Walter Energy up with buyout buzz; Flexera, George Little Management, NewPage talk emerges

By Sara Rosenberg

New York, Sept. 7 - Walter Energy Inc.'s term loan B headed higher in trading on Wednesday as rumors were circulating about a possible buyout offer being in the works, and the secondary market in general was stronger.

Moving to the primary, Flexera Software released pricing guidance, and George Little Management came out with talk and structure on its credit facility, as both transactions were presented to lenders during the session.

Also, NewPage Corp. announced plans for a debtor-in-possession financing transaction and some price talk on the upcoming deal has already been released, and Blackboard Inc. nailed down timing on the launch of its credit facility.

Walter Energy rises

Walter Energy's term loan B gained ground in trading on Wednesday with chatter that Anglo American plc may be considering an offer to purchase the company, a trader told Prospect News.

Another factor that was seen as pushing the term loan B higher was the overall strength in the secondary market, with the trader describing things overall as up by a quarter of a point to a half-point.

By late day, the B loan was quoted at 96½ bid, 97½ offered, up from 95 bid, 96½ offered, the trader added.

Walter Energy is a Tampa, Fla.-based producer and exporter of metallurgical coal for the steel industry. Anglo American is a London-based mining company.

Flexera sets guidance

Switching to primary happenings, Flexera Software held a bank meeting on Wednesday to launch its proposed credit facility, and in connection with the event, price talk on the first- and second-lien term loans was released, according to a market source.

The $230 million first-lien term loan (B2/B) is being talked at Libor plus 600 basis points with a 1.25% Libor floor and an original issue discount of 98, and the $100 million second-lien term loan (Caa2/CCC+) is being talked at Libor plus 925 bps with a 1.25% floor and a discount of 98, the source said.

BMO Capital Markets Corp. is the lead bank on the $355 million deal, which also includes a $25 million revolver (B2/B) and will be used to help fund the buyout of the company by Teachers' Private Capital from Thoma Bravo LLC.

Closing on the transaction is expected in late September.

Flexera is a Schaumburg, Ill.-based provider of strategic application usage management services for application producers and their enterprise customers.

George Little details surface

George Little Management launched its credit facility on Wednesday as well, outlining to lenders that the $88 million six-year deal consists of a $10 million revolver and a $78 million term loan, according to a market source.

The facility was launched with price talk of Libor plus 550 bps with a 1.5% Libor floor and an original issue discount of 99, the source continued.

GE Capital Markets is leading the deal that will be used to help fund the buyout of the company by Providence Equity Partners from Daily Mail and General Trust plc for about $173 million in cash.

Closing is expected by the end of September, subject to customary conditions and regulatory approvals.

George Little Management is a creator of face-to-face and online buying, selling and networking platforms for designers, product developers, manufacturers, reps, retailers and operators.

Garden Ridge launches

Another company that held a bank meeting Wednesday was Garden Ridge, launching its $250 million six-year term loan B (B2/B+) at previously disclosed talk of Libor plus 625 bps to 650 bps with a 1.5% Libor floor, sources said.

There is 101 soft call protection for one year and an original issue discount that is still to be determined, sources added.

The company's $330 million credit facility also provides for an $80 million ABL revolver.

Bank of America Merrill Lynch and UBS Securities LLC are the lead banks on the deal that 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.

NewPage reveals talk

NewPage began circulating some pricing details on its proposed $600 million debtor-in-possession financing facility as the company is getting ready to launch the transaction with a bank meeting on Friday, according to a market source.

The $350 million first-out ABL revolver is expected at Libor plus 325 bps with no Libor floor, the source remarked.

And, the $250 million second-out term loan is talked at Libor plus 750 bps with a 1.5% Libor floor and an original issue discount that is still to be determined, the source added.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to repay outstanding revolver debt and for general corporate purposes, while the Miamisburg, Ohio-based producer of printing and specialty papers restructures under Chapter 11.

NewPage filing no surprise

NewPage's announcement on Wednesday that it filed for bankruptcy protection was pretty much expected as the company had already warned that this step may have to be taken back in a 10-Q filed with the Securities and Exchange Commission in mid-August.

The company has been facing issues with the maturity of its revolver since it did not refinance its floating-rate and 10% second-lien senior secured notes by July 4.

Because the notes were not taken out, $30 million of the company's $500 million revolver is set to mature on Oct. 3, and if the notes are not refinanced by Dec. 2, the maturity on the remaining $470 million revolver would be accelerated to March 1 from Dec. 21, 2012.

Also, if the notes are not repaid by Jan. 31, the maturity of NewPage's $1.69 billion 11 3/8% senior first-lien notes due 2014 would be moved up to March 31.

As of June 30, the outstanding amount of the second-lien notes was $1.03 billion.

Blackboard schedules meeting

Blackboard zeroed in on timing for the launch of its proposed $1.23 billion senior secured credit facility as a bank meeting has been set for Monday with a 1:30 p.m. ET start time, according to a source.

The facility, which will help fund the buyout of the company by Providence Equity Partners, consists of a $100 million five-year revolver, a $780 million seven-year first-lien term loan and a $350 million eight-year second-lien term loan, the source said.

Based on filings with the SEC, the first-lien term loan was anticipated to be $700 million, but it was said that it could be upsized by $80 million if 100% of the outstanding equity interests of a portfolio company of Providence were to be contributed to the company.

Also, while official talk is not yet out, the regulatory filings had the revolver expected at Libor plus 450 bps, the first-lien term loan expected at Libor plus 475 bps with a 1.5% Libor floor and the second-lien term loan expected at Libor plus 800 bps with a 1.5% Libor floor.

Blackboard lead banks

Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc. are the lead banks on Blackboard's credit facility.

Other funds for the company's buyout will come from up to $850 million in equity.

Under the agreement, the company is being purchased by Providence for $45 per share in cash. The transaction is valued at $1.64 billion, plus the assumption of $130 million of net debt.

Closing is expected in the fourth quarter, subject to stockholder and regulatory approvals, and other customary conditions.

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

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