IMS, Six Flags break; Harbor Freight tweaks deal; Skype mulls changes; Savers readies launch

By Sara Rosenberg

New York, Feb. 17 - IMS Health Inc.'s credit facility allocated and freed up for trading during Wednesday's market hours, with both the U.S. and the euro term loans quoted above their original issue discount prices.

Another deal to free up for trading was Six Flags Theme Parks Inc., with its term loan moving to levels above the original issue discount as well.

Meanwhile, over in the primary market, Harbor Freight Tools came out with a couple of changes to its term loan due to strong market demand, including flexing pricing lower, adding a step down based on leverage and reducing the Libor floor.

Also on the new deal front, Skype Technologies is considering an increase to pricing, the Libor floor and the original issue discount on its term loan so as to attract more interest, and Savers Inc. is getting ready to launch a new credit facility at the end of this week.

IMS frees to trade

IMS Health's credit facility hit the secondary market, with the U.S. term loan and the euro term loan trading higher than the discount price at which they were sold during syndication, according to traders.

Specifically, the U.S. term loan was quoted by one trader at par ½ bid, par ¾ offered on the break and then he saw it edge a little lower to par 3/8 bid, par 5/8 offered. Another trader was quoting the loan at par ½ bid, par ¾ offered in the late afternoon and a third trader was quoting it at par 3/8 bid, par ¾ offered.

As for the euro term loan, that was quoted by the first trader at 99¾ bid, par ¼ offered on the break and was then seen moving down to 99½ bid, par offered.

The $1.25 billion U.S. term loan is priced at Libor plus 350 basis points, the low end of the initial Libor plus 350 bps to 375 bps guidance, while the €550 million euro term loan is priced at Euribor plus 375 bps, the high end of talk.

Both tranches include a 1.75% Libor floor, and both were sold at an original issue discount of 99, the tight end of the initial 98½ to 99 guidance.

IMS getting revolver

IMS Health's roughly $2.275 billion senior secured credit facility (Ba3/BB) also includes a $275 million revolver.

Goldman Sachs, Bank of America, Barclays, HSBC and RBC are the lead banks on the deal, with Goldman the left lead.

Proceeds will be used to help fund the buyout of the company by TPG Capital and the CPP Investment Board for $22 in cash per share of common stock. The transaction is valued at $5.2 billion, including the assumption of debt.

The buyout is also expected to be funded with $2.793 billion in equity and $1 billion of senior unsecured notes that are backed by a commitment for a $1 billion senior unsecured term loan.

IMS is a Norwalk, Conn.-based provider of market intelligence to the pharmaceutical and health care industries.

Six Flags breaks

Six Flags Theme Parks' credit facility also freed up for trading on Wednesday, with the term loan quoted just under par, according to traders.

The $730 million six-year term loan was seen by two traders at 99¼ bid, 99¾ offered and by a third trader at 99 1/8 bid, 99 5/8 offered.

Pricing on the term loan is Libor plus 375 bps with a 2% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, the term loan was upsized from $680 million, pricing was lowered from Libor plus 425 bps and the soft call protection was added.

Six Flags' $830 million credit facility (B1) also includes a $100 million five-year revolver that downsized from $150 million when the term loan was upsized.

Six Flags loan to fund exit

Proceeds from Six Flags' credit facility will be used to repay $1.147 billion of pre-petition bank debt upon the company's emergence from Chapter 11. The revolver will also be available for general corporate purposes.

JPMorgan, Bank of America, Barclays and Deutsche Bank are the joint bookrunners and joint lead arrangers on the deal.

Covenants contained in the credit agreement include a maximum senior secured leverage covenant, a minimum consolidated interest coverage covenant and a maximum consolidated capital expenditures covenant.

Six Flags is a New York-based regional theme park company.

Harbor Freight revises pricing

Switching to the primary market, Harbor Freight Tools announced modifications to the pricing and Libor floor on its $494 million term loan due in 2016 and gave lenders until Thursday to throw in their recommitments to the transaction, according to a fund manager.

Pricing on the term loan was reduced to Libor plus 325 bps from initial talk at launch of Libor plus 350 bps, and a step down was added under which the spread can drop to Libor plus 300 bps when leverage is 1.5 times or lower, the fund manager said.

In addition, the Libor floor under the term loan was tightened to 1.75% from the originally proposed level of 2%, the fund manager continued.

As before, the term loan is being offered to investors at an original issue discount of 991/4.

Prior to launch, investors had been expecting the term loan to be talked in the Libor plus low-300 bps area with a small Libor floor.

Harbor Freight allocating soon

Currently, the expectation is that Harbor Freight Tools will allocate its credit facility either late this week or sometime next week, the fund manager remarked.

The $534 million credit facility also includes a $40 million revolver due in 2015.

Financial covenants include a leverage ratio, an interest coverage ratio and capital expenditures limitations.

Amortization on the term loan is 1% per year with a bullet due at maturity.

Credit Suisse is the lead bank on the deal that will be used to refinance existing debt.

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

Skype may up pricing

Skype Technologies is thinking about making some revisions to its term loan so as to attract more demand, including reworking pricing, the Libor floor and the discount, according to a buyside source.

Chatter is that pricing on the U.S. term loan tranche may flex up to at least Libor plus 450 bps from initial talk of Libor plus 400 bps, the source said.

Also, the Libor floor may widen to 2% from 1.75%, and the original issue discount may increase to somewhere in the range of 99 to 99½ from initial guidance of 993/4, the source continued.

"Not firm, but that is what they are saying," the source remarked regarding the potential changes.

"Am not looking at it. Turned it down last time, too," he added.

Skype lead banks

Skype Technologies' $800 million dollar and euro-denominated term loan (B1/B+) is being led by JPMorgan, Barclays and RBC.

The euro term loan piece was launched with price talk of Euribor plus 450 bps with an original issue discount of 981/2.

Both the U.S. term loan and the euro term loan include 101 soft call protection for one year.

Proceeds will be used to refinance the company's $700 million five-year term loan that was obtained late last year for its buyout by an investor group led by Silver Lake and including Joltid Ltd., the Canada Pension Plan Investment Board and Andreessen Horowitz.

The existing term loan is priced at Libor plus 700 bps with a 2% Libor floor, and it was sold at an original issue discount of 971/2.

Skype is a Luxembourg-based software that enables individuals and businesses to make free video and voice calls, send instant messages and share files with other Skype users.

Savers launching Friday

Also in the primary, news emerged that Savers is planning to launch a proposed $365 million senior secured credit facility (Ba3/B+) to lenders on Friday, according to a market source.

The facility consists of a $40 million revolver and a $325 million term loan, with price talk not yet available.

JPMorgan is the lead bank on the deal that will be used to refinance existing bank and mezzanine debt.

Savers is a Bellevue, Wash.-based thrift store chain.

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