Adesa, Network Solutions, USPF set talk; Hawker flex rejected; Dynegy tweaks deal

By Sara Rosenberg

New York, March 22 - Adesa Inc., Network Solutions Inc. and United States Power Funds Holdings (USPF) came out with price talk on their credit facilities as all three deals were launched with bank meetings during Thursday's market hours.

In other primary news, Hawker Beechcraft Corp.'s recently announced second flex down in institutional loan pricing was unsuccessful, resulting in spreads reverting back to initial flex levels, and Dynegy Holdings Inc. shifted some funds around, revised pricing on its synthetic letter-of-credit facility and added a new term loan B tranche.

Adesa held a bank meeting on Thursday morning to launch its $1.79 billion senior secured credit facility (Ba3), at which time it was revealed that both tranches under the transaction are being talked at Libor plus 225 basis points to 250 bps, according to a market source.

Tranching on the deal is comprised of a $300 million revolver that will have a covenant and a $1.49 billion covenant-light term loan B.

Bear Stearns, UBS, Goldman Sachs and Deutsche Bank are the lead banks on the deal, with Bear Stearns the left lead.

Proceeds will be used to help fund the leveraged buyout of Adesa by Kelso & Co., GS Capital Partners, ValueAct Capital and Parthenon Capital for $27.85 per share in cash.

As part of the transaction, Insurance Auto Auctions, Inc., a Kelso and Parthenon Capital-owned provider of automotive salvage auction and claims processing services, will be combined with Adesa.

The total transaction value, including the contribution of Insurance Auto, the assumption or refinancing of about $700 million of debt and the payment of related fees and expenses, is $3.7 billion.

Adesa is a Carmel, Ind., provider of wholesale vehicle auctions and used vehicle dealer floorplan financing.

Network Solutions price talk

Network Solutions also launched a new deal on Thursday, during which it presented the $340 million seven-year first-lien term loan B (B1/B) and the $25 million six-year revolver (B1/B) to lenders with talk of Libor plus 250 bps, according to a market source.

The company's $450 million credit facility also includes an $85 million 71/2-year second-lien term loan (Caa1/CCC+).

Deutsche Bank and Bank of America are the joint lead arrangers on the deal.

Proceeds will be used to finance a leveraged buyout of the company by General Atlantic LLP.

Network Solutions is a Herndon, Va., seller of Internet domain names and provider of related services.

USPF guidance emerges

Continuing on the price talk front, United States Power Funds Holdings came out with talk of Libor plus 175 bps on both tranches under its $300 million credit facility (BB) as syndication on this deal also got started with a bank meeting during the session, according to a market source.

Tranching on the facility is comprised of a $288 million term loan B and a $12 million synthetic letter-of-credit facility.

Lehman is the sole lead bank on the deal, which will be used to fund a dividend and a debt service reserve.

USPF is a limited liability company formed by United States Power Fund, which is managed by Energy Investors Funds, a private equity fund manager that invests in the energy and electric power sector.

Hawker flex pulled on pushback

Hawker Beechcraft's most recent change to term loan and synthetic letter-of-credit facility spreads resulted in enough investor pushback to prompt the syndicate to stick with pricing levels that went through the first time they flexed, according to a fund manager.

The $1.3 billion covenant-light seven-year term loan and the $110 million covenant-light seven-year pre-funded synthetic letter-of-credit facility are both ending up priced at Libor plus 200 bps with a step down to Libor plus 175 bps when corporate family ratings are upgraded to B1/B+, the fund manager said.

The pricing level that sparked the pushback was when the syndicate tried the other day to take the spread on these two tranches down to Libor plus 175 bps with no step, the fund manager continued.

Both the term loan and the synthetic letter-of-credit facility were originally launched with price talk of Libor plus 225 bps to 250 bps. The flex to Libor plus 200 bps with the step to Libor plus 175 bps was announced at the end of last week.

"They tried to bring it down to Libor plus 175 [bps] but most investors dropped out of the book at that level," the fund manager told Prospect News on Thursday morning. "So, CS just sent something out saying that pricing is now Libor plus 200 [bps] with a step down to Libor plus 175 [bps] if B1/B+ corporate ratings."

Pricing isn't the only thing to have changed on the term loan and synthetic letter-of-credit facility during syndication. Last week, the term loan was upsized from $1.2 billion after the company downsized its high-yield bond offering by $100 million, and then, the synthetic letter-of-credit facility was downsized from $250 million.

The company's $1.81 billion credit facility (Ba3/BB-) also includes a $400 million six-year revolver with a 50 bps commitment fee.

Credit Suisse, Goldman Sachs and Lehman are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds from the credit facility, along with the $1.1 billion of bonds and sponsor equity, will be used to fund the acquisition of Raytheon Aircraft Services, Ltd., the aviation division of Raytheon Co., by Onex Corp. and GS Capital Partners.

Hawker Beechcraft is a Wichita, Kan., manufacturer of business jet, turboprop, piston-driven and military training aircraft.

Dynegy reworks deal

Dynegy made a round of changes to its credit facility, including moving some funds out of its synthetic letter-of-credit facility and into its revolver, lowering pricing on the synthetic letter-of-credit facility and adding a new term loan B tranche to the capital structure, according to a market source.

The synthetic letter-of-credit facility due April 2013 is now sized at $400 million, down from $500 million, and pricing was reverse flexed to Libor plus 150 bps from original talk at launch of Libor plus 175 bps, the source said.

On the flip side, the revolver due April 2012 is now sized at $850 million, up from $750 million, while pricing was left unchanged at Libor plus 150 bps, the source continued.

And, lastly, a new $70 million term loan B was added to the deal with pricing set at Libor plus 150 bps, the source added. Proceeds from this term loan B will be used to repay a note.

Proceeds from the rest of the facility will be used to refinance the company's existing $470 million revolver and $200 million term letter-of-credit facility, for general corporate purposes and to support activities of certain subsidiaries.

Citigroup and JPMorgan are the lead arrangers on the now $1.32 billion (up from $1.25 billion) senior secured credit facility (Ba1/BB-/BB).

Dynegy is a Houston-based electric company.

Secondary tone improves

In general, the secondary loan market seemed to carry a better tone with things feeling stronger than they have recently, including names like VNU NV and Georgia-Pacific Corp., according to a trader.

VNU, a Haarlem, Netherlands-based information and media company, saw its term loan B end the session at par 7/8 bid, 101 1/8 offered, up from par ¾ bid, 101 offered, the trader said.

And, Georgia-Pacific, an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals, saw its term loan B end the day at par ½ bid, par ¾ offered, up from par 3/8 bid, par 5/8 offered, the trader added.

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