Select Medical, Dunkin' break; FairPoint still under pressure; Xerium revises deal

By Sara Rosenberg

New York, May 18 - Select Medical Corp. and Dunkin' Brands Group Inc. freed for trading during Tuesday's market hours, and FairPoint Communications Inc.'s term loan had another volatile session on the back of the company's recent earnings news.

Over in the primary, Xerium Technologies Inc. set pricing on its U.S. term loan at the low end of talk and flexed down the spread on its euro term loan, while adding step-downs to both tranches and trimming the Libor floor.

Also, Barbri revealed details on tranching and talk, and U.S. Silica came out with pricing guidance on its term loan, as both deals were launched to investors.

Additionally, EIG Global Energy Partners may decide to forego holding an official bank meeting for its proposed term loan as initial talks with a small group of investors have been going really well, and Endo Pharmaceuticals nailed down timing on its term loan B launch.

Furthermore, Chrysler Group LLC's term loan has seen a strong amount of interest since changes were recently made, and Alliance Data Systems Corp.'s has seen good demand as well.

Select Medical tops OID

Select Medical's credit facility hit the secondary market on Wednesday, with the $850 million seven-year term loan B quoted at 99¼ bid, 99½ offered, according to a trader.

Pricing on the B loan is Libor plus 375 basis points with a 1.75% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for two years.

During syndication, the term loan B was downsized from $1.2 billion, the Libor floor was increased from 1.5% and the soft call protection was extended from one year.

The company's $1.15 billion credit facility (Ba3/BB-) also includes a $300 million revolver that priced in line with talk at Libor plus 375 bps with no Libor floor and a 50 bps unused fee.

Select Medical lead banks

J.P. Morgan Securities LLC, Goldman Sachs & Co., Bank of America Merrill Lynch, Morgan Stanley & Co. Inc., Wells Fargo Securities LLC and RBC Capital Markets are the lead banks on Select Medical's credit facility.

Proceeds will be used to refinance debt, including senior subordinated notes due 2015.

As a result of the reduction in the term loan B size, $345 million of the company's $61l.5 million of senior subordinated notes will be left outstanding.

Select Medical is a Mechanicsburg, Pa.-based operator of specialty hospitals and outpatient rehabilitation clinics.

Dunkin' trades above par

Another deal to break for trading was Dunkin' Brands' $100 million term loan add-on, with levels quoted at par 1/8 bid, par 3/8 offered, according to a market source.

The add-on is priced in line with existing term loan pricing at Libor plus 300 bps with a 1.25% Libor floor, and was sold at par.

Barclays Capital Inc. is the left lead on the deal that will be used, along with proceeds from a proposed initial public offering of common stock, to repay all of the company's $475 million of 9 5/8% senior notes due Dec. 1, 2018 and for working capital and general corporate purposes.

Canton, Mass.-based Dunkin' Brands is the parent company of Dunkin' Donuts, a coffee and baked goods restaurant chain, and Baskin-Robbins, an ice cream specialty store chain.

FairPoint slide continues

FairPoint Communications' term loan was softer in trading as investors were still reacting to the company's disappointing first-quarter earnings and disclosure that it will likely miss its full-year revenue guidance, according to traders.

One trader had the term loan quoted at 89 bid, 89½ offered, versus 89¾ bid, 90¼ offered on Tuesday, and he saw levels get as low as 88¼ bid, 89 offered early on in the day.

A second trader, meanwhile, had the loan quoted at 89 3/8 bid, 89 7/8 offered, down from 90 bid, 91 offered.

And, a third trader was quoting the loan at 89 bid, 90 offered, down from 89¼ bid, 90¼ offered.

By comparison, before the earnings news hit, the term loan was quoted at 95¼ bid, 95¾ offered.

FairPoint earnings details

As was previously reported, on Tuesday, FairPoint reported numbers, including first-quarter net income of $562.5 million, or $6.56 per diluted share, compared to a net loss of $86.3 million, or $0.97 per diluted share, in the prior year, revenue of $254.8 million, compared to $270.8 million, and consolidated EBITDAR of $49.1 million, versus $60.8 million.

The company also said that it will probably not achieve its full-year 2011 revenue guidance of $1.06 billion to $1.09 billion and that it might meet the low end of its full-year consolidated EBITDAR guidance of $260 million to $280 million.

FairPoint is a Charlotte, N.C.-based communications provider of high-speed internet access, local and long-distance phone, television and other broadband services.

Caesars holds steady

Caesars Entertainment Operating Co. Inc.'s term loan debt held firm on Wednesday after the company disclosed just how much of its borrowings were being extended, according to a trader.

The extended term loan was quoted at 92¾ bid, 93½ offered, and the non-extended term loan was quoted at 93¾ bid, 94 offered, with both unchanged on the day, the trader said.

In an 8-K filed with the Securities and Exchange Commission on Wednesday, Caesars said that it is extending about $800 million of its B-1, B-2 and B-3 term loans to Jan. 28, 2018 from Jan. 20, 2015, and converting about $425 million of its revolver commitments into the extended term loan.

As of Dec. 31, the had about $5.8 billion of outstanding term loan B-1, B-2 and B-3 debt, and the revolver had an aggregate principal amount of up to $1.63 billion.

Pricing on the Las Vegas-based casino entertainment company's extended term loan is Libor plus 425 bps, versus non-extended pricing of Libor plus 300 bps.

Xerium updates pricing

Moving to the primary, Xerium set pricing on its $120 million term loan at Libor plus 425 bps, the tight end of the Libor plus 425 bps to 450 bps talk, and on its €87 million term loan at Euribor plus 425 bps, down from talk of Euribor plus 450 bps to 475 bps, according to a market source.

Also, pricing step-downs were added to the two term loans to Libor/Euribor plus 400 bps after one year from closing, when secured leverage is less than 1.75 times, the source said.

And, the Libor floor on the tranches was reduced to 1.25% from 1.5%, while the original issue discount of 99½ and 101 soft call protection for one year were left unchanged.

Recommitments are due at noon ET on Thursday.

Xerium getting revolver

Xerium's approximately $285 million senior secured credit facility (Ba2/BB-) also provides for a $40 million revolver.

Citigroup Global Markets Inc. and Jefferies & Co. are the lead banks on the deal that will be used, along with $240 million of senior unsecured notes, to refinance existing bank debt.

Closing on the refinancing is expected to occur later this month.

Xerium is a Raleigh, N.C.-based manufacturer of industrial textiles and rolls used primarily in the paper production process.

Barbri structure, talk emerge

Barbri held a bank meeting on Wednesday to kick off syndication on its proposed credit facility, and in connection with the event, structure and price talk was announced, according to a market source.

The $270 million credit facility consists of a $30 million revolver and a $240 million term loan, with both tranche talked at Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 99, the source said.

GE Capital Markets is the lead bank on the deal that will be used for buyout financing.

Barbri is a provider of bar review courses and law student support.

U.S. Silica reveals guidance

U.S. Silica launched its $260 million six-year term loan with a call on Wednesday afternoon, at which time lenders were told that the debt is being talked at Libor plus 375 bps with a 1% Libor floor, according to a market source. The new money is being offered at an original issue discount of 99½ and the old money is being offered at a discount of 993/4.

The loan is structured as an amendment and add-on, with proceeds from the add-on being used to take out existing mezzanine debt and fund a distribution to the holding company.

The amendment is to allow for the upsizing, extend the existing term loan maturity and reduce pricing from Libor plus 400 bps with a 1.75% Libor floor. The existing five-year term loan was sized at $165 million when it was obtained in May 2010 for a dividend recapitalization, and it was sold at an original issue discount of 991/2.

BNP Paribas Securities Corp. is the lead bank on the deal for the Berkeley Springs, W.Va.-based producer of ground and unground silica sand, kaolin clay, aplite and related industrial minerals.

EIG may be clubbed up

In other news, EIG Global Energy Partners was thinking about holding a bank meeting this week for its $100 million secured term loan facility due in 2016, but "initial one-on-one discussions with anchor investors are going well enough that a bank meeting may not be necessary," an informed source told Prospect News.

Goldman Sachs is the lead arranger and sole bookrunner on the deal.

Proceeds will be used primarily to invest in funds managed by the company and to continue to expand its global platform.

EIG is a Washington, D.C.-based institutional investor to the energy sector.

Endo sets B loan launch

Endo Pharmaceuticals disclosed timing on its $900 million seven-year term loan B, with the scheduling of a 3 p.m. ET bank meeting at the W New York on Monday, according to a market source.

Official talk on the B loan is not yet available, however, filings with the SEC said that the tranche would be priced at Libor plus 325 bps with a step-down to Libor plus 300 bps at 3.75 times leverage. There is expected to be a 1% floor and 101 soft call protection for six months.

The company's $2.9 billion senior secured credit facility, led by Morgan Stanley and Bank of America Merrill Lynch, also includes a $500 million five-year revolver and a $1.5 billion five-year term loan A that were already launched with a meeting on May 5.

Pricing on the revolver and term loan A can range from Libor plus 175 bps to 250 bps based on leverage. Opening pricing is Libor plus 250 bps, with the revolver having a 50 bps unused fee. This pricing came out in line with what was outlined in the company's filings.

Endo funding acquisition

Proceeds from Endo's credit facility, along with $700 million of senior notes, will be used to help fund the acquisition of American Medical Systems for $30 per share, or $2.9 billion in cash, which includes the assumption and repayment of $312 million of debt.

The notes are backed by a commitment for a $700 million one-year bridge loan priced at Libor plus 625 bps, increasing by 50 bps at the end of each three-month period. There is a 1% Libor floor.

Closing on the transaction is expected late in the third quarter, subject to customary conditions, regulatory approval and American Medical stockholder approval.

Endo is a Chadds Ford, Pa.-based specialty health care company. American Medical is a Minnetonka, Minn.-based provider of devices and therapies for male and female pelvic health.

Chrysler fills out

Chrysler's $2.5 billion six-year term loan B is oversubscribed ahead of Thursday's 10 a.m. ET commitment deadline at revised terms, according to a market source.

The loan is talked at Libor plus 475 bps with a 1.25% to 1.5% Libor floor and an original issue discount of 99, and is non-callable for one year, then at 102 in year two and 101 in year three.

Earlier this week, the term B was downsized from $3.5 billion as the company's senior secured notes offering was upsized to $3.5 billion from $2.5 billion, pricing widened from talk of Libor plus 400 bps to 425 bps with a 1.25% Libor floor and an original issue discount of 99 to 991/2, and call protection was sweetened from just 101 soft call for one year.

Chrysler's $4 billion senior secured credit facility (Ba2/B+) also provides for a $1.5 billion five-year revolver.

Chrysler repaying loans

Proceeds from Chrysler's credit facility, the notes and $1.3 billion of proceeds from an investment by Fiat will be used to repay all of the company's loans provided by the U.S. Department of the Treasury and the Canadian federal and Ontario governments.

Morgan Stanley, Citigroup, Goldman Sachs and Bank of America Merrill Lynch are the lead banks on the deal, with Morgan Stanley the left lead on the term loan and Citi the left lead on the revolver.

Chrysler is an Auburn Hills, Mich.-based producer of Chrysler, Jeep, Dodge, Ram, Mopar and Fiat vehicles and products.

Alliance Data well met

Alliance Data Systems' $1.5 billion five-year credit facility is also oversubscribed, but lenders jumped onto this deal at initial pricing, according to a market source.

The facility consists of a $750 million term loan A and a $750 million revolver, with both tranches priced at Libor plus 225 bps with a no Libor floor.

SunTrust Robinson Humphrey Inc. is the lead arranger on the deal that will be used to refinance existing debt.

Alliance Data is a Dallas-based provider of loyalty and marketing services.

MoneyGram closes

MoneyGram International Inc., a Dallas-based payment services company, closed on its $540 million senior secured credit facility (Ba1/BB-) comprised of a $150 million five-year revolver and a $390 million 61/2-year term loan, according to a news release.

Pricing on the facility is Libor plus 325 bps, with the revolver having a 50 bps unused fee, and the term loan having a 1.25% Libor floor and 101 soft call protection for one year. The term loan was sold at an original issue discount of 993/4.

During syndication, pricing on the term loan was reduced from Libor plus 350 bps, and the discount tightened from 991/2.

Bank of America Merrill Lynch, JPMorgan, Citigroup, Deutsche Bank Securities Inc. and Wells Fargo Securities led the deal that was used to fund a recapitalization.

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