R.J. O'Brien, EPD break for trading; HydroChem shifts funds; Bragg Communications sets talk

By Sara Rosenberg

New York, July 13 - R.J. O'Brien & Associates Inc. and EPD Inc. both saw their credit facilities free for trading on Friday afternoon, with R.J. O'Brien's first- and second-lien term loans quoted below par and EPD's first-lien term loan wrapping around par.

In the primary market, HydroChem Industrial Services, Inc. retranched its credit facility and Bragg Communications Inc. came out with price talk on its in-market term loan B.

R.J. O'Brien's credit facility hit the secondary market on Friday, with the $385 million seven-year first-lien term loan (B2/B-) quoted at 98½ bid, 99 offered, according to a trader.

And, the $150 million eight-year second-lien term loan (B3/CCC) was quoted at 99 bid, 99½ offered, the trader added.

The first-lien term loan is priced at Libor plus 300 bps and was sold to investors with an original issue discount of 981/2.

The second-lien term loan is priced at Libor plus 675 bps, with call protection of 103 in year one, 102 in year two and 101 in year three, and was sold at an original issue discount of 99.

During syndication, the first-lien term loan pricing was flexed up from revised talk of Libor plus 275 bps and original talk at launch of Libor plus 250 bps, an original issue discount of 99 was added and then increased by half a point to sweeten the deal, and a total leverage covenant was added that opens at 9.25 times, with steps down by one turn annually starting Dec. 31, 2008 until 2011, when the test hits 5.0 times.

Also during syndication, the second-lien term loan pricing was increased from revised talk of Libor plus 650 bps and from original talk at launch of Libor plus 600 bps, call premiums were changed from just 102 in year one and 101 in year two, the original issue discount was added, the tranche's PIK toggle feature was removed and a total leverage covenant was added that is set a quarter of a turn back from the first-lien ratio, meaning it opens at 9.5 times.

R.J. O'Brien's $585 million senior secured credit facility also includes a $50 million six-year revolver (B2/B-).

During syndication, the revolver's super-priority status was eliminated and the tranche saw the addition of the same total leverage covenant that the first-lien term loan carries.

Lehman Brothers and Deutsche Bank acted as the joint lead arrangers on the deal.

Proceeds are being used to help fund the acquisition of the company by Spectrum Equity Investors and Technology Crossover Ventures. The O'Brien family will retain a substantial minority ownership in the company.

R.J. O'Brien is a Chicago-based futures brokerage firm.

EPD frees to trade

EPD's credit facility also broke for trading during the afternoon, with the $800 million of seven-year first-lien term loan debt (B1/B+) quoted at 99¾ bid, par ¼ offered, according to a trader.

The first-lien term loan debt is priced at Libor plus 250 bps and was sold to investors with an original issue discount of 991/2.

Of the total first-lien term loan amount, $100 million is delayed draw for 12 months.

During syndication, the funded first-lien term loan was upsized from $650 million, funded and delayed-draw pricing firmed up at the wide end of talk of Libor plus 225 bps to 250 bps, the original issue discount was added to the first-lien debt and a leverage covenant that opens at 5.75 times, with step downs over time, was added as well.

EPD's $1.26 billion senior secured credit facility also includes a $100 million six-year multi-currency revolver (B1/B+) priced at Libor plus 250 bps and a $360 million eight-year second-lien term loan (Caa1/CCC+) priced at Libor plus 575 bps that was offered to investors at a discount of 98½ and carries call protection of 102 in year one and 101 in year two.

During syndication, pricing on the revolver firmed up at the wide end of talk of Libor plus 225 bps to 250 bps, the second-lien term loan was downsized from $410 million, the original issue discount was added to the second-lien term loan and pricing on the second lien firmed up at the wide end of talk of Libor plus 550 bps to 575 bps.

Lehman Brothers, JPMorgan and Goldman Sachs are the joint lead arrangers and joint bookrunners on the deal.

Proceeds will be used to help fund the Carlyle Group's acquisition of EPD, which is the engineered products division of the Goodyear Tire & Rubber Co., in an all-cash transaction valued at $1.475 billion.

EPD is an Akron, Ohio, manufacturer of hoses, conveyor belts and power transmission belts, as well as tank tracks for military and off-road vehicles.

LCDX stronger

Also in trading Friday, LCDX continued to grind higher, along with the cash market, as equities held firm, according to a trader.

LCDX went out at 97.10 bid, 97.20 offered, up from 96.85 bid, 96.95 offered, the trader said.

And, the cash market, generally speaking, was up about an eighth of a point across the board, the trader added.

Nasdaq ended the day up 5.27 points, or 0.20%, the Dow Jones Industrial Average ended the day up 45.52 points, or 0.33%, S&P 500 ended the day up 4.80 points, or 0.31%, and NYSE ended the day up 22.98 points, or 0.23%.

HydroChem reworks deal

Switching to primary news, HydroChem Industrial Services made some changes to the tranching of its senior secured credit facility, resulting in an overall upsizing to $250 million from $230 million, according to a market source.

Under the changes, the five-year revolver (B1/B+) is now sized at $40 million, down from $50 million, while pricing was left unchanged at Libor plus 225 bps, the source said.

The five-year first-lien term loan (B1/B+) is now sized at $150 million, up from $130 million, with pricing remaining at Libor plus 225 bps, the source continued.

And, the seven-year second-lien term loan (Caa1/CCC+) is now sized at $60 million, up from $50 million, with pricing staying in line with initial talk at Libor plus 575 bps, the source remarked.

On the flip side, the company's senior unsecured holdco PIK term loan was downsized to $29 million from $52 million and pricing was increased to 13.5% from original talk of 13%, the source added.

RBS Securities and Credit Suisse are the lead banks on the deal.

Proceeds are being used to back the already completed acquisition of HydroChem by Aquilex Holdings LLC, a Harvest Partners, LLC portfolio company, from Oaktree Capital Management, LLC.

HydroChem generated last-12-months March 31 revenues of $247 million and pro forma adjusted EBITDA of $39.2 million.

HydroChem is a Deer Park, Texas-based provider of industrial cleaning services, including maintenance work to the petrochemical, refining, utility and pulp and paper industries. Aquilex is an Atlanta-based provider of maintenance, repair and overhaul services with associated engineering and technical support to heavy industries.

Bragg price talk

Bragg Communications released price talk of Libor plus 225 bps on its in-market $675 million U.S. term loan B, according to a market source.

TD Securities is the bookrunner on the deal, which was launched with a bank meeting this past Wednesday, with CIBC and BMO involved as well.

At the time of the launch, sources said that price talk was still to be determined.

Bragg's approximately C$1.5 billion credit facility also includes a C$75 million revolver and a C$700 million term loan A.

Proceeds will be used to help fund the acquisition of Persona Communications Corp., a St. John's, Newfoundland, cable operator, from HM Capital Partners, Birch Hill Equity Partners and CIBC Capital Partners.

Bragg Communications is a Halifax, N.S., media company.

Hyland Software guidance emerges

Hyland Software Inc. price talk surfaced on its $130 million credit facility now that the deal has been launched to investors with a bank meeting this past Wednesday, according to a syndicate document.

The $20 million five-year revolver (BB-) is being talked at Libor plus 275 bps, with a 50 bps commitment fee, the $80 million six-year first-lien term loan (BB-) is being talked at Libor plus 275 bps and the $30 million seven-year second-lien term loan (CCC+) is being talked at Libor plus 600 bps, the document said.

Credit Suisse is the lead bank on the deal.

Proceeds will be used to help fund the buyout of the company by Thoma Cressey Bravo.

Hyland Software is a Westlake, Ohio, provider of enterprise content management software.

Titan Worldwide spread talk

Titan Worldwide is talking its in-market $55 million six-year revolver, $120 million seven-year term loan and $50 million synthetic letter-of-credit facility at Libor plus 275 bps to 300 bps and its $80 million six-year letter-of-credit facility at Libor plus 200 bps, according to a syndicate document.

The revolver and the letter-of-credit facility both carry a 50 bps commitment fee, the document added.

Credit Suisse and BNP Paribas are the lead banks on the $305 million deal, which launched with a bank meeting this past Tuesday.

Proceeds will be used to refinance existing debt.

Titan is a New York-based outdoor advertising company.

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