Integra, Bisys, CEVA, Primedia, Thomas Properties, CPI set talk; Biomet, EPD, Hilite tweak deals

By Sara Rosenberg

New York, July 12 - Integra Telecom Inc., Bisys Crump, CEVA Group plc, Primedia Inc., Thomas Properties Group, Inc. and Communications & Power Industries, Inc. (CPI) came out with price talk on their credit facilities as all of these deals were launched to investors during Thursday's session.

In other primary news, Biomet Inc. shifted some funds between its U.S. and euro term loans, firmed up pricing on the tranches at the high end of revised talk and added soft call protection.

Also, EPD Inc. made some more changes to its credit facility, this time adding original issue discounts and a maintenance covenant, and Hilite International flexed pricing higher on its credit facility and added original issue discounts.

Over in trading news, LCDX was better for a second day in a row and Movie Gallery Inc.'s bank debt was stronger as investors are viewing recoveries more favorably.

Integra Telecom held a bank meeting on Thursday to begin syndication on its proposed $1.035 billion senior secured credit facility, and in connection with the launch, price talk on the transaction was announced, according to a market source.

The $50 million revolver (B1) and the $715 million first-lien term loan B (B1) were both presented with talk of Libor plus 325 basis points, and the $270 million second-lien term loan (Caa1) was presented with talk of Libor plus 600 bps, the source said.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

In addition, the company also is getting a $215 million unsecured PIK term loan (Caa2) that is talked at Libor plus 850 bps, with a 50 bps step up in pricing after 12 months, the source continued.

The PIK loan is non-callable for one year, then at 106 in year two, 104 in year three, 102 in year four and par thereafter.

Deutsche Bank and Morgan Stanley are the joint lead arrangers on the deal, and CIBC is the documentation agent.

Proceeds will be used to help fund the acquisition of Eschelon Telecom, Inc. for $30.00 per share or a total purchase price of $710 million, including the repayment of about $144 million in Eschelon debt.

Through this acquisition, one of the largest competitive local exchange carriers in the nation will be formed, as total company revenues are predicted to be more than $700 million annually with more than $200 million in pro-forma 2007 EBITDA.

Integra is a Portland, Ore.-based provider of local, long-distance and internet services for businesses. Eschelon is a Minneapolis-based competitive communications services provider of voice and data services and business telephone systems.

Bisys Crump spread guidance

Bisys Crump released price talk of Libor plus 225 bps on both tranches under its proposed $565 million credit facility as this deal was yet another one to launch with a bank meeting during market hours, according to a buyside source.

Tranching on the facility is comprised of a $40 million revolver and a $525 million term loan.

Wachovia, Citigroup and Bear Stearns are the lead banks on the deal.

Proceeds will be used to help fund JC Flowers' acquisition of Bisys' Insurance Services Group and Retirement Services business. JC Flowers will be combining its existing commercial insurance business, Crump, with the Bisys business.

CEVA floats talk

CEVA came out with price talk on its $525 million of incremental bank debt (BB-) as it too launched with a bank meeting on Thursday, according to a market source.

The $425 million term loan add-on, the $50 million synthetic letter-of-credit facility add-on and the $50 million revolver add-on are all being talked at Libor plus 275 bps based on a B2 corporate rating, with a step down to Libor plus 250 bps at B1, the source said.

In addition, the company is repricing its existing bank debt from Libor plus 250 bps to match the add-on pricing, the source said.

Credit Suisse, Morgan Stanley, Bear Stearns, JPMorgan and UBS are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds will be used to help fund the acquisition of EGL Inc. for $47.50 in cash per share, for a total transaction consideration of about $2 billion.

The buyout is expected to close in the third quarter, subject to regulatory and EGL stockholder approvals. The EGL stockholder meeting to vote on this transaction is set for July 31.

CEVA is a Hoofddorp, Netherlands-based logistics and supply chain management company. EGL is a Houston-based transportation, supply chain management and information services company.

Primedia guidance

Primedia was yet another deal to come out with price talk in conjunction with its bank meeting launch during the session, according to a market source.

The company's $100 million revolver is being talked at Libor plus 175 bps and the $250 million term loan is being talked at Libor plus 200 bps, the source said.

Credit Suisse, Bank of New York, Lehman Brothers and Citigroup are the lead banks on the $350 million senior secured deal (Ba3/BB).

Proceeds from the facility, along with proceeds expected to be received upon the completion of the sale of the company's Enthusiast Media business, will be used to repay existing debt, fund a one-time dividend of about $96 million to shareholders and provide access to additional growth capital.

The deal is expected to close in late July or early August.

Primedia is a New York-based media company.

Thomas Properties price talk

Thomas Properties Group also held a bank meeting on Thursday to launch its proposed credit facility, at which time it too revealed price talk, according to a market source.

Both the $100 million five-year revolver and the $192.5 million six-year term loan are being talked at Libor plus 250 bps, the source said.

Lehman Brothers is the lead bank on the $292.5 million deal.

Proceeds will be used to help fund Thomas' already completed acquisition, in partnership with the California State Teachers Retirement System and Lehman Brothers, of 10 class A office properties in Austin, Texas, from Blackstone Real Estate Advisors for $1.15 billion.

Thomas is a Los Angeles-based full-service real estate company.

CPI guidance emerges

Continuing on the price talk front, Communications & Power announced opening guidance of Libor plus 200 bps on both tranches under its $160 million senior credit facility as syndication kicked off with a conference call on Thursday, according to a market source.

Tranching on the deal is comprised of a $100 million term loan and a $60 million revolver.

UBS Securities LLC, Bear Stearns and RBS Securities are the joint bookrunners on the deal, with UBS the left lead.

Proceeds will be used to refinance existing bank debt and fund a tender offer for $58 million of floating-rate senior notes due 2015.

The tender offer will expire on July 30.

Communications & Power is a Palo Alto, Calif., provider of microwave, radio frequency, power and control services for critical defense, communications, medical, scientific and other applications.

Biomet shifts funds, firms pricing

Biomet moved some funds between its U.S. and euro covenant-light 71/2-year term loan B's (B3/B+), firmed pricing at the wide end of revised guidance and added soft call protection, according to a buyside source.

The U.S. term loan B is now sized at $2.34 billion, down from $2.6 billion, pricing is set at Libor plus 300 bps, compared to revised talk of Libor plus 275 bps to 300 bps and original talk at launch of Libor plus 225 bps to 250 bps, and the paper now carries 101 soft call protection for one year, the source said.

The euro term loan B is now sized at €875 million, up from around $1 billion equivalent, pricing is set at Euribor plus 300 bps, compared to revised talk of Euribor plus 275 bps to 300 bps and original talk at launch of Euribor plus 225 bps to 250 bps, and the paper now carries 101 soft call protection for one year, the source added.

The funds were shifted to the euro term loan B because it was oversubscribed.

Biomet's approximately $4.35 billion senior secured credit facility also includes a $400 million six-year cash-based revolver and a $350 million six-year asset-based revolver (Ba2/BB-).

Bank of America and Goldman Sachs are joint lead arrangers on the deal; Bank of America, Goldman, Bear Stearns, Lehman and Merrill Lynch are joint bookrunners; and Wachovia is co-manager. Bank of America is administrative agent, Goldman is syndication agent, and Bear Stearns, Lehman and Merrill Lynch are co-documentation agents.

Proceeds will be used to help fund the buyout of the company by the Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. and TPG.

In June, the consortium raised their buyout price for Biomet to $46.00 per share from $44.00 per share, or roughly $11.4 billion compared with $10.9 billion, and began a tender offer to buy the company's common shares.

The increase in the purchase price is being funded by an increase in the amount of equity being used for the transaction.

On Thursday, news emerged that the tender offer for Biomet's common shares was successful with 82.85% tendered by Wednesday's expiration date.

Biomet is a Warsaw, Ind., designer and manufacturer of musculoskeletal medical products.

EPD adds OIDs

EPD came out with another round of changes to its credit facility, including adding original issue discounts to the first- and second-lien term loans and adding a leverage covenant to the first-lien debt, according to a market source.

The $700 million seven-year first-lien term loan (B1/B+) and the $100 million 12-month delayed-draw, with seven-year final maturity, term loan (B1/B+) are both now being offered to investors at a discount of 991/2, the source said.

And, the $360 million eight-year second-lien term loan (Caa1/CCC+) is now being offered to investors at a discount of 981/2, the source remarked.

The leverage covenant that was added to the first-lien credit agreement opens at 5.75 times, with step downs over time, the source added.

Pricing on the first-lien funded and delayed-draw term loans remained at Libor plus 250 bps, and pricing on the second-lien term loan remained at Libor plus 575 bps.

Call protection on the second-lien term loan is 102 in year one and 101 in year two.

EPD's $1.26 billion senior secured credit facility also includes a $100 million six-year multi-currency revolver (B1/B+) priced at Libor plus 250 bps.

Earlier in syndication, the funded first-lien term loan was upsized from $650 million when the second-lien term loan was downsized from $410 million, pricing on the funded and delayed-draw term loans and the revolver firmed up at the wide end of talk of Libor plus 225 bps to 250 bps, and pricing on the second lien firmed up at the wide end of talk of Libor plus 550 bps to 575 bps.

Lehman Brothers, JPMorgan and Goldman Sachs are the joint lead arrangers and joint bookrunners on the deal.

Proceeds will be used to help fund the Carlyle Group's acquisition of EPD, which is the engineered products division of the Goodyear Tire & Rubber Co., in an all-cash transaction valued at $1.475 billion.

EPD is an Akron, Ohio, manufacturer of hoses, conveyor belts and power transmission belts, as well as tank tracks for military and off-road vehicles.

Hilite ups pricing, adds OIDs

Hilite increased pricing on all tranches under its $190 million credit facility and added original issue discounts to the first- and second-lien term loans, according to a market source.

The $25 million revolver (B1/BB-) and the $95 million first-lien term loan (B1/BB-) are now both priced at Libor plus 400 bps, up from original talk in the Libor plus 325 bps area, the source said.

Meanwhile, the $70 million second-lien term loan (Caa2/B-) is now priced at Libor plus 750 bps, up from original talk in the Libor plus 675 bps area, the source continued.

In addition, the first-lien term loan is now being sold at a discount of 98½ and the second-lien term loan is now being sold at a discount of 97, the source added.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

Recommitments are due at the end of the day Monday.

Bear Stearns is the lead bank on the deal, which will be used to refinance existing debt.

Hilite is a Cleveland-based supplier of automotive components.

Vertrue fine tunes deal

Vertrue Inc. modified its credit facility by adding original issue discounts to the first- and second-lien term loans, firming up pricing on the first-lien debt at the high end of talk and increasing pricing on the second lien, according to a market source.

Under the changes, the $430 million seven-year first-lien term loan (Ba3/B+) is now being sold at a discount of 99 and pricing firmed at Libor plus 250 bps, compared to original talk at launch of Libor plus 225 bps to 250 bps, the source said.

Meanwhile, the $200 million eight-year second-lien term loan (Caa1/CCC+) is now also being sold at a discount of 99 and pricing was flexed up to Libor plus 650 bps from original talk of Libor plus 550 bps to 575 bps, the source continued.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

Lastly, pricing on the company's $30 million six-year revolver (Ba3/B+) firmed up at Libor plus 250 bps, compared to original talk of Libor plus 225 bps to 250 bps, the source added.

The revolver has a 50 bps commitment fee.

Earlier in syndication, the deal had been revised to add a leverage covenant to the first- and second-lien term loans, which previously contained no financial covenants at all.

The first-lien term loan leverage covenant opens at 7.25 times, and the second-lien term loan leverage covenant opens at 7.5 times.

There was no need to add a leverage ratio to the revolver because the tranche already carried one.

Lehman and JPMorgan are the joint lead arrangers and joint bookrunners on the $660 million deal, with Lehman the administrative agent and JPMorgan the syndication agent.

Proceeds will be used to help fund the buyout of Vertrue by management, One Equity Partners, Oak Investment Partners and Rho Ventures for $48.50 in cash per share of common stock. The transaction is valued at about $800 million.

Other buyout financing will come from a $175 million equity commitment.

Vertrue is a Norwalk, Conn., internet direct marketing services company.

LCDX inches higher

LCDX was once again on the rise on Thursday, and the cash market was better as well, according to a trader.

LCDX went out at 96.80 bid, 97 offered, up from opening levels of 96.65 bid, 96.75 offered, the trader said.

And, the cash market was up about an eighth to a quarter of a point, the trader added.

Movie Gallery up

Movie Gallery's first- and second-lien term loans headed higher on Thursday as people are starting to feel more comfortable with recoveries, according to a trader.

The first-lien term loan B ended the day at 93 bid, 94 offered, up on the bid side from 92 bid, 94 offered, the trader said.

Meanwhile, the second-lien term loan went out at 73 bid, 75 offered, up from 70 bid, 72 offered, the trader added.

Last week, the Dothan, Ala.-based video rental company said that it is considering strategic alternatives, including asset divestitures, recapitalizations, alliances with strategic partners and a sale to or merger with a third party.

In addition, the company revealed that it was not able to meet the financial covenants contained in its senior facility for the fiscal quarter ended July 1 due to significantly softer-than-expected second-quarter results.

The company is talking to its lenders about a way to remedy the defaults, including possibly seeking a waiver, amendment, forbearance or similar agreement.

Generac trades higher

Generac Power Systems Inc.'s first- and second-lien term loan debt was stronger on the day in active trading, with the momentum attributed to the overall better market tone, according to a trader.

The first-lien term loan ended the day at 96 bid, 96¾ offered, and the second-lien term loan ended the day at 92 bid, 93 offered, with both tranches up by about half a point, the trader said.

Generac is a Waukesha, Wis., manufacturer of standby power products.

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