NBTY breaks for trading; West tweaks amendment; HealthSpring, Peak 10 price talk emerges

By Sara Rosenberg

New York, Sept. 22 - NBTY Inc.'s credit facility allocated and freed up for trading during Wednesday's market hours, with the term loan B quoted in the secondary above its original issue discount price.

In other news, West Corp. increased the consent fee on its amendment and extension proposal and added some soft call protection.

Meanwhile, over on the new deal front, HealthSpring Inc. and Lantiq came out with price talk on their loans as the deals were presented to lenders, and talk on Peak 10 Inc.'s in-market deal surfaced.

Also, TriZetto Group Inc. is getting ready to bring an incremental term loan to market, assuming that its current amendment proposal receives enough lender consents to pass, and Lightower Fiber Networks announced plans for a new deal.

NBTY frees up

NBTY's credit facility hit the secondary market on Wednesday afternoon, with the $1.5 billion term loan B quoted by one trader at par ¾ bid, 101 1/8 offered, by a second trader at par ¾ bid, 101 and by a third trader at par 7/8 bid, 101 1/8 offered.

The first trader said that the term loan B first opened up at par bid, 101 offered, while the second trader said it broke at par ½ bid, par ¾ 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. The spread can drop to Libor plus 425 bps upon a leverage test being met.

During syndication, the term loan B was upsized from $1.3 billion, pricing and discount firmed at the tight end of the Libor plus 450 bps to 475 bps with an original issue discount of 98½ to 99 talk, and the step-down was added.

NBTY firms revolver size

Also on Wednesday, NBTY finalized the size of its revolving credit facility at $250 million, according to a market source. Most recently, the revolver was talked at $200 million to $250 million, and at launch it was talked only at $200 million.

The company's $2 billion senior secured credit facility (Ba3/BB-) also includes a $250 million that was upsized from $200 million during syndication.

Pricing on the revolver and term loan A came in line with initial talk at Libor plus 425 bps with a 1.75% Libor floor. There were upfront fees based on commitment size.

Barclays, Bank of America Merrill Lynch and Credit Suisse are the lead banks on the deal, with Barclays the left lead.

NBTY funding buyout

Proceeds from NBTY's credit facility, $650 million of notes and $1.6 billion in equity will be used to finance the acquisition of the company by the Carlyle Group for $55.00 per share in cash. The transaction is valued at $3.8 billion.

The notes were downsized from $900 million when the term loan B and term loan A were upsized.

Closing on the transaction may occur as soon as October, subject to customary conditions. It is not subject to any financing condition.

NBTY is a Ronkonkoma, N.Y.-based manufacturer and marketer of nutritional supplements.

West sweetens amendment

West revised its amend and extend offer by raising the consent fee to 25 bps from 12.5 bps and adding 101 soft call protection for one year to the proposed term loan B-5 and the existing term loan B-4, according to a market source.

Consents are due at noon ET on Thursday.

As was previously reported, the company is looking to extend the maturity of its $250 million revolver to January 2016 from October 2012 and the maturity of $500 million of its term loans to July 2016 from October 2013.

Pricing on the extended revolver will be increased by 100 bps across the grid, and pricing on the extended term loan, which will be called a term loan B-5, will be Libor plus 387.5 bps - matching terms on the previously extended term loan B-4 - up from Libor plus 237.5 bps on the non-extended.

West revising covenants

In addition to the extension, West's proposed amendment would modify the step-down schedule in the current financial covenants and change certain covenant baskets.

Wells Fargo and Deutsche Bank are the lead banks on the amendment, with Wells Fargo the left lead.

The amendment is subject to the sale of at least $500 million of senior unsecured notes that will be used to repay about $500 million of the term loans due October 2013.

West is an Omaha, Neb.-based provider of outsourced communication services.

HealthSpring sets talk

Moving to new deal happenings, HealthSpring held a bank meeting on Wednesday to kick off syndication on its proposed bank debt, and in connection with the launch, price talk on the term loan B was announced, according to a market source.

The $250 million six-year term loan B is being talked at Libor plus 450 bps with a 1.5% Libor floor, an original issue discount of 981/2, and 101 soft call protection for one year, the source said.

The company's $400 million in new financing (Ba3/B+) also includes a $150 million term loan A due Feb. 11, 2015.

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.

HealthSpring buying Bravo

Proceeds from HealthSpring's term loans 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.

In addition to the term loans, funding for the transaction will come from $100 million of revolver borrowings and unrestricted cash.

The company expects to amend its existing credit facility, which is comprised of $175 million revolver and a $175 million term loan A, to allow for the new term loans.

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.

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.

Lantiq pricing guidance

Another deal to hold a bank meeting on Wednesday and release price talk was Lantiq, with its $225 million term loan (B+) guided at Libor plus 600 bps to 625 bps with a 2% Libor floor, an original issue discount of 98 and 101 soft call protection for one year, according to a market source.

Deutsche Bank and Barclays are the lead banks on $245 million credit facility, which also includes a $20 million revolver (BB).

Proceeds will be used to refinance the company's capital structure, which is currently all equity funded.

Commitments are due on Oct. 4.

Lantiq is a Neubiberg, Germany-based provider of broadband and voice telephony semiconductor services.

Peak 10 talk revealed

Price talk on Peak 10's $140 million term loan B came out now that the company has received its private corporate ratings, which are heard to be in the mid-single Bs, according to a market source.

The term loan B is talked at Libor plus 500 bps with a 1.75% Libor floor and an original issue discount of 98 to 99, the source said.

RBC is the lead bank on $155 million credit facility, which also includes a $15 million revolver, and was launched with a bank meeting on Sept. 16.

Proceeds will be used to help fund the buyout of the data center operator and managed services provider by Welsh, Carson, Anderson & Stowe from Seaport Capital and McCarthy Capital.

The transaction is expected to close in early October.

TriZetto term loan

TriZetto is scheduled to hold a conference call on Sept. 29 to launch a proposed $100 million incremental term loan, according to a market source.

Price talk on the term loan is expected somewhere in the Libor plus 400 bps area with a typical Libor floor and a slight original issue discount, the source said.

RBC Capital Markets is the lead bank on the deal that will be used, along with cash on hand, to repay all of the company's $192 million of mezzanine notes, which would bring the capital structure to all senior debt.

Pro forma leverage for the transaction is 3.2 times.

TriZetto seeks amendment

In order for TriZetto to be allowed to repay the mezzanine debt with the incremental loan and cash on hand, it must first amend its existing credit facility, the source explained.

To that end, a conference call was held this past Tuesday to launch the amendment proposal and consents are being sought by Sept. 28, the day before the incremental loan is set to officially come to market.

Lenders are being offered a 12.5 bps amendment fee.

It is currently expected that some of the existing lenders, who heard about the incremental term loan during the amendment call, will place some orders in towards the new debt before the actual launch takes place, and it's possible that the whole tranche may end up being spoken for by existing guys, the source added.

TriZetto is a Greenwood Village, Colo.-based health care information technology company to the health care payer industry.

Lightower launching soon

Lightower Fiber Networks has scheduled a bank meeting on Sept. 30 to launch its proposed $230 million five-year credit facility that is being talked at Libor plus 400 bps with no Libor floor, according to sources.

Tranching on the deal is a $40 million revolver and a $190 million term loan A.

GE Capital and SunTrust are the lead banks on the deal that will be used to fund the acquisition of Lexent Metro Connect, a New York-based provider of custom built dark fiber networks.

Closing is expected in the fourth quarter, subject to regulatory approval.

Following the transaction, leverage will be 2.4 times.

Lightower Fiber Networks is a Boxborough, Mass.-based metro fiber network and bandwidth service provider.

Visant closes

Visant Holding Corp. closed on its $1.425 billion credit facility (Ba3/BB-), consisting of a $1.25 billion term loan and a $175 million revolver, according to a news release.

Pricing on the term loan is Libor plus 525 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 98. There is 101 soft call protection for one year.

During syndication, pricing on the term loan was increased from talk of Libor 475 bps to 500 bps.

Credit Suisse, Goldman Sachs, Barclays, Deutsche Bank, Bank of America and KKR Capital Markets acted as the lead banks on the deal.

Proceeds were used to fund a recapitalization that included tender offers for the company's 10¼% senior discount notes due 2013, its 8¾% senior notes due 2013 and its 7 5/8% senior subordinated notes due 2012.

Visant is an Armonk, N.Y.-based marketing and publishing services enterprise.

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