Mylan tweaks deal, breaks; Tropicana up as full repayment expected; Culligan dips; GasServ firms spread

By Sara Rosenberg

New York, Dec. 17 - Mylan Inc. made some changes to and finalized details on its credit facility, shifting some funds between the term loan A and the term loan B tranches, adding call protection to the term loan B, setting the original issue discount on the institutional paper and determining the sizes of the euro and U.S. subtranches.

Once all these final details on Mylan were established, the facility allocated and freed up for trading, with the U.S. term loan B quoted above its original issue discount price.

Also in trading, Tropicana Entertainment, LLC's first-lien term loan gained some more ground during Monday's market hours as the company announced additional asset sales and disclosed that it will be repaying its credit facility in full, and Culligan International Co.'s term loan B was softer on market technicals.

Back in the primary, GasServ firmed pricing on its credit facility at the wide end of talk but is still working on finalizing the original issue discount.

Mylan came out with modification to its roughly $4.85 billion senior credit facility (B1/BB) on Monday as the term loan A was upsized and the term loan B was downsized with the addition of call protection and the finalization of an original issue discount level, according to a market source.

In addition, the breakdown of U.S. and euro sizes under the term loan A and term loan B was revealed, whereas before it was just said that the subtranches would be determined based on demand.

And lastly, after the structure was finalized, allocations went out and the deal was able to break for trading in the afternoon, with the U.S. term loan B quoted at 98¾ bid, 99¼ offered on the open and then tightening to 98¾ bid, 99 offered by the close, a trader said.

Under the changes, the six-year term loan A was increased to approximately $800 million from $500 million and the seven-year term loan B was decreased to approximately $3.3 billion from $3.6 billion, the source said.

The term loan A consists of a $312.5 million tranche and a €350.4 million tranche, and the term loan B consists of a $2.556 billion tranche and a €525 million tranche, the source continued.

In addition, the term loan B saw the addition of 101 hard call protection, the source remarked.

The original issue discount on the term loan B firmed up at 98, the wide end of original guidance that was in the 98 to 98½ area, the source added.

Pricing on the term loan A and the term loan B was left in line with initial talk at Libor/Euribor plus 325 basis points.

Mylan's credit facility also includes a $750 million six-year multicurrency revolver that is priced at Libor/Euribor plus 275 bps, with a 50 bps commitment fee.

Banks were offered two tickets on the pro rata tranches - as managing agents, they were asked to commit $20 million to the revolver and $30 million to the term loan A for a 75 bps upfront fee, and as co-managing agents, they were asked to commit $10 million to the revolver and $15 million to the term loan A for 50 bps upfront.

Proceeds from the facility, which actually funded in early October, were used to help fund the acquisition of Merck KGaA's generics business, to refinance Mylan's existing credit facility and to purchase the company's 5¾% senior notes due 2010 and 6 3/8% senior notes due 2015 under a tender offer.

Senior debt to pro forma EBITDA opens at 3.8 times, and total debt to pro forma EBITDA opens at 4.1 times.

There are minimum consolidated interest coverage and maximum consolidated senior leverage covenants contained in the credit agreement.

Merrill Lynch and Citigroup are the joint bookrunners and joint lead arrangers on the deal, with Merrill the left lead, and JPMorgan is the administrative agent.

Mylan is a Canonsburg, Pa., pharmaceutical company.

Tropicana stronger on paydown news

Tropicana Entertainment's first-lien term loan inched its way higher in trading after the company revealed plans to sell two assets, in addition to the Tropicana Resort and Casino in Atlantic City, and said that proceeds will be used to repay all of its senior bank debt, according to a trader.

The first-lien term loan was quoted at 98 3/8 bid, 99 3/8 offered, up from Friday's levels of 97½ bid, 98 offered, the trader said.

On Monday afternoon, Tropicana Entertainment said that it will sell its Casino Aztar in Evansville, Ind., and its casino in Vicksburg, Miss., which is under contract with Nevada Gold & Casinos, Inc.

The company also reconfirmed that its Tropicana Resort and Casino in Atlantic City will be sold as well.

Proceeds from the three asset sales are expected to be enough to repay the company's credit facility in its entirety, and if there are any proceeds left, they will be reinvested in the company's business.

The company also said on Monday that it made its scheduled semiannual interest payment on its 9 5/8% senior subordinated notes and is attempting to reach an agreement with its lenders that will allow for an orderly sale of the assets.

Last week, Tropicana Entertainment's gaming license renewal application at its Tropicana Casino and Resort in Atlantic City was denied by the New Jersey Casino Control Commission.

As a result, the commission ordered that the Atlantic City property be transferred immediately to a trustee until a sale can be arranged.

At that time, it was said that proceeds from the Atlantic City sale would be used to repay debt under the company's credit facility. Market participants were unsure as to whether the proceeds would be sufficient to repay the bank debt in full.

Tropicana Entertainment is a Fort Mitchell, Ky.-based gaming entertainment provider.

Culligan trades down

Culligan's term loan B was off by a few points on Monday, with the move likely caused by one seller "single-handedly bringing this thing down," according to a trader.

The term loan B was quoted around 78 bid, 80 offered, down from Friday's levels that were bid in the low 80s, the trader said.

Last Wednesday, Moody's Investors Service downgraded Culligan's corporate family rating to B3 from B2, first-lien senior secured credit facility to B2 from B1 and second-lien senior secured term loan to Caa2 from Caa1.

The downgrade reflected weaker-than-expected operating performance and credit metrics since the company completed its leveraged recapitalization in May 2007.

Prior to the downgrade, the term loan B was quoted in the mid-to-high 80s, the trader added.

Culligan is a Northbrook, Ill., provider of water treatment products and services for household and commercial applications.

GasServ sets pricing

Turning back to the primary market, GasServ firmed pricing on both tranches under its $163 million credit facility at Libor plus 400 bps, the high end of original talk of Libor plus 375 bps to 400 bps, according to a market source.

Tranching on the deal is comprised of a $35 million revolver and a $128 million term loan.

The original issue discount on the term loan is still being firmed up, the source added.

GE Capital is the lead bank on the deal, which will be used to help fund the buyout of the company by Wind Point Partners from Harsco Corp. for a total purchase price of $340 million.

The terms include $300 million payable in cash at closing and $40 million payable in the form of an earnout, contingent on the company achieving certain performance targets in 2008 or 2009.

Senior leverage at close will be 3.1 times and total leverage will be 4.6 times.

GasServ is a Mechanicsburg, Pa., technology, service and manufacturing company for gas applications involving pressure vessels and precision valves.

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