Calpine rises on paydown; Focus Brands sets talk; Illumination and Detection timing emerges

By Sara Rosenberg

New York, Oct. 18 - Calpine Corp.'s old term loan headed higher in trading on Monday after the company revealed plans to repay some of the debt with proceeds from a senior secured notes offering, and a Bid Wanted In Competition surfaced.

Over in the primary market, Focus Brands Inc. came out with price talk on its credit facility as the transaction was presented to lenders in the afternoon, and Illumination and Detection Solutions has firmed up timing on the launch of its deal.

Also, Rural/Metro Corp. and Getty Images Inc. announced plans to come to market with new loans later this week.

And, General Growth Properties Inc. no longer expects to get a new term loan in connection with its emergence from bankruptcy since notes issued by its subsidiary, Rouse, will now be reinstated rather than repaid.

Calpine gains ground

Calpine's old term loan was stronger in the secondary market as investors are expecting the debt to be repaid with proceeds from the sale of $1.5 billion of senior secured notes, according to traders.

After the news hit, Calpine's old term loan was quoted by one trader at 99 1/8 bid, 99 5/8 offered, up from 97 7/8 bid, 98 3/8 offered, and by a second trader at 99 1/8 bid, 99 5/8 offered, up from 97¾ bid, 98¼ offered.

Meanwhile, the new term loan was quoted by the first trader at 101½ bid, 102 offered, unchanged on the day, and by the second trader at 101 5/8 bid, 102 1/8 offered, also flat from Friday.

Calpine is a Houston-based power generation company.

BWIC bids due Tuesday

A $235 million Bid Wanted In Competition was announced on Monday, for which bids are being requested by 1 p.m. ET on Tuesday, according to a market source.

The portfolio is made up of about 17 names, including Charter Communications, Dollar General Corp., First Data Corp., Harrah's Operating Co. Inc., HCA, Michaels Stores, NRG Energy, Texas Competitive Electric Holdings Co. LLC and Univision Communications.

"It's some pretty chunky stuff. You would think the market would be a little lower after it hit, but it wasn't. Not much trading in the names though. Probably won't be tomorrow either," one trader added.

Focus Brands talk emerges

Switching to the primary, Focus Brands held a bank meeting at 2 p.m. ET on Monday to kick off syndication on its proposed $285 million credit facility (B), and in connection with the launch, price talk was announced, according to a market source.

Both the $10 million revolver and the $275 million term loan are being talked at Libor plus 475 bps to 500 bps with a 1.75% Libor floor and an original issue discount of 981/2, the source said.

Credit Suisse is the lead bank on the deal that will be used to refinance existing debt and fund the acquisition of the Auntie Anne's, a Lancaster, Pa.-based hand-rolled soft pretzel chain.

Focus Brands is an Atlanta-based franchisor and operator of ice cream stores, bakeries, restaurants and cafes.

Illumination and Detection launch

Illumination and Detection Solutions nailed down timing on the launch of its $193 million credit facility with the scheduling of a bank meeting for Thursday at the New York Palace with a 2:30 p.m. ET start time, according to a market source. Previously, the deal was being labeled simply as October business.

UBS is the lead bank on the facility that consists of a $15 million five-year revolver and a $178 million six-year term loan.

Proceeds, along with $90 million of mezzanine financing, will be used to help fund the buyout of the company by Veritas Capital from PerkinElmer Inc. for about $500 million in cash.

Closing is expected by the end of the year, subject to customary conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Illumination and Detection Solutions is a provider of specialty lighting and sensor components, subsystems and integrated products to OEMs serving health, environmental and security segments.

Rural/Metro readies deal

Rural/Metro has scheduled a conference call for Wednesday to launch a proposed $175 million secured credit facility that is being led by RBC Capital, according to a market source.

The facility consists of a $75 million term loan and a $100 million revolver, the source said, adding that price talk is not yet available.

Proceeds will be used, along with a $200 million of senior notes, to refinance the company's existing bankdebt, to fund a tender offer for its senior discount notes, to pay-off cash collateralized letters of credit and for working capital and general corporate purposes.

Rural/Metro is a Scottsdale, Ariz.-based provider of medical ambulance response services.

Getty launching Wednesday

Getty Images has set a bank meeting for 2 p.m. ET on Wednesday to launch a proposed $1.37 billion credit facility that consists of a $100 million revolver and a $1.27 billion term loan, according to a market source.

Barclays, JPMorgan, GE Capital, Bank of America and Goldman Sachs are the lead banks on the deal that will be used to refinance existing debt and fund a dividend payment.

There is no price talk available on the facility as of yet, the source said.

Getty Images is a Seattle-based creator, aggregator and distributor of visual and multimedia content to creative and communication professionals.

General Growth to drop term

General Growth Properties said in an S-11/A filed late Friday with the Securities and Exchange Commission that it no longer intends to get a $1.5 billion five-year secured term loan to help fund its exit from Chapter 11.

The company explained that the term loan commitment was obtained in case the bankruptcy court determined that reinstatement of the notes issued by its Rouse subsidiary was not permitted.

But since the objection deadline has passed without objection to reinstatement, there is no longer a need for the proposed term loan.

The Rouse notes include $400 million of 7.20% notes dues 2012, $450 million of 5.375% notes due 2013 and $800 million of 6¾% notes due 2013.

Under the plan, $1.041 billion of the Rouse notes will be reinstated, and holders of $608.7 million of Rouse notes elected to receive new five-year notes priced at 6¾%.

General Growth getting revolver

General Growth Properties still anticipates getting a new $300 million three-year revolving credit facility in connection with its bankruptcy emergence, the filing said.

However, none of the revolver commitments are expected to be used to consummate the reorganization plan.

Deutsche Bank, Wells Fargo and RBC are the joint lead arrangers on the revolver, with Deutsche the administrative agent.

The company previously disclosed that pricing on the revolver would be Libor plus 450 basis points.

Covenants include a maximum net debt to value ratio, a maximum leverage ratio and a minimum net cast interest coverage ratio.

General Growth Properties is a Chicago-based real estate investment trust that owns shopping malls, community developments and commercial office buildings.

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