LodgeNet plunges more on poor results; Connolly tweaks deal; Biomet plans amend, extend

By Sara Rosenberg

New York, July 20 - LodgeNet Interactive Corp.'s term loan continued to plummet in trading on Friday on the back of disappointing second-quarter results, and Dole Food Co. Inc.'s strip of loans were fairly steady following news of a potential asset sale or spin-off.

Over in the primary, Connolly Inc. reverse flexed pricing on first-lien term loan as the deal was met with good demand and is targeting giving out allocations to investors in the next few days, and Biomet Inc. came out with amendment and extension plans.

LodgeNet fall progresses

LodgeNet's term loan dropped again in trading on Friday as investors continued to react to the company's uninspiring quarterly results, according to a trader.

The term loan was quoted at 67½ bid, 69½ offered, down from 73 bid, 75 offered post numbers on Thursday, and 75 bid, 78 offered before earnings were released.

The loan was extremely volatile from early on in the day on Friday, with opening levels seen at 70 bid, 73 offered and then it dropped very quickly to 66 bid, 69 offered. A little after 9 a.m. ET some of the losses were recouped as levels moved to 67½ bid, 71½ offered and then, as the day went on, levels tightened up a little.

LodgeNet results

For the quarter, LodgeNet reported a net loss of $103.1 million, or $4.08 per share, compared to a net loss of $4.4 million, or $0.17 per share in the previous year.

Revenue for the quarter was $92.8 million, versus $106.6 million in the second quarter of 2011.

And, adjusted operating cash flow was $19.2 million, compared to $26.4 million last year.

Also, the company withdrew its financial guidance for 2012 due to market uncertainties and challenges with room churn and Guest Entertainment revenue.

LodgeNet is a Sioux Falls, S.D.-based provider of interactive media and connectivity services to hospitality and health care businesses.

Dole holds steady

Dole Food's strip of term loan B and term loan C debt was relatively flat after the company disclosed late Thursday that it has been in discussions on some asset sales, according to traders.

The strip of debt was quoted by one trader at par 3/8 bid, par ¾ offered, unchanged on the day, and by a second trader at par 1/8 bid, par 5/8 offered, versus par ¼ bid, par 5/8 offered previously.

The company said in a news release that it is exploring a possible sale transaction or a possible spin-off for its packaged foods business, and that it is considering a separation of the packaged foods business in combination with Dole operations in Asia, into a stand-alone, primarily Asia-based company either through a joint venture or through an initial public offering in Asia.

Deutsche Bank Securities Inc. and Wells Fargo Securities LLC are assisting the company's Board of Directors and management in reviewing a number of strategic alternatives.

Dole releases earnings

Also, late Thursday, Dole announced results for the second quarter, including earnings of $66 million, or $0.74 per share, compared to $83 million, or $0.94 per share, in the prior year.

Revenues for the quarter were $1.72 billion, versus $1.92 billion in the comparable period last year.

And, adjusted EBITDA for the quarter was $132 million, compared to $161 million in the second quarter of 2011.

Dole is a Westlake Village, Calif.-based fruit and vegetables company.

Connolly trims spread

Moving to the primary, Connolly revised its $240 million first-lien term loan (Ba3), reducing the coupon to Libor plus 525 basis points from Libor plus 550 bps, while leaving the 1.25% Libor floor, original issue discount of 99 and 101 soft call protection for one year unchanged, according to a market source.

The company's $400 million credit facility also includes a $30 million revolver (Ba3) and a $130 million second-lien term loan (Caa1).

Terms on the second-lien loan were left intact at Libor plus 925 bps with a 1.25% Libor floor, a discount of 98 and call protection of 103 in year one, 102 in year two and 101 in year three, the source remarked.

Connolly readies allocations

With the change to the first-lien pricing done, and the commitment deadline passing on Friday, Connolly is targeting allocating its credit facility on Tuesday or Wednesday, the source added.

RBC Capital Markets LLC and SunTrust Robinson Humphrey Inc. are leading the transaction that will help fund the buyout of the company by Advent International.

At close, which is expected this month, first-lien leverage will be 3.97 times and second-lien leverage will be 6.13 times.

Connolly is an Atlanta-based provider of technology-enabled recovery audit services.

Biomet coming soon

Biomet set a call for Monday to launch an amendment and extension of its term loan, under which it is looking to push out the maturity to July 2017 from March 25, 2015, according to sources.

Price talk on the extended U.S. debt is Libor plus 375 bps to 400 bps, and the extended euro debt is expected to be priced 25 bps wider than the U.S. piece, sources said. By comparison, current pricing on the term loans is Libor/Euribor plus 300 bps.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., Barclays Capital Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading the deal.

Following the news, Biomet's U.S. term loan was unchanged in trading at 99 7/8 bid, par ¼ offered, a trader added.

Biomet is a Warsaw, Ind.-based designer, manufacturer and marketer of products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy.

Van Wager nets interest

Sources are hearing that the book is going well on Van Wagner Communications LLC's $200 million senior secured credit facility, with investors still having until Wednesday to place their orders.

The deal consists of a $25 million five-year revolver and a $175 million seven-year term loan B.

Talk on the B loan is Libor plus 600 bps to 625 bps with a 1.25% Libor floor, an original issue discount of 98 and 101 soft call protection for one year.

Barclays Capital Inc. and GE Capital Markets are leading the deal that will refinance existing debt, fund an upfront cash payment for an acquisition and go towards general corporate purposes.

Van Wagner, an out-of-home advertising company, will have net senior secured leverage of 5.2 times.

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