Both tranches saw the Libor floor widen from 1.25%. Also, the second-lien term loan call protection was revised from 103 in year one, 102 in year two and 101 in year three.

Plato is a Bloomington, Minn.-based provider of education technology services. Archipelago Learning is a Dallas-based subscription-based software-as-a-service provider of education products.

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