Team Health breaks; Sophos tweaks structure; AdvoServ firms pricing; Alliance pulls deal

By Sara Rosenberg

New York, June 28 - Team Health Holdings Inc. credit facility made its way into the secondary market on Tuesday, with levels on the recently downsized term loan B quoted above its original issue discount price.

Over in the primary, Sophos completely revised its financing plans, moving to an add-on structure instead of an all new credit facility, AdvoServ set the spread on its term loan at the low end of guidance, and Alliance HealthCare Services Inc. removed its deal from market as a result unfavorable conditions.

Additionally, Quad/Graphics Inc. and SunCoke Energy Inc. released price talk on their credit facilities, timing surfaced on the launch of Nebraska Book Co. Inc.'s debtor-in-possession transaction, and Meritas revealed new deal plans.

Team Health frees up

Team Health's credit facility broke for trading on Tuesday afternoon, with the $250 million seven-year term loan B quoted at 99¾ bid, par ¼ offered, according to a trader.

Pricing on the term loan B is Libor plus 275 basis points with a 1% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

The company's $575 million credit facility (Ba3/BB) also includes a $175 million five-year revolver and a $150 million five-year term loan A, both priced at Libor plus 225 bps, with the revolver having a 45 bps unused fee.

Team Health lead banks

J.P. Morgan Securities LLC and Barclays Capital Inc. are the joint lead arrangers and bookrunners on Team Health's credit facility.

During syndication, the B loan was downsized from $300 million and pricing firmed at the low end of the Libor plus 275 bps to 300 bps talk, the revolver was upsized from $165 million and the term loan A was upsized from $110 million.

Proceeds will be used to refinance existing debt.

Team Health is a Knoxville, Tenn.-based provider of hospital-based clinical outsourcing.

Sophos restructures

Moving to the primary, Sophos decided not to move forward with its roughly $460 million six-year senior secured credit facility (B+) and instead is getting a $125 million term loan add-on, according to a market source.

The add-on, comprised of a U.S. dollar and a euro tranche with sizes still to be determined, is talked at Libor plus 562.5 bps with a 2% Libor floor and an original issue discount of 99½ on the U.S. piece, the source said. Pricing on the euro piece is not yet available.

By comparison, the original deal consisted of a $20 million revolver, a $280 million term B and a €110 million term loan that was going to be divided into an A tranche and a B tranche. Price talk on the revolver and A loan had been Libor/Euribor plus 400 bps with no floor and a 100 bps upfront fee, and talk on the B loan had been Libor/Euribor plus 450 bps with a 1.5% floor, a discount of 99 and 101 soft call protection for one year.

Sophos funding acquisition

With the change in structure, Sophos is still getting the funds it needs for the acquisition of Astaro, a provider of network security services that is based in Wilmington, Mass., and Karlsruhe, Germany, but will no longer be refinancing its existing credit facility.

Last summer, to help fund its buyout by Apax Partners, Sophos got a $229.4 million six-year term loan B, including a $25 million euro-equivalent tranche, priced at Libor/Euribor plus 575 bps with a 2% Libor floor that was sold at an original issue discount of 96, as well as a $75 million six-year euro equivalent term loan A and a $20 million six-year revolver, both priced at Libor plus 450 bps.

No changes will be made to the existing deal with this add-on transaction, the source remarked.

RBC Capital Markets LLC is the lead bank on the deal.

Sophos is an IT security and data protection firm with headquarters in Boston and Oxford, England.

AdvoServ finalizes spread

AdvoServ firmed pricing on its $125 million six-year term loan at Libor plus 475 bps, the low end of the Libor plus 475 bps to 500 bps talk, and left the 1.25% Libor floor and original issue discount of 99 unchanged, according to a market source.

The $135 million credit facility also includes a $10 million five-year revolver.

GE Capital Markets is the lead arranger on the deal that will be used to refinance debt and fund a sponsor dividend.

AdvoServ is a Mount Dora, Fla.-based provider of education and residential services to disabled and mentally ill children and adults.

Alliance Healthcare withdrawn

Alliance HealthCare Services pulled its $590 million senior secured credit facility (Ba3/BB-) due to poor conditions in the financing markets, according to a market source.

The facility consisted of a $120 million five-year revolver talked at Libor plus 400 bps to 425 bps with no Libor floor and a $470 million seven-year term loan B talked at Libor plus 400 bps to 425 bps with a 1.5% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

Barclays Capital Inc., Deutsche Bank Securities Inc. and SunTrust Robinson Humphrey Inc. were the bookrunners on the deal that was going to be used to refinance an existing credit facility, including an about $454 million term loan B.

Alliance Healthcare is a Newport Beach, Calif.-based provider of outpatient diagnostic imaging and radiation therapy services.

Quad/Graphics pricing

In more primary happenings, Quad/Graphics Inc. launched its credit facility with a bank meeting in the morning, and in connection with the event, price talk on the term loan B was announced, according to a market source.

The $300 million seven-year term loan B is being talked at Libor plus 300 bps with a 1.25% Libor floor, an original issue discount of 99 to 99½ and 101 soft call protection for one year, the source said.

The company's $1.5 billion credit facility also includes an $800 million five-year revolver and a $400 million five-year term loan A.

J.P. Morgan Securities LLC is the left lead on the deal and is asking for commitments by July 15.

Proceeds will be used by the Sussex, Wis.-based provider of print and related services to refinance an existing senior secured credit facility.

SunCoke reveals guidance

SunCoke Energy also held a bank meeting on Tuesday morning, at which time talk on its $300 million seven-year term loan B was disclosed as Libor plus 325 bps to 350 bps with a 1% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year, according to a market source.

The company's $450 million credit facility also provides for a $150 million five-year revolver.

Commitments are due on July 20.

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Bank of America Merrill Lynch are the lead banks on the deal that will be used, along with proceeds from an initial public offering of common stock, to fund the company's separation from its parent, Sunoco Inc., by repaying certain intercompany debt and for general corporate purposes.

SunCoke, a Lisle, Ill.-based producer of metallurgical coke, expects to close on the credit facility and the stock offering at the same time.

Chiquita talk emerges

Chiquita Brands International Inc. came out with price talk of Libor plus 275 bps on its $150 million revolver and Libor plus 300 bps on its $250 million term loan now that the deal was launched with a bank meeting on Monday, according to a market source.

The $400 million senior secured credit facility, which has no Libor floor, is being syndicated to banks on a pro rata basis.

Rabobank is the lead arranger on the deal and is asking for commitments by July 11.

Proceeds, along with cash, will be used to refinance about $155 million of existing bank debt and fund a tender offer for $100 million of the roughly $177 million outstanding under the company's 8 7/8% senior notes due 2015.

The tender offer expires on July 26 and is subject to completion of debt financing.

Chiquita is a Cincinnati-based marketer and distributor of fresh and value-added food products.

Nebraska Book sets launch

Nebraska Book has set a bank meeting for Wednesday at 10 a.m. ET to launch its proposed $200 million one-year debtor-in-possession financing facility, according to a market source.

The facility consists of a $75 million ABL revolver talked at Libor plus 350 bps with no Libor floor and a $125 million term loan B talked at Libor plus 700 bps with a 1.25% Libor floor and an original issue discount that is still to be determined, the source said.

Terms on the facility are in line with what the company outlined on Monday when it first announced its Chapter 11 plans.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used for general corporate purposes during the bankruptcy process.

Nebraska Book is a Lincoln, Neb.-based retailer and wholesaler of college textbooks.

Meritas coming soon

Meritas will be holding a bank meeting on July 6 to launch a proposed $200 million credit facility that is being led by Credit Suisse Securities (USA) LLC, and price talk on the deal has already started making its way around the market, according to a source.

The facility consists of a $10 million revolver, a $125 million first-lien term loan talked at Libor plus 600 bps with a 1.5% Libor floor and a discount of 99, and a $65 million second-lien term loan talked at Libor plus 1,000 bps with a 1.5% floor and a discount of 981/2, the source said.

Call protection on the second-lien term loan is 103 in year one, 102 in year two and 101 in year three, the source added.

Proceeds will be used to refinance existing debt and for general corporate purposes.

Meritas is a Northbrook, Ill.-based operator of college-preparatory schools.

Ducommun closes

In other news, Ducommun Inc. completed its $250 million senior secured facility (Ba2/BB-), consisting of a $190 million six-year term B and $60 million five-year revolver, according to a news release.

Pricing on the term loan B and revolver is Libor plus 425 bps with a 1.25% Libor floor. The term loan B was sold at an original issue discount of 99 and has 101 soft call protection for one year.

During syndication, the revolver was upsized from $40 million and pricing on the entire facility was increased from initial talk of Libor plus 400 bps.

UBS Securities LLC and Credit Suisse Securities (USA) LLC led the deal that was used to help fund the acquisition of LaBarge Inc. for $19.25 per share in cash and refinance debt at both companies.

Ducommun is a Carson, Calif.-based provider of engineering and manufacturing services to the aerospace and defense industry. LaBarge is a St. Louis-based supplier of electronics manufacturing services.

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