Landry's, Formula One, Endurance, MotorCity break; Plato reworks loan; Wendy's sets coupon

By Sara Rosenberg

New York, April 19 - Landry's Inc.'s credit facility made its way into the secondary market on Thursday, with the term loan B quoted above its original issue discount price, and Formula One, Endurance International Group and MotorCity Casino Hotel freed up too.

Also on the trading front, Revel Entertainment Group LLC's term loan B headed higher with news of a new delayed-draw term loan that will help improve liquidity.

Over in the primary, Plato Learning made a number of changes to its credit facility, including moving funds between the first- and second-lien term loans, raising the coupon on the debt and sweetening other terms.

Additionally, Wendy's International Inc. nailed down pricing on its term loan B at the low end of talk, and Bausch & Lomb and Ineos Group Holdings SA released pricing guidance on their term loans as the deals were launched to investors during market hours.

Landry's starts trading

Landry's credit facility broke for trading on Thursday, with the $1.025 billion six-year term loan B quoted at 99½ bid, par offered on the open and then it moved up to par bid, par ¼ offered, according to a trader.

Pricing on the term loan B is Libor plus 525 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 981/2. There is 101 soft call protection for one year.

During syndication, the loan was upsized from $950 million - first to $1 billion and then to its final amount - pricing was increased from Libor plus 475 bps, amortization was changed to 1% in year one and 2½% thereafter, from just 1% per year, and the excess cash flow sweep was sweetened to 75%, stepping down to 50% when senior secured leverage is less than 3.0 times, from just 50%.

The company's $1.225 billion credit facility (B1/B+) also includes a $200 million five-year revolver priced at Libor plus 400 bps that had been downsized from $250 million.

Landry's sells notes

In addition to the credit facility, Landry's is getting $425 million of 9 3/8% senior notes, upsized from a most recent amount of $400 million. It was initially thought that the notes would be sized at $200 million, but the offering was increased earlier when the company decided to remove a proposed $200 million five-year term loan A from its capital structure.

Proceeds will be used to refinance a roughly $231 million term loan and $100 million revolver at Landry's, a roughly $193 million term loan and $15 million revolver at Morton's Restaurant Group Inc. and other debt, including Landry's $655 million of 11 5/8 % senior secured notes due 2015.

As a result of the upsizing to the term loan B tranche, less will drawn under the revolver at close, sources previously said.

Jefferies & Co. is the lead bank on the deal.

Landry's is a Houston-based full-service restaurant, hospitality and entertainment company.

Formula One hits secondary

Formula One's credit facility freed up too, with the $1.383 billion term loan B trading at 99 ¾ on the break and then levels moved to par 5/8 bid, 101 offered, according to a trader.

Pricing on the term loan B is Libor plus 450 bps, after flexing earlier from Libor plus 500 bps, with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

The company's $2.27 billion credit facility (Ba3/BB-) also includes an $817.5 million term loan C priced at Libor plus 500 bps with a 1.25% Libor floor, and a $70 million revolver.

Goldman Sachs & Co. and RBS Securities Inc. are the lead banks on the deal that will be used to refinance existing debt and fund a cash distribution to the holding company.

Formula One is the organizer of the Formula One World Championship (F1) and owner of the commercial rights to F1 motorsports racing.

Endurance breaks

Another deal to start trading was Endurance International's $535 million six-year term loan B (B1/B), with levels quoted at 99¾ bid, par ¼ offered, according to a market source.

Pricing on the loan is Libor plus 625 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to take out preferred notes held by Accel-KKR, to refinance an existing $350 million term loan B and to add cash to the balance sheet.

The existing B loan was done in December at pricing of Libor plus 625 bps with a 1.5% floor and sold at a discount of 98. The debt includes 101 repricing protection, but it's not applicable here since this is a refinancing and pricing isn't being changed.

Endurance is a Burlington, Mass.-based provider of web hosting and online services to small- and medium-sized businesses.

MotorCity tops par

MotorCity Casino Hotel's roughly $590 million term loan B broke as well, with levels quoted at par ¼ bid, par ½ offered, according to a trader.

The term loan B is priced at Libor plus 475 bps with a 1.25% Libor floor, and was used to reprice an existing B loan that carried an interest rate of Libor plus 500 bps and included a 2% Libor floor.

Bank of America Merrill Lynch is the lead bank on the deal.

MotorCity Casino Hotel is a casino in Detroit.

Revel gains ground

In more trading happenings, Revel Entertainment's term loan B moved up to 97¾ bid, 98 offered from 96 bid, 97 offered on the open on Thursday as news surfaced that the company is getting a $50 million delayed-draw term loan, according to a trader.

Pricing on the delayed-draw loan is Libor plus 750 bps with a 1.5% Libor floor, in line with existing term B pricing, and it is being offered with an original issue discount of 98.76 and an undrawn fee of 200 bps.

Proceeds will be used to provide the company with additional liquidity.

J.P. Morgan Securities LLC is leading the deal and has already syndicated it to some existing lenders. However, the loan is now being marketed to a larger group.

Revel is a gaming and entertainment company.

Plato revises deal

Moving to the primary, Plato Learning revised tranching and pricing on its $390 million credit facility, and is asking to lenders to get their recommitments in by Wednesday, according to a market source.

Under the changes, the six-year first-lien term loan was cut to $225 million from $240 million, and pricing moved to Libor plus 600 bps with a 1.5% Libor floor and an original issue discount of 981/2, from talk of Libor plus 450 bps to 475 bps with a 1.25% floor and a discount of 981/2, the source said. The 101 soft call protection for one year was left unchanged.

Meanwhile, the seven-year second-lien term loan was increased to $140 million from $125 million, and pricing is now Libor plus 975 bps with a 1.5% floor and a discount of 98, versus earlier guidance of Libor plus 875 bps to 900 bps with a 1.25% floor and a discount of 98, the source remarked.

The debt is now non-callable for one year, then at 103 in year two and 101 in year three, as opposed to having call protection of 103 in year one, 102 in year two and 101 in year three.

Plato buying Archipelago

Proceeds from Plato Learning's credit facility, which also includes a $25 million five-year revolver, will be used with $60 million of equity to fund the acquisition of Archipelago Learning for $11.10 per share in cash, or about $291 million.

Closing on the transaction is expected in the second quarter, subject to regulatory approvals and the approval of Archipelago Learning shareholders.

Credit Suisse Securities (USA) LLC and Jefferies & Co. are the lead banks on the deal.

As part of the revisions, the excess cash flow sweep under the credit agreement became 75% and amortization on the first-lien term loan was set at 5%, the source added.

Plato, a portfolio company of Thoma Bravo LLC, is a Bloomington, Minn.-based provider of education technology services. Archipelago Learning is a Dallas-based subscription-based software-as-a-service provider of education products.

Wendy's finalizes pricing

Wendy's firmed the spread on its $1.125 billion seven-year term loan B at Libor plus 350 bps, the low end of the Libor plus 350 bps to 375 bps guidance, and left the 1.25% Libor floor, original issue discount of 99 and 101 soft call protection for one year unchanged, according to a market source.

The company's $1.325 billion senior secured credit facility (B1/BB-), which is expected to allocate on Friday, also includes a $200 million five-year revolver.

Bank of America Merrill Lynch and Wells Fargo Securities LLC are leading the deal that will be used to refinance an existing $150 million revolver and $500 million term loan B, to repurchase $565 million of 10% senior notes due 2016 and for general corporate purposes.

Wendy's, a Dublin, Ohio-based quick-service hamburger chain, is targeting a May 15 close for the transaction.

Bausch talk emerges

Also in the primary, Bausch & Lomb held a bank meeting on Thursday morning to kick off syndication on its credit facility, and with the launch, price talk on the U.S. funded and delayed-draw term loans as well as on the euro term loan was announced, according to a market source.

The $2.035 billion covenant-light term loan B and $350 million covenant-light delayed-draw term loan are talked at Libor plus 375 basis points to 400 bps, and the $600 million covenant-light euro term loan B is talked at Euribor plus 400 bps to 425 bps, the source remarked.

All of the term loans have a 1% floor, an original issue discount of 99 and 101 soft call protection for one year, the source continued.

Commitments towards the company's $3.485 billion credit facility (B1/B+), which also includes a $500 million revolver, are due on May 2.

Bausch lead banks

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and Bank of America Merrill Lynch are the bookrunners on Bausch & L:omb's credit facility.

Proceeds will be used to refinance existing debt and fund the acquisition of ISTA Pharmaceuticals Inc., an Irvine, Calif.-based branded prescription eye care business, for $9.10 per share in cash.

Closing on the roughly $500 million acquisition is expected in the second quarter, subject to regulatory approval, ISTA shareholder approval and other customary conditions.

Bausch & Lomb is a Rochester, N.Y.-based eye health company.

Ineos launches

Ineos also held a bank meeting, launching its $1.5 billion of U.S. and euro covenant-light term loan B debt with a two tranche structure, and asking for commitments by April 26, a market source said.

The debt will include a six-year tranche targeted at around $1.2 billion and talked in the low 7% context all-in, including a 1.25% floor, and a three-year tranche targeted at around $300 million and talked around 100 bps inside of the six-year loan, including a 1.25% floor, the source continued. Firmer talk on spread and original issue discount on the tranches is expected to come out early next week.

The tranches have soft call protection of 102 in year one and 101 in year two.

Barclays Capital Inc. and J.P. Morgan Securities LLC are joint global coordinators and joint bookrunners on the deal, and Goldman Sachs & Co. and UBS Securities LLC are mandated lead arrangers and joint bookrunners.

Ineos, a Lyndhurst, England-based chemical company, will use the proceeds to refinance senior secured debt.

Goodyear closes

In other news, Goodyear Tire & Rubber Co. completed its $1.2 billion senior secured second-lien term loan (Ba1/BB) due 2019 that is priced at Libor plus 375 bps with a 1% Libor floor, according to a news release. The debt was sold at an original issue discount of 98 and there is 101 soft call protection for one year.

During syndication, the spread on the term loan was increased from Libor plus 325 bps and the discount widened from 99.

J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Goldman Sachs & Co. and Wells Fargo Securities LLC led the deal that was used to refinance an existing second-lien term loan.

In addition, the Akron, Ohio-based tire company got a $2 billion asset-based revolver due 2017 that is priced at Libor plus 150 bps and was used to replace an existing $1.5 billion revolver.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.