Asurion breaks, old loan rises; Penn National strengthens; Hilex, Omnova, Goodman tweak deals

By Sara Rosenberg

New York, Oct. 21 - Asurion's new incremental first-lien term loan hit the secondary market during Thursday's session, with levels on the debt seen above its original issue discount price, and the company's existing first-lien term loan, which has been under some pressure lately, traded up.

Also in the secondary, Penn National Gaming Inc.'s term loan was a little better following the company's release of third-quarter numbers that were better than earlier guidance had anticipated and better than last year's results.

Over in the primary market, Hilex Poly Co. came out with some changes to its term loan B, including reducing the size, shortening the maturity date and increasing pricing, Omnova Solutions Inc. lowered the pricing and discount on its B loan, while adding call protection, and Goodman Global Group Inc. moved funds between its term loans and revised the spread, discount and call premiums.

And, in more new deal happenings, Focus Brands Inc.'s term loan has been filling out quite nicely since launching at the start of this week, with the tranche already a little over a third done.

Asurion starts trading

Asurion's new $900 million incremental first-lien term loan freed up for trading on Thursday, with one trader quoting it at 97 bid, 98 offered on the break and then he saw it move up to 97¼ bid, 98½ offered.

Meanwhile, a second trader was quoting the new term loan at 97¾ bid, 98¼ offered in the afternoon.

Pricing on the term loan is Libor plus 525 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 96. There's call protection of 102 in year one and 101 in year two.

During syndication, pricing was flexed up from Libor plus 450 bps, the discount was widened from most recent talk of 98 and initial talk at launch of 99, and call protection of 101 in year one was added and then sweetened to the final terms.

Barclays, Credit Suisse, Morgan Stanley and Goldman Sachs are the lead banks on the deal that will be used to fund a dividend.

Asurion existing moves up

In addition, on the Asurion front, the company's existing first-lien term loan gained some ground after seeing levels drop over the past couple of days, traders said.

The loan was quoted by one trader at 93 bid, 93½ offered, up from 92 bid, 92¾ offered, and by a second trader at 92½ bid, 93½ offered, up from 91¾ bid, 92¾ offered.

The traders were unsure as to why the paper saw such positive momentum, although one guessed that there "could just be a technical bid to it."

Asurion is a Nashville, Tenn.-based provider of technology protection services.

Penn up with numbers

Penn National Gaming's term loan was up as the company announced quarterly results that showed a year-over-year improvement in earnings, revenues and adjusted EBITDA, according to traders.

The term loan was quoted by one trader at 99 1/8 bid, 99 5/8 offered, up from 99 bid, 99½ offered, and by a second trader at 99 3/8 bid, 99¾ offered, up from 98 7/8 bid, 99 3/8 offered.

For the third quarter, Penn National reported net income of $48.3 million, or $0.46 per diluted share, compared to net income of $21.4 million, or $0.20 per diluted share in the prior year. The company also beat its guidance for the quarter, which was net income of $31.8 million, or $0.30 per diluted share.

Net revenues for the quarter were $638 million, up from $620 million in the 2009 third quarter. Again, the actual results beat guidance that was outlined at $623 million.

Lastly, adjusted EBITDA for the quarter was $162 million, compared to $144.3 million last year, and estimated guidance of $150 million.

Penn National guidance

Also on Thursday, Penn National revised its full-year 2010 estimates, increasing its expected net income, net revenues and adjusted EBITDA.

Net income for the year is now expected to be $122 million, or $1.15 per diluted share, compared to previous guidance of $104.3 million, or $0.98 per diluted share.

Net revenues for 2010 are now anticipated at $2.459 billion, up from prior guidance of $2.443 billion.

And, adjusted EBITDA for the year is now expected to be $597 million, compared to the prior guidance of $580 million.

Penn National is a Wyomissing, Pa.-based gaming company.

Hilex Poly reworks B loan

Moving to the primary, Hilex Poly reduced its term loan B (B3/B) to $135 million from $160 million, shortened the maturity to five years from six years and increased pricing to Libor plus 900 bps from Libor plus 700 bps, according to a market source.

Left unchanged was the loan's 2% Libor floor and original issue discount of 98.

Amortization is 10% per annum.

Commitments are due at noon ET on Wednesday.

Deutsche Bank and GE Capital are the lead banks on the deal that will be used to refinance existing debt and fund a dividend.

Hilex Poly is a Hartsville, S.C.-based producer of recycled content plastic bags and recycler of plastic bags and film.

Omnova trims spread

Also coming out with changes on Thursday was Omnova Solutions, as it reverse flexed pricing on its $200 million term loan B (Ba2/B+) to Libor plus 400 bps from Libor plus 450 bps and added a step-down to Libor plus 375 bps at 2.75 times net total leverage, according to a market source.

Other revisions to the loan included cutting the original issue discount to 99 from 98½ and adding 101 soft call protection for one year, the source said, noting that the 1.75% Libor floor was left intact.

Deutsche Bank and JPMorgan are the lead banks on the deal that will be used, along with $250 million of senior notes, to fund the acquisition of Eliokem International SAS and to repay an existing term loan.

Commitments are due at noon ET on Monday and closing is expected to occur on Dec. 1.

Omnova is a Fairlawn, Ohio-based provider of emulsion polymers, specialty chemicals, and decorative and functional surfaces for commercial, industrial and residential end uses.

Goodman revises facility

Another deal to announce revisions was Goodman Global, as it reworked tranche sizes, pricing, discounts and call protection and is asking for recommitments at 2 p.m. ET on Friday, according to market source.

Under the changes, the first-lien term loan (Ba3/B+) is now sized at $1.5 billion, up from $1.4 billion, and is priced at Libor plus 400 bps with a 1.75% Libor floor and an original issue discount of 99. By comparison, initial talk on the tranche had been Libor plus 450 bps with a 1.75% Libor floor and a discount of 981/2. Also, 101 soft call protection for one year was added.

As for the second-lien term loan (B3/B-), that is now sized at $275 million, down from $375 million, and pricing is Libor plus 700 bps with a 2% Libor floor and an original issue discount of 98, the source said. At launch, the loan was talked at Libor plus 800 bps with a 2% floor and a discount of 971/2. Additionally, call protection is now 103 in year one, 102 in year two and 101 in year three, modified from non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

Goodman Global revolver

Goodman Global's $2.025 billion secured credit facility also includes a $250 million revolver (Ba3/B+).

JPMorgan, Barclays Capital, Deutsche Bank and GE Capital are the lead banks on the deal, with JPMorgan the left lead.

Proceeds will be used to repay substantially all of the company's outstanding debt, to fund a distribution to equityholders and for other general corporate purposes.

Goodman is a Houston-based manufacturer of heating, ventilation and air conditioning products for residential and light commercial use.

Focus Brands nets interest

Focus Brands' $275 million term loan, which just launched with a bank meeting on Monday afternoon, "is doing well early" with "over $100 million of commits" in by Thursday morning, according to a market source.

The company's $285 million credit facility (B2/B) also includes a $10 million revolver.

Price talk on the term loan and the revolver is Libor plus 475 bps to 500 bps with a 1.75% Libor floor and an original issue discount of 981/2.

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.

Columbian Chemicals launches

Columbian Chemicals Co. held a bank meeting on Thursday to launch its $375 million senior secured credit facility (Ba3/BB) due in 2015 that consists of a $300 million term loan A and a $75 million revolver.

As was previously reported, price talk on both tranches is Libor plus 375 bps.

UBS and JPMorgan are the lead banks on the deal that will be used to refinance existing bank debt.

Columbian Chemicals is a Marietta, Ga.-based manufacturer of carbon black.

Illumination and Detection hits

Also launching with a bank meeting was Illumination and Detection Solutions' $215 million credit facility that is comprised of a $15 million revolver and a $200 million term loan.

Initially, it was thought that the term loan would be sized at $178 million, but it was increased prior to launch.

Price talk of Libor plus 650 bps with a 1.75% Libor floor and an original issue discount of 98 emerged on the term loan late Wednesday.

UBS and Credit Suisse are the lead banks on the deal, with UBS the left lead.

Illumination being bought

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

The reason for the term loan upsizing was that "EBITDA grew," a market source explained.

Closing on the transaction 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 for health, environmental and security segments.

National Vision returns

National Vision launched a $200 million term loan on Thursday that will be used to refinance existing debt and fund a dividend, according to a market source.

JPMorgan and Societe Generale are the lead banks on the term loan, with JPMorgan the left lead.

The company had approached the market back in April with a $220 million term loan led by JPMorgan and Credit Suisse for the same purpose, but that deal was later pulled because of market conditions.

National Vision is a Lawrenceville, Ga.-based provider of optical products and services.

Alaska Communications closes

In other news, Alaska Communications Systems Group Inc. closed on its $470 million senior secured credit facility (Ba3/BB-), consisting of a $30 million five-year revolver and a $440 million six-year term loan B, according to a news release.

Pricing on the term loan B is Libor plus 400 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99.

JPMorgan acted as the lead bank on the deal that was used to refinance and extend the maturity of the company's existing $426 million term loans due Feb. 1, 2012 and $45 million revolver due Feb. 1, 2011.

Alaska Communications is an Anchorage-based provider of broadband and other wireline and wireless services across businesses and consumers.

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