Spectrum Brands, Continental Building upsize, tighten talk; Allison, Cincinnati Bell launch deals

By Paul A. Harris

Portland, Ore., Aug. 12 - The primary market saw a steady news flow throughout the session, as Spectrum Brands Inc. upsized its first-lien covenant-light term loans to $1.15 billion from $1.1 billion and cut pricing.

Continental Building Products LLC upsized its credit facility to $490 million from $450 million and also cut the price talk.

There were also deal announcements.

Allison Transmission, Inc. is in the loan market with a $1.139 billion senior secured term loan B-3 due Aug. 23, 2019 (expected Ba3/BB-) via Citigroup.

And Cincinnati Bell Inc. kicked off a new $400 million seven-year term loan B (Ba3) at a Monday bank meeting, via BofAmerica Merrill Lynch, Barclays, Deutsche Bank and Morgan Stanley.

The LCDX bank loan index finished the Monday session unchanged at 103 3/8 bid, 103 7/8 offered, according to a market source.

Spectrum tightens talk

Spectrum Brands upsized its term loans (Ba3/BB/BB-) to $1.15 billion.An upsized $850 million four-year term loan is talked at a 225 basis points spread to Libor, down from 250 bps.

The tranche is upsized from $700 million.

The discount is decreased by 50 cents, with the reoffer price now set at 99.5 versus previous OID talk of 99.

Meanwhile, a downsized $300 million six-year term loan has revised spread talk of 275 bps, down from 300 bps.

The tranche is downsized from $400 million.

The OID is reduced to 50 cents from the previously contemplate discount of one dollar.

The Libor floors of both tranches are cut to 0.75% from 1%.

On both tranches, the 101 soft call protection is reduced to six months. Earlier, the deal was talked with a year of soft call protection.

Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the lead banks on the deal.

Proceeds will be used to fund a tender offer for the company's $950 million of 9½% senior secured notes due 2018.

Continental Building upsizes

The price talk on Continental Building Products' upsized $320 million seven-year first-lien covenant-light term loan (B1/B+) was cut to Libor plus 350 basis points from 400 bps. The tranche, which was upsized from $300 million, is now talked at 99.5, a 50-cent decrease in the previously contemplate offering price of 99.

There is a 1% Libor floor and 101 soft call protection.

Meanwhile, an upsized $120 million 71/2-year second-lien covenant-light term loan (Caa1/CCC+) is talked at a 750 bps Libor spread, down from earlier 800 bps spread talk. The second lien, which is upsized from $100 million, is now being offered at 99, a dollar higher than the previous offer price of 98.

Also, the term loans have a 50 bps step-down with an initial public offering and B1/B+ ratings or less than 4 times total leverage.

The credit facility also includes a $50 million five-year revolver (B1).

Credit Suisse Securities (USA) LLC and RBC Capital Markets are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by Lone Star Funds from Lafarge for about $700 million. Additional proceeds will be used to reduce the equity portion of the deal to 36% in total.

Huntsman brings add-on

Huntsman International LLC plans to price a $100 million add-on to its extended term loan B (Ba1/BB+) at a 250 basis points spread to Libor, with a 99.5 OID.

Commitments from existing lenders are due by 5 p.m. ET on Tuesday.

The deal comes with no Libor floor and has a 1% annual amortization, the same as the existing loan.

Covenants are the same as those of the existing senior secured credit facilities.

Citigroup Global Markets is the lead arranger.

The Salt Lake City-based manufacturer of differentiated organic and inorganic chemical products plans to use the proceeds for general corporate purposes.

Alcatel-Lucent sets terms

Alcatel-Lucent USA Inc. priced a $1,741,250,000 Libor plus 475 basis points term loan C due Jan. 30, 2019 (B1/B+) at par.

The deal came on top of spread talk that was reduced from previous talk of Libor plus 500 bps.

The term loan C has a 1% Libor floor and 101 soft call protection for six months.

The facility also has a euro-denominated tranche, a €298.5 million Euribor plus 525 bps term loan D due Jan. 30, 2019 (B1/B+), which also priced at par.

The euro loan, which came on top of spread talk, has a 1% floor and soft call protection for six months.

Proceeds will be used to reprice the existing term loan C from Libor plus 625 bps with a 1% Libor floor and the existing term loan D from Euribor plus 650 bps with a 1% Euribor floor.

The deal is expected to close on Friday.

Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the lead banks on the deal.

Hubbard prices add-on

Hubbard Radio LLC priced its $63.5 million add-on Libor plus 350 basis points delayed-draw term loan B due April 29, 2019 (B1/B+) at 99.50.

The spread came on top of spread talk, but the discount was trimmed to half a point from earlier talk, which had the deal pricing at 99.

The loan has a 1% Libor floor and a ticking fee of half the spread for the first 30 days and the full spread thereafter.

The delayed-draw period is for eight months from close and the debt is available in two separate borrowings, subject to maximum pro forma first-lien leverage of 4.75 times.

Morgan Stanley Senior Funding Inc. is the lead bank on the debt that launched with a call on Wednesday.

Proceeds will be used to help fund the acquisition of 10 radio stations from Sandusky Radio for about $85.5 million.

Closing is expected upon Federal Communications Commission approval and other customary conditions.

Allison brings $1.139 billion

Allison Transmission is in the loan market with a $1.139 billion senior secured term loan B-3 due Aug. 23, 2019 (expected Ba3/BB-) via Citigroup.

The deal is talked with 275 basis points spread to Libor at par with a Libor floor talked at 0.75% to 1%. It will feature a 101 six-month soft call.

The loan comes with the same guarantors and security as the existing B-3 loan, and prepayments and covenants are also the same as those of the existing B-3 loan.

The agreement is being modified to so that the change of control has a traditional public company change of control definition, and will include a ratings decline trigger that is consistent with that of the company's existing 7 1/8% senior notes due 2019.

Also the financial reporting covenant will be amended to limit the financial reporting requirement to Allison Transmission Holdings, Inc., the public parent company.

Commitments from existing lenders are due on Aug. 15, and from new lenders on Aug. 19.

Cincinnati Bell kicks off loan

Cincinnati Bell kicked off a new $400 million seven-year term loan B (Ba3) at a Monday bank meeting.

Bank of America Merrill Lynch, Barclays, Deutsche Bank and Morgan Stanley are leading the deal.

Proceeds from the term loan will be used to repay a portion of the company's 8¼% senior notes due 2017 and for general corporate purposes.

© 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.