Delta breaks; Travelport rises with paydown news; Toys 'R' Us, MedAssets, CTI reveal talk

By Sara Rosenberg

New York, March 7 - Delta Air Lines Inc.'s term loan freed up for trading on Monday with levels quoted above its original issue discount price, and Travelport Ltd.'s extended and non-extended institutional bank debt headed higher after the company revealed that it will be repaying some borrowings with asset sale proceeds.

Over in the primary, Toys 'R' Us Inc., MedAssets Inc. and CTI Foods released price talk on their term loans as the deals were presented to lenders during market hours, Sidera Networks Inc. launched its deal at previously outlined guidance, and MEG Energy Corp. announced plans for a refinancing.

Also, Brock Group Inc. came out with a number of changes to its term loans, including moving some funds between the tranches, firming the spread and tightening the discount on the first lien and increasing the pricing and discount on the second lien.

Delta starts trading

Delta Air Line's $250 million term loan (Ba2/BB-) hit the secondary market on Monday, with levels quoted at 99¾ bid, par ¼ offered on the open and then moving down to 99 5/8 bid, par 1/8 offered, according to a trader.

The Atlanta-based airline company's term loan is priced at Libor plus 300 basis points with a 1.25% Libor floor and an original issue discount of 99½ and includes 101 soft call protection for one year.

Recently, pricing on the loan had been flexed from Libor plus 325 bps and the call protection was added.

Citigroup and Deutsche Bank are the lead banks on the deal that will be used to refinance/reprice an existing $246.8 million term loan.

Pricing on the existing loan is Libor plus 675 bps with a 2% Libor floor, and it was sold at an original issue discount of 98 when it was obtained in 2009 to repay bank debt.

Travelport trades up

Travelport's strip of extended institutional bank debt and non-extended institutional bank debt was stronger as the company announced plans for a senior secured credit facility paydown, according to traders.

One trader had the extended debt quoted at 98¼ bid, 98¾ offered, up from 97¼ bid, 97¾ offered, and the non-extended debt quoted at 97 bid, 98½ offered, up from 96¾ bid, 97¾ offered.

Meanwhile, a second trader had the extended debt quoted at 98¼ bid, 98½ offered, up about a point on the day.

On Monday morning, Travelport revealed that it is selling its GTA business, a wholesaler of ground content, to Kuoni for $720 million, adding that proceeds from the sale will be used to repay bank debt.

The transaction is conditioned on the majority approval by Travelport's bank lenders and a vote by the shareholders of Kuoni in favor of a capital increase to finance the transaction. It is scheduled for completion in May.

Travelport discloses numbers

In connection with the acquisition news, Travelport released some earnings results for the year ended Dec. 31 in an 8-K filed with the Securities and Exchange Commission, including the expectation for net revenue of $1.996 billion.

Adjusted EBITDA for the year, excluding GTA, is expected to be $545 million.

As for GTA, net revenue for the year is expected to be $294 million, and adjusted EBITDA is expected to be $84 million.

The company also said that as of Sept. 30, 2010, on a pro forma basis for the proposed sale of GTA, group net debt was $2.761 billion.

Travelport is a Parsippany, N.J.-based travel distribution services company.

Pelican fairly steady

Pelican Products Inc.'s $405 million six-year term loan B was quoted at par 3/8 bid, par ¾ offered, compared to levels of par ¼ bid, par ¾ offered when it broke for trading on Friday, according to a trader.

Pricing on the loan is Libor plus 350 bps with a 1.5% Libor floor, and it was sold at par. There is 101 soft call protection for one year.

Credit Suisse is the lead bank on the deal that is being used to refinance an existing $405 million term loan that was obtained late last year to refinance debt.

Pricing on the 2010 loan is Libor plus 425 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99.

Pelican Products is a Torrance, Calif.-based designer and manufacturer of advanced lighting systems and virtually indestructible cases.

Toys guidance surfaces

Moving to the primary, Toys 'R' Us held a conference call at 2 p.m. ET on Monday to launch its $1.1 billion of term loans (B1/NA/B-), and in connection with the event, price talk was announced, according to a market source.

Both the amended $700 million term loan B-1 due Sept. 1, 2016 and the new $400 million 71/2-year term loan B-2 are being guided at Libor plus 300 bps to 325 bps with a 1.25% to 1.5% Libor floor and a par offer price, the source said, adding that there's 101 soft call protection for six months.

Bank of America Merrill Lynch, J.P. Morgan and Goldman Sachs are the lead arrangers and bookrunners on the deal, and Wells Fargo, Credit Suisse, Citigroup and Deutsche Bank are bookrunners as well.

Commitments are due on March 14 and closing is targeted for around March 18.

Toys refinancing debt

Proceeds from Toys 'R' Us' term loans will be used to refinance/reprice an existing term loan that also matures on Sept. 1, 2016 and to repay its $500 million 7.625% notes due August 2011 on or before maturity.

The company got its $700 million secured term loan in August 2010 as part of a refinancing at pricing of Libor plus 450 bps with a 1.5% Libor floor and an original issue discount of 981/2. There is 101 soft call protection for one year.

In connection with the launch Monday, the company disclosed that its year-end net leverage ratio for fiscal 2010 was 3.9 times and that total debt to adjusted EBITDA for the year is estimated to be 2.9 times.

The Wayne, N.J.-based toy retailer also expects revenue of $9.6 billion for its fiscal 2010 year and adjusted EBITDA of $675 million.

MedAssets sets talk

MedAssets disclosed that its $635 million term loan B is being talked at Libor plus 300 bps to 325 bps with a 1% Libor floor, a par offer price and 101 soft call protection for one year, according to a market source.

Barclays and J.P. Morgan are the lead banks on the deal that launched with a conference call in the morning.

Proceeds will be used to reprice an existing term loan B obtained in November in connection with the acquisition of the Broadlane Group at pricing of Libor plus 375 bps with a step-down to Libor plus 350 bps when total leverage is less than 4.5 times and a 1.5% Libor floor. The existing term loan B has 101 soft call protection for one year and was sold at an original issue discount of 99.

MedAssets is an Alpharetta, Ga.-based provider of technology-enabled products and services for hospitals, health systems and ancillary health care providers.

CTI deal emerges

CTI Foods came out with a $180 million term loan B that was launched with a call on Monday at talk of Libor plus 350 bps with a 1.5% Libor floor, a par offer price and 101 soft call protection for one year, according to a market source.

J.P. Morgan is the lead bank on the deal that will be used to refinance existing debt.

CTI Foods is a supplier of processed food to quick service and casual dining restaurants.

Sidera launches

Also launching with a call on Monday was Sidera Networks' proposed $310 million term loan, which, as was previously reported, is being talked at is Libor plus 375 bps with a 1.5% Libor floor, a par offer price and 101 soft call protection for one year, according to a market source.

SunTrust is the lead bank on the deal that will be used by the New York-based provider of fiber optic-based network services to reprice existing term loan borrowings.

The company initially got a $240 million term loan in August to help fund its buyout by ABRY Partners that was sold at an original issue discount of 981/2. Then, in November, Sidera got a $45 million term loan add-on for acquisition financing that was talked at a discount of 98½ and, in December, it got a $25 million term loan add-on for the purchase of Long Island Fiber Exchange Inc. that was talked at a discount of 993/4.

All $310 million of existing term loan debt carries an interest rate of Libor plus 450 bps with a 2% Libor floor.

MEG plans refi

MEG Energy Corp. is set to hold a conference call at 10:30 a.m. ET on Tuesday to launch a proposed $1.5 billion credit facility that will be used to help refinance an existing revolver, term loan B and term loan D and for general corporate purposes, according to a market source.

The facility consists of a $500 million revolver and a $1 billion term loan B, the source said. Price talk is not yet available.

The company's existing revolver due Jan. 31, 2013 is sized at $200 million and is priced at Libor plus 400 bps with a 75 bps unused fee, its term loan B due April 3, 2013 is sized at $41.5 million and is priced at Libor plus 200 bps, and its term loan D due April 3, 2016 is sized at $957.9 million and is priced at Libor plus 400 bps with a 2% Libor floor, according to recent filings with SEDAR.

MEG selling notes

Other funds for MEG Energy's refinancing will come from the issuance of $500 million of senior notes, the source added.

A roadshow for the notes is expected to kick off on Wednesday and wrap up on March 16.

Closing on the credit facility and the notes is expected to occur at the same time.

Barclays, Credit Suisse, BMO Capital Markets and Morgan Stanley are the joint bookrunners on the credit facility and the bonds.

MEG Energy is a Calgary, Alta.-based oil sands development company.

Brock reworks deal

Brock Group made changes to its credit facility, revising size and pricing on its first-and second-lien term loans, according to a market source.

The six-year first-lien term loan B (B1/B+) is now $510 million, up from $490 million, and pricing is Libor plus 450 bps with a 1.5% Libor floor and an original issue discount of 99¼ versus initial talk of Libor plus 450 bps to 475 bps with a 1.5% Libor floor and a discount of 99, the source said.

And, the seven-year second-lien term loan (Caa1/B-) is now $190 million, down from $210 million, and pricing is Libor plus 825 bps with a 1.75% Libor floor and a discount of 98, versus initial talk of Libor plus 750 bps to 775 bps with a 1.75% Libor floor and a discount of 981/2, the source continued.

The first-lien term loan still includes 101 soft call protection for one year, while the second-lien is now non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four, compared to the previously proposed call protection of 103 in year one, 102 in year two and 101 in year three.

Brock lead banks

J.P. Morgan, Credit Suisse and Bank of America Merrill Lynch are the lead banks on Brock's $805 million credit facility, which also provides for a $105 million revolver (B1/B+).

Recommitments are due from lenders at 5 p.m. ET on Tuesday.

Proceeds will be used to refinance existing debt, to fund a dividend payment and for general corporate purposes.

Brock is a Houston-based provider of industrial specialty maintenance services, including painting, scaffolding and insulation.

Presidio in price discovery

In other news, Presidio Inc. has not yet gone out with price talk on its credit facility that launched with a bank meeting on Friday as the plan is to first talk to some lenders and figure out where guidance should be set, according to a market source.

The $360 million credit facility (Ba3/B+) consists of a $35 million revolver and a $325 million term loan B.

Barclays and Morgan Stanley are the joint lead arrangers and bookrunners on the deal, and GE Capital Markets is a bookrunner as well.

Proceeds will be used to help fund the buyout of the company by American Securities.

Presidio repeat issuer

This is Presidio's second venture in the loan market in the past few months. Back in December, the company brought a deal led by J.P. Morgan that was used to refinance debt, fund a dividend and for general corporate purposes.

In the end, the company ended up with a $200 million term loan B priced at Libor plus 575 bps with a 1.75% Libor floor that was sold at an original issue discount of 971/2. There is 101 soft call protection for one year.

However, it took a bunch of changes to get the struggling deal done. During syndication, the loan had to be reduced from $300 million, and as a result, so was the dividend, pricing was flexed up from Libor plus 550 bps and, before that, from Libor plus 475 bps, and the discount was increased from 98 and, prior to that, from 981/2.

Presidio is a Greenbelt, Md.-based provider of advanced technology infrastructure services.

J. Crew closes

The buyout of J. Crew Group Inc. by TPG Capital LP and Leonard Green & Partners LP for $43.50 per share in cash was completed, according to a news release.

To help fund the transaction, J. Crew got a new $1.45 billion senior secured credit facility, consisting of a $250 million five-year asset-based revolver and a $1.2 billion seven-year term loan (B1/B).

Pricing on the term loan is Libor plus 350 bps, with a step-down to Libor plus 325 bps at less than 3.25 times net senior secured leverage. There is a 1.25% Libor floor and 101 soft call protection for six months, and it was sold at an offer price of par.

During syndication, the term loan was upsized from $1 billion as a bond offering was downsized to $400 million from $600 million, pricing was reduced from Libor plus 375 bps, the Libor floor was cut from 1.5%, the 99½ original issue discount was removed and call protection was changed.

Bank of America and Goldman Sachs acted as the joint lead arrangers and joint bookrunners on the deal for the New York-based retailer of women's, men's and children's apparel, shoes and accessories.

CB Richard wraps loans

CB Richard Ellis Group Inc. closed on its $800 million of delayed-draw term loans comprised of a $400 million seven-year term loan C and a $400 million 81/2-year term loan D, according to a news release.

Pricing on the Los Angeles-based commercial real estate services firm's term C, which was downsized from $500 million, is Libor plus 325 bps, and pricing on the term D, which was upsized from $300 million, is Libor plus 350 bps, with no Libor floor on either, and an original issue discount of 99½ on both.

Credit Suisse Securities and Bank of America Merrill Lynch acted as the lead banks on the senior secured deal (BB) that will be used to help fund the roughly $940 million, or $1.2 billion all-in, acquisition of the real estate investment management business of ING Group NV.

Closing on the acquisition is expected in the second half of this year, subject to approval by certain stakeholders, including regulatory agencies in the United States, Europe and Asia.

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