Pinnacle at rich end of talk; Freescale massively upsized; loan funds see $728 million inflows

By Paul A. Harris

Portland, Ore., Sept. 5 - Cash loans were unchanged on the day, according to a trader, who added that the market was quiet due to the fact that many participants were out because of the Rosh Hashanah celebration, which began on Wednesday night.

The LCDX 20 index of bank loan credit default swaps was also unchanged at 102 15/16 bid, 103 7/16 offered, according to a hedge fund manager.

And cash continued to pour into bank loan funds during the week to Wednesday's close, sources said, citing information contained in a weekly report from Lipper-AMG.

Bank loan funds saw $728.3 million of inflows for the week.

Not long before the fund flow information circulated, a trader said that investors' bank loans represent the only positive asset class over the past few months in terms of total return.

"The bank loan funds had about $75 billion under management at the beginning of the year," the trader said.

"Now it is up to $115 to $120 billion, so the technicals are very strong."

"However, things seem to have quieted down a little," the source added, explaining that Wednesday's daily inflow was the smallest since June.

In the primary market, Pinnacle Foods' $525 million incremental term loan, which will have an initial Libor spread of 250 basis points, is coming together at 98, which is the rich end of the 97.5 to 98 discount talk, the trader said.

And Freescale Semiconductor Inc. grew its loan by half a billion dollars on Thursday, upsizing the deal to $800 million from $300 million.

Pinnacle coming at rich end

Pinnacle Foods' $525 million incremental loan has a 0.75% Libor floor and a 25 bps spread step-down, which would take it to Libor plus 225 bps if total net leverage falls below 4.25 times, a market source said.

The deadline for orders is Sept. 12.

Bank of America Merrill Lynch, Barclays, UBS Securities LLC, Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc. and Macquarie Capital are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of the Wish-Bone salad dressings business from Unilever plc.

Other funds for the $580 million acquisition will come from cash on hand.

Closing is expected late in the third quarter or early in the fourth quarter.

Freescale upsizes

Having closed the books on its senior secured term loan B-5 due Jan. 15, 2021 a day early, Freescale Semiconductor grew the loan by $500 million, upsizing the deal to $800 million, market sources said.

The deal is expected to allocate on Friday.

Deutsche Bank Securities Inc., Barclays and Citigroup Global Markets Inc. are the bookrunners on the deal.

Pricing is unchanged at Libor plus 375 basis points with a 1.25% Libor floor and an original issue discount of 99, a buyside source said.

Included in the B-5 loan is 101 soft call protection for one year.

Proceeds will be used to redeem the company's 10 1/8% senior secured notes due 2018 and a portion of its 9¼% senior secured notes due 2018.

Fieldwoods' $2.625 billion

A bank meeting is scheduled to take place on Monday for Fieldwood Energy LLC's $2.625 billion credit facility, according to a market source.

The deal includes a $900 million seven-year first-lien term loan via left lead arranger Citigroup Global Markets and $1.725 billion eight-year second-lien term loan via left lead arranger J.P. Morgan Securities LLC.

Deutsche Bank, Bank of America and Goldman Sachs are joint lead arrangers.

Proceeds will be used to help fund the acquisition of Apache Corp.'s Gulf of Mexico shelf business by Fieldwood, a portfolio company of Riverstone Holdings LLC, for $3.75 billion.

Alliant gets $900 million

Alliant Techsystems Inc. has received commitments for $900 million of secured loans from BofA Merrill Lynch, a market source said on Thursday.

The loans are part of the financing for Alliant's acquisition of Bushnell Holdings Inc. for about $1 billion.

The acquisition is expected to close during the second half of 2014.

Envision sets talk

Envision Pharmaceutical Holdings Inc. (Envision Acquisition Co. LLC) set price talk for $580 million of term loans, a market source said on Thursday.

A $405 million seven-year first-lien term loan (B2/B) is talked at Libor plus 400 to 425 basis points with a 1% Libor floor at 99. The first-lien tranche has a 101 six-month soft call.

A $175 million eight-year second-lien term loan (Caa2/CCC+) is talked at Libor plus 800 to 825 bps with a 1% Libor floor at 98.5. The second-lien tranche has hard calls at 102 in the first year, and 101 in the second.

The $645 million credit facility also has a $65 million five-year revolver.

The deadline is Sept. 18.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Credit Suisse Securities (USA) LLC are the lead banks on the financing.

Proceeds will be used to help fund the buyout of the company by TPG.

Closing is expected in the fourth quarter, subject to customary conditions and regulatory clearances.

As part of the transaction, management and other senior executives will take a significant minority stake in the company.

Nine Entertainment talk

Nine Entertainment Group Pty Ltd. talked its U.S. dollar-equivalent A$200 million pari passu first-lien term loan B due Feb. 5, 2020 at a 325 basis points spread to Libor at 99.5. It has a 0.75% Libor floor.

The deal, which is being managed by lead left bookrunner UBS Securities LLC, features a 101 soft call for six months.

Commitments are due on Sept. 13.

Proceeds will be used to fund the acquisition of WIN Perth.

Nine Entertainment is an Australian diversified media and entertainment group.

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