Hearthside breaks; Alaska Communications trades up; Jazz, Wastequip, Elo Touch tweak deals

By Sara Rosenberg

New York, June 5 - Hearthside Food Solutions LLC firmed pricing on its credit facility at the mid point of revised guidance and the deal then hit the secondary market on Tuesday, with levels seen above the original issue discount price.

Also, Alaska Communications Systems Group Inc.'s term loan headed higher in trading as the company announced the combination of its wireless network with General Communications Inc.'s wireless network.

Over in the primary market, Jazz Pharmaceuticals plc came out with changes to its credit facility, including lifting pricing on all tranches, widening the original issue discount on the term loan B and adding call protection.

Additionally, Wastequip LLC revised the coupon, Libor floor, discount guidance and call premiums on its B loan, and Elo Touch Solutions downsized its term loans, widened Libor floors and discounts and lifted the second-lien spread.

Furthermore, eResearchTechnology Inc. and NCI Building Systems Inc. began circulating price talk on their loans in preparation for upcoming bank meetings, and Fresenius SE & Co. KGaA disclosed upfront fees on its U.S. pro rata loans with launch.

Hearthside frees up

Hearthside Food Solutions credit facility broke for trading on Tuesday, with the $340 million six-year term loan B quoted at 99½ bid, par offered, according to a market source.

Pricing on the term loan B, as well as on a $30 million six-year delayed-draw term loan that is available for one year and a $30 million five-year revolver, is Libor plus 525 basis points with a 1.25% Libor floor, and the debt was sold at an original issue discount of 99.

The revolver has a 50 bps unused fee, the delayed-draw term loan has a 100 bps unused fee and the term loan B includes 101 soft call protection for one year.

GE Capital Markets and SunTrust Robinson Humphrey Inc. are the lead banks on the deal.

Hearthside recapitalizing

Proceeds from Hearthside Food's $400 million credit facility will be used to refinance existing debt and fund a small dividend.

During syndication, pricing on the facility finalized in the middle of revised guidance of Libor plus 500 bps to 550 bps and higher than original talk of Libor plus 450 bps, and call protection was added to the institutional debt.

Hearthside is a Downers Grove, Ill.-based bakery and a full-service contract manufacturer of grain-based food and snack products.

Alaska Communications rises

Alaska Communications' term loan strengthened in trading following news of an agreement to form Alaska Wireless Network LLC through the merger of its and General Communications' (GCI) wireless networks, according to a trader.

The term loan was quoted at 87½ bid, 89½ offered, up from 87 bid, 89 offered on Monday, the trader said. In the morning, the loan had been as high as 89½ bid, 91½ offered, but levels came back in by late afternoon.

Under the agreement, Alaska Communications and GCI will each contribute their respective wireless assets, including spectrum licenses, cell sites and backhaul facilities, switching systems and certain other assets necessary to operate an Alaska statewide wireless network.

Additionally, as part of the transaction, GCI will purchase $100 million of wireless assets from Alaska Communications and contribute them to Alaska Wireless Network.

Alaska Communications will use the proceeds from the sale to pay down some term loan borrowings and increase cash reserves.

GCI intends to refi

To fund the acquisition of the wireless assets from Alaska Communications, GCI expects to refinance its existing senior credit facility, a news release said.

At close, Alaska Communications will own one-third and GCI will own two-thirds of Alaska Wireless Network. During the first four years of Alaska Wireless Network's operations, Alaska Communications will be eligible to receive preferential cash distributions totaling $190 million and GCI will receive all remaining available cash distributions over the same period. Following the initial four year period, the companies will receive distributions proportional to their ownership interests.

Closing is expected by the second quarter of 2013, subject to Hart-Scott-Rodino review, FCC approval and other customary conditions.

Alaska Communications is an Anchorage-based provider of high-speed wireless, mobile broadband, Internet, local, long-distance and advanced broadband solutions. GCI is an Anchorage-based provider of voice, data and video services.

Jazz reworks deal

Moving to the primary, Jazz Pharmaceuticals announced revisions to pricing, as well as other terms, on its credit facility on Tuesday morning, and asked lenders to get their recommitments by the end of the day, according to market sources.

With the changes, the $100 million five-year revolver is now talked in the Libor plus 400 bps area, up from talk of Libor plus 325 bps to 350 bps, sources said. This tranche has no Libor floor and is being offered at an original issue discount of 99.

Meanwhile, the $500 million six-year term loan B is talked in the Libor plus 425 bps area, up from guidance of Libor plus 350 bps to 375 bps, the discount was moved to 98½ from 99 and 101 soft call protection for one year was added, sources remarked. The 1% Libor floor was left unchanged.

Also, amortization on the term loan was beefed up to 5% in year one, 7.5% in year two, 10% in years three and four and 15% in year five, with the balance due at maturity, from just 1% per year, and the excess cash flow sweep was modified to 50% from 25%.

Jazz buying EUSA

Proceeds from Jazz Pharmaceuticals' $600 million credit facility (Ba3/BBB-) and cash on hand will fund the purchase of EUSA Pharma for $650 million in cash plus a potential $50 million milestone payable based upon EUSA's lead product, Erwinaze, achieving a specified U.S. net sales target in 2013.

Closing on the acquisition is expected in June, subject to customary conditions and regulatory approvals, including antitrust approval in the United States.

Barclays Capital Inc., J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are the lead banks on the credit facility.

Jazz Pharmaceuticals is a Dublin, Ireland-based specialty biopharmaceutical company. EUSA is a specialty pharmaceutical company with headquarters in Langhorne, Pa., and Oxford, England.

Wastequip flexes higher

Also making changes was Wastequip, as it revised talk on its $150 million term loan B (B3/BB-) to Libor plus 675 bps with a 1.5% Libor floor and an original issue discount of 97 to 98 from initial guidance of Libor plus 600 bps to 625 bps with a 1.25% floor and a discount of 98, a source said.

In addition, call protection was revised to 103 in year one and 101 in year two, from just 101 soft call protection for one year.

Recommitments are due on Wednesday, the source added.

The company's Goldman Sachs & Co.-led $190 million senior secured credit facility also includes a $40 million revolver (Ba2/BB-).

Proceeds will fund a recapitalization through which first-lien lenders are expected to get a roughly 90% equity stake in the Charlotte, N.C.-based company that manufactures waste handling and recycling equipment.

Elo revised again

Elo Touch Solutions made a new round of changes to its credit facility, this time reworking term loan sizes, Libor floors, original issue discounts and second-lien pricing, according to market sources, who said that recommitments are due at 5 p.m. ET on Wednesday.

The six-year first-lien term loan (B1/B+) is now $175 million, down from $180 million, and pricing is Libor plus 650 bps with a 1.5% Libor floor and an original issue discount of 96, compared to recently revised talk of Libor plus 650 bps with a 1.25% floor and a discount of 97 and initial talk of Libor plus 525 bps with a 1.25% floor and a discount of 98, sources remarked.

And, the 61/2-year second-lien term loan (Caa1/CCC+) is now $85 million, down from $90 million, and pricing is Libor plus 1,050 bps with a 1.5% floor and a discount of 96, versus revised guidance of Libor plus 1,025 bps with a 1.25% floor and a discount of 97 and initial talk of Libor plus 950 bps with a 1.25% floor and a discount of 98.

Elo call premiums

As before, Elo's first-lien term loan has 101 repricing for one year and its second-lien term loan is non-callable for one year, then at 103 in year two and 101 in year three.

The company's $275 million credit facility also includes a $15 million revolver.

Other changes included setting the excess cash flow sweep at 75% versus 50% previously, setting the first-lien accordion at $50 million with a 2.5 times first-lien leverage test, versus $75 million with a 2.9 times leverage test before, and removing the second-lien accordion, sources added.

Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. are leading the deal that will be used with equity to fund the already completed buyout of the company by the Gores Group from TE Connectivity for $380 million in cash.

As a result of the term loan downsizings, the equity component of the transaction was increased.

Elo is a Menlo Park, Calif.-based supplier of touch screens, touch monitors and all-in-one touch computers.

eResearch talk surfaces

eResearchTechnology released price talk on its $270 million credit facility as the deal is getting ready to launch with a bank meeting at 10:30 a.m. ET in New York on Thursday, according to a market source.

The $50 million five-year revolver and $220 million six-year first-lien term loan are both being talked at Libor plus 600 bps with a 1.5% Libor floor, but the revolver is being offered at an original issue discount of 98, and the term loan is being offered at 97 and includes 101 soft call protection for one year, the source said.

Terms on the facility are different than what the company had previously outlined in filings with the Securities and Exchange Commission.

In the filings, the company had said that it would be a $224 million senior secured credit facility comprised of a $50 million five-year revolver and a $174 million six-year term loan, and that pricing on both tranches was expected at Libor plus 550 bps.

eResearch being acquired

Proceeds from eResearchTechnology's credit facility, which is being led by Credit Suisse Securities (USA) LLC and Jefferies Finance LLC, will be used to help fund the company's buyout by Genstar Capital LLC for $8 per share in cash.

Based on regulatory filings, it is anticipated that other funds for the transaction will come from equity and 61/2-year subordinated notes that will be purchased by CDP-Genstar Mezzanine Opportunities LP. Pricing on the notes is expected at 13% per annum, with up to 2% available as payment-in-kind.

Closing on the acquisition will occur either this quarter or next quarter, subject to stockholder approval. A special stockholder meeting to vote on the transaction will take place on June 22.

eResearchTechnology is a Philadelphia-based technology-driven provider of health outcomes research services and customizable medical devices.

NCI discloses guidance

NCI Building Systems came out with talk of Libor plus 600 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year on its $250 million seven-year first-lien term loan (B) that is set to launch with a bank meeting on Wednesday, a market source said.

The loan has a maximum net total leverage covenant, the source said.

By comparison, in filings with the Securities and Exchange Commission, the company had previously said that the loan would be priced at Libor plus 550 bps with a 1.25% Libor floor, and be covenant-light.

Credit Suisse Securities (USA) LLC, RBC Capital Markets LLC, UBS Securities LLC and Citigroup Global Markets Inc. are leading deal.

NCI purchasing Metl-Span

Proceeds from NCI's term loan will be used with cash on hand to fund the acquisition of Metl-Span LLC for $145 million in cash from BlueScope Steel North America Corp. and to refinance existing bank debt.

Closing is subject to conditions, including the expiration or termination of any applicable waiting period under the Hart Scott Rodino Act.

In connection with the transaction, the company plans to amend its ABL revolver with Wells Fargo Capital Finance LLC to allow for the acquisition and the new term loan, increase the revolver size to $150 million and extend the maturity to May 2, 2017.

NCI is a Houston-based manufacturer of metal products for the nonresidential building industry. Metl-Span is a Lewisville, Texas-based manufacturer and marketer of insulated building panel products.

Fresenius U.S. upfront fees

In more happenings, Fresenius held the bank meeting to launch its pro rata U.S. debt and lenders are being offered upfront fees of 30 bps to 60 bps, depending on ticket size, according to a market source.

As was previously reported, the euro pro rata debt, which launched last week, is being offered with upfront fees of 40 bps to 75 bps, based on order size.

The five-year pro rata debt is comprised of a $200 million revolver, a €650 million revolver, a $200 million term loan A and a €700 million term loan A, all talked at Libor/Euribor plus 225 bps.

In addition, European banks are being offered a €200 million carve-out from the €500 million seven-year term loan B that is talked at Euribor plus 325 bps with a 1% floor. This carve-out is also being offered with upfront fees of 40 bps to 75 bps depending on commitment amount.

The Bad Homburg, Germany-based dialysis services and products company is seeking pro rata commitments by June 22, the source added.

Fresenius term loan B

Fresenius' roughly €3.1 billion credit facility also includes a $1.2 billion seven-year term loan B that is not being syndicated at the moment, but is expected to come to market in July. Price talk on this debt is not yet available.

Proceeds will be used to help fund the public takeover offer made to Rhon-Klinikum AG shareholders of €22.50 per share in cash and the refinancing of a credit facility that was obtained in 2008 for the acquisition of APP Pharmaceuticals.

Based on company documents, it is anticipated that other funds for the transaction will come from about €2.1 billion of bonds and €1 billion in equity instruments.

Deutsche Bank, JPMorgan, Societe Generale, Credit Suisse and UniCredit are the lead banks on the debt.

Closing is targeted for the third quarter, with the offer contingent upon a minimum acceptance threshold of 90% of Rhon-Klinikum's share capital and upon antitrust approval.

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