Skilled Healthcare rises; Ocwen firms OID; Interactive, Fidelity tweak; Allscripts sets talk

By Sara Rosenberg

New York, July 8 - Skilled Healthcare Group Inc.'s term loan regained some ground during Thursday's trading session after plummeting drastically on news of a jury verdict regarding damages payments.

Over in the primary market, Ocwen Loan Servicing LLC set the original issue discount on its term loan at the wide end of talk, Interactive Data Corp. raised pricing and discount on its term loan, and Fidelity National Information Services Inc. upsized its deal and lowered pricing.

Also, Allscripts came out with price talk on its pro rata debt as the transaction was launched to banks, inVentiv Health Inc. firmed timing on its new deal, and Midcontinent Communications and Alliance Data Systems Corp. surfaced with upcoming loans as well.

Skilled Healthcare rebounds partially

Skilled Healthcare's term loan saw an improvement in levels as the market had a day to digest the news that a jury ruled that the company should pay $613 million in statutory damages and $58 million in restitutionary damages, according to a trader.

The verdict relates to a complaint filed in 2006 that claimed certain of the company's California-based facilities were understaffed and misrepresented the quality of care provided in their facilities.

On Thursday, the term loan was quoted at 90 bid, 92 offered, and at least one guy traded the paper in that context, the trader said. By comparison, on Wednesday, the loan was quoted at 82 bid, 85 offered, but the trader remarked that he didn't think it actually traded at those levels. Prior to the news, the loan was seen in the 98½ bid, 99½ offered area.

Upon announcing the verdict, the company said that it intends to vigorously pursue various post-trial motions as well as an appeal, if necessary, after the final judgment is made in the next few weeks.

Skilled Healthcare is a Foothill Ranch, Calif.-based health care services company.

Ocwen sets discount

Switching to the primary, Ocwen Loan Servicing determined that the original issue discount on its $350 million senior secured term loan (B1/B/BB-) is 98, the high end of the initial 98 to 99 guidance, according to a market source.

Pricing on the term loan is in line with the original talk of Libor plus 700 basis points with a 2% Libor floor.

As before, there is 101 soft call protection for one year.

Barclays and Deutsche Bank are the joint bookrunners on the oversubscribed deal, with Barclays the lead arranger.

Allocations are expected to go out early next week, the source added. Commitments had been due on Thursday.

Ocwen buying HomEq

Proceeds from Ocwen Loan Servicing's term loan will be used to help fund the purchase of Barclays Bank plc's HomEq Servicing, a U.S. mortgage servicing business, for $1.3 billion in cash.

As part of the purchase agreement, Barclays has agreed to provide Ocwen with seller financing in the form of a $140 million bridge loan, which is expected to be replaced by the term loan, and a $905 million servicer advance facility.

Closing on the acquisition is expected to take place in the third quarter, subject to customary conditions, including competition clearance.

Ocwen Loan Servicing is a subsidiary of Ocwen Financial Corp., a West Palm Beach, Fla.-based provider of residential and commercial loan servicing, special servicing and asset management services.

Interactive Data revises pricing

Interactive Data flexed the spread higher on its $1.3 billion term loan to Libor plus 500 bps from Libor plus 475 bps and increased the original issue discount to 97 from 98, according to a market source.

Left unchanged was the term loan's 1.75% Libor floor and 101 soft call protection for one year.

The company's $1.46 billion senior secured credit facility (Ba3/B+) also includes a $160 million revolver.

Originally, based on filings with the Securities and Exchange Commission, it was thought that the revolver would be sized at $150 million, but when official details on tranching surfaced, it was said that the revolver would be coming at the larger size of $160 million.

Bank of America, Barclays Bank, Credit Suisse and UBS Investment Bank are the lead banks on the deal.

Books on the now oversubscribed deal closed at noon ET on Thursday and allocations are hoped to go out early next week.

Interactive Data being bought out

Proceeds from Interactive Data's credit facility will be used to help fund the buyout of the company by Silver Lake and Warburg Pincus for $33.86 in cash per share. The transaction has a total value of $3.4 billion.

Other financing will come from $700 million of senior unsecured notes and up to $1.31 billion of equity.

The bond offering is backed by a commitment for a senior unsecured bridge loan.

Completion of the transaction is expected in early August, following regulatory approvals and other customary conditions.

Interactive Data is a Bedford, Mass.-based provider of financial market data.

Fidelity National reworks loan

Fidelity National Information Services increased the size of its six-year term loan B (Ba1/BBB-/BB+) to $1.5 billion from $1.4 billion, while decreasing its senior notes offering to $1.1 billion from $1.2 billion, according to a market source.

In addition, pricing on the term loan B was reduced to Libor plus 375 bps from Libor plus 400 bps, and the original issue discount firmed at 99, the low end of the initial 98½ to 99 guidance, the source said.

The 1.5% Libor floor was left unchanged.

JPMorgan and Bank of America are the lead banks on the loan that will be used, along with the notes, to help fund the company's recapitalization plan, under which it will repurchase up to $2.5 billion of its common stock in a modified Dutch auction tender offer, and refinance an existing term loan B.

Fidelity National is a Jacksonville, Fla.-based provider of financial institution core processing and card-issuer and transaction-processing services.

Allscripts reveals talk

Allscripts held a bank meeting on Thursday to launch its proposed $150 million five-year revolver and $320 million term loan A, and in connection with the event, price talk was announced, according to market sources.

The revolver and term loan A are being talked at Libor plus 325 bps, sources said. Pricing on the tranches can range from Libor plus 250 bps to 350 bps based on leverage, with the lowest point on the grid being 0.5 times leverage and the highest point being 2.5 times.

The revolver has a 50 bps unused fee.

The credit facility includes a minimum interest coverage ratio of 3.5 to 1.0, with step-ups to be agreed upon, and a maximum leverage ratio of 4.0 to 1.0, with step-downs to be agreed upon.

Allscripts plans B loan

Allscripts' $720 million credit facility (Ba2/BBB-) also includes a $250 million term loan B that will be launched at a later date. One source said that the launch is expected to take place after commitments are due on the pro rata debt, which is about two weeks away.

Originally the deal was outlined as containing one term loan sized at $570 million, but the loan was later divided into an A and a B tranche. Sizes can still be moved around based on demand, one source added.

Pro forma leverage is 2.1 times LTM EBITDA.

JPMorgan, Barclays Capital and UBS are the lead banks on the deal.

Allscripts buying back shares

Proceeds from Allscripts' credit facility will be used to fund the buyback of shares from Misys plc.

There will be a market placing of between 36 million and 40 million Allscripts shares held by Misys, and Allscripts will buy back 24.4 million of shares from Misys for an aggregate consideration of $577 million.

Allscripts will then merge with Eclipsys, an Atlanta-based provider of health care IT services, and following this merger, Misys will have an option to sell to Allscripts an additional 5.3 million of shares for $102 million.

Subject to certain conditions being met, the buyback of shares and the merger with Eclipsys are expected to be completed in September or October.

Allscripts is a Chicago-based provider of software, services, information and connectivity services to physicians and other health care providers.

inVentiv timing emerges

inVentiv Health nailed down timing on the launch of its proposed $600 million senior secured credit facility (Ba3), with the scheduling of a bank meeting for 10 a.m. ET on Tuesday at the InterContinental Hotel in New York, according to a market source.

Previously, chatter was that the deal would launch either late this week or sometime next week, with a specific date unavailable.

Tranching on the facility is comprised of a $525 million term loan and a $75 million revolver.

Citigroup and Bank of America are the joint lead arrangers and bookrunners on the deal, with Credit Suisse and Deutsche Bank bookrunners as well.

Proceeds will be used to help fund the buyout of the company by Thomas H. Lee Partners LP for $26 per share in cash. The acquisition is valued at $1.1 billion.

inVentiv plans notes

Other funds for the buyout of inVentiv are expected to come from $275 million of senior unsecured notes and up to $384 million in equity.

As a backup for the notes, the company has received a commitment for an at least $275 million senior unsecured bridge loan.

Closing on the transaction is expected to take place in the third quarter, subject to customary conditions.

inVentiv is a Somerset, N.J.-based provider of end-to-end clinical development, launch and commercialization services to the pharmaceutical and health care industries.

Midcontinent B loan coming soon

Midcontinent Communications is scheduled to hold a bank meeting on Wednesday to launch its proposed $350 million 61/2-year term loan B, according to a market source.

The source also said that the company's proposed $125 million 51/2-year revolver and $200 million 51/2-year term loan A are already fully subscribed.

Price talk on the term loan B is Libor plus 450 bps to 475 bps with a 1.75% Libor floor and an original issue discount of 981/2, the source continued. There is 101 soft call protection for one year.

As for the revolver and the term loan A, those are both being talked at Libor plus 400 bps, and, the revolver has a 50 bps unused fee.

Midcontinent lead banks

SunTrust, Wells Fargo, US Bank and RBC are the joint bookrunners on Midcontinent Communications' $675 million senior secured credit facility (B1/B+), with SunTrust the left lead.

In addition, CoBank and Bank of America have signed on to the deal as agents.

Proceeds will be used to fund a $320 million distribution to the partnership - $160 million as part of an estate settlement related to the death in 2009 of the company's founder, Larry Bentson, and $160 million to the other part in the joint venture, Comcast Corp.

In addition, proceeds will be used to refinance about $230 million of debt and for general corporate purposes.

Midcontinent Communications is a Minneapolis-based provider of cable television, local and long-distance digital telephone service and high-speed internet access.

Alliance Data readies launch

Alliance Data Systems is scheduled to launch a $200 million unsecured term loan A-2 on Friday via lead banks BMO Capital Markets and SunTrust Robinson Humphrey, according to a market source.

The term loan A-2 matures in March 2012, which matches the maturity of the company's existing bank debt, and is being talked at Libor plus 250 bps, based on senior leverage of below 1.75 times.

Pricing can step up to Libor plus 300 bps at leverage of 1.75 to 2.25 times and to Libor plus 350 bps at leverage of 2.25 times or above.

Financial covenants include a maximum total leverage ratio of 3.75 times, a maximum senior leverage ratio of 2.75 times, a minimum interest coverage ratio of 3.5 times and a delinquency ratio of 4.5%.

Proceeds will be used by the Dallas-based provider of loyalty and marketing services to refinance existing debt.

R3 wraps revised deal

In other news, R3 Treatment Inc. completed its revised $160 million senior credit facility, according to a market source.

The deal consists of a $40 million three-year revolver priced at Libor plus 575 bps, a $60 million 41/2-year term loan A priced at Libor plus 600 bps and a $60 million five-year term loan B priced at Libor plus 650 bps, the source said. All tranches include a 2% Libor floor.

Initially, the deal was going to include a $40 million four-year revolver that was talked at Libor plus 450 bps with a 2% Libor floor and a single $125 million five-year term loan that was talked at Libor plus 500 bps with a 2% Libor floor.

Then, the facility was changed to split the term loan into a $40 million 41/2-year term loan A talked at Libor plus 600 bps and an $85 million five-year term loan B talked at Libor plus 650 bps, while the revolver was left unchanged.

And then the deal was modified again to bring it to its final structure.

R3 funds acquisitions

Proceeds from R3 Treatment's credit facility, which closed on July 1, were used for acquisitions, as four companies were rolled up to create the company, an independent provider of environmentally conscious waste services for energy and industrial wastes.

UBS and Macquarie acted as the joint bookrunners and lead arrangers on the deal, with UBS the left lead, and Comerica acted as a lead arranger as well.

Financial covenants include a maximum leverage ratio and a minimum fixed-charge coverage ratio.

On a consolidated basis in 2009, R3 Treatment generated pro forma revenue of $94.9 million, EBITDA of $48.7 million and EBITDA margins of 51.3%.

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