Cunningham Lindsey loan breaks, gains; Penn National scraps discount; loans see big inflows

By Paul A. Harris

Portland, Ore., Oct. 18 - The LCDX 19 bank loan index was unchanged on Thursday, ending at 101¼ bid, 101½ offered, according to a market source.

The bank loan saw massive cash inflows for the week to Thursday, according to a market source, who said that Lipper-AMG is reporting $456.9 million of inflows for the week.

Meanwhile, the onslaught of repricings is creating a kind of uniformity in the secondary market with respect to recent deals.

"Ask me what's up," a trader insisted during a Thursday, call.

But before the question could be put, the source answered it.

"Everything is up," the source said, adding that new deals are trading to 101, which tends to be the one-year soft call price, whereupon investors sit and wait for news of repricing, confident that when the repricing news breaks they will be taken out of their paper at 101.

"Wolverine was repriced before it could even close, and was then taken out at 101," the trader exclaimed, referring to the Wolverine Worldwide, Inc. $350 million seven-year term loan B which was repriced at 300 basis points, down from 375 bps.

Elsewhere in the secondary, among distressed names Hawker Beechcraft's bank debt dropped to 58 from 65 on the news that the company won't be selling itself.

In the primary market Cunningham Lindsey Group Ltd. priced its upsized $410 million seven-year first-lien covenant-light term loan B (Ba3/B) at 99.

And Penn National Gaming Inc. eliminated the original issue discount on its $600 million term loan B, relaunching the deal at par

Cunningham Lindsey gains

Cunningham Lindsey priced its upsized $410 million seven-year first-lien covenant-light term loan B (Ba3/B) at 99 on Thursday.

The deal, which was upsized from $395 million, broke to par bid, par ½ offered, the source added.

The spread came on top of spread talk, which had been tightened from earlier talk of 400 bps to 425 bps. There is a 1.25% Libor floor and 101 soft call protection for one year.

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., RBC Capital Markets and UBS Securities LLC are the lead banks.

The company is also in the market with a 71/2-year covenant-light second-lien term loan (B3/B-), which it downsized to $110 million from $125 million.

Pricing on the second-lien term loan is Libor plus 800 bps, tightened from earlier talk of Libor plus 800 bps to 825 bps. There is a 1.25% Libor floor.

The original issue discount on the second-lien term loan tightened to 99 from previous guidance of 98 to 981/2. Hard call protection of 103 in year one, 102 in year two and 101 in year three on the second-lien loan.

The company's $660 million credit facility also includes a $140 million five-year revolver (Ba3/B).

Proceeds will be used to help fund the company's buyout by an investment group led by CVC Capital Partners from Stone Point Capital.

Cunningham Lindsey is a Tampa, Fla.-based provider of independent loss adjusting and claims management services.

Penn National drops discount

Penn National Gaming eliminated the original issue discount on its $600 million term loan B, relaunching the deal at par. Previous price talk was 99.75 to par.

As previously reported, price talk on the term loan B is Libor plus 275 bps with a 1% Libor floor.

The company is also getting a $400 million term loan A that is talked at Libor plus 175 bps.

Bank of America Merrill Lynch, Wells Fargo Securities LLC, Commerzbank, Fifth Third Securities Inc., RBS Securities Inc. and UBS Securities LLC are the lead banks on the deal.

Proceeds will be used to fund the roughly $610 million acquisition of Harrah's St. Louis gaming and lodging facility from Caesars Entertainment and to repay revolver debt.

Closing is expected this year, subject to customary conditions and regulatory approvals.

Penn National is a Wyomissing, Pa.-based owner and operator of gaming and racing facilities with a focus on slot machine entertainment.

Spectrum sets Monday call

A lender call is set for Monday to discuss Spectrum Brands Holdings, Inc.'s term loan, which could be sized at up to $800 million.

The deal, backing the acquisition of Stanley Black & Decker, Inc., is being led by Deutsche Bank Securities Inc.

As reported, debt financing also includes a $1.04 billion senior unsecured bridge loan that will be either partially or totally taken out with senior unsecured notes.

Deutsche Bank and Barclays are leading the bridge, which was announced on Oct. 8.

The acquisition is expected to close in the first quarter of 2013.

Spectrum is also acquiring some assets of Tong Lung Metal Industry Co. Ltd., a Taiwanese manufacturer of residential and commercial locksets with facilities in Taiwan and the Philippines. That closing is slated to occur in the second quarter of fiscal 2013.

Spectrum Brands is a Madison, Wis.-based consumer products company.

Hyland moves up timing

Hyland Software Inc. moved up timing for its upsized $360 million seven-year first-lien term loan.

Commitments are due on Friday. Previously the commitment deadline had been set for Monday.

As reported, the deal was upsized to $360 million from $320 million, along with the elimination of a $235 million 71/2-year second-lien term loan, according to a market source.

Pricing on the first-lien term loan is Libor plus 450 bps, down from talk of Libor plus 475 bps to 500 bps, the source said.

The 1.25% Libor floor, 101 soft call protection for one year and original issue discount of 99 on new money was left unchanged. Rollover commitments are being offered the debt at par.

The second-lien term loan that was eliminated had been talked at Libor plus 875 bps to 900 bps with a 1.25% Libor floor and a discount of 981/2.

Call protection on the second-lien loan had been 103 in year one, 102 in year two and 101 in year three.

The company's now $380 million credit facility, down from $575 million, still includes a $20 million five-year revolver.

Credit Suisse Securities (USA) LLC and Jefferies & Co. are the lead banks on the deal.

Proceeds will be used to fund a dividend and refinance existing debt.

Plans were eliminated for a permitted change-of-control definition (pre-capitalization) that would allow the capital structure to stay in place if the company were to be sold and the buyer met certain leverage and equity criteria.

Renaissance Learning eyed

Renaissance Learning Inc. set pricing on its $230 million six-year term loan B.

The deal is talked at a 450 bps to 475 bps spread to Libor, with a 1.25% Libor floor, at 99, with a 101 one-year soft call.

Commitments are due on Wednesday.

RBC Capital Markets LLC and BMO Capital Markets Corp. are the lead banks on the deal.

The $250 million credit facility also has a $20 million revolver.

Proceeds will be used to refinance existing debt.

With this transaction, the company's existing first-lien term loan will be repaid at par and its existing second-lien term loan will be repaid at 103.

Renaissance Learning is a Wisconsin Rapids, Wis.-based provider of technology-based school improvement and student assessment programs for K-12 schools.

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