Essential Power, Homeward Residential, Blue Buffalo free up; American Capital cuts pricing

By Sara Rosenberg

New York, Aug. 7 - Essential Power LLC's credit facility made its way into the secondary market on Tuesday, as did Homeward Residential Inc. and Blue Buffalo Co., and FLY Leasing Ltd.'s term loan gained ground its second day of trading.

Switching to the primary market, American Capital Ltd. made some changes to its term loan, including reducing the spread and tightening the original issue discount as the debt has been met with strong demand.

In addition, Wilton Brands Inc. came out with the size and structure on its credit facility in connection with its bank meeting and also announced price talk on the institutional debt.

Furthermore, Genpact International Inc. released talk with its launch too. EP Energy Corp. approached lenders with a repricing, and Mediacom Broadband Group revealed new loan plans.

Essential Power breaks

Essential Power's credit facility freed up for trading on Tuesday, with the $565 million seven-year term loan B quoted at 99 bid, par offered, according to a market source.

Pricing on the B loan is Libor plus 425 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 981/2. There is 101 soft call protection for one year.

The company's $665 million senior secured credit facility (Ba2/BB) also includes a $100 million five-year revolver that is priced at Libor plus 425 bps with no Libor floor.

During syndication, pricing on the entire deal was reduced from Libor plus 450 bps, and the discount on the B loan firmed at the low end of the 98 to 98½ talk.

Essential Power repaying debt

Proceeds from Essential Power's credit facility will be used to refinance existing bank borrowings and to fund a tender offer for its 10 7/8% senior secured second-lien notes due 2016.

The offer is set to expire on Aug. 15.

Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Union Bank of California and RBC Capital Markets are the lead banks on new deal.

Essential Power is an Iselin, N.J.-based wholesale power generation and marketing company.

Homeward starts trading

Homeward Residential also hit the secondary market, with the $300 million term loan seen at 98½ bid, 99½ offered on the open and then it moved to 99 bid, par offered, a source said.

Pricing on the term loan is Libor plus 675 bps with a 1.5% Libor floor, and it was sold at a discount of 971/2. There is hard call protection of 102 in year one and 101 in year two.

On Monday, pricing on the loan was trimmed from Libor plus 700 bps and the discount was tightened from 96.

Barclays Capital Inc., Bank of America Merrill Lynch and Citigroup Global Markets Inc. are leading the $375 million credit facility (B1), which also includes a $75 million revolver.

Homeward Residential, a Coppell, Texas-based non-bank mortgage servicing and finance company, will use the new credit facility to redeem preferred shares held by WL Ross & Co.

Blue Buffalo tops OID

Blue Buffalo broke as well, with the $350 million seven-year term loan B quoted at 99 bid, 99½ offered, according to a market source.

Pricing on the B loan is Libor plus 525 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 98. There is 101 soft call protection for one year.

The loan had been downsized from $430 million and the discount widened from 99 during the syndication process.

The company's $390 million credit facility (B1/B+) also provides for a $40 million five-year revolver that is expected to be undrawn at close.

Citigroup Global Markets Inc. and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to fund a dividend, the size of which was reduced when the term loan was downsized.

Blue Buffalo is a Wilton, Conn.-based pet food company.

FLY heads up

FLY Leasing's $395 million senior secured term loan (B1/BBB-) moved to 98¼ bid, 99 offered on Tuesday from the 98 bid level that was seen upon its break late Monday, a market source told Prospect News.

The term loan is priced at Libor plus 550 bps with a 1.25% Libor floor and was sold at an original issue discount of 96. There is 101 soft call protection for one year.

During syndication, pricing was increased from Libor plus 500 bps, the discount widened from talk of 98 to 99 and amortization of 5% per annum was added, as opposed to there being no amortization.

Citigroup Global Markets Inc., BNP Paribas Securities Corp., Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., RBC Capital Markets LLC and Jefferies & Co. are leading the loan that will refinance remaining 2012 debt maturities, and debt under a facility that matures in 2013.

FLY is an aircraft lessor with corporate offices in Dublin, Ireland, and San Francisco.

American Capital pricing

Over in the primary, American Capital revised its $600 million four-year term loan B (B2/NA/BB), cutting pricing to Libor plus 425 bps from talk of Libor plus 475 bps to 500 bps and setting the original issue discount at 991/2, versus earlier guidance of 99, according to a market source.

As before, the loan has a 1.25% Libor floor and 101 soft call protection for one year and amortizes at a rate of 25% per annum.

Lead banks, J.P. Morgan Securities LLC, BMO Capital Markets Corp. and UBS Securities LLC, are asking for recommitments by noon ET on Wednesday, the source remarked.

American Capital revolver

American Capital's $750 million credit facility also includes a $150 million four-year revolver (NA/NA/BB) that is priced at Libor plus 375 bps with a 50 bps unused fee.

The revolver has no amortization in first three years, then amortizes at a rate of 8.33% per month in year four.

Proceeds will be used to refinance basically all of the company's existing recourse debt and for working capital and general corporate purposes.

American Capital is a Bethesda, Md.-based private equity firm and global asset manager.

Wilton details emerge

Wilton Brands held a bank meeting on Tuesday to launch its credit facility, at which point investors learned that the deal is sized at $525 million, split between a $125 million ABL revolver and a $400 million term loan (B), according to a market source.

In addition, talk on the term loan was disclosed as Libor plus 550 bps with a 1.25% Libor floor, an original issue discount of 98 to 99 and 101 soft call protection for one year, the source said.

Commitments are due on Aug. 16.

Deutsche Bank Securities Inc. and UBS Securities LLC are leading the transaction that will be used to refinance existing debt.

Wilton is a Woodridge, Ill.-based craft and celebration company.

Genpact sets guidance

Another deal to launch was Genpact, and talk on its $675 million seven-year term loan came out at Libor plus 325 bps to 350 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

The company's $925 million senior secured credit facility (Ba2/BB+), for which commitments are due on Aug. 17, also provides for a $250 million five-year revolver.

Morgan Stanley Senior Funding Inc., Citigroup Global Markets Inc., Bank of America Merrill Lynch, Credit Agricole Securities (USA) Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading the deal that will be used to refinance existing debt and fund a distribution to shareholders.

Genpact is a Hamilton, Bermuda-based provider of business process management services.

EP Energy launches

EP Energy held its call during the session, and lenders were presented with a proposal through which the company is looking to lower pricing on its $750 million senior secured covenant-light term loan due May 1, 2018 to Libor plus 400 bps with a 1% Libor floor from Libor plus 525 bps with a 1.25% Libor floor, according to a market source.

When the deal was syndicated in April, it was sold at a discount of 99. Now, the repriced loan is being offered at par, but existing lenders will get paid down at 101 due to existing soft call protection, the source said. And, the repriced loan will include 101 soft call protection through May 2013.

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are leading the deal for the Houston-based oil and natural gas exploration and production company.

Consents are due at 5 p.m. ET on Aug. 14.

Mediacom plans loan

Meanwhile, Mediacom scheduled a lender call for 11 a.m. ET on Wednesday to launch a $200 million term loan G due in 2020 that is talked at Libor plus 300 bps with a 1% Libor floor and an original issue discount that is still to be determined, according to a market source.

J.P. Morgan Securities LLC and Bank of America Merrill Lynch are the joint lead arrangers on the deal.

Proceeds will be used by the Middletown, N.Y.-based cable operator to repay revolver borrowings and for general corporate purposes.

CDC/Consona closes

In other news, Atlanta-based CDC Software and Indianapolis-based Consona Corp. completed their merger, forming Aptean, an enterprise software provider of on-premise and cloud technologies, according to a news release.

For the merger, the companies got a new $260 million credit facility, consisting of a $10 million revolver, a $100 million term loan A and a $150 million term loan B.

Pricing on the revolver and A loan is Libor plus 550 bps, after flexing during syndication from Libor plus 525 bps, and pricing on the B loan is Libor plus 600 bps, after increasing earlier from Libor plus 550 bps. The term B has a 1.25% Libor floor and was sold at an original issue discount of 99.

BMO Capital Markets Corp. and Golub Capital led the deal.

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