Tube City upsizes, reduces spreads; Green Valley, Harbor Freight, TransDigm set price talk

By Sara Rosenberg

New York, Jan. 18 - Tube City IMS Corp. made some changes to its credit facility, including upsizing its term loan B tranche and lowering pricing on its term loan B and synthetic letter-of-credit facility.

In other primary happenings, Green Valley Ranch Gaming LLC, Harbor Freight Tools and TransDigm Group Inc. came out with price talk on their new bank debt as all three deals were launched during Thursday's market hours.

Tube City modified its credit facility early in the session by increasing the size of the term loan B due to a decrease in size to its bond offering, reverse flexing pricing on the term loan B and synthetic letter-of-credit facility, and adding a step down to these two institutional tranches, according to a market source.

Under the changes, the seven-year term loan B (Ba3/BB-) is now sized at $165 million, up from an original size of $140 million, in order to compensate for the company's bond offering being downsized to $225 million from $250 million, the source said.

In addition, pricing on the upsized term loan B and the $20 million seven-year synthetic letter-of-credit facility was reduced to Libor plus 225 basis points from original talk at launch of Libor plus 275 bps.

Furthermore, a pricing grid was added to the term loan B and synthetic letter-of-credit facility under which the spread can drop to Libor plus 200 bps when leverage is 4.0 times or less, the source continued.

And the last change that was made to the deal was that the accordion feature associated with the term loan B was increased to $80 million from $40 million, the source added.

Tube City's $350 million credit facility also includes a $150 million six-year last-in, first-out ABL revolver priced at Libor plus 150 bps and a $15 million first-in, last-out ABL revolver priced at Libor plus 250 bps.

Both ABL revolver tranches, which were left unchanged throughout the syndication process, carry a commitment fee of 25 bps.

Credit Suisse and UBS are joint lead arrangers on the deal, with Credit Suisse the left lead.

Proceeds will be used to fund Onex Corp.'s acquisition of the company in a transaction valued at about $720 million.

Tube City is a Glassport, Pa., provider of outsourced services to steel mills.

Green Valley price talk

Green Valley Ranch Gaming released price talk on its first- and second-lien credit as syndication on the transaction officially kicked off with a bank meeting Thursday, according to market sources.

The $500 million term loan B (Ba3/B+) was launched with price talk of Libor plus 250 bps and the $300 million second-lien term loan (Caa1/CCC+) was launched with price talk of Libor plus 350 bps, sources said.

"I think both are too tight, even in this market," one buyside source remarked about the price talk on the deal.

Green Valley's $830 million senior secured credit facility also includes a $30 million revolver (Ba3/B+).

Bank of America is the lead bank on the deal that will be used by the Henderson, Nev., resort to refinance existing bank debt and to pay a special dividend to the company owners.

Harbor Freight spread guidance

Also on the price talk front, Harbor Freight Tools launched its $160 million institutional term loan add-on at Libor plus 225 bps with a step down to Libor plus 200 bps when leverage is less than 3.25 times, according to a market source.

In addition, pricing on the company's existing term loan debt will be changed to match the pricing on the incremental term debt, the source said.

The current grid on the existing term loan calls for pricing of Libor plus 200 bps if leverage is above 3.25 times and Libor plus 175 bps if leverage is below 3.25 times. Excluding the add-on, leverage is below 3.25 times, meaning that the existing term loan is carrying pricing of Libor plus 175 bps.

Following completion of the $160 million add-on, the company's leverage will go up to 3.5 times, the source added.

Credit Suisse is the lead bank on the add-on that will be used to fund a dividend payment.

Harbor Freight Tools is a Camarillo, Calif.-based tool and equipment catalog retailer.

TransDigm add-on price talk

TransDigm also launched add-ons to its credit facility; however, unlike Harbor Freight, the company opted to present the incremental debt with price talk that's in line with existing pricing, according to a market source.

Both the $180 million term loan B add-on and the $50 million revolver add-on were launched with a conference call Thursday at Libor plus 200 bps, the source said.

Credit Suisse and Lehman are the lead banks on the incremental debt.

Proceeds from the term loan add-on will be used to help fund the acquisition of Aviation Technologies Inc. for about $430 million in cash.

Following the acquisition, debt to EBITDA is expected to be around 5.7 times and EBITDA to interest coverage is expected to be around 2.9 times.

TransDigm is a Cleveland-based designer, producer and supplier of highly engineered aircraft components. Aviation Technologies is a Seattle-based supplier of aerospace products.

Open Solutions cuts pricing

Open Solutions Inc. reverse flexed pricing on its $530 million seven-year term loan to Libor plus 212.5 bps from original talk at launch of Libor plus 250 bps, according to a market source.

The company's $605 million senior secured credit facility (B+) also includes a $75 million six-year revolver.

Wachovia and JPMorgan are the joint lead arrangers and joint bookrunners on the credit facility. Wachovia is administrative agent, JPMorgan is syndication agent and Merrill Lynch is documentation agent.

Proceeds from the credit facility, along with $325 million of high-yield senior subordinated notes, will be used to fund the leveraged buyout of the company by The Carlyle Group and Providence Equity Partners for $38.00 in cash for each share. The enterprise value of the transaction, including assumption of debt, is more than $1.3 billion.

Other LBO financing will come from a $560 million equity commitment.

Open Solutions is a Glastonbury, Conn., provider of integrated enabling technologies for financial institutions.

Intelsat/PanAmSat repricings likely to pass

Consents were due from lenders on the repricing proposals for Intelsat Ltd. and PanAmSat Holding Corp. on Thursday, and the expectation early on in the day was that the repricings would pass, according to a market source.

The repricings are anticipated to close either on Friday or on Monday.

Under the proposals, Intelsat is looking to reprice its term loan B at Libor plus 200 bps from current pricing of Libor plus 225 bps, and PanAmSat is looking to reprice its term loan A at Libor plus 200 bps from Libor plus 212.5 bps and its term loan B at Libor plus 200 bps from Libor plus 250 bps.

Citigroup is the lead bank on the repricings.

Intelsat is a Pembroke, Bermuda, satellite company. PanAmSat is a Wilton, Conn., satellite company. The two companies merged in 2006.

Ford, Herbst trade lower

The secondary market on Thursday seemed to be somewhat quieter and a touch softer, with names like Ford Motor Co. and Herbst Gaming Inc. coming in by about an eighth of a point, according to traders.

Ford, a Dearborn, Mich.-based automaker, saw its term loan close the day at 101¼ bid, 101½ offered, down from previous levels of 101 3/8 bid, 101 5/8 offered, one trader said.

And, Herbst, a Las Vegas-based slot route operator, saw its term loan close the day at par 5/8 bid, par 7/8 offered, down from previous levels of par ¾ bid, 101 offered, a second trader added.

Fidelity National closes

Fidelity National Information Services, Inc. closed on its new $3 billion five-year unsecured credit facility consisting of a $900 million revolver and a $2.1 billion term loan, according to a company news release.

Both tranches are priced at Libor plus 100 bps.

JPMorgan, Bank of America and Wachovia acted as the lead arrangers and bookrunners on the deal that was used to refinance the company's existing bank debt.

Fidelity National is a Jacksonville, Fla.-based provider of technology to the financial services and real estate industries.

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