United Components breaks; GenOn, Valeant tweak deals; Denny's firms pricing; RBS OID revealed

By Sara Rosenberg

New York, Sept. 17 - United Components Inc.'s credit facility hit the secondary market early on in the day on Friday, with levels on the term loan B seen above the original issue discount price at which it was sold during syndication.

Over in the primary market, GenOn Energy Inc. lifted the size of its oversubscribed term loan B, Valeant Pharmaceuticals International Inc. completely reworked tranching on its deal and updated pricing, and Denny's Corp. finalized pricing on its credit facility at the low end of talk.

Also, RBS WorldPay released original issue discount talk on its U.S. term loan B as the tranche was presented to lenders, and price talk on Grifols term loan B surfaced on the back of the deal's recent launch.

Additionally, HealthSpring Inc. came out with timing on its term loans, and GenTek Inc. revealed that it will be coming to market with a new deal.

United Components trading

United Components' credit facility freed up for trading on Friday, with the $425 million term loan B quoted at par ¼ bid, par ½ offered on the break. The loan was then seen by one trader at par ¾ bid, 101¼ offered, and by a second trader at par ½ bid, 101 offered.

Pricing on the term loan B is Libor plus 450 basis points with a 1.75% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, pricing firmed at the low end of the initial talk of Libor plus 450 bps to 475 bps at a discount of 98½ to 99.

The Evansville, Ind.-based vehicle replacement parts company's $500 million credit facility (Ba3) also includes a $75 million revolver.

Bank of America and Deutsch Bank are leading the deal that will be used to refinance existing bank debt and senior subordinated notes.

GenOn upsizes

Moving to the primary, GenOn increased the size of its seven-year term loan B to $700 million from $500 million following a reduction in its bond offering to $1.2 billion from $1.4 billion, according to sources.

Pricing on the term loan B is Libor plus 425 bps with a 1.75% Libor floor and an original issue discount of 99, and there is 101 soft call protection for one year.

On Thursday, the spread on the term loan B was reduced from initial talk of Libor plus 450 bps, the original issue discount was tightened from 98½ and the soft call protection was added.

The company's now $1.7 billion, up from $1.5 billion, credit facility (B2) also includes a $1 billion revolver that is priced at Libor plus 350 bps with a 75 bps unused fee.

GenOn lead banks

JPMorgan, Credit Suisse, Deutsche Bank, Morgan Stanley and Goldman Sachs are the lead banks on GenOn's credit facility, which will be used to help fund the merger of Mirant Corp. with RRI Energy Inc.

Under the agreement, Mirant stockholders will receive a fixed ratio of 2.835 shares of RRI Energy common stock for each share of Mirant common stock they own. Mirant stockholders will own about 54% of the equity of the combined company, and RRI Energy stockholders will own approximately 46%.

Closing is expected before the end of the year, subject to stockholder approval, U.S. antitrust approval and approval by the Federal Energy Regulatory Commission. The closing is also subject to the refinancing.

GenOn will be a Houston-based power producer with about 24,700 megawatts of electric generating capacity and a pro forma market capitalization of $3.1 billion.

Valeant revises facility

Valeant Pharmaceuticals completely restructured its credit facility, resulting in a new size of up to $1.8 billion, down from $1.875 billion, according to a market source.

The facility now consists of a $125 million revolver, down from $250 million, a $950 million to $1 billion term loan A, up from $750 million, and $625 million to $675 million of term loan B and delayed-draw term loan B debt, down from $875 million (divided into $725 million of funded and $150 million of delayed-draw), the source said.

And, based on the commitment letter, the deal was initially expected to consist of a $250 million revolver, a $500 million term loan A, an up to $1.972 billion six-year term loan B and a $300 million delayed-draw six-year term loan B - however, tranching was initially revised in connection with the deal's recent bank meeting.

Valeant tweaks pricing

Valeant also updated pricing on its credit facility, with the revolver and the term loan A now set at Libor plus 400 bps, the high end of the initial Libor plus 375 bps to 400 bps talk. There are upfront fees based on commitment size.

Pricing on the term loan B and the delayed-draw term loan B is Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 99, compared to previous price talk of Libor plus 400 bps to 425 bps with a 1.75% Libor floor and an original issue discount of 981/2, the source continued. As before, the delayed -draw loan has an undrawn fee of 75 bps.

By comparison, the commitment letter had price talk on the revolver and term loan A expected anywhere from Libor plus 425 bps to 525 bps, and pricing on the term loan B anywhere from Libor plus 450 bps to 550 bps, based on ratings.

Commitments are due on Monday and allocations are expected to go out on Tuesday.

Valeant funding merger

Proceeds from Valeant's credit facility will be used to fund a merger with Biovail Corp. and to refinance existing debt, including Valeant's 7 5/8% and 8 3/8% senior unsecured notes.

Goldman Sachs, Morgan Stanley and Jefferies are the joint lead arrangers and joint bookrunners on the deal, with Goldman the administrative agent and the left lead.

The transaction is expected to close before year-end, subject to Valeant and Biovail stockholder approval, which will be sought at a special meeting on Sept. 27, and regulatory approvals.

All stockholders of the merged company are expected to receive an additional one-time $1.00 per share special dividend by Dec. 31. Funding for the dividend will come from the delayed-draw term loan B.

Aliso Viejo, Calif.-based Valeant and Mississauga, Ont.-based Biovail are specialty pharmaceutical companies. The combined company will be based in Mississauga and will be named Valeant Pharmaceuticals International Inc.

Denny's sets pricing

Denny's firmed pricing on its $250 million at Libor plus 475 bps with a 1.75% Libor floor and an original issue discount of 981/2, according to a market source. There is 101 soft call protection for one year.

Pricing came at the tight end of talk of Libor plus 475 bps to 500 bps at a discount of 98 to 981/2.

The company's $300 million credit facility (B1/B+) also includes a $50 million revolver that is priced at Libor plus 475 bps with a 1.75% Libor floor as well.

Currently, it is expected that the facility will allocate and free up for trading on Monday.

Bank of America and Wells Fargo are the lead banks on the deal that will be used to refinance existing debt.

Denny's is a Spartanburg, S.C.-based restaurant franchise operator.

RBS WorldPay floats OID

RBS WorldPay held a bank meeting in New York on Friday morning to launch its proposed £235 million seven-year dollar equivalent term loan B-2 to U.S. investors, and in connection with the event, the original issue discount was announced, according to a market source.

The term loan B-2 is being offered to investors at a discount of 98 to 99, the source said.

As was previously reported, price talk on the loan is Libor plus 500 bps with a 1.75% Libor floor.

The remainder of the company's £970 million secured credit facility (Ba2/BB) is being marketed in Europe and was launched with a bank meeting on Thursday.

The European tranches include a £75 million six-year revolver, a £75 million six-year capital expenditures facility, a £160 million six-year term loan A, a £325 million seven-year term loan B-1 and a £100 million seven-year euro equivalent term loan B-3.

RBS WorldPay being acquired

Proceeds from RBS WorldPay's credit facility will be used to help fund the acquisition of an 80.01% interest in the company by Advent International and Bain Capital from RBS Group for an enterprise value of up to £2.025 billion.

Goldman Sachs, Barclays, Morgan Stanley, RBS and UBS are the lead banks on the credit facility, with Goldman the left lead on the U.S. piece.

Closing on the transaction is expected by the end of the year, subject to regulatory approvals.

RBS WorldPay is a provider of global payment processing services.

Grifols sets talk

Grifols came out with price talk on its proposed $1.6 billion term loan B following a bank meeting that took place on Thursday to officially kick off the retail syndication round, according to a market source. Currently, there is no word of a U.S. bank meeting being scheduled.

The term loan B is being talked at Libor plus 450 bps on the dollar portion and Euribor plus 475 bps on the euro portion, with both tranches having a 1.75% Libor floor and being offered at an original issue discount of 981/2, the source said.

Previously, it was known that the B loan would have a 1.75% Libor floor, but the spread and discount talk were unavailable. However, this summer there were some rumors of talk in the Libor plus 400 bps/Euribor plus 425 bps context.

Of the total term loan B amount, about $300 million is being targeted to be raised in euros.

Grifols revolver, A loan

Grifols' $3.4 billion credit facility (Ba3/BB) also includes a $1.5 billion term loan A priced at Libor plus 375 bps/Euribor plus 400 bps and a $300 million revolver.

Initially, the term loan B was expected to be sized at $2.35 billion, and the term loan A was expected at $750 million, but funds were shifted between the tranches as a result of strong demand from banks during the pro rata syndication.

Deutsche Bank, Nomura, BBVA, BNP Paribas, HSBC and Morgan Stanley are the lead banks on the deal.

In addition to the credit facility, the company is planning $1.1 billion of notes backed by a bridge loan commitment.

At close, the company's initial net debt to EBITDA ratio is expected to be roughly 5.0 times.

Grifols buying Talecris

Proceeds from Grifols' credit facility and notes will be used to help fund the acquisition of Talecris Biotherapeutics Holdings Corp.

Under the agreement, Grifols is buying Talecris for a combination of cash and newly issued Grifols non-voting shares having an aggregate value of $3.4 billion. The enterprise value of the transaction is $4 billion if Talecris' debt is included.

Specifically, Grifols is paying $19.00 per share in cash and 0.641 in newly issued non-voting shares for each Talecris share. The cash portion of the consideration is $2.5 billion.

Closing is expected to take place in the second half of the year, subject to customary conditions, including antitrust and regulatory review and the approval of each company's shareholders.

Grifols is a Spain-based health care company and producer of plasma protein therapies. Talecris is a Research Triangle Park, N.C.-based biotherapeutics products company.

HealthSpring timing surfaces

HealthSpring has scheduled a bank meeting for Wednesday to launch its proposed $150 million term loan A due Feb. 11, 2015 and a $250 million six-year term loan B, according to a market source.

Financial covenants include a minimum consolidated statutory net worth and a maximum consolidated total leverage ratio of 2.25 times, with step-downs to be determined.

JPMorgan and Bank of America are the joint lead arrangers and bookrunners on the deal, and Raymond James Bank is a co-arranger.

Proceeds will be used to help fund the acquisition of Bravo Health Inc., a Baltimore-based operator of Medicare Advantage coordinated care plans, for $545 million.

At close, leverage on a pro forma EBITDA basis is anticipated to be 1.6 times, and debt to capital is expected in the mid-to-high 30s.

HealthSpring to amend loan

In connection with the acquisition, HealthSpring expects to amend its existing credit facility to allow for the new term loans.

The company's existing credit facility consists of a $175 million revolver and a $175 million term loan A, with both tranches currently priced at Libor plus 325 bps.

To finance the acquisition, the company plans on drawing $100 million under the currently undrawn revolver, in addition to getting the new term loans, and using unrestricted cash.

Closing on the acquisition is expected by year-end, subject to customary conditions, including federal and state regulatory approvals.

HealthSpring is a Nashville, Tenn.-based Medicare Advantage coordinated care plans.

GenTek readies deal

GenTek is scheduled to hold a bank meeting on Wednesday at 10 a.m. ET in New York to launch a new credit facility that will be used for a dividend recapitalization, according to a market source.

Goldman Sachs is the lead bank on the deal.

Details on structure and pricing are not yet available, the source added.

GenTek is a Parsippany, N.J.-based provider of specialty inorganic chemical products and valve actuation systems and components for automotive and heavy duty/commercial engines.

Alpha Packaging closes

In other news, Alpha Packaging closed on its $150 million credit facility, consisting of a $20 million revolver, a $100 million term loan B and a $30 million delayed-draw one-year term loan, according to a market source.

All tranches are priced at Libor plus 500 bps with a 1.75% Libor floor. The delayed-draw term loan was sold at an original issue discount of 98, while the funded term loan B and revolver were sold at 981/2. There is a 100 bps unused fee under the delayed-draw loan.

Bank of Ireland, BMO and GE Capital acted as the lead banks on the deal that was used to help fund the buyout of the company by Irving Place Capital.

The delayed-draw loan is available for acquisitions.

Alpha Packaging is a St. Louis-based manufacturer of bottles and jars for the nutritional, pharmaceutical, personal care and niche food and beverage markets.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.