Dynegy under pressure; Hearthside Food, Vision Solutions tweak deals; inVentiv adds lead

By Sara Rosenberg

New York, July 6 - Dynegy Holdings Inc.'s strip of institutional bank debt has been steadily trending lower since late last week when the company's ratings were downgraded by Moody's Investors Service, and Tuesday was no exception.

Meanwhile, over in the primary market, Hearthside Food Solutions came out with some changes to its credit facility in order to attract more interest from investors, including increasing pricing and the Libor floor on all tranches, and Vision Solutions Inc. lifted pricing and the discount on its bank debt.

Also, inVentiv Health Inc. has added another lead bank to its credit facility that is expected to launch shortly, Allscripts is set to kick off syndication on its term loan A later this week, and Savvis Inc. is getting ready to bring its deal to market this month.

Dynegy slides

Dynegy's strip of term loan and letter-of-credit facility debt softened on Tuesday in the secondary market and has been since Moody's announced that it lowered the company's ratings, according to a trader.

The strip was quoted at 91¾ bid, 92¾ offered, down from 92 bid, 93 offered on Friday and from 92½ bid, 93½ offered on Thursday, the trader said.

It was actually on Thursday that Moody's said that it cut Dynegy's corporate family rating to B3 from B2 and senior secured credit facility to Ba3 from Ba2.

Moody's explained that the downgrades reflect the very weak financial metrics anticipated for 2010 based upon the company's EBITDA guidance due principally to reduced power margins and the belief that these credit metrics are likely to continue into 2011.

Dynegy is a Houston-based producer and seller of electric energy, capacity and ancillary services.

Hearthside Food lifts pricing

Moving to new deal happenings, Hearthside Food Solutions flexed pricing higher on its $280 million senior secured credit facility and lifted the Libor floor as well, according to a market source.

Both the $35 million five-year revolver and the $245 million six-year term loan are now being talked at Libor plus 600 basis points with a 2.25% Libor floor, up from talk at launch of Libor plus 550 bps with a 1.75% Libor floor, the source said.

Prior to launch, price talk on both tranches was being whispered at Libor plus 500 bps with a 1.75% floor, but at the bank meeting, lenders were presented with revised guidance.

As before, the term loan is being offered at an original issue discount of 98.

Rabobank International and GE Capital are the bookrunners and lead arrangers on the deal, with Bank of America also a lead arranger. GE is the syndication agent, and Bank of America and Fifth Third are co-documentation agents.

Hearthside funding acquisitions

Proceeds from Hearthside Food's credit facility will be used to help fund the acquisition of Consolidated Biscuit Co., a McComb, Ohio-based producer of cookies, crackers, toaster pastries, fruit and cereal bars, ice cream cones, nuts and candies.

In addition, proceeds will be used to fund the acquisition of the cereal division of Golden Temple of Oregon, a Eugene, Ore.-based manufacturer and marketer of all-natural ready-to-eat cereals, bulk granola and granola snacks.

Senior secured leverage is 3.2 times and total leverage is 4.2 times.

Hearthside, a Wind Point Partners portfolio company, is a Downers Grove, Ill.-based manufacturer of specialty food products, such as granola bars, croutons, cereals, popcorn and snack mixes.

Vision Solutions reworks deal

Vision Solutions made a number of changes to its $255 million senior secured credit facility (B1/B+), including raising pricing and the original issue discount, adding call protection to the term loan, and modifying the excess cash flow sweep and amortization, according to a market source.

Pricing on the $240 million six-year term loan and the $15 million five-year revolver is now Libor plus 600 bps, up from Libor plus 500 bps, with an original issue discount of 96, up from 981/2, the source said.

Also, 101 soft call protection for one year was added to the term loan.

Unchanged was the 1.75% Libor floor on both tranches.

In addition, the excess cash flow sweep was changed to 75% from 50%, and amortization on the term loan is now 5% per year, up from 1%, the source continued.

Vision Solutions readies allocations

Vision Solutions' credit facility filled out at the revised terms and the expectation is that allocations will go out next week, the source added.

Jefferies is the lead bank on the deal that will be used to help fund the acquisition of Double-Take Software Inc. in a transaction with a net offer value of about $242 million and to refinance existing debt.

Double-Take stockholders will receive $10.55 in cash per share.

Closing is expected in the third quarter, subject to customary conditions, including the expiration of the Hart-Scott Rodino waiting period and the approval of Double-Take stockholders.

Vision Solutions, a portfolio company of Thoma Bravo LLC, is an Irvine, Calif.-based provider of high availability, disaster recovery and system management services for IBM Power Systems. Double-Take Software is a Southborough, Mass.-based provider of recovery services.

inVentiv gets more leads

Bank of America has joined on as a lead on the inVentiv Health proposed $600 million senior secured credit facility, according to a market source.

As was previously reported, Citigroup is the left lead bank on the deal and was the one who provided the original commitment letter.

The credit facility, as outlined by recent filings with the Securities and Exchange Commission, consists of a $525 million term loan and a $75 million revolver.

A bank meeting to launch the deal is expected to take place either late this week or maybe next week, the source remarked.

Proceeds will be used to help fund the buyout of the company by Thomas H. Lee Partners LP for $26 per share in cash. The acquisition is valued at $1.1 billion.

inVentiv plans notes

Other funds for InVentiv's buyout will come from $275 million of senior unsecured notes and up to $384 million in equity, the filings said.

As a backup for the notes, the company has received a commitment for an at least $275 million senior unsecured bridge loan.

The debt commitments expire on Nov. 19.

Closing on the buyout is expected to take place in the third quarter, subject to customary conditions.

inVentiv is a Somerset, N.J.-based provider of end-to-end clinical development, launch and commercialization services to the pharmaceutical and health care industries.

Allscripts sets A loan launch

Allscripts has scheduled a bank meeting for Thursday to launch its proposed term loan A, with the plan being to launch the term loan B at a later date, according to a market source.

Previous chatter had the deal expected to launch sometime this week, but a specific date had been unavailable, and it was unclear that the launch would be for the pro rata debt only.

The company is expected to get a total of $570 million of term loan debt. The exact sizes of the term loan A and term loan B were not available prior to press time.

The proposed $720 million credit facility (Ba2/BBB-) also includes a $150 million undrawn five-year revolver.

JPMorgan, Barclays Capital and UBS are the lead banks on the deal.

Allscripts expected pricing

Allscripts previously said that it expects its new revolver to be priced at Libor plus 300 bps and its six-year term loan to be priced at Libor plus 350 bps. Prior to now, there has been no mention of two term loan tranches by the company or in the debt commitment letter.

According to the commitment letter, pricing on the debt is based on corporate ratings - if rated Ba1/BB+, pricing on the term loan will be in the Libor plus 300 bps to 325 bps range and pricing on the revolver will be in the Libor plus 250 bps to 275 bps range.

If rated Ba2/BB, pricing on the term loan will be in the Libor plus 325 bps to 350 bps range and pricing on the revolver will be in the Libor plus 275 bps to 300 bps range, and if rated Ba3/BB- or lower, pricing on the term loan will be in the Libor plus 350 bps to 375 bps range and pricing on the revolver will be in the Libor plus 300 bps to 325 bps range.

Also, the letter said that the term loan is anticipated to have a 1.5% Libor floor and the revolver has a 50 bps unused fee.

Pro forma leverage is 2.1 times LTM EBITDA.

Allscripts funding shares purchase

Proceeds from Allscripts' credit facility will be used to fund the buyback of shares from Misys plc, which is selling the majority of its 54.6% interest in its Allscripts subsidiary in a transaction that is expected to raise roughly $1.3 billion. The amount of shares being sold is about 68 million, and Misys will retain about 12 million shares.

Allscripts will then merge with Eclipsys, an Atlanta-based provider of health care IT services, and following this merger, Misys will have an option to sell to Allscripts an additional 5.3 million of shares for $102 million.

The new credit facility will fund the initial buyback of shares, and any additional buyback will be funded with cash on hand.

Subject to the conditions being met, the buyback of shares and the merger with Eclipsys are expected to be completed in September or October.

Allscripts is a Chicago-based provider of software, services, information and connectivity services to physicians and other health care providers.

Savvis coming soon

Talk is that Savvis will be launching its proposed senior secured credit facility with a bank meeting that will take place sometime this month, according to a market source.

Details on the structure of the facility are not yet available, the source said.

Bank of America is the left lead bank on the deal that will be used to refinance existing debt and fund the purchase of the company's $345 million of 3% convertible senior notes.

The tender offer for the convertibles expires on July 29.

Savvis is a Town & Country, Mo.-based provider of cloud infrastructure and hosted IT services.

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