Callon, United Surgical, Hunter Fan tweak deals; Iasis, Oceania, USI set talk; Antero, Venetian break

By Sara Rosenberg

New York, April 11 - Callon Petroleum Co. made a number of changes to its credit facility, including increasing pricing, adding an original issue discount, sweetening call premiums and revising some covenants.

Other deals to announce revisions included United Surgical Partners International Inc., who upsized its term loan B after downsizing its bond deal, and Hunter Fan Co., who shifted funds between its first- and second-lien term loans and increased pricing on its second-lien debt.

Also in the primary, Iasis Healthcare LLC, Oceania Cruises Inc. and USI Holdings Corp. came out with price talk on their credit facilities as all three deals were launched with bank meetings during Wednesday's session.

Over in the secondary market, Antero Resources Corp.'s second-lien term loan freed up for trading with bids seen in the low par's and Venetian Macau Ltd.'s incremental bank debt hit the secondary as well, with levels on the term loan ending the day wrapped around 101.

Callon Petroleum revised its $200 million seven-year synthetic revolving credit facility by flexing pricing higher, adding an original issue discount and additional call protection, and tweaking some covenants, according to a market source.

The synthetic revolver is now priced at Libor plus 700 basis points, up from original talk at launch that was in the Libor plus 600 bps area, the source said.

In addition, call protection on the deal is now set at non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four, as opposed to the originally proposed premiums of 102 in year one and 101 in year two, the source continued.

Furthermore, the revolver is being offered to investors with an original issue discount of 99, compared with the original offer price of par, the source remarked.

And, lastly, the maximum leverage and the minimum interest coverage covenants were both modified, the source added.

Merrill Lynch is the lead bank on the deal, which will be used to help fund the acquisition of BP Exploration and Production Co.'s 80% working interest in the Entrada Field. Callon will pay an initial price of $150 million for Entrada and an additional $40 million after the field produces 12.5 million barrels of oil equivalent.

In connection with this new deal, Callon is amending its existing credit facility, increasing fees and interest rates and lowering the borrowing base to $50 million from $75 million.

Callon is a Natchez, Miss., explorer, developer, acquirer and operator of oil and gas properties.

United Surgical ups term B size

United Surgical Partners increased the size of its term loan B by $40 million after downsizing its bond deal to $440 million from $480 million, according to a market source.

The seven-year funded term loan B is now sized at $430 million, up from $390 million, with price talk left unchanged at Libor plus 225 bps, the source said.

United Surgical's now $630 million (up from $590 million) senior secured credit facility (Ba3/B) also includes a $100 million six-year revolver and a $100 million 18-month delayed-draw seven-year final maturity term loan, with both these tranches talked at Libor plus 225 bps as well.

The revolver carries a 50 bps unused fee and the delayed-draw term loan carries a 125 bps unused fee.

Citigroup, Lehman, SunTrust, UBS and Bear Stearns are the lead banks on the deal.

Proceeds will be used to help fund Welsh, Carson, Anderson & Stowe's buyout of the company for $1.8 billion, which includes the assumption of certain debt. Holders of United Surgical common stock will receive $31.05 per share in cash for their shares.

United Surgical is an Addison, Texas, owner and operator of short-stay surgical facilities.

Hunter Fan moves funds, ups spread

Hunter Fan also revealed some changes to its credit facility as it moved $15 million out of its second-lien term loan and into its funded first-lien term loan and increased pricing on the second-lien term loan debt, according to a market source.

With the changes, the funded first-lien term loan is now sized at $160 million (B1/B), up from $145 million, while pricing was left unchanged at Libor plus 250 bps, the source said.

Meanwhile, the second-lien term loan (Caa1/CCC+) is now sized at $60 million, down from $75 million, and pricing was flexed higher to Libor plus 675 bps from original talk at launch of Libor plus 625 bps, the source continued.

Call premiums on the second-lien term loan are 103 in year one, 102 in year two and 101 in year three.

Hunter Fan's $295 million credit facility also includes a $60 million revolver (B1/B).

JPMorgan is the lead bank on the deal, which will be used to help fund MidOcean Partners' leveraged buyout of the company.

Hunter Fan is a Memphis-based home comfort company that offers ceiling fans, portable fans, air purifiers, humidifiers, thermostats and vaporizers.

Iasis price talk

In other primary happenings, Iasis Healthcare held a bank meeting on Wednesday to kick off syndication on its $829 million senior secured credit facility, and in connection with the launch, price talk on the transaction emerged, according to a market source.

The $439 million seven-year term loan (Ba2/B), the $150 million seven-year delayed-draw term loan (Ba2) and the $40 million seven-year synthetic letter-of-credit facility (Ba2/B) were all launched with talk of Libor plus 225 bps, while the $200 million six-year revolver (Ba2/B) was launched with talk of Libor plus 200 bps, the source said.

The delayed-draw term loan has a 100 bps undrawn fee.

In connection with the credit facility, Iasis also launched a $300 million holdco senior paid-in-kind loan (Caa1/CCC+) that will convert to cash-pay after five years.

The PIK loan due June 15, 2014 will be borrowed by parent company Iasis Healthcare Corp.

Call protection on the PIK loan is non-callable for one year, then at 102 in year two and 101 in year three.

Bank of America and Citigroup are the lead banks on the deal.

Proceeds will be used to refinance the company's existing credit facility, to increase its borrowing capacity and to fund a dividend to the equity holders of its parent company. The delayed-draw loan will be used to fund capital projects, including completion of the company's previously announced 171-bed Mountain Vista Medical Center located in Mesa, Ariz., which is scheduled to open in June, and for other general corporate purposes.

Iasis is a Franklin, Tenn., owner and operator of medium-sized acute care hospitals.

Oceania spread guidance

Another deal to launch on Wednesday was Oceania Cruises at which time it too came out with pricing guidance on its proposed $415 million credit facility, according to a market source.

The $40 million revolver (B1/B) and the $300 million first-lien term loan (B1/B) were both presented to lenders with talk of Libor plus 225 bps, while the $75 million second-lien term loan (Caa1/CCC+) was presented with talk of Libor plus 575 bps, the source said.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

Lehman Brothers and UBS are the lead banks on the deal, which will be used to help fund Apollo Management LP's acquisition of the company in a transaction valued at about $850 million, including the assumption of debt.

Oceania is a Miami-based upper-premium cruise line.

USI floats talk

USI Holdings was yet another deal to release price talk during market hours as it held a bank meeting at 2:00 p.m. ET to launch its proposed $625 million senior secured credit facility (B2/B-).

The company's $100 million six-year revolver is being talked at Libor plus bps and its $525 million seven-year term loan B is being talked at Libor plus 275 bps, according to an 8-K report filed with the Securities and Exchange Commission Wednesday.

The revolver has a 50 bps commitment fee.

Goldman Sachs and JPMorgan are the joint lead arrangers and joint bookrunners on the deal, with JPMorgan the administrative agent.

Proceeds will be used to help fund GS Capital Partners' acquisition of the company for $17.00 in cash per share. The transaction is valued at about $1.4 billion, including repayment of about $365 million of USI's existing debt.

USI is a Briarcliff Manor, N.Y., distributor of insurance and financial products and services to businesses.

Culligan talk surfaces

Also on the price talk front, Culligan Holding Sarl released guidance on its proposed $640 million senior secured first-lien credit facility (B1/B) and €200 million second-lien term loan (Caa1/CCC+) as the deal was launched with a bank meeting in New York on Tuesday and a bank meeting in London on Wednesday, according to a market source.

The $110 million revolver and $530 million term loan B were both launched with talk of Libor plus 225 bps, while the €200 million second-lien loan was launched with talk of Libor plus 425 bps, the source said.

BNP Paribas and Citigroup are the lead banks on the deal.

Proceeds will be used for a recapitalization that will include an about $360 million distribution to equity holders, refinancing the company's existing credit facility and the repayment of its 8% senior subordinated notes due 2014.

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

The Pantry sets structure, price talk

The Pantry Inc. released tranching and price talk on its $650 million credit facility (BB) now that the deal has been presented to lenders with a bank meeting that took place on Tuesday, according to a market source.

The facility consists of a $200 million six-year revolver talked at Libor plus 150 bps, a $350 million seven-year covenant-light term loan B talked at Libor plus 175 bps and a $100 million seven-year covenant-light delayed-draw term loan talked at Libor plus 175 bps, the source said.

The delayed-draw term loan carries an undrawn fee of 75 bps for the first six months and 87.5 bps for months six through 12.

JPMorgan is the lead bank on the deal, which will be used to refinance existing debt.

Commitments are due from lenders on April 24.

The Pantry is a Sanford, N.C., convenience store chain.

MediMedia softens repricing

MediMedia revised its term loan B repricing proposal so as to only cut the spread by 25 bps as opposed to by 50 bps, and with that change the transaction was expected to close on Wednesday, according to a market source.

Under the modified proposal, the company is lowering pricing on its term loan B to Libor plus 225 bps from Libor plus 250 bps, with 101 soft call protection for one year, the source said.

By comparison, under the original proposal, the company was looking to lower pricing to Libor plus 200 bps with 101 soft call protection.

Goldman Sachs is the lead bank on the repricing.

MediMedia is a Chatham, N.J.-based specialty health care communications, publishing and patient education company.

Antero frees to trade

Moving to the secondary market, Antero Resources' $225 million second-lien term loan broke for trading, with the bid seen at par 1/4, according to a market source.

The term loan is priced at Libor plus 450 bps with call protection of 102 in year one and 101 in year two. During syndication, the loan was upsized from $200 million.

Lehman Brothers and Credit Suisse are the lead banks on the deal, which will be used to refinance debt under the company's existing revolving credit facility and to provide liquidity for continued development.

Antero is a Denver-based oil and gas company.

Venetian Macau breaks

Also freeing up for trading on Wednesday was Venetian Macau's incremental bank debt (B1), with the $575 million of add-on term loan debt quoted at par 5/8 bid, par 7/8 offered on the open and then moving up to par 7/8 bid, 101 1/8 offered, where it closed out the session, according to a trader.

The add-on term loan is priced at Libor plus 225 bps with 101 soft call protection for one year. In addition, the company repriced its existing term loan at Libor plus 225 bps from Libor plus 275 bps with 101 soft call protection. The existing term loan and the add-on term loan trade as one tranche.

Venetian Macau also got a $200 million revolver add-on that is priced at Libor plus 225 bps. With this add-on, pricing on the existing revolver was also lowered to Libor plus 225 bps from Libor plus 275 bps.

Originally, the company was looking to get $400 million in additional credit facility, but that amount was upsized to $775 million during syndication.

Goldman Sachs, Lehman and Citigroup are the lead banks on the deal, and Scotia is the administrative agent.

Proceeds from the incremental debt will be used to make investments in Macau.

Venetian Macau is a subsidiary of Las Vegas Sands Corp., a Las Vegas-based hotel, gaming, resort and exhibition/convention company.

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