Dunkin', BWAY break; Michaels Stores softens; Cumulus, CMP, Citadel move on merger buzz

By Sara Rosenberg

New York, Feb. 17 - Dunkin' Brands Inc. and BWAY Holding Co. allocated and freed up for trading, with levels on both companies' term loans quoted above par, and Michaels Stores Inc.'s term loan B-2 was a little weaker as sales numbers were released.

Also in trading, Cumulus Media Inc. and its subsidiary, CMP Susquehanna Corp., headed higher, and Citadel Broadcasting Corp. was lower on news that Cumulus has entered into exclusive talks to purchase Citadel.

Over in the primary market, Michael Foods Inc. reduced pricing on its term loan, while leaving all other terms intact, and U.S. TelePacific lowered the spread and eliminated original issue discount plans on its loan.

Furthermore, Capital Automotive, CB Richard Ellis Group Inc., Brock Group Inc., Rite Aid Corp., Microsemi Corp. and Evertec Inc. released price talk as their facilities were launched to lenders, and TravelClick Inc. began circulating guidance on its upcoming deal.

Dunkin's frees up

Dunkin' Brands' $1.4 billion term loan B (B2/B) hit the secondary market on Thursday, with levels quoted at par ½ bid, 101 offered on the open and then it moved to par 5/8 bid, 101 offered, according to market sources.

Pricing on the term loan is Libor plus 300 basis points with a 1.25% Libor floor, and it was sold at par. There is 101 soft call protection for one year.

During syndication, the loan was upsized from $1.25 billion and pricing firmed at the tight end of initial talk of Libor plus 300 bps to 325 bps.

Barclays, J.P. Morgan, Bank of America Merrill Lynch and Goldman Sachs are the lead banks on the deal.

Dunkin' refinancing debt

Proceeds from Dunkin's new term loan will be used to reprice/refinance an existing $1.25 billion term loan B that is priced at Libor plus 425 bps with a 1.5% Libor floor and was sold at an original issue discount of 991/2.

The existing loan was obtained late last year to repay securitization debt and pay a dividend. It includes 101 soft call protection for one year.

In addition, the extra term loan debt that is being raised through the recent upsizing will be used to repay bonds.

Canton, Mass.-based Dunkin' Brands is the parent company of Dunkin' Donuts, a coffee and baked goods restaurant chain, and Baskin-Robbins, an ice cream specialty store chain.

BWAY breaks

BWAY, an Atlanta-based supplier of general line rigid containers, saw its $512.5 million seven-year covenant-light term loan B (Ba3/B) free up during the day too, with levels quoted at par ¾ bid, 101¼ offered, according to a trader.

Pricing on the term loan is Libor plus 325 basis points with a step-down to Libor plus 300 bps when net secured leverage is 2.75 times or less. There is a 1.25% Libor floor and 101 soft call protection for one year, and it was issued at par.

During syndication, pricing was lowered from Libor plus 350 bps, the step-down was added and the Libor floor was tightened from 1.5%.

Deutsche Bank, Bank of America and Barclays are the lead banks on the deal that is being used to refinance debt including a $490 million seven-year term loan from June 2010 that was used to help fund the company's buyout by Madison Dearborn Partners LLC and is priced at Libor plus 375 bps with a 1.75% Libor floor and sold at an original issue discount of 991/2.

Michaels Stores B-2 dips

Michaels Stores' term loan B-2 headed to par ¾ bid, 101½ offered from 101 bid, 101¾ offered as the company came out with fourth-quarter sales results, according to a trader.

The company's term loan B-1, however, was fairly steady with levels of 99¾ bid, par ¼ offered versus 99 7/8 bid, par ¼ offered previously, the trader added.

For the fiscal quarter ended Jan. 29, the company reported net sales of $1.331 billion, a 2.4% increase over last year's net sales of $1.299 billion, and same-store sales increased 0.7% from the prior year.

The company also said that it repaid $50 million of its senior secured term loan after its fiscal year ended, in addition to the $228 million of paydowns that were made during the fiscal year.

Michaels Stores is an Irving, Texas-based retailer of arts, crafts, framing, floral, wall décor, and seasonal merchandise for the hobbyist and do-it-yourself home decorator.

Cumulus, CMP rise

Cumulus Media's term loan gained some ground in the secondary market after the company announced that it is in negotiations to acquire Citadel Broadcasting, and Cumulus' subsidiary, CMP Susquehanna, also saw an improvement in trading levels on the news, according to a trader.

Cumulus' term loan was quoted at 97¾ bid, 98¼ offered, up about three quarters of a point on the day, and CMP's term loan was quoted at 96 bid, 97 offered, up from around 94½ bid, 95½ offered, the trader said.

The debt wasn't really trading; it was mostly bid, looking for offers, the trader remarked.

He also said that people aren't sure yet whether the potential acquisition would lead to a compete refinancing of Cumulus' debt, or if it would just be incremental debt used for the transaction.

Citadel softens

Citadel Broadcasting's term loan, however, dropped to par ¼ bid, par ¾ offered from par 5/8 bid, par 7/8 offered as investors are thinking that the debt will be repaid at par is the acquisition is completed, the trader added.

Under the merger talks, Cumulus may buy Citadel for $37 per share in a combination of cash and stock. Based upon the proposed cash and stock election formula, the price would on average be capped at $30 per share in cash and at $14 per share in Cumulus stock at a fixed exchange ratio.

Cumulus said in a news release that it would get new debt financing led by UBS and Macquarie, as well as up to $500 million of equity financing from Crestview Partners and Macquarie, to fund the transaction.

Execution of a definitive agreement is subject to completion of due diligence and financing arrangements.

Citadel Broadcasting is a Las Vegas-based radio company. Cumulus Media is an Atlanta-based radio broadcaster.

Michael Foods flexes

Switching to the primary, Michael Foods lowered pricing on its $840 million term loan (B1) to Libor plus 300 bps from Libor plus 325 bps, but kept the 1.25% Libor floor, par offer price and 101 soft call protection for six months unchanged, according to a market source.

Bank of America Merrill Lynch, Goldman Sachs & Co. and Barclays Capital Inc. are the lead banks on the deal and are asking for commitments by noon ET on Friday.

Proceeds will be used for a dividend payment and to refinance an existing term loan that was obtained last summer to help fund the company's buyout by GS Capital Partners.

The existing term loan was completed at a size of $790 million term loan and pricing of Libor plus 450 bps with a 1.75% Libor floor. It was sold at an original issue discount of 98 and includes 101 soft call protection for one year.

Michael Foods is a Minnetonka, Minn.-based producer and distributor of food products.

U.S. TelePacific cuts pricing

Also coming out with changes was Los Angeles-based competitive local exchange carrier U.S. TelePacific, as it reduced pricing on its $435 million six-year term loan to Libor plus 450 bps from Libor plus 500 bps and is now selling the debt at par, as opposed to at a discount of 991/2, according to a market source. The 1.25% Libor floor and 101 soft call protection for one year were left unchanged.

The company's $460 million credit facility (B3/B-) also includes a $25 million five-year revolver.

Credit Suisse, Deutsche Bank and Bank of America Merrill Lynch are the lead banks on the deal that will be used to refinance existing debt.

Early last year, the company got a $25 million revolver and a $370 million 51/2-year first-lien term loan that is priced at Libor plus 725 bps with a 2% Libor floor. The revolver was sold at an original issue discount of 98. The term loan includes 101 soft call protection for one year, but lenders will get paid down at par since that call protection will expire by the time this new deal is completed.

Capital Auto reveals talk

Moving to the topic of pricing, Capital Automotive released talk on its $1.7 billion senior secured credit facility (Ba3/B+) as the deal was presented to lenders through a bank meeting in the afternoon, according to a market source.

Both the $200 million five-year revolver and the $1.5 billion six-year term loan B were launched at Libor plus 350 bps with a 1.5% Libor floor, the source said. The revolver is being offered with a 100 bps upfront fee, and the term loan has an original issue discount of 99.

Barclays is leading the deal that will be used to refinance existing debt.

Capital Automotive is a McLean, Va.-based provider of sale-leaseback capital to the automotive retail industry.

CB Richard deal emerges

CB Richard held a conference call at 1 p.m. ET on Thursday to launch $800 million of delayed-draw senior secured term loans (BB) that are being led by Credit Suisse and Bank of America Merrill Lynch, according to sources.

Ahead of the call, it was disclosed that the debt consists of a $500 million delayed-draw seven-year term loan C talked at Libor plus 325 bps and a $300 million delayed-draw 81/2-year term loan D talked at Libor plus 350 bps, with both tranches having no Libor floor and an original issue discount price of 991/2, sources said.

Proceeds will be used to help fund the roughly $940 million, or $1.2 billion all-in, purchase of ING Group NV's real estate investment management business in Europe and Asia, and Clarion Real Estate Securities, its U.S.-based real estate listed securities business. CB Richard is also buying about $55 million of CRES co-investments and potentially interests in other funds managed by ING REIM Europe and Asia.

CB Richard seeks amendment

In connection with the financing, CB Richard, a Los Angeles-based commercial real estate services firm, is looking to amend its existing credit facility to maintain the availability of its current credit agreement's accordion feature at $800 million.

Additionally, the amendment would allow its wholly owned subsidiaries to be borrowers of the new term loans and add an exception to the investment covenant relating to the pending acquisition.

When the acquisition was first announced on Tuesday, the company had said that the transaction would be funded with a combination of cash and debt. As of Dec. 31, it had $507 million of cash, undrawn revolver capacity of about $650 million and the $800 million unused accordion feature.

The company had also remarked that following completion of the transaction, it expects overall leverage to be less than 2.25 times. The credit facility allows for maximum leverage of 3.75 times.

The transaction is expected to close in the second half of this year, subject to approval by certain stakeholders, including regulatory agencies in the U.S., Europe and Asia.

Brock discloses talk

Brock Group was another company to reveal price talk on its new bank deal in connection with a Thursday launch when lenders were given a look at $700 million of first- and second-lien term loans, according to a market source.

The $490 million six-year first-lien term loan B is being talked at Libor plus 450 bps to 475 bps with a 1.75% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source said.

And, the $210 million seven-year second-lien term loan is being talked at Libor plus 750 bps to 775 bps with a 1.75% Libor floor and original issue discount of 981/2. It has call protection of 103 in year one, 102 in year two and 101 in year three, the source added.

Brock lead banks

J.P. Morgan, Credit Suisse and Bank of America Merrill Lynch are the lead banks on Brock's proposed term loans.

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.

Rite Aid sets guidance

Rite Aid came to market with a $343 million tranche 5 term loan (NA/NA/BB-) in the morning that is being talked at Libor plus 325 bps with a 1.5% Libor floor and an original issue discount of 991/2. It has 101 soft call protection for six months, according to a market source.

Citigroup, Bank of America Merrill Lynch, Credit Suisse, GE Capital and Wells Fargo are the lead banks on the deal.

Proceeds will be used by the Camp Hill, Pa.-based drugstore chain to replace a tranche 3 term loan that is priced at Libor plus 300 bps with a 3% Libor floor and was sold at an original issue discount of 90 when it was done in July 2008. The loan was sized at $350 million at close but has seen been paid down.

Microsemi B loan talk

Microsemi launched a repricing of its $350 million seven-year term loan B on Thursday, although no investor call was held, and released price talk on the transaction, according to a market source.

The term loan is being talked at Libor plus 300 bps with a 1% Libor floor, a par offer price and 101 soft call protection for one year, the source said.

By comparison, when the loan was completed last year for the acquisition of Actel Corp., it was priced at Libor plus 350 bps with a 1.5% Libor floor and an original issue discount of 99.

Morgan Stanley is the lead bank on the deal for the Irvine, Calif.-based semiconductor manufacturer.

Evertec pricing

Evertec launched its proposed $354 million term loan B with a conference call on Thursday at price talk of Libor plus 375 bps to 400 bps with a 1.5% Libor floor and a par offer price, and there is 101 soft call protection for six months, according to a market source.

Bank of America Merrill Lynch and Morgan Stanley are the lead banks on the $404 million deal, which also includes a $50 million revolver and will be used to refinance an existing credit facility that was obtained in the fall of 2010 to help fund the company's buyout by Apollo Management LP's.

At close, the facility consisted of a $355 million term loan and a $50 million revolver. The term loan priced at Libor plus 525 bps with a 1.75% Libor floor, was sold at an original issue discount of 97 and has 101 soft call protection for one year.

Evertec is a Puerto Rico-based provider of transaction processing, payment processing, merchant acquiring and other related services.

TravelClick floats talk

TravelClick is whispering early talk of Libor plus 450 bps on its proposed $230 million senior secured credit facility that is set to launch with a bank meeting on Wednesday, according to a market source.

The facility consists of a $20 million revolver, a $160 million term loan and a $50 million delayed-draw term loan.

Currently, the funded and delayed-draw term loans are expected to have a 1.5% Libor floor and be offered at an original issue discount of 99, the source remarked.

BMO Capital Markets is the lead bank on the deal that will be used to refinance senior and junior debt. The delayed-draw term loan will be used to fund an acquisition.

Following completion of the financing, TravelClick, a Schaumburg, Ill.-based provider of online bookings to hotels, will have leverage or around 4.0 times all senior.

Denny's talk surfaces

Price talk on Denny's Corp.'s $240 million term loan B and $50 million revolver emerged at Libor plus 375 bps, with the term loan having a 1.5% Libor floor and 101 soft call protection for one year, as well as a par offer price, according to a market source.

Bank of America Merrill Lynch and Wells Fargo are the lead banks on the $290 million credit facility that launched with a call on Wednesday and will be used to reprice/refinance the Spartanburg, S.C.-based restaurant franchise operator's existing credit facility.

The existing facility, obtained in September 2010 to refinance debt, consisted of a $250 million term loan, which has since been paid down, and a $50 million revolver, with both tranches priced at Libor plus 475 bps with a 1.75% Libor floor. The term loan had been sold at an original issue discount of 98½ and has 101 soft call protection for one year.

Maturities and covenants will remain unchanged from the existing loan.

Allegiant launches

In more primary happenings, Allegiant Travel Co. launched its $125 million term loan (Ba3/BB-) as planned on Thursday with price talk of Libor plus 425 bps with a 1.75% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

Citadel Securities is leading the deal that was already about halfway done before the meeting took place as a result of some premarketing.

Proceeds will be used for general corporate purposes, including to fund capital expenditures.

Allegiant Travel is a Las Vegas-based all-jet passenger airline company.

Grande holds meeting

Also launching with a bank meeting on Thursday was Grande Communications' $185 million credit facility, which, as was previously reported, is being talked at Libor plus 400 bps, according to a market source.

Societe Generale and SunTrust are the lead banks on the deal that consists of a $20 million five-year revolver and a $165 million six-year term loan A and will be used to refinance existing debt and fund a dividend.

Being refinanced is the company's 2009 facility that consisted of an $18.7 million revolver and a $103.8 million term loan priced at Libor plus 675 bps with a 3% floor. It was sold at a discount of 97.

Following completion of this new deal, net leverage will be 3.5 times.

Grande Communications is a San Marcos, Texas-based provider of high-speed internet, local and long-distance telephone and digital cable services.

Solutia kicks off refi

Yet another deal to officially launch was Solutia Inc.'s previously announced $700 million term loan B due August 2017 that is being talked at Libor plus 275 bps with a 1% Libor floor and a par offer price, It has 101 soft call protection for six months, according to a market source.

Deutsche Bank is the lead bank on the deal that will be used to refinance/reprice an existing term loan B that was obtained in March 2010 to refinance existing bank debt. The initial size on the loan had been $850 million, but it has since been reduced through paydowns.

Pricing on the existing loan is Libor plus 325 bps with a step-down to Libor plus 300 bps at 2.5 times leverage and a 1.5% Libor floor, and it was sold at an original issue discount of 991/2.

Solutia is a St. Louis-based performance materials and specialty chemicals company.

Tomkins closes

Tomkins Ltd. completed its amendment, under which pricing on its $293 million term loan A and $1.677 billion term loan B was lowered to Libor plus 300 bps with a 1.25% Libor floor, according to a market source. The spread on the B loan was reverse flexed from Libor plus 325 bps during syndication.

Prior to the amendment, the term loan A was priced at Libor plus 425 bps with a 1.75% floor and the term loan B was priced at Libor plus 450 bps with a 1.75% floor.

Also as part of the amendment, the company revised its net total leverage ratio, its interest coverage ratio, its maximum capital expenditures requirement and the availability of its accordion feature.

Citigroup, Bank of America, Barclays, RBC and UBS acted as the lead banks on the deal.

Tomkins is a Denver-based engineering and manufacturing group providing products for the industrial, automotive and building products markets.

Revel wraps financing

Revel Entertainment Group LLC closed on the financing that will be used to help fund the construction of a casino and hotel in Atlantic City, N.J., according to a news release. It consists of an $850 million six-year first-lien term loan B (B3/B) and $305 million of mezzanine debt.

Pricing on the term loan is Libor plus 750 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 981/2. The tranche is non-callable for two years, then at 102, 101, par.

During the most recent syndication round, the term loan was upsized from $700 million, pricing was lowered from Libor plus 800 bps, the Libor floor was cut from 2% and call protection was changed from non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

As a result of the first-lien upsizing, a $150 million 61/2-year second-lien term loan was eliminated from the capital structure. This tranche was talked at Libor plus 1,100 bps with a 2% floor and a discount of 98. It was non-callable for one year, then at 103, 102, 101, par.

JPMorgan acted as the lead bank on the term loan for the gaming and entertainment company.

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