DTZ, Dayco break; Regal moves around; Essar tweaks deal; TransFirst, Block move deadlines

By Sara Rosenberg

New York, Oct. 28 – DTZ (DTZ U.S. Borrower LLC and DTZ Aus HoldCo Pty Ltd.) and Dayco Products LLC hit the secondary market on Tuesday, and Regal Entertainment Group’s term loan was a little lower in trading after rising during the prior session on the back of earnings news and indications that a sale of the company is being considered.

Moving to the primary, Essar Steel Algoma raised pricing on its term loan B and widened the original issue discount, and TransFirst Inc. and Block Communications Inc. accelerated the commitment deadlines on their loans.

In addition, Southeast PowerGen LLC released price talk with launch, and Tecomet Inc. came out with timing and price talk on its proposed credit facility.

DTZ frees up

DTZ’s credit facility began trading on Tuesday with the $470 million seven-year first-lien term loan (B1/B+) and $280 million delayed-draw term loan (B1/B+) quoted at 99½ bid, par offered, and the $210 million eight-year second-lien term loan (B3/B-) quoted at par bid, according to a market source.

Pricing on the first-lien term loan and delayed-draw term loans is Libor plus 450 basis points with a 1% Libor floor and they were sold at an original issue discount of 98½. There is 101 soft call protection for one year and the delayed-draw term loan has a ticking fee of the full spread after 30 days.

Pricing on the second-lien term loan is Libor plus 825 bps with a 1% Libor floor and it was issued at 98. This tranche has call protection of 102 in year one and 101 in year two.

During syndication, pricing on the first-lien term loan and delayed-draw term loan increased from talk of Libor plus 400 bps to 425 bps and the discount was revised from 99, and pricing on the second-lien term loan flexed up from talk of Libor plus 725 bps to 750 bps and the discount firmed at the high end of revised talk of 98 to 98½ and wide of initial talk of 99.

DTZ getting revolver

In addition to the first- and second-lien term loans, DTZ’s $1.11 billion credit facility includes a $150 million revolver (B1/B+).

UBS AG, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Mizuho Securities USA Inc. and HSBC Securities (USA) Inc. are leading the deal that will be used to help fund the buyout of DTZ from UGL Ltd. and the buyout of Cassidy Turley by TPG Capital, PAG Asia Capital and Ontario Teachers’ Pension Plan.

DTZ, a Chicago-based property services company, and Cassidy Turley, a commercial real estate services provider, will be combined to create a full-service commercial real estate services company.

Dayco starts trading

Dayco Products’ fungible $70 million first-lien tack-on term loan (B1/B+) due December 2019 broke as well, with levels quoted at 99¼ bid, 99¾ offered, a market source said.

The add-on is priced at Libor plus 425 bps with a 25 bps step-down at 2.5 times total net leverage, a 1% Libor floor, and was sold at an original issue discount of 99. There is 101 soft call protection for one year, and the existing first-lien term loan will get the same call protection.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to fund a dividend to unit holders.

With this transaction, existing lenders are being offered a 25 bps amendment fee.

Dayco Products is a Troy, Mich.-based manufacturer of highly engineered engine management systems.

Regal softens

Also in the secondary market, Regal Entertainment’s term loan dipped to 98¼ bid, 98½ offered from 98½ bid, 99 offered at the close on Monday, but was still up from Monday’s morning levels of 97 7/8 bid, 98 3/8 offered, according to a trader.

On Monday afternoon, the company released fiscal third quarter 2014 results showing revenues of $693.8 million, compared to revenues of $813.1 million in the prior year, net income of $26.7 million, versus $75.1 million in the third quarter of 2013, and diluted earnings per share of $0.17, compared to $0.48 in the previous year.

The company also said that its board of directors authorized the exploration of strategic alternatives to enhance shareholder value, including a potential sale of the company.

Morgan Stanley & Co. LLC Inc. has been retained to as the financial advisor to assist in the review process.

Regal is a Knoxville, Tenn.-based motion picture exhibitor.

Essar Steel flexes

Meanwhile, in the primary, Essar Steel Algoma raised pricing on its $350 million 4¾-year first-lien term loan B (Ba3/B+) to Libor plus 550 bps from talk of Libor plus 475 bps to 500 bps and moved the original issue discount to 98 from 99, according to a market source.

As before, the term loan B has a 1% Libor floor and 101 soft call protection for one year.

Deutsche Bank Securities Inc., Goldman Sachs Bank USA and Jefferies Finance LLC are leading the deal that will be used with $350 million of senior secured notes and $275 million of junior secured notes to refinance the company’s capital structure.

Essar Steel is a Sault Ste. Marie, Ont.-based manufacturer of hot and cold rolled steel products.

TransFirst revises timing

TransFirst changed the commitment deadline on its $1.05 billion credit facility to noon ET on Friday from Nov. 6, according to a market source.

The facility consists of a $50 million five-year revolver (B1/B), a $665 million seven-year covenant-light first-lien term loan (B1/B) and a $335 million eight-year covenant-light second-lien term loan (Caa2/CCC+)

The first-lien term loan is talked at Libor plus 450 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and the second-lien term loan is talked at Libor plus 800 bps with a 1% Libor floor, a discount of 99 and hard call protection of 102 in year one and 101 in year two.

Jefferies Finance LLC, Guggenheim and Nomura are leading the deal that will be used with $566 million of equity to fund the buyout of the company by Vista Equity Partners.

First-lien net leverage is 4.6 times, and total net leverage is 7 times.

Closing is expected later this year.

TransFirst is a Hauppauge, N.Y.-based provider of secure payment processing.

Block tweaks deadline

Block Communications accelerated the commitment deadline on its $225 million seven-year covenant-light term loan B (Ba1/BB+) to 2 p.m. ET on Wednesday from noon ET on Friday, according to a market source.

Talk on the loan is Libor plus 375 bps with a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

Bank of America Merrill Lynch and J.P. Morgan Securities LLC are leading the deal that will be used to fund the acquisitions of MetroCast and Line Systems Inc.

Block Communications is a Toledo, Ohio-based diversified media company.

Southeast PowerGen launches

Southeast PowerGen LLC held a bank meeting on Tuesday morning, launching its $480 million seven-year term loan B with talk of Libor plus 375 bps to 400 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, a market source remarked.

The company’s $550.5 million senior secured deal (Ba2/BB) also includes a $70.5 million five-year revolver.

Commitments are due on Nov. 11, the source said.

Morgan Stanley Senior Funding Inc., MUFG Union Bank and Citigroup Global Markets Inc. are leading the credit facility that will be used to fund the acquisition by the Carlyle Group of 75.05% of the outstanding interests and operational control of Southeast PowerGen from ArcLight Capital Partners and GIC, to repay existing debt, to fund an operating expense reserve account, to partially fund a debt service reserve and to make a distribution to GE EFS.

Southeast PowerGen is a portfolio of six natural gas-fired power plants in Georgia.

Tecomet readies meeting

Timing on Tecomet’s $770 million credit facility emerged, with a bank meeting slated to take place at 12:30 p.m. ET in New York on Wednesday and commitments scheduled to be due on Nov. 12, according to a market source.

Also, talk on the $520 million seven-year first-lien covenant-light term loan was revealed to be Libor plus 450 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and talk on the $190 million eight-year second-lien covenant-light term loan was disclosed as Libor plus 825 bps with a 1% Libor floor, a discount of 98½ and call protection of 102 in year one and 101 in year two, the source said.

Previously, filings with the Securities and Exchange Commission had outlined expected first-lien term loan pricing at Libor plus 400 bps with a 1% Libor floor and expected second-lien term loan pricing at Libor plus 750 bps with a 1% Libor floor.

Rounding out the deal is a $60 million five-year revolver.

Tecomet lead banks

Credit Suisse Securities (USA) LLC, GE Capital Markets and Goldman Sachs Bank USA are leading Tecomet’s credit facility.

Proceeds, along with equity from Genstar Capital Partners, Tecomet’s current sponsor, will be used to help fund the acquisition of Symmetry Medical Inc.’s OEM Solutions business for $450 million in cash, or $7.50 per share after fees and elimination of outstanding debt.

Concurrently, Symmetry Medical plans to spin off its surgical business to its shareholders so that Symmetry Surgical will become a newly traded public company.

Closing is expected by the end of the year, subject to receipt of regulatory approvals, registration and listing of Symmetry Surgical’s common stock and shareholder approval.

Tecomet is a Wilmington, Mass.-based contract manufacturing, engineering and metal fabrication technology company. Symmetry Medical is a Warsaw, Ind.-based provider of medical device products, including surgical instruments, orthopedic implants, and sterilization cases and trays.

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