Exco sets second-lien price talk; Radnet frees to trade; Dura second-lien levels widen

By Sara Rosenberg

New York, Sept. 11 - Exco Resources Inc. came out with official price talk on its second-lien term loan as the deal was launched to retail investors with a Monday morning bank meeting.

In secondary happenings, Radnet Inc.'s credit facility freed for trading, with both the first- and the second-lien term loan quoted in the lower-par context, and Dura Automotive Systems Inc.'s second-lien term loan levels widened out on little trading.

Exco announced opening price talk of Libor plus 450 basis points on its proposed $750 million five-year second-lien term loan as the debt was launched into general syndication with a bank meeting that took place in New York on Monday morning, according to a market source.

Previously, a company spokesman had told Prospect News that the second-lien loan was being talked around the Libor plus 400 basis points area, but official price talk had been unavailable.

The retail syndication bank meeting was originally anticipated to take place on Sept. 6 but with the Labor Day holiday and people being out on vacation, the meeting ended up getting pushed off by a couple of days.

The company did start presenting the second-lien term loan to some potential investors around mid-August. Those presentations, however, were one-on-one's that were taking place with a select group of lenders.

Exco's $1.5 billion senior secured credit facility also includes a $750 million four-year revolver with pricing ranging from Libor plus 100 to 175 basis points based on utilization. Initial pricing on the revolver will be Libor plus 175 basis points, the source added.

The revolver was already launched to senior managing agents in late July.

JPMorgan and Credit Suisse are leading the second-lien term loan, with JPMorgan the left lead. JPMorgan is the lead bank on the revolver.

The credit facility is being borrowed by a wholly owned unrestricted subsidiary of Exco to fund the acquisition of Winchester Energy Co. Ltd. from Progress Energy, Inc. for $1.2 billion in cash, subject to purchase price adjustments. The debt will be non-recourse to Exco Resources Inc.

Credit statistics for the transaction include first-lien net debt to EBITDA of 2.5x and net debt to EBITDA of 5.4x.

Exco's existing amended and restated revolving credit facility will remain in place following this transaction.

The acquisition is expected to close on Oct. 2, subject to customary conditions to closing and governmental clearance.

Exco is Dallas-based independent energy company.

Radnet breaks

Meanwhile, in trading news, Radnet's credit facility hit the secondary, with both the $225 million six-year first-lien term loan B (B2/B) and the $135 million seven-year second-lien term loan (Caa1/CCC+) quoted at par bid, par ½ offered, according to a market source.

The first-lien term loan B is priced with an interest rate of Libor plus 350 basis points, and the second-lien term loan is priced with an interest rate of Libor plus 750 basis points.

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

Radnet's $405 million credit facility also contains a $45 million revolver (B2/B) that is priced with an interest rate of Libor plus 350 basis points.

General Electric Capital Corp. is the lead bank on the deal.

Proceeds will be used to fund Primedex Health Systems Inc.'s acquisition of Radiologix, Inc. in a cash and stock transaction valued at about $208 million, including net debt, and to refinance existing debt at both companies.

Under the agreement, Radiologix shareholders will receive a total of 22,621,922 shares of Primedex common stock and $42.95 million in cash.

In conjunction with the transaction, Primedex is changing its corporate name, subject to shareholder approval, to Radnet.

Primedex is a Los Angeles-based operator of outpatient diagnostic imaging facilities. Radiologix is a Dallas-based provider of imaging services.

Dura second lien widens out

Dura's second-lien term loan saw bid/offer levels diverge during Monday's market hours basically due to a lack of activity in the name and in the overall loan market, according to a trader.

The second-lien paper closed the day quoted at 97½ bid, 98½ offered, compared with Friday's closing levels of 98¼ bid, 98¾ offered, the trader said.

"It was very quiet today. I think a lot of people were out of the office for 9/11 memorials," the trader remarked.

Recently, Dura's second-lien loan has bounced around on investor uncertainty over the perfection of the lien.

Last Thursday, the loan had fallen by about a point and a half to the 98 context due to nervousness over this lien issue and then levels rebounded slightly on Friday as the apprehension eased.

Dura Automotive is a Rochester Hills, Mich.-based designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the automotive industry.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.