Skilled Healthcare rises; Savvis, Altegrity, Fairmount, Centerplate, EnergySolutions set talk

By Sara Rosenberg

New York, July 15 - Skilled Healthcare Group Inc.'s term loan headed higher during Thursday's trading session as news emerged that the company's legal battle has been put on hold so that the parties can try to settle through mediation.

Over in the primary market, Savvis Inc., Altegrity Inc., Fairmount Minerals Ltd. and Centerplate Inc. came out with price talk on their credit facilities as the deals were presented to lenders during the session, and EnergySolutions Inc. revealed structure and talk with its launch.

Also, Cedar Fair LP raised the size of its term loan as a downsized bond offering resurfaced and is set to hold a conference call for loan investors on Friday to discuss the rejuvenated transaction.

Skilled Healthcare trades up

Skilled Healthcare's term loan was stronger in trading after the company announced plans to pursue mediation to settle a previously disclosed lawsuit, according to traders.

The term loan was quoted by one trader at 92 bid, 94 offered, up from 91½ bid, 93 offered, and by a second trader at 91½ bid, 93½ offered, up from 91 bid, 93 offered.

Specifically, the legal battle involves a complaint that was filed in 2006 that claims certain of the company's California-based facilities were understaffed and misrepresented the quality of care provided in their facilities.

The mediation stipulation is subject to approval by the Humboldt County Superior Court of California and was scheduled to be submitted to the judge on Thursday.

Skilled Healthcare stipulation

Under Skilled Healthcare's mediation stipulation, from now through Aug. 9, the plaintiffs have agreed neither to seek to convert the previously announced jury verdict in the litigation to a judgment nor to try to get control over the company's property.

Also through Aug. 9, the company has agreed not to transfer or otherwise impair its assets outside of bankruptcy and not to file for Chapter 11.

Earlier this month, a jury ruled that the company should pay $613 million in statutory damages and $58 million in restitutionary damages to the plaintiffs, and the jury had yet to hear the punitive damages phase of the trial.

Skilled Healthcare is a Foothill Ranch, Calif.-based healthcare services company.

Savvis talk emerges

Moving to new deal happenings, Savvis held a bank meeting at 9:30 a.m. ET on Thursday at the W Hotel in New York to launch its proposed $625 million senior secured credit facility, and shortly before the launch, price talk on the deal was announced, according to a market source.

The $550 million term loan due in 2016 is being talked at Libor plus 475 basis points and the $75 million revolver due in 2014 is being talked at Libor plus 450 bps, the source said.

The term loan has a 1.75% Libor floor and is being offered at an original issue discount of 97 to 98, the source continued.

In addition, the term loan provides for 101 soft call protection for one year.

Savvis purchasing convertibles

Proceeds from Savvis' credit facility will be used to help repay existing debt, including the repurchase of roughly $345 million of the company's 3% convertible senior notes due May 2012 and outstanding bank borrowings, and for general corporate purposes.

A tender offer for the convertibles began on July 1 and expires on July 29.

Bank of America, Morgan Stanley, Credit Suisse and SunTrust are the joint lead arrangers and bookrunners on the credit facility.

Savvis is a Town & Country, Mo.-based provider of cloud infrastructure and hosted IT services.

Altegrity add-on guidance

Altegrity held a bank meeting at 1 p.m. ET on Thursday to launch to its proposed $550 million add-on term loan (B+) due in 2015, which was presented to lenders with talk of Libor plus 600 bps with a 1.75% Libor floor and an original issue discount of 98, according to a market source.

The term loan includes 101 soft call protection for one year, the source said.

The term loan is being obtained under the accordion feature that is part of the company's existing credit agreement, and the existing credit facility will be left in place.

Goldman Sachs is the lead bank on the deal that will be used to help fund the acquisition of Kroll Inc. from Marsh & McLennan Cos. Inc. in an all-cash transaction valued at $1.13 billion.

Altegrity getting mezzanine debt

Other financing for Altegrity's acquisition of Kroll will come from $210 million of 12% mezzanine notes privately placed with Apollo Investment Corp. and equity.

Closing on the transaction is expected by late September, subject to regulatory approvals and other customary conditions.

Pro forma for the deal, senior secured first-lien leverage is in the low 4.0 times and total leverage is just around 6.0 times.

Altegrity, a Providence Equity Partners portfolio company, is a Falls Church, Va.-based screening and security services company. Kroll is a New York-based risk consulting company.

Fairmount Minerals price talk

Fairmount Minerals came out with price talk on its $775 million senior secured credit facility (B1) as it, too, launched with a bank meeting on Thursday, according to a market source.

The $550 million term loan B is being talked at Libor plus 475 bps to 500 bps with a 1.75% Libor floor and an original issue discount in the 98 to 98½ area, the source said.

And, the $75 million revolver and $150 million term loan A are being talked at Libor plus 450 bps, with the term loan A having a 1.75% Libor floor and being offered at a discount of 981/2, the source added.

Amortization on the term loan A is 10% for the first three years and 15% in years four and five.

Barclays, KeyBank, Bank of America and PNC are the lead banks on the deal that will be used to help fund the acquisition of the company by American Securities.

Fairmount Minerals is a Chardon, Ohio-based producer of industrial sand.

Centerplate reveals guidance

Another deal to launch with a bank meeting on Thursday was Centerplate, and in connection with the event, talk on the term loan B surfaced, according to a market source.

The $194 million term loan B is being guided at Libor plus 625 bps to 675 bps with a 2% Libor floor and an original issue discount of 98, the source said.

The company's $314 million credit facility also includes a $70 million revolver and a $50 million term loan A.

Macquarie, UBS and BMO Capital Markets are the lead banks on the deal that will be used to refinance existing debt and fund a dividend payment.

Centerplate is a Stamford, Conn.-based provider of food and beverage concessions, high-end catering and merchandise services in sports facilities, convention centers and other entertainment facilities.

EnergySolutions sets structure, talk

EnergySolutions also held a bank meeting during the session, and details on the structure of its proposed $685 million senior secured credit facility (Ba2/BB+), along with term loan price talk, were released, according to a market source.

The facility consists of a $125 million revolver and a $560 million term loan, the source said.

Price talk on the term loan is Libor plus 450 bps with 1.75% Libor floor and an original issue discount of 98 to 981/2, the source continued.

Previously, it was known that the deal would include a revolver and term loan, but sizes and pricing were unavailable.

EnergySolutions selling notes

In addition to the new credit facility, EnergySolutions is planning on issuing $300 million of senior notes, the source remarked.

Proceeds from the facility and the notes will be used to refinance the company's existing bank deal, which includes a revolver, a first-lien term loan and a synthetic letter-of-credit facility.

A portion of the proceeds from the term loan will be held in a restricted cash account to provide for cash-collateralized letters of credit.

JPMorgan, Credit Suisse and Citigroup are the lead banks on the credit facility, with JPMorgan the left lead.

EnergySolutions is a Salt Lake City-based provider of nuclear services.

Cedar Fair tweaks size

Cedar Fair upsized its proposed six-year term loan to $1.15 billion from $1.05 billion after its senior unsecured notes offering was downsized to $405 million from $500 million, according to a market source.

A conference call for the credit facility is scheduled for 11 a.m. ET on Friday, at which time price talk is expected to come out, the source said.

The credit facility, which also includes a $300 million five-year revolver, was originally launched on May 21, but has been just sitting in market as a result of the company's bond offering being delayed.

The bonds, which had been launched with a roadshow on May 20 and were expected to price on May 27, resurfaced on Thursday with the smaller size. In the morning, the bonds were expected at $300 million and the term loan at $1.25 billion, but the sizes changed in the afternoon.

Rumors about a change in sizes started circulating on Wednesday, with some hearing that the term loan would be increased by $200 million to $300 million and the bonds would be decreased by the equivalent amount.

Cedar Fair refinancing debt

Proceeds from Cedar Fair's now $1.45 billion, up from $1.35 billion, senior secured credit facility (Ba2/BB-), along with the notes, will be used to refinance and terminate an existing bank deal.

As of March 28, the company had $1.5 billion of term loan debt with a final maturity in 2012 and $216 million in borrowings under its revolving credit facility that matures in 2011.

Closing is expected to take place on July 29.

JPMorgan, KeyBank, UBS and Fifth Third Bank are the lead banks on the credit facility, with JPMorgan the left lead.

When first launched, the term loan was being talked at Libor plus 375 bps with a 1.5% Libor floor and an original issue discount of 99 to 991/2, and the revolver was being talked at Libor plus 350 bps with no Libor floor.

Cedar Fair reveals financials

Also on Thursday, Cedar Fair released revenues and adjusted EBITDA expectations for the first six months of the year based on preliminary results.

The company said in an 8-K filed with the Securities and Exchange Commission that it anticipates year-to-date net revenues through June 27 to be in the range of $297 million to $307 million, compared with $290.6 million for the same six-month period a year ago.

In addition, the company estimates that its generated adjusted EBITDA, excluding costs incurred in connection with the debt refinancing and terminated merger, was in the range of $34 million to $40 million for the six months ended June 27, compared with $32 million in the same six-month period in 2009.

Cedar Fair is a Sandusky, Ohio-based regional amusement-resort operator.

Gentiva holds call

In other news, Gentiva Health Services Inc. held a conference call on Thursday to discuss with potential investors the investigation by the SEC so that it could explain what's going on and address any questions, according to a market source.

The company disclosed on Tuesday that it has been informed by the SEC that an investigation relating to its participation in the Medicare Home Health Prospective Payment System has begun.

The source remarked that the SEC is investigating the industry as a whole and has, therefore, asked Gentiva for some information.

The company said that it plans to comply with any requests.

Gentiva facility in market

As was previously reported, Gentiva is in the process of trying to syndicate a $925 million senior credit facility (Ba2/BB-), consisting of a $125 million revolver, a $200 million term loan A and a $600 million term loan B.

Price talk on the revolver and term loan A, which were launched to banks on June 16, is Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 981/2.

And, the term loan B, which was launched on July 7, is being talked at Libor plus 450 bps to 475 bps with a 1.75% Libor floor and an original issue discount of 98. There is 101 soft call protection for one year.

Bank of America, GE Capital, Barclays Bank and SunTrust are the joint lead arrangers and bookrunners on the deal, with Bank of America the administrative agent.

Covenants under the credit facility include a minimum interest coverage ratio and a maximum total leverage ratio.

Gentiva buying Odyssey

Proceeds from Gentiva's credit facility will be used to help fund the acquisition of Odyssey HealthCare Inc. for $27 per share, for an aggregate purchase price of about $1 billion, and refinance existing debt.

Other funding for the transaction is expected to come from $305 million of eight-year senior unsecured notes, which is backed by a commitment for a $305 million 12-month senior bridge loan.

Following completion of the transaction, net leverage is expected to be around the 4.0 times area.

Closing on the credit facility and the acquisition is expected in the third quarter, subject to approval by Odyssey's stockholders.

Gentiva is an Atlanta-based home health care provider. Odyssey is a Dallas-based provider of hospice care.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.