iStar up with new deal; Clear Channel dips from recent rally; Sabre extended loan gains

By Sara Rosenberg

New York, Feb. 28 - iStar Financial Inc.'s term loan A-2 was stronger in trading on Tuesday as the company announced plans to refinance near-term debt maturities and disclosed fourth-quarter earnings results.

Also in the secondary, Clear Channel Communications Inc.'s term loans weakened from highs that were reached in the previous session on paydown news as investors were taking some profits, and Sabre Holdings' extended term loan was a stronger with the determination of a final size.

Over in the primary, Hyland Software modified the original issue discount on its incremental first-lien term loan in the morning and asked lenders to get recommitments in by the afternoon.

Additionally, Sleepy's Intermediate LLC released price talk on its term loan as the deal was presented to lenders during the session, and Weight Watchers International Inc. came out with original issue discount guidance on its institutional term loan.

iStar A-2 rises

iStar Financial's term loan A-2 moved up to 99 3/8 bid, 99 7/8 offered from 99 1/8 bid, 99 5/8 offered with the company's unsecured debt refinancing news and release of quarterly numbers, according to a trader.

The term loan A-1, however, was unchanged at 99¾ bid, par offered, the trader said.

For the refinancing of its 2012 unsecured debt maturities, the company will be getting $900 million of new senior secured term loans, comprised of a $500 million first-out four-year term loan A-1 and a $400 million second-out five-year term loan A-2, a market source said. Price talk is not yet available.

Barclays Capital Inc. is the lead arranger on the new deal that will launch with a bank meeting on Thursday afternoon.

The debt is being done as new tranches, and the existing A-1 and A-2 term loans will be staying in place, the source added.

iStar quarterly results

With the refinancing announcement, iStar came out with fourth-quarter results that included a net loss of $35.2 million, or $0.43 per diluted common share, compared to a net loss of $67.1 million, or $0.73 per diluted common share, for the fourth quarter of 2010.

Adjusted EBITDA for the quarter was $100.3 million, versus $103.4 million in the prior year.

During the quarter, the company generated $243.7 million of proceeds from its portfolio and funded a total of $80.4 million of investments.

Additionally, in the fourth quarter, the company repurchased $37.6 million of its senior unsecured notes and repaid $109.8 million of its secured A-1 tranche.

At Dec. 31, the company's net leverage was 2.7 times, down from 2.8 times at the end of the third quarter, and gross leverage was 2.1 times.

iStar Financial is a New York-based finance and investment company focused on the commercial real estate industry.

Clear Channel softens

Clear Channel Communications' term loans were a bit lower from levels seen during a late-day run up in the prior day's activity, with one trader attributing the movement to profit taking.

The term loan A was quoted at 93½ bid, 94½ offered, down from Monday's closing levels of 93¾ bid, 94¼ offered, but still higher than the 92¾ bid, 93½ offered levels that were seen Monday afternoon, the trader said.

And, the term loan B was quoted at 81¾ bid, 82¾ offered, versus 82½ bid, 83½ offered at the close and 81 1/8 bid, 81 7/8 offered earlier in the Monday session, the trader continued.

The rally that was experienced in the company's term loans on Monday began with news that some senior secured credit facility debt would be repaid with notes proceeds.

According to the trader, the debt that will get paid down is revolver borrowings.

Clear Channel is a San Antonio-based media and entertainment company.

Sabre extended rises

Sabre Holdings' extended term loan moved to 94¼ bid, 94¾ offered from 94 bid, 94½ offered as lenders were told that the tranche would be sized at roughly $1.175 billion, according to a trader.

Most recently, sources were hearing that the extended loan would be somewhere in the area of $1.15 billion to $1.2 billion, well in excess of the original $750 million target.

The debt is being extended by three years to 2017 at pricing of Libor plus 575 bps, versus non-extended pricing of Libor plus 225 bps, and lenders were offered an 85 bps extension fee as well as a 15 bps amendment fee.

Last week, the Southlake, Texas-based online travel company flexed the spread on the extended loan from Libor plus 525 bps and the extension fee was increased from 35 bps.

In addition, the company is looking to extend its $500 million revolver by 31/2-years to September 2016 at pricing of Libor plus 450 bps, versus non-extended pricing of Libor plus 200 bps.

Bank of America Merrill Lynch is the left lead on the amendment.

Hyland revises OID

Moving to the primary, Hyland Software told investors Tuesday morning that the original issue discount on its $80 million incremental first-lien term loan (B2/B+) was changed to 99 from 98, while pricing remained at Libor plus 475 bps with a 1.25% Libor floor, a market source told Prospect News.

Lenders were then given until 1 p.m. ET to revise their commitments, if necessary.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to fund a dividend.

With the add-on, the company is amending its existing credit facility to allow for the dividend, and consenting term loan lenders are getting repriced from Libor plus 425 bps with a 1.5% Libor floor to match the incremental loan pricing.

Lenders are being offered a 20 bps amendment fee.

Hyland Software is a Westlake, Ohio-based enterprise content management software vendor.

Sleepy's talk emerges

Sleepy's held a bank meeting on Tuesday to kick off syndication on its proposed $170 million seven-year first-lien term loan, and in preparation for the event, price talk was released first thing in the morning, according to a market source.

The term loan is being shopped at Libor plus 600 bps with a 1.25% Libor floor and an original issue discount of 98 and includes 101 soft call protection for one year, the source remarked.

Ratings are expected in the low single-Bs, the source continued.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to refinance existing debt and pay a distribution to shareholders. With this transaction, Calera Capital is making a significant minority equity investment in the company.

Sleepy's, a specialty mattress retailer owned by the Acker family, is seeking commitments towards the loan by March 13.

Weight Watchers OID

Also launching was Weight Watchers' new term loans, at which time lenders were told that the $500 million to $600 million term loan F due March 2019 is talked with an original issue discount of 99, according to a market source.

As was already reported, price talk on the term loan F is Libor plus 275 bps to 300 bps with a 1% Libor floor.

Meanwhile, the company's $900 million to $1 billion term loan E due March 2017 was launched with talk of Libor plus 225 bps, the source said, versus earlier whispered guidance of Libor plus 225 bps to 250 bps.

The company previously stated that the total amount of new term loans is expected to total up to $1.5 billion and will be used for the repurchase of common stock.

Weight Watchers amending

With the new loans, Weight Watchers is seeking an amendment to allow for the borrowings and is asking to extend its existing revolver, term loan A-1 due January 2013, term loan B due January 2014, term loan C due June 2015 and term loan D due June 2016.

The extended term loan B and term loan D loans will be combined into the new term loan F, and the extended term loan A-1 and term loan C loans would have the same terms as the new term loan E.

Term loan A-1 and term loan B lenders are being offered a 20 bps extension fee, and term loan C and term loan D lenders are being offered a 7.5 bps extension fee.

All lenders are being offered a 5 bps amendment fee.

At Dec. 31, the company had $1.052 billion outstanding under its credit facility, $15 million of which was drawn under the revolver, the various term loans were priced at different rates, ranging from Libor plus 87.5 bps to 225 bps, and the revolver was priced at Libor plus 225 bps.

Weight Watchers lead banks

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch and Scotia Capital (USA) Inc. are the lead banks on Weight Watchers' new loan and amendment and extension transaction.

For the stock buyback, the company launched a modified Dutch auction tender offer that expires on March 22 for up to $720 million of its common stock at a price of $72 to $83 per share.

Furthermore, the company will purchase shares from Artal, which owns about 52% of the company's outstanding shares, at the same price as the one determined in the tender offer.

If the tender offer is fully subscribed, the company will repurchase a total of about $1.5 billion of its common stock through the offer and the Artal purchase agreement.

Weight Watchers is a New York-based provider of weight management services.

Freif fills out

In other news, Freif North American Power I's $243 million seven-year credit facility (Ba3/BB-) is oversubscribed as Monday's commitment deadline passed, and the expectation is that allocations will go out later this week, according to a market source.

The deal consists of a $210 million term loan and a $33 million letter-of-credit facility, both talked at Libor plus 450 bps and offered at an original issue discount of 98. The term loan has a 1.5% Libor floor and 101 call protection for one year.

Deutsche Bank Securities Inc., Barclays Capital Inc., Citigroup Global Markets Inc. and Macquarie Capital are leading the deal.

Proceeds will be used to help fund the acquisition by First Reserve Corp. and CalPERS of a diversified portfolio of U.S. contracted natural gas fired power generation plants totaling 1,068 MW from Arclight Capital.

Semtech nets interest

Semtech Corp.'s $100 million amortizing term loan A is already oversubscribed at initial talk of Libor plus 300 bps with a step-down to Libor plus 275 bps at 1.5 times gross leverage, according to a market source. There is no Libor floor and an original issue discount of 991/2.

The company's $350 million of new five-year debt also includes a $250 million term loan B talked at Libor plus 325 bps to 350 bps with a 1.25% Libor floor, a discount of 99 and 101 soft call protection for one year.

Commitments are due on March 8.

Jefferies & Co. is the lead bank on the deal that will be used with cash on hand to fund the acquisition of Gennum Corp., a Burlington, Ont.-based supplier of high-speed analog and mixed-signal semiconductors, for about C$500 million. Gennum shareholders will receive C$13.55 in cash per share.

The transaction is subject to shareholder and Ontario Superior Court approvals.

Semtech is a Camarillo, Calif.-based supplier of analog and mixed-signal semiconductors.

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