Kenan Advantage breaks; Ford up with earnings; Ntelos sets talk; Allscripts changes expected

By Sara Rosenberg

New York, July 23 - Kenan Advantage Group's credit facility freed up for trading during Friday's market hours, and Ford Motor Co.'s term loans headed higher after the company released positive second-quarter numbers.

Over in the primary market, Ntelos Inc. came out with price talk on its incremental term loan as the deal was presented to lenders, Allscripts is anticipated to do away with its term loan B and move to an all pro rata structure, and Cedar Fair LP tweaked its deal.

Also, Vertis Holding Inc. is getting ready to launch its new terms loans, syndication of Fairmount Minerals Ltd.'s credit facility has attracted some significant orders, with lenders still having a few more days to place their commitments, and Midcontinent Communications is filling out, too.

Kenan Advantage frees up

Kenan Advantage Group's credit facility hit the secondary market on Friday, with the $250 million term loan B quoted by one source at 98 bid, 99 offered, while a second source said that it traded at 99.

Pricing on the term loan B is Libor plus 450 basis points with a 1.75% Libor floor, and it was sold at an original issue discount of 98.

During syndication, pricing on the loan was increased from Libor plus 400 bps and the discount widened from 99.

The company is also getting a $125 million delayed-draw term loan priced at Libor plus 450 bps, after flexing up from Libor plus 400 bps as well, with a 1.7% Libor floor. This tranche was originally talked and sold at a discount of 98.

Kenan Advantage revolver

Kenan Advantage's $450 million credit facility (Ba3/BB-) also includes a $75 million revolver priced in line with initial talk at Libor plus 400 bps with a 1.75% Libor floor. The tranche was sold at an original issue discount of 983/4.

Proceeds from credit facility will be used to help fund the buyout of the company by Goldman Sachs from Littlejohn & Co. and to refinance existing debt.

KeyBanc Capital Markets is the lead arranger, bookrunner and administrative agent on the deal.

Kenan Advantage is a North Canton, Ohio-based logistics and liquid bulk transportation services provider to the fuels, chemical and food end-markets.

Ford rises on numbers

Ford's term loans posted some gains on Friday as the company announced second-quarter results that showed a year-over-year improvement in net income and revenues, according to traders.

The Dearborn, Mich.-based automotive company's term loan B-1 was quoted by one trader at 96 5/8 bid, 97 offered, up from 96 3/8 bid, 96 7/8 offered, by a second trader at 96½ bid, 97 offered, up a quarter of a point, and by a third trader at 96½ bid, 97 offered, unchanged on the day.

And, the term loan B-2 was quoted by the first trader at 95½ bid, 96 offered, up from 94 3/8 bid, 95 3/8 offered

For the second quarter, Ford posted net income of $2.6 billion, or $0.61 per share, compared to net income of $2.3 billion, or $0.69 per share, in the previous year.

Revenues for the quarter were $31.3 billion, up from $26.8 billion in the second quarter of 2009.

Ford reduces debt

Ford also said on Friday that it ended the second quarter with automotive debt of $27.3 billion, down $7 billion in the quarter. The reduction included a $3.8 billion payment by Ford to the UAW Retiree Medical Benefits Trust and a $3 billion repayment of its revolving credit facility.

The company's automotive gross cash at the end of the quarter was $21.9 billion, a decrease of $3.4 billion since the first quarter as a result of the debt reduction actions.

Automotive operating-related cash flow was $2.6 billion positive.

"We delivered a very strong second quarter and first half of 2010 and are ahead of where we thought we would be despite the still-challenging business conditions," said Alan Mulally, president and chief executive officer, in a news release.

"We remain on track to deliver solid profits and positive automotive operating-related cash flow for 2010, and we expect even better financial results in 2011," Mulally added.

Ntelos talk surfaces

Moving to the primary, Ntelos held a conference call at 11 a.m. ET on Friday to launch its proposed $125 million incremental term loan, and in connection with the event, price talk was announced, according to a market source.

The term loan is being talked in line with the existing term loan at Libor plus 375 basis points with a 2% Libor floor, the source said.

And, original issue discount on the new loan is talked at 991/2, the source added.

The incremental loan will mature in August 2015, same as the existing term loan.

JPMorgan is the lead bank on the deal.

Ntelos buying FiberNet

Proceeds from Ntelos' incremental term loan, along with revolver borrowings and cash on hand, will be used to fund the acquisition of One Communications Corp.'s FiberNet business for about $170 million.

Leverage will be in the 3 times zone.

Completion of the acquisition is anticipated to occur in the fourth quarter, subject to approval from the FCC and the relevant state public service commissions and anti-trust review under the Hart-Scott-Rodino Act.

Closing on the term loan, however, is expected to occur in mid-August.

Ntelos is a Waynesboro, Va.-based provider of wireless and wireline communications services. FiberNet is a fiber optic network of 3,500 route miles.

Allscripts anticipated to go all pro rata

Allscripts is expected to increase the size of its pro rata bank debt and eliminate the proposed $250 million term loan B from its capital structure since demand from banks for the pro rata has been so strong, according to a market source.

The pro rata debt is currently comprised of a $150 million five-year revolver and $320 million term loan A, which were launched to banks on July 8.

A bank meeting for the term loan B never took place. The plan had been to wrap syndication of the revolver and the term loan A and then bring the term loan B to market. Previously, some sources had been hearing that the launch could have taken place during the week of July 26.

Initially, the deal was outlined as containing one term loan sized at $570 million, but the loan was later divided into an A and a B tranche. Sizes were said to be able to move around based on demand.

Allscripts pro rata price talk

As was previously reported, price talk on Allscripts' revolver and term loan A is Libor plus 325 bps. Pricing on the tranches can range from Libor plus 250 bps to 350 bps based on leverage, with the lowest point on the grid being 0.5 times leverage and the highest point being 2.5 times.

The revolver has a 50 bps unused fee.

The credit facility includes a minimum interest coverage ratio of 3.5 to 1.0 with step-ups and a maximum leverage ratio of 4.0 to 1.0 with step-downs.

JPMorgan, Barclays Capital and UBS are the lead banks on the $720 million credit facility (Ba2/BBB-), and it is thought that they will announce official changes to structure during the week of July 26.

Allscripts purchasing shares

Proceeds from Allscripts' credit facility will be used to fund the buyback of 24.4 million of shares from Misys plc for an aggregate consideration of $577 million.

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 credit facility will be used to fund the initial buyback of shares, while any additional buyback will be funded with cash on hand.

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

Allscripts, a Chicago-based provider of software, services, information and connectivity services to physicians and other health care providers, will have pro forma leverage of 2.1 times.

Cedar Fair revises deal

Cedar Fair made some changes to its $1.45 billion senior secured credit facility (Ba2/BB-), including upsizing and reducing pricing on the term loan and downsizing the revolver, according to a market source.

The six-year term loan is now sized at $1.175 billion, up from $1.15 billion, and pricing was cut to Libor plus 400 bps from Libor plus 425 bps, while the 1.5% Libor floor and original issue discount of 99 were left unchanged, the source said.

On the flip side, the five-year revolver was reduced to $275 million from $300 million, while pricing was left at Libor plus 400 bps.

When the deal first launched on May 21, the term loan was sized at $1.05 billion and price talk was Libor plus 375 bps with a 1.5% Libor floor and an original issue discount of 99 to 991/2, and talk on the revolver was Libor plus 350 bps with no Libor floor.

Syndication on the credit facility had been halted after the May launch because of a delay with the company's bonds, but once the bonds priced in mid-July, momentum on the loan picked up again.

Cedar Fair refinancing debt

Proceeds from Cedar Fair's credit facility, along with the $405 million of senior unsecured notes, will be used to refinance an existing credit facility.

Initially, the notes were expected at $500 million, but they were downsized upon being brought back to market.

JPMorgan, KeyBank, UBS and Fifth Third Bank are the lead banks on the credit facility, with JPMorgan the left lead.

Closing is expected on July 29.

Cedar Fair is a Sandusky, Ohio-based regional amusement-resort operator.

Vertis sets launch

Vertis has scheduled a bank meeting for Monday to launch its $575 million of term loans, comprised of a $425 million first-lien first-out term loan and a $150 million first-lien second-out term loan.

Credit Suisse and Citadel are leading the financing, a company spokesperson said.

Proceeds will be used to refinance an existing term loan and fund the cash consideration for an exchange offer for 18½% senior secured second-lien notes due 2012.

Previously, the company had said that it was looking to get $600 million in new first-lien debt.

Vertis downsizes revolver

Also, Vertis reduced the size of its proposed senior secured asset-based revolving credit facility to $190 million from the previously expected $200 million, the company official added.

GE Capital, Bank of America and Citibank have provided commitments towards the revolver, with GE the left lead.

Proceeds from the asset-based revolver will be used to refinance the company's existing $225 million revolver.

Vertis is a Baltimore-based marketing communications company.

Fairmount Minerals nets interest

Fairmount Minerals' $775 million senior secured credit facility (B1/BB) is moving along nicely with some big orders already finding their way into the books since the July 15 bank meeting, according to a market source.

The facility consists of a $75 million revolver, a $150 million term loan A and a $550 million term loan B.

Price talk on the revolver and the term loan A is Libor plus 450 bps, with the term loan A having a 1.75% Libor floor and being offered at a discount of 981/2.

As for the term loan B, that is being talked at Libor plus 475 bps to 500 bps with a 1.75% Libor floor and an original issue discount in the 98 to 98½ area.

Fairmount Minerals lead banks

Barclays, KeyBank, Bank of America and PNC are the lead banks on Fairmount Minerals' credit facility, with Barclays the left lead.

Amortization on the term loan A is 10% for the first three years and 15% in years four and five.

Proceeds from the new deal will be used to help fund the acquisition of the company by American Securities.

Commitments are due from lenders on Thursday.

Fairmount Minerals is a Chardon, Ohio-based producer of industrial sand.

Midcontinent sees orders

Midcontinent Communications' $350 million 61/2-year term loan B has been attracting interest and the tranche appears to be on its way to filling out within original price talk, according to a market source.

Price talk on the term loan B is Libor plus 450 bps to 475 bps with a 1.75% Libor floor and an original issue discount of 981/2. There is 101 soft call protection for one year.

The company's $675 million senior secured credit facility (B1/B+) also includes a $125 million 51/2-year revolver and a $200 million 51/2-year term loan A, with both of these tranches already fully subscribed.

The revolver and the term loan A are being talked at Libor plus 400 bps, with the revolver having a 50 bps unused fee.

Midcontinent funding distribution

Proceeds from Midcontinent Communications's credit facility will be used to fund a $320 million distribution to the partnership, refinance about $230 million of debt and for general corporate purposes.

The company is a partnership that was formed in April 2000 as joint venture between Midcontinent Media Inc. and Comcast Corp.

Larry Bentson, the company's founder, passed away in 2009 and left the business to its three top officers. As part of the estate settlement, the company has to pay $160 million to the estate and $160 million to Comcast - the $320 million distribution that the credit facility will finance.

SunTrust, Wells Fargo, US Bank and RBC are the joint bookrunners on the deal, with SunTrust the left lead. CoBank and Bank of America have signed on as agents.

Midcontinent Communications is a Minneapolis-based provider of cable television, local and long-distance digital telephone service and high-speed internet access.

AL Gulf Coast closes

In other news, AL Gulf Coast Terminals LLC announced in a news release on Friday that it completed its $305 million six-year senior secured holdco term loan (Ba2/BBB-).

Pricing on the loan is Libor plus 500 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 97. The tranche is non-callable for one year, then at 101 in the second year.

During syndication, pricing was increased from the Libor plus 375 bps to 400 bps area, the floor was lifted from 1.5%, the discount widened from the 98 to 98½ context and call protection was added.

Barclays acted as the lead bank on the deal that was used to refinance existing holdco debt, fund a debt service reserve account and pay a dividend to the company's sponsor, ArcLight Capital Holdings LLC.

Channelview, Texas-based AL Gulf Coast owns a 100% interest in the Houston Fuel Oil Terminal Co. LLC, a provider of crude and residual fuel oil storage in the Gulf of Mexico.

SonicWALL buyout wraps

The purchase of SonicWALL Inc. by Thoma Bravo LLC and Ontario Teachers' Pension Plan for $11.50 per share in cash was completed, according to a news release.

To help fund the transaction, SonicWALL got a new $275 million credit facility, consisting of $15 million revolver (Ba3/BB-), a $155 million 51/2-year first-lien term loan (Ba3/BB-) and a $105 million 61/2-year second-lien term loan.

Pricing on the revolver and first-lien term loan is Libor plus 625 bps, and on the second-lien term loan, it is Libor plus 1,000 bps, with all tranches having a 2% Libor floor and an original issue discount of 97.

The first-lien term loan carries 101 soft call protection for one year, and the second-lien term loan is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

During syndication, pricing on the first-lien term loan and the revolver was flexed up from Libor plus 500 bps, pricing on the second-lien term loan was increased from Libor plus 900 bps, the Libor floor on all tranches was revised from 1.75%, the discount on all tranches widened from 98 and call protection was changed.

SonicWALL is a San Jose, Calif.-based provider of IT security and data backup and recovery services.

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