Garden Ridge breaks; Microsemi ups deadline; Total Safety, BarrierSafe, NewWave set talk

By Sara Rosenberg

New York, Oct. 4 - Garden Ridge revised the original issue discount on its term loan B for a second time, and then the deal emerged in the secondary market on Tuesday, with levels quoted right around the new discount price.

Back over in the primary, Microsemi Corp. accelerated the commitment deadline on its term loan B as syndication is going well, and Total Safety and BarrierSafe Solutions International Inc. released price talk with their launches.

Additionally, NewWave Communications LLC began circulating pricing guidance on its upcoming all pro rata deal, and Emdeon Inc. nailed down timing for its credit facility.

Garden Ridge frees up

Garden Ridge's $250 million six-year term B (B2/B+) broke for trading on Tuesday at 90 bid, 91 offered, after the original issue discount price on the deal was finalized at 90, according to a market source.

Pricing on the loan is Libor plus 725 basis points with a 1.5% Libor floor. There is soft call protection of 102 in year one and 101 in year two.

During syndication, the discount widened to 93 from 97 before settling in at the final price, the spread was increased from guidance of Libor plus 625 bps to 650 bps, the soft call protection was changed from just 101 in year one, and amortization was beefed up to 5% from 1% per year.

Bank of America Merrill Lynch and UBS Securities LLC are leading the $330 million facility, which also provides for an $80 million ABL revolver and will be used to fund the buyout of the company by AEA Investors LP.

Garden Ridge is a Houston-based seller of mattresses, ready-to-assemble furniture, discount apparel and handbags and books.

Microsemi closing early

In more loan happenings, Microsemi moved the commitment deadline for existing and prospective lenders on its well-received $800 million amended and restated senior secured term loan B (BB) to this Thursday from Oct. 11, according to a market source.

The B loan due Feb. 2, 2018 is still being talked at Libor plus 425 bps to 450 bps with a 1.25% Libor floor and an original issue discount of 97 to 98 and includes 101 soft call protection for one year.

With this deal, the company is basically amending, restating and extending its existing $375 million term loan B that was obtained a few months ago at pricing of Libor plus 300 bps with a 1% Libor floor, and sold at par, and getting $425 million of new term loan B borrowings.

Morgan Stanley Senior Funding Inc. is the lead arranger and bookrunner on the deal.

Microsemi buying Zarlink

Proceeds from Microsemi's term loan B will be used to help fund the acquisition of Zarlink Semiconductor Inc. for C$3.98 in cash per share and about C$1.6 in cash per 6% unsecured subordinated convertible debenture, for a total transaction value of roughly $525 million, net of Zarlink's cash which is currently $107 million.

A tender offer for Zarlink's shares and debentures expires on Oct. 12, and closing is subject to customary conditions, including the tender of 66 2/3% of the outstanding shares.

At close, debt to EBITDA will be about 3.0 times.

Microsemi is an Aliso Viejo, Calif.-based provider of semiconductor services. Zarlink is an Ottawa, Canada-based designer of mixed-signal semiconductor products for communications and medical applications.

Total Safety reveals talk

Also in the primary, Total Safety held a bank meeting on Tuesday to kick off syndication on its proposed credit facility, and in connection with the event, price talk on the $235 million seven-year term loan was announced, according to a market source.

The term loan is being talked at Libor plus 575 bps with a 1.25% Libor floor and an original issue discount of 97 and includes soft call protection of 102 in year one and 101 in year two, the source said.

The company's $275 million credit facility (B2/B-) also provides for a $40 million five-year revolver.

Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC are the lead banks on the deal and are asking for commitments by Oct. 20.

Total Safety being acquired

Proceeds from Total Safety's credit facility will be used to help fund the acquisition of the company by Warburg Pincus from DLJ Merchant Banking Partners.

Closing is expected in the fourth quarter, at which time leverage through the first-lien will be 4.3 times and total leverage will be 4.4 times.

Total Safety is a Houston-based outsourced provider of integrated safety and compliance solutions and the products necessary to support them.

BarrierSafe guidance emerges

Also holding a bank meeting on Tuesday was BarrierSafe Solutions, and the company's $150 million five-year credit facility was launched with talk of Libor plus 550 bps with a 1.5% Libor floor and an original issue discount of 981/2, according to a market source.

CIT Group and SunTrust Robinson Humphrey Inc. are leading the deal that consists of a $30 million revolver and a $120 million term loan, and are seeking commitments by Oct. 20.

Proceeds, along with $46 million of mezzanine debt being provided by Morgan Stanley, will be used to fund the buyout of the company by Odyssey Investment Partners LLC from Linden LLC.

Leverage is 3.4 times on a senior secured basis, and total leverage is 4.75 times.

BarrierSafe is a Lake Forest, Ill.-based designer, developer and distributor of disposable gloves and a variety of food safety products.

NewWave floats talk

Continuing on the topic of pricing, NewWave Communications disclosed ahead of its Wednesday bank meeting that its $140 million five-year credit facility is being talked at Libor plus 400 bps with no Libor floor, according to a market source.

The facility is comprised of a $40 million revolver and a $100 million term loan A, the source said.

GE Capital Markets and SunTrust Robinson Humphrey Inc. are the lead banks on the deal that will be used to refinance existing debt and fund a dividend.

NewWave is a Sikeston, Mo.-based communications services company.

Emdeon firms timing

In other news, Emdeon zeroed in on a launch date for its proposed $1.325 billion senior secured credit facility (Ba3) with the scheduling of a bank meeting for 9:30 a.m. ET on Thursday, according to a market source. Previous chatter had the deal expected as this week's business, but a specific date had been unavailable.

The facility consists of a $125 million five-year revolver and a $1.2 billion seven-year term loan B.

Official price talk is not yet out. The company, however, disclosed in filings with the Securities and Exchange Commission that the revolver is expected at Libor plus 450 basis points with a 50 bps unused fee, and the term loan B is expected at Libor plus 475 bps with a 1.25% Libor floor.

Also, the filings said that both revolver and term loan pricing are anticipated to be subject to at least one 25 bps reduction on a pricing grid to be based on consolidated first-lien net leverage.

Emdeon lead banks

Bank of America, Citigroup and Barclays are the joint lead arrangers and bookrunners on Emdeon's credit facility, and Goldman Sachs & Co. signed on as a bookrunner as well.

Proceeds, along with $750 million of senior unsecured notes, $870 million of equity and the rollover of about $330 million of equity, will be used to fund the buyout of the company by Blackstone Capital Partners VI LP for $19.00 per share in cash. The transaction is valued at about $3 billion.

The notes are backed by a commitment for a $750 million one-year senior unsecured bridge loan, priced at Libor plus 850 bps for the first 60 days. Thereafter, interest will be payable at a rate equal to the senior cap. There is a 1.25% Libor floor.

Closing is expected this year, subject to customary conditions, including approval by Emdeon's stockholders, which will be sought at a meeting on Nov. 1, and clearance under the Hart-Scott-Rodino Act.

Emdeon is a Nashville-based provider of revenue and payment cycle management solutions, connecting payers, providers and patients in the U.S. health care system.

Level 3 closes

Level 3 Communications Inc. completed its acquisition of Global Crossing Ltd. for 16 shares of Level 3 stock per share, according to a news release.

To help fund the purchase and to refinance existing debt, the company's subsidiary, Level 3 Financing Inc., got a new $650 million six-year senior secured covenant-light term loan B II (B+) priced at Libor plus 425 bps with a 1.5% Libor floor that firmed at the wide end of the 1.25% to 1.5% talk. The loan was sold at an original issue discount of 99 and includes 101 soft call protection for one year.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc. and Credit Suisse Securities (USA) LLC led the deal.

Level 3 is a Broomfield, Colo.-based provider of fiber-based communications services. Global Crossing is a Florham Park, N.J.-based IP, ethernet, data center and video services provider.

Metropolitan wraps deal

Metropolitan Health Networks Inc. closed on its $355 million credit facility, consisting of a $40 million revolver, a $240 million five-year first-lien term loan and a $75 million six-year second-lien term loan, according to a news release.

Pricing on the revolver is Libor plus 500 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99, pricing on the first-lien term loan is Libor plus 550 bps with a 1.5% Libor floor, and it was sold at 981/2, and pricing on the second-lien loan is Libor plus 1,175 bps with a 1.75% floor, and it was sold at 98.

The deal was revised from an original structure of a $25 million revolver talked at Libor plus 475 bps with a 1.5% floor, a $240 million first-lien term loan talked at Libor plus 475 bps with a 1.5% Libor floor and a discount of 99, and a $90 million second-lien term loan talked at Libor plus 900 bps with a 1.75% floor and a discount of 98.

Metropolitan funds acquisition

Proceeds from Metropolitan Health's credit facility were used, along with cash and investments, to fund the purchase of Continucare Corp. for $403 million in cash and 2.5 million shares of common stock.

The second-lien term loan has four years of call protection, and, if a paydown is made prior to May 4, 2013, a make whole payment.

GE Capital Markets Inc. and SunTrust Robinson Humphrey Inc. led the credit facility.

Metropolitan Health is a Boca Raton, Fla.-based health care organization. Continucare is a Miami-based provider of primary care physician services on an outpatient basis.

Blackboard completes buyout

Blackboard Inc.'s purchase by Providence Equity Partners for $45 per share in cash closed on Tuesday, according to a news release, and the company got a $1.23 billion senior secured credit facility to help fund the transaction.

The facility consists of a $100 million five-year revolver (B1/B+), a $780 million seven-year first-lien term loan (B1/B+) and a $350 million eight-year second-lien term loan (Caa1/CCC+).

Pricing on the first-lien term loan is Libor plus 600 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 92. There is soft call protection of 102 in year one and 101 in year two.

During syndication, pricing on the first-lien loan was flexed up from Libor plus 550 bps, and the discount moved from revised talk of 94 to 95 and initial talk at launch of 96½ to 97.

Blackboard second-lien held

Blackboard's second-lien term loan is being funded by the underwriters as market conditions weren't supportive of the syndication effort, a source said.

The second-lien term loan had been talked at Libor plus 975 bps with a 1.5% Libor floor and an original issue discount of 97½ to 98, and was non-callable for one year, then at 102 in year two and 101 in year three. There is no indication as to where final pricing fell out, the source added.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc. led the deal.

Blackboard is a Washington, D.C.-based provider of enterprise software applications and related services to the education industry.

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