EquiPower frees up; Wolverine Worldwide shifts funds, modifies talk; Endurance launches

By Sara Rosenberg

New York, June 20 - EquiPower Resources Holdings' credit facility made its way into the secondary market on Wednesday, with the first- and second-lien term loans both seen trading above their original issue discounts.

Moving to the primary, Wolverine Worldwide Inc. revised its credit facility structure, opting for more term loan A borrowings and less term loan B debt, and price talk on the institutional loan was updated while a ticking fee was also added.

Furthermore, Endurance International Group (EIG Investors Corp.) launched its term loans to investors in the morning at previously outlined talk, and lenders are being given close to three weeks to commit to the deal because of the July 4 holiday, and Intelligrated released timing and structure on its upcoming deal.

EquiPower breaks

EquiPower Resources' credit facility hit the secondary market on Wednesday, with the $685 million first-lien term loan (Ba3/BB) quoted at 99½ bid, par ½ offered, and the $200 million second-lien term loan (B2/BB) quoted at 99 bid, par offered, according to a market source.

Pricing on the first-lien term loan is Libor plus 500 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 981/2. There is 101 soft call protection for one year.

The second-lien loan is priced at Libor plus 850 bps with 1.5% Libor floor and was sold at a discount of 98. Included in the tranche is hard call protection of 103 in year one, 102 in year two and 101 in year three.

EquiPower getting revolver

EquiPower's $985 million credit facility also provides for a $100 million revolver (Ba3/BB) that is priced at Libor plus 500 bps with no floor.

Through the syndication process, the revolver was upsized from $90 million, pricing on the revolver and first-lien term loan firmed at the wide end of the Libor plus 475 bps to 500 bps talk and pricing on the second-lien term loan came at the tight end of the Libor plus 850 bps to 875 bps guidance.

Barclays Capital Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. and Morgan Stanley Senior Funding Inc. are leading the deal that is being used to refinance existing debt, pay deferred costs associated with hedge restructuring, fund a debt service reserve and pay a small dividend.

EquiPower is a Hartford, Conn.-based competitive power generation company that is owned by Energy Capital Partners LLC.

Wolverine restructures

Switching to the primary, Wolverine Worldwide revised sizes on its term loan A and term loan B, widened the price talk range on the B loan and added a ticking fee, a market source said, remarking that recommitments are due at 3 p.m. ET on Thursday.

The five-year term loan A is now sized at $550 million, up from $400 million, the source said. This tranche, as well as a $200 million five-year revolver, is talked at Libor plus 225 bps.

Meanwhile, the company's seven-year term loan B is now $350 million, down from $500 million, the source continued. Price talk is Libor plus 375 bps to 400 bps, compared to initial talk of just Libor plus 375 bps. There is still a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

With the size and spread changes, the term loan B saw the addition of a ticking fee of 50% of the drawn spread starting on July 16, stepping up to 100% of the drawn spread plus the Libor floor on Oct. 16.

Wolverine funding acquisition

Proceeds from Wolverine Worldwide's $1.1 billion senior secured credit facility (Ba2/BB), which is being led by J.P. Morgan Securities LLC and Wells Fargo Securities LLC, will help fund the $1.23 billion acquisition of Collective Brands Inc.'s Performance + Lifestyle Group.

In addition to the credit facility, the company expects to issue $375 million of senior unsecured notes that are backed by a commitment for a $375 million senior unsecured bridge loan.

Closing is expected late in the third quarter or early in the fourth quarter, subject to customary conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and Collective Brands' shareholder approval.

Wolverine Worldwide is a Rockford, Mich.-based marketer of branded casual, active lifestyle, work, outdoor sport and uniform footwear and apparel. Collective Brands is a Topeka, Kan.-based footwear and related accessories company.

Endurance sets deadline

Endurance International Group held a conference call at 10:30 a.m. ET on Wednesday to launch $225 million in first-and second-lien term loans, and lenders are being told that they have until July 10 to place their orders, according to a market source.

The just shy of three weeks commitment deadline is because the week in which the July 4 holiday falls out is expected to be "dead", the source explained.

As was previously reported, the new debt is comprised of a $100 million incremental first-lien term loan due April 2018 that is talked at Libor plus 625 bps and a $125 million second-lien term loan due October 2018 that is talked at Libor plus 950 bps. Both tranches have a 1.5% Libor floor and an original issue discount of 98.

Endurance call protection

Endurance's first-lien term loan has 101 soft call protection to April 2013, which matches that of the existing $535 million first-lien term loan done in April at pricing of Libor plus 625 bps with a 1.5% floor and a discount of 99. Call protection on the second-lien loan is 103 in year one, 102 in year two and 101 in year three.

Proceeds from the new term loans will be used to fund the purchase of HostGator, a Houston-based provider of web hosting service that has more than 400,000 shared, reseller, vps and customers and hosts more than 5 million websites on over 12,000 Intel-powered servers running Linux CentOS.

Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc. and Goldman Sachs & Co. are the lead banks on the new financing.

Endurance is a Burlington, Mass.-based provider of web hosting and online services to small- and medium-sized businesses.

Intelligrated readies deal

Intelligrated disclosed that it will be launching its proposed credit facility with a bank meeting at 9:30 a.m. ET on Tuesday, and that the deal will be comprised of a $35 million revolver, a $215 million covenant-light first-lien term loan and a $90 million covenant-light second-lien term loan, a source said.

RBC Capital Markets LLC and Morgan Stanley Senior Funding Inc. are the lead banks on the $340 million facility, with RBC left lead on the first-lien and Morgan Stanley left lead on the second-lien.

Proceeds will be used to help fund the company's purchase by Permira from Gryphon Investors in a transaction that is expected to close in the third quarter, subject to regulatory approvals and customary conditions. The deal is valued at more than $500 million.

Net first-lien leverage is 3.4 times and net total leverage is 4.8 times, the source added.

Intelligrated is a Mason, Ohio-based provider of automated material handling services and products.

Quest revises buyout

Quest Software Inc. amended its acquisition agreement with Insight Venture Partners, adding Vector Capital as a member of the buyout group and increasing the purchase price to $25.75 per share in cash from $23 per share, a news release said.

In addition, the termination fee payable by Quest if a proposal from another party is accepted was lifted to $25 million from $6.3 million and the maximum amount of expense reimbursement payable by the company under certain circumstances was raised to $12 million from $7 million.

The higher price was a result of the receipt, through the go-shop period, of a proposal from a different buyer for $25.50 per share. This is no longer being considered a superior offer because of the amendment to the Insight deal.

The company expects that its revised buyout agreement will be funded with about $1.2 billion of debt , $187 million in equity from Insight, $187 million in equity from Vector and a rollover of at least 84% of existing shares from Vinny Smith, chairman and chief executive officer.

Quest lead banks

J.P. Morgan Securities LLC, RBC Capital Markets LLC and Barclays Capital Inc. are leading Quest Software's new debt.

Under the original agreement, the company was also planning roughly $1.2 billion of debt through the same leads, with the structure outlined as a $75 million senior secured revolver an $820 million senior secured term loan and $300 million of senior unsecured notes.

Pricing on the $895 million credit facility has been described in regulatory filings as Libor plus 475 bps, and the notes are backed by a commitment for a $300 million senior unsecured bridge loan that is priced at Libor plus 925 bps with a 1.25% Libor floor.

Equity for the original transaction was expected to total $210 million.

Quest Software is an Aliso Viejo, Calif.-based provider of IT management services.

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