SoftLayer breaks; IDS, Leslie's, Lantiq, Hilex tweak deals; Burlington, AZ Chem talk emerges

By Sara Rosenberg

New York, Nov. 5 - SoftLayer Technologies firmed pricing on its credit facility and then proceeded to free the deal up for trading, with the term loan B quoted above its original issue discount price.

In more loan happenings, Illumination and Detection Solutions (IDS) made some changes to its credit facility, including lowering pricing, the Libor floor and original issue discount, as a result of strong demand from investors.

Also, Leslie's Poolmart Inc. upsized its credit facility and reduced the spread and discount on its term loan, Lantiq downsized its term loan and increased pricing as well as discount, and Hilex Poly Co. widened the spread and discount on its loan.

In addition, Burlington Coat Factory Warehouse Corp. revealed guidance on its term loan as the deal was presented to lenders, Arizona Chemical Inc. (AZ Chem) released price talk on its credit facility on the back of ratings being announced, MailSouth nailed down timing on its credit facility and Ascend Learning disclosed plans for a new deal.

SoftLayer pricing finalized

SoftLayer Technologies set pricing on its $255 six-year term loan B at Libor plus 550 basis points with a 1.75% Libor floor and an original issue discount of 981/2, according to a market source.

By comparison, most recently, the B loan was talked at Libor plus 525 bps to 550 bps with a 1.75% floor and a discount of 981/2, and at launch, the tranche was talked at Libor plus 450 bps to 500 bps with a 1.75% floor and a discount of 98 to 981/2.

A source previously told Prospect News that the book got great traction after pricing moved from the original talk and that investors were initially reluctant to come in at the lower spread due to the sector and high growth of company coupled with capital expenditures spend.

The source also remarked that offsetting the negatives was the low leverage of 2.5 times, 2.3 times net, and 70%-plus equity contribution.

SoftLayer frees up

After determining pricing on the term loan B, SoftLayer hit the secondary market, with the tranche quoted at 99½ bid, par offered on the break, the source continued. A second source had the loan bid at 99¾ in the afternoon.

SunTrust and RBC Capital are the lead banks on the $275 million credit facility (B1/B+), which also includes a $20 million five-year revolver.

Proceeds will be used to help fund a merger with ThePlanet.com Internet Services, a Houston-based provider of internet infrastructure services that is owned by GI Partners.

SoftLayer is a Dallas-based provider of on-demand data center and hosting services that is also owned by GI Partners.

IDS reworks pricing

Illumination and Detection Solutions made a round of revisions to pricing, the Libor floor and discount on its $215 million credit facility and asked that lenders recommit by noon ET on Monday, according to a market source.

Under the changes, both the $15 million revolver and the $200 million term loan are priced at Libor plus 575 bps, down from Libor plus 650 bps, with a 1.5% Libor floor, down from 1.75%, the source said.

Pricing on the facility will reduce to Libor plus 500 bps upon receipt of a rating from Moody's Investors Service, which is expected to occur in the first quarter of 2011. A 50 bps step-down with ratings was part of the deal since the start. As a result of the flex, the spread that the loan will carry changed.

Also as part of Friday's modifications, the original issue discount on the term loan was reduced to 99 from 98, the source continued.

IDS being acquired

Proceeds from Illumination and Detection Solutions' credit facility will be used to help fund its buyout by Veritas Capital from PerkinElmer Inc. for about $500 million in cash.

Prior to launch, the term loan was upsized from $178 million as a result of a growth in EBITDA.

Closing is expected by the end of the year, subject to customary conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

UBS and Credit Suisse are the lead banks on the deal.

Illumination and Detection Solutions is a provider of specialty lighting and sensor components, subsystems and integrated products to OEMs for health, environmental and security segments.

Leslie's revises facility

Another deal to come out with changes on Friday was Leslie's Poolmart, as its term loan was upsized, its revolver was downsized and pricing on the term loan was made more issuer-friendly, according to sources.

The seven-year term loan (BB-) was increased to $310 million from $225 million, while the revolver was decreased to $70 million from $75 million, sources said.

As for pricing, the term loan is coming at Libor plus 450 bps, down from Libor plus 475 bps, a step-down to Libor plus 425 bps was added at less than 4.5 times leverage, the 1.5% Libor floor was left unchanged and the original issue discount tightened to 99 from 981/2.

The term loan still includes 101 soft call protection for one year.

Leslie's allocating soon

Leslie's Poolmart's credit facility is expected to allocate on Monday as recommitments were due from investors on Friday, sources remarked.

Bank of America, Wells Fargo and Goldman Sachs are the lead banks on the now $380 million deal, up from $300 million.

Proceeds will be used to refinance existing bonds and an existing revolver and to pay off a shareholder that is exiting the investor group.

Leslie's Poolmart is a Phoenix-based retailer of swimming pool supplies and related products.

Lantiq size, pricing

Lantiq also reworked its term loan on Friday, reducing the size to $190 million from $225 million, flexing pricing to Libor plus 700 bps from most recent talk of Libor plus 675 bps and initial talk at launch of Libor plus 600 bps to 625 bps, and widening the original issue discount to 97 from 98, according to a market source.

The term loan still includes a 2% Libor floor and hard call protection of 102 in year one and 101 in year two. The call protection was revised earlier in syndication from 101 soft call for one year.

Another change made earlier to the term loan was setting amortization at 5% in year one, 12.5% in year two and 10% every year thereafter.

Recommitments were due from lenders on Friday.

Lantiq getting revolver

Lantiq's now $210 million credit facility, down from $245 million, also provides for a $20 million revolver.

Initially, the revolver had super-priority status. However, when the first round of changes were made to the deal a few days ago, the status of the revolver was modified so that it ranks pari passu with the term loan.

Also, when the initial changes were made, the accordion feature under the facility was reduced to $50 million.

Deutsche Bank and Barclays are the lead banks on the deal that will be used to refinance the company's capital structure, which is currently all equity funded.

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

Hilex Poly ups spread

And, continuing on the topic of revised deals, Hilex Poly lifted pricing on its $135 million five-year term loan B (B3/B) to Libor plus 925 bps from Libor plus 900 bps, increased the discount to 97 from 98, and added hard call protection of 104 in year one and 102 in year two, according to a market source.

Earlier in syndication, the term loan had been downsized from $160 million, the maturity had been shortened from six years, and pricing had been flexed up from Libor plus 700 bps.

As has been the case since launch, the loan includes a 2% Libor floor.

Deutsche Bank and GE Capital are the lead banks on the deal that will be used to refinance existing debt and fund a dividend.

Hilex Poly is a Hartsville, S.C.-based producer of recycled content plastic bags and recycler of plastic bags and film.

Burlington discloses talk

In more primary happenings, Burlington Coat Factory held a bank meeting on Friday to launch its proposed $1 billion term loan (B3), and in connection with the event, price talk was announced at Libor plus 525 bps with a 1.75% Libor floor and an original issue discount of 981/2, according to a market source.

JPMorgan and Goldman Sachs are the joint bookrunners on the deal that will be used to help repay an existing term loan, redeem 11 1/8% senior notes due 2014 and 14½% senior discount notes due 2014, make a distribution to equity holders and for general corporate purposes.

Other funding for the refinancing/dividend will come from $500 million of notes.

Burlington Coat Factory is a Burlington, N.J.-based discount retailer.

Arizona Chemical guidance

Also on the topic of price talk, Arizona Chemical came out with guidance on its $520 million credit facility on Friday morning as facility ratings of B1/B+ and corporate ratings of B1/B surfaced late in the day Thursday, according to a markets source.

Both the $50 million revolver and the $470 million term loan B are being talked at Libor plus 525 bps to 550 bps with a 1.75% Libor floor, the source said.

In addition, the term loan B is being offered at an original issue discount of 98 and carries 101 soft call protection for one year.

A bank meeting to officially launch the deal took place on Thursday afternoon, but prior to that, Goldman Sachs, the left lead on the deal, gave some banks an early look at the transaction.

Arizona Chemical nets orders

Arizona Chemical's credit facility has already attracted sizeable commitments from GE Capital and KeyBank, and as a result, they were both named joint bookrunners and GE got the title of administrative agent, the source remarked.

Proceeds will be used to help fund American Securities' purchase of a controlling interest in the company from Rhone Capital, who, along with other current investors and the management team, will retain 25% of the company's ownership.

The transaction is expected to close in the fourth quarter, subject to regulatory approvals and customary conditions.

Arizona Chemical is a Jacksonville, Fla., supplier of pine chemicals to the adhesives, inks and coatings and oleochemicals markets.

MailSouth firms timing

MailSouth zeroed in on timing for the launch of its proposed credit facility with the scheduling of a bank meeting for Wednesday, according to a market source. Previously, the deal was simply labeled as Nov. 8 week business.

Details on the structure of the facility are not yet available.

GE Capital is the lead bank on the deal that will be used to help fund the buyout of the company by Court Square Capital Partners from New Mountain Capital.

MailSouth is a Helena, Ala.-based provider of shared mail services.

Ascend readies launch

Ascend Learning is scheduled to hold a bank meeting on Monday to launch a proposed $400 million credit facility that is comprised of a $40 million revolver, a $260 million first-lien term loan B and a $100 million second-lien term loan, according to a market source.

Bank of America, GE Capital and Barclays are the lead banks on the deal that will be used to refinance existing debt and replace some equity with debt.

Ascend Learning is a Stilwell, Kan.-based provider of technology-based learning services focused on student training and testing results in health care and other vocational fields.

Rural/Metro shuts books

Commitments were due from lenders on Friday on Rural/Metro Corp.'s $175 million secured credit facility (Ba1/BB), but prior to the deadline, the deal was already "heavily oversubscribed," according to a market source.

The facility consists of a $75 million term loan and a $100 million revolver, with both tranches talked at Libor plus 425 bps to 450 bps.

The term loan talk includes a 1.75% Libor floor and an original issue discount of 99 to 991/2, and the revolver is being offered with a 75 bps upfront fee and a 75 bps commitment fee.

It is expected that pricing on the will firm up early next week.

Rural/Metro refinancing

Proceeds from Rural/Metro's credit facility will be used to refinance its existing senior secured revolver, term loan and letter-of-credit facilities, to fund a tender offer for its senior discount notes and to pay off cash collateralized letters of credit.

Additionally, remaining proceeds will be used for working capital and general corporate purposes.

RBC Capital Markets is the lead bank on the bank deal.

Other funds for the refinancing will come from a planned $200 million senior notes offering.

Rural/Metro is a Scottsdale, Ariz.-based provider of medical ambulance response services.

Gavilon momentum building

Things are starting to pick up on Gavilon LLC's $900 million term loan as ratings on the debt surfaced, with Moody's giving the deal a Ba3 rating and Standard & Poor's giving it a BB+ rating, which was better than the BB rating that was initially expected, according to a market source.

By Friday afternoon, about 20% to 25% of the deal was done, with the expectation being that the bulk of the commitments would be coming in late day or early next week. The commitment deadline isn't until Nov. 12, so it's still early in the process, the source added.

The term loan is being talked at Libor plus 425 bps with a 1.75% Libor floor and an original issue discount on 981/2. There is 101 soft call protection for one year.

BNP Paribas, Bank of America, JPMorgan and Morgan Stanley are the lead banks on the deal.

Gavilon may up revolver

In addition to the term loan, Gavilon is considering upsizing its existing asset-based revolver to somewhere in the $2.25 billion to $2.5 billion range from the current size of $1.7 billion.

Pricing on the revolver will remain unchanged at Libor plus 275 bps with a 50 bps unused fee.

Proceeds will be used to help fund the acquisition of DeBruce Cos.

Closing on the acquisition is expected in November, subject to receipt of certain regulatory approvals.

Gavilon is an Omaha-based commodity management firm. DeBruce is a Kansas City, Mo.-based agricultural firm.

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