Harbor Freight Tools, Race Point Power, A&P, Henry break; Decision Resources tweaks deal

By Sara Rosenberg

New York, Dec. 22 - Harbor Freight Tools, Race Point Power, Great Atlantic & Pacific Tea Co. Inc. (A&P) and Henry Co. saw their credit facilities free up for trading during Wednesday's market hours, and levels on Data Device Corp.'s term loan emerged.

Over in the primary market, Decision Resources Inc. made some changes to its credit facility, including removing the second-lien term loan from the structure and increasing pricing and the discount on the first-lien term loan.

Harbor Freight starts trading

Harbor Freight Tools' credit facility (Ba3/B+) broke for trading in the morning, with the $650 million term loan quoted at 99¼ bid, par ¼ offered on the open, according to trader. By late afternoon, another source was seeing it at 99½ bid, par ½ offered.

Pricing on the term loan, as well as on a $25 million revolver, is Libor plus 500 basis points with a 1.5% Libor floor. The term loan was sold at an original issue discount of 99 and has soft call protection of 102 in year one and 101 in year two.

During syndication, the term loan was downsized from $750 million, and as a result, the distribution to shareholders that the debt is funding was reduced.

Barclays is the lead bank on the $675 million deal that in addition to funding the dividend, will be used to refinance an existing term loan.

Harbor Freight Tools is a Camarillo, Calif.-based tool and equipment catalog retailer.

Race Point frees up

Race Point Power's $275 million seven-year term loan (BB) also hit the secondary market on Wednesday, with levels quoted at 99¼ bid, par ¼ offered on the break and then moving up to 99½ bid, par ½ offered, according to traders.

Pricing on the term loan is Libor plus 600 bps with a 1.75% Libor floor, and it was sold at a discount of 98. There is call protection against refinancings of 102 in year one and 101 in year two.

During syndication, the term loan was reduced from $370 million, resulting in net leverage moving down to 4.3 times versus 5.7 times under the original structure, and call protection was increased from just 101 in year one.

Race Point funding recap

Proceeds from Race Point Power's term loan will be used to refinance existing debt and to fund a dividend payment. As a result of the size reduction, however, less existing debt will be taken out, and the dividend was trimmed to $177 million from $205 million.

Also, the downsizing to the loan accounted for the removal of acquisition funding from the use of proceeds. This is because of delays with respect to the acquisition.

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

Race Point Power is an enterprise that holds interests in a number of power plants and is owned by ArcLight Capital Partners LLC.

A&P trades atop OID

Great Atlantic & Pacific Tea's credit facility also freed up, with the $350 million term loan quoted at par ½ bid, 101 offered on the open and then moving up to par 7/8 bid, 101 3/8 offered, according to a trader.

Pricing on the term loan is Libor plus 700 bps with a 1.75% Libor floor, and it was sold at a discount of 99. There is 101 soft call protection for one year.

During syndication, pricing on the loan was trimmed from Libor plus 750 bps and the original issue discount tightened from 98.

The company's $800 million 18-month debtor-in-possession financing facility also includes a $450 million revolver that is expected at Libor plus 300 bps with a 50 bps unused fee.

A&P led by JPMorgan

JPMorgan is the lead arranger, bookrunner and administrative agent on Great Atlantic & Pacific Tea's credit facility.

Proceeds will be used to refinance the company's pre-petition senior secured credit facility, to provide incremental liquidity and for working capital and general corporate purposes.

The company announced on Dec. 12 that it filed for Chapter 11 to facilitate a financial and operational restructuring designed to restore its long-term financial health.

Great Atlantic & Pacific Tea is a Montvale, N.J.-based supermarket chain.

Henry breaks

Henry, an El Segundo, Calif.-based provider of roof coatings, cements, roofing systems, driveway maintenance products and sealants, saw its $40 million 61/2-year second-lien term loan (Caa1/CCC+) quoted at 98 bid after allocating on Wednesday, according to a trader.

The second-lien loan is priced at Libor plus 900 bps with a 1.75% Libor floor and was sold at a discount of 98. There is call protection of 103 in year one, 102 in year two and 101 in year three.

The company's $195 million senior secured credit facility also includes a $20 million five-year revolver (B2/B+) and a $135 million six-year first-lien term loan (B2/B+), with both tranches priced at Libor plus 550 bps with a 1.75% floor, and it sold at a discount of 981/2. The spread was flexed up from talk of Libor plus 500 bps to 525 bps.

UBS and GE Capital are the lead banks on the deal that is being used to refinance existing debt and to fund a dividend payment.

Data Device levels surface

Data Device's $300 million term loan started with quotes at 99 bid, 99½ offered on Wednesday on the back of allocations going out on Tuesday, according to a market source.

Pricing on the term loan is Libor plus 550 bps with a 1.75% Libor floor, and it was sold at a discount of 981/2.

Recently, the term loan was downsized from $310 million and pricing was increased from talk of Libor plus 475 bps to 500 bps.

Credit Suisse and GE Capital are the lead banks on the $340 million deal that also includes a $30 million revolver and is being used to refinance existing debt and fund a dividend.

Data Device is a Bohemia, N.Y.-based supplier of data networking services and MIL-STD-1553 interfaces.

Southern Pacific allocates

Southern Pacific Resource Corp. gave out allocations on its $275 million second-lien term loan on Wednesday, according to a market source.

Pricing on the loan is Libor plus 850 bps, with a 2% Libor floor, and it was sold at an original issue discount of 97. The tranche is non-callable for one year, then at 102 in year two and 101 in year three.

Pricing on the loan was recently reverse flexed from initial talk of Libor plus 925 bps.

Credit Suisse Securities LLC and RBC Capital Markets Corp. are the joint lead arrangers and joint bookrunners on the deal, with BMO Capital Markets Corp. and TD Securities LLC bookrunners as well.

Southern Pacific project

Proceeds from Southern Pacific's second-lien loan, C$125 million of 6% convertible unsecured subordinated debentures and cash on hand will be used to fund the development of the company's McKay phase 1 project.

The company expects that the McKay project will cost $408 million. Through Sept. 30, about $9 million has been spent on construction of the project, leaving remaining costs of about $399 million.

Additionally, the company plans to enter into a separate first-lien secured revolving credit facility that will be used to replace its current credit facility.

Southern Pacific is a Calgary, Alberta-based explorer, developer and producer of in-situ thermal heavy oil and bitumen production in the Athabasca oil sands of Alberta and in Senlac, Saskatchewan.

Decision reworks facility

Switching to the primary, Decision Resources decided to do away with its proposed $50 million second-lien term loan, and pricing on its first-lien term loan was flexed higher, while the discount widened, according to a market source.

The second-lien term loan had been talked at Libor plus 900 bps with a 1.5% Libor floor and an original issue discount of 98. The source remarked that the tranche was oversubscribed but the company decided not to obtain the debt in the end.

As for the first-lien term loan, the size was left unchanged at $170 million, but pricing moved to Libor plus 550 bps from Libor plus 500 bps and the discount to 98½ from 99, the source continued. The 1.5% Libor floor was left unchanged.

Decision Resources revolver

Decision Resources' now $195 million credit facility, down from $245 million, still includes a $25 million revolver.

GE Capital and Credit Suisse are the lead banks on the deal that is expected to close next week, with GE the left lead.

Proceeds will be used to refinance existing debt and fund a dividend. The amount of the dividend was reduced as a result of the elimination of the second-lien loan.

Decision Resources is a Burlington, Mass.-based research and advisory firm focused on healthcare insights and analysis.

NexTag sliding into 2011

Syndication of NexTag Inc.'s $250 million credit facility (B1/BB-) is drifting into next year now that a lot of market players have already started their holiday vacations, according to a market source.

The deal, which was launched in early December, consists of a $50 million revolver and a $200 million seven-year term loan B talked at Libor plus 475 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 99.

Deutsche Bank, JPMorgan and Morgan Stanley are the lead arrangers on the deal, with Deutsche the left lead. Societe Generale and Bank of America are the co-managers.

Proceeds will be used to fund a distribution to shareholders and for general corporate purposes.

NexTag is a San Mateo, Calif.-based comparison shopping website for products and services.

Virtual Radiologic closes

In other news, Virtual Radiologic completed its acquisition of NightHawk Radiology Holdings Inc., a Scottsdale, Ariz.-based provider of radiology services, for $6.50 per share in cash, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

To fund the transaction, Virtual Radiologic got a $253 million senior secured credit facility, consisting of a $40 million revolver and a $213 million term loan B priced at Libor plus 550 bps with a 1.75% Libor floor that was sold at a discount of 981/2.

GE Capital and SunTrust acted as the joint bookrunners on the deal.

Virtual Radiologic is an Eden Prairie, Minn.-based radiology practice and developer of radiologist workflow technology.

Aventine wraps loans

Aventine Renewable Energy Holdings Inc. completed its $200 million five-year senior secured term loan (Caa1/B), according to a news release.

Pricing on the Pekin, Ill.-based fuel-grade ethanol company's term loan is Libor plus 850 bps with a 2% Libor floor, and it was sold at a discount of 96. The loan is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four

During syndication, pricing was flexed up from Libor plus 750 bps, the discount widened from 98 and call protection was sweetened from non-callable for one year, then at 102 in year two and 101 in year three.

Citigroup and Jefferies acted as the lead banks on the deal that is being used to refinance the company's 13% senior secured notes due 2015 and for general corporate purposes.

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