CompuCom, Vertrue tweak deals; Generac plummets on numbers; LCDX, cash softer

By Sara Rosenberg

New York, Aug. 14 - CompuCom Systems Inc. and Vertrue Inc. both increased pricing on their in-market credit facilities and both came out with call protection news, with CompuCom adding the feature to its deal and Vertrue sweetening its second-lien premiums.

In other news, Generac Power Systems Inc.'s first-lien term loan nosedived on poor financial results, and LCDX and cash were both a touch weaker on light volume.

CompuCom Systems made some changes to its $190 million term loan B (Ba2/BB) on Tuesday evening, including raising pricing and adding call protection, according to a market source.

In addition, the term loan B is now expected to come at an original issue discount, as opposed to at par, although this discount is still to be determined.

Pricing on the term loan B was flexed up to Libor plus 350 basis points from original talk in the Libor plus 300 bps area, the source remarked.

The new call premiums on the deal are 101 in years one and two and par after that. Previously, the tranche did not carry any call protection.

Recommitments are due from lenders at the end of the day Wednesday.

Bear Stearns is the lead bank on the deal.

Proceeds will be used to help fund the acquisition of the company by Court Square Capital Partners from Platinum Equity.

The transaction is valued at about $628 million and is subject to regulatory approvals as well as satisfaction of other customary closing conditions.

Other buyout financing is expected to come from $210 million of senior subordinated notes, $50 million borrowed under the company's existing receivable securitization facility and equity of about 30%.

In late July, the bond deal was postponed to September business from August business because of market conditions, but the term loan B was left in syndication.

At that time, it was said that basically all the bond postponement meant for the loan was that the company will have more time for the loan syndication process, because now it's looking at a September close as opposed to an August close.

In connection with the buyout, CompuCom intends to tender for all of its outstanding 12% senior notes due 2014.

And, CHR Intermediate Holding Corp., another subsidiary of CompuCom's parent company CHR Holding Corp., plans to tender for all of its outstanding senior floating-rate toggle notes due 2013.

Leverage through the secured debt will be around 2.7 times, and total leverage will be around 5.0 times.

CompuCom is a Dallas-based provider of technology services that help clients through the requisition, procurement, deployment, management and retirement lifecycle of their IT assets.

Vertrue ups pricing

Vertrue lifted pricing on all tranches under its $660 million credit facility and added some more call protection to the second-lien loan, according to a market source.

The $430 million seven-year first-lien term loan (Ba3/B+) and the $30 million six-year revolver (Ba3/B+) are now both priced at Libor plus 300 bps, up from revised talk of Libor plus 250 bps and original talk of Libor plus 225 bps to 250 bps, the source said.

The revolver has a 50 bps commitment fee.

The $200 million eight-year second-lien term loan (Caa1/CCC+) is now priced at Libor plus 700 bps, up from revised talk of Libor plus 650 bps and from original talk of Libor plus 550 bps to 575 bps, the source continued.

Second-lien term loan call protection was changed to non-callable for one year, then at 102 in year two and 101 in year three, from just 102 in year one and 101 in year two.

Both the first- and the second-lien term loans are being sold at an original issue discount. Earlier on in syndication, a discount of 99 was added to the two tranches, but now the level of the discounts have been revised to "still to be determined" status, the source added.

Lehman and JPMorgan are the joint lead arrangers and joint bookrunners on the deal, with Lehman the administrative agent and JPMorgan the syndication agent.

Proceeds will be used to help fund the buyout of Vertrue by management, One Equity Partners, Oak Investment Partners and Rho Ventures for $48.50 in cash per share of common stock. The transaction is valued at about $800 million.

Other buyout financing will come from a $175 million equity commitment.

Vertrue is a Norwalk, Conn., internet direct marketing services company.

Hunter wraps at higher pricing

Hunter Defense Technologies Inc. completed syndication of its $265 million credit facility after increasing pricing on all tranches, according to a market source.

The $20 million revolver (B1/BB) and the $165 million first-lien term loan (B1/BB) both ended up at Libor plus 325 bps, compared with original talk at launch of Libor plus 300 bps, the source said.

The $80 million second-lien term loan (Caa1/B-) ended up with pricing of Libor plus 675 bps, compared with original talk of Libor plus 625 bps, the source added.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

Bear Stearns and Bank of America are the lead banks on the deal, which will be used to help fund the buyout of the company by Metalmark Capital.

Hunter Defense is a Solon, Ohio, developer of comprehensive solutions to provide shelter, heat, power generation and chem/bio protection for military and Homeland Security applications.

Generac tumbles

Moving to the secondary, Generac Power Systems saw its first-lien term loan give up a couple of points in trading on Tuesday after a private lender call was held to discuss quarterly results that came in at weaker-than-expected levels, according to traders.

The first-lien term loan ended the session at 83 bid, 85 offered, down from previous levels of 89 bid, 91 offered, traders said.

"There's probably a little overreaction to the quarter itself," one trader remarked. "Some guys still think there's good money there and things will get better over the next few quarters."

Generac is a Waukesha, Wis., manufacturer of standby power products.

LCDX, cash dip

LCDX and the cash market in general were both a touch lower during the trading session, but it was more so due to lower liquidity than to actual weakness, according to traders.

The index went out around 94¼ bid, 94½ offered, down from Monday's levels of around 94½ bid, 94¾ offered, traders said.

At the open on Tuesday, the index was quoted at 94 5/8 bid, 94 7/8 offered, and it ticked up to a high of around 94 7/8 bid, 95 1/8 offered before ticking back down.

"[Tuesday] felt a little weaker but again it wasn't on any volume," one trader said. "Stocks are down. Not surprising that the sentiment moved into LCDX. Cash market also a little softer but there wasn't really anything that stood out."

At the close, Nasdaq was down 43.12 points, or 1.7%, Dow Jones Industrial Average was down 207.61 points, or 1.57%, S&P 500 was down 26.38 points, or 1.82%, and NYSE was down 174.59 points, or 1.85%.

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