Hostess, Monarch break; Travelport up with refi plan; Duff & Phelps, Salem, EMI tweak deals

By Sara Rosenberg

New York, March 12 - Hostess Snacks, eResearchTechnology Inc. and Monarch (AI Chem Intermediate Sarl) saw their deals free up for trading on Tuesday, and Travelport Ltd.'s term loan was better as the company revealed a restructuring plan for its capital structure.

Over in the primary, Duff & Phelps Corp. made a number of revisions to its term loan, including tightening the coupon, the Libor floor and the original issue discount, as well as shortening the call protection.

Also, Salem Communications Corp. finalized pricing on its term loan B at the high end of talk, reduced the original issue discount that is being offered and added covenants to the previously covenant-light tranche, and EMI Music Publishing firmed its spread at the wide end of guidance.

In addition, Reddy Ice Corp. set talk with launch, Doncasters Group Ltd., United Continental Holdings, Panda Temple II, Fender Musical Instruments Corp., SRAM LLC and Twin River Management Group Inc. joined this week's calendar, and H.J. Heinz Co. revealed timing and talk on its deal.

Hostess starts trading

Hostess Snacks' credit facility emerged in the secondary market on Tuesday, with the $500 million seven-year covenant-light first-lien term loan quoted at par bid, par ½ offered, according to a market source.

Pricing on the term loan is Libor plus 550 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 99. The debt is non-callable for two years, then at 102 in year three and 101 in year four and includes a ticking fee of 50% of the margin after 30 days.

During syndication, the term loan was upsized from $450 million, pricing was cut from talk of Libor plus 600 bps to 625 bps and the discount was tightened from 981/2.

The company's $560 million credit facility also provides for a $60 million ABL revolver.

Credit Suisse Securities (USA) LLC and UBS Securities LLC are leading the deal.

Hostess funding buyout

Proceeds from Hostess Snacks' credit facility will be used to fund the purchase of the baked snack foods business from Hostess Brands Inc., an Irving, Texas-based operator of regional bakeries.

The snacks business is being bought for $410 million by Apollo Global Management LLC and Metropoulos & Co.

The additional funds from the term loan upsizing will be used for general corporate purposes, which could include a reduction of common equity or a potential bid for Drake's, a snack cake brand.

Closing is expected by the end of April, subject to approval by the United States Bankruptcy Court and customary conditions.

eResearch frees up

eResearchTechnology's $255 million first-lien term loan (B1/B+) due May 2, 2018 also broke for trading, with levels quoted at par bid, par ½ offered, a market source said.

Pricing on the term loan is Libor plus 475 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 repricing protection for one year.

Recently, the loan was upsized from $220 million, the discount firmed at the high end of the 99 to 99½ talk, and the maximum leverage and interest coverage ratios were increased slightly to accommodate the increase in funded debt.

Proceeds will be used to repay existing bank debt, with lenders getting paid out at 101 with the refinancing, and the funds from the upsizing, along with $15 million of cash on the balance sheet, will be used to fund a $50 million dividend to equity holders.

Credit Suisse Securities (USA) LLC and Jefferies Finance LLC are leading the deal for the Philadelphia-based technology-driven provider of health outcomes research services and medical devices.

Monarch breaks

Monarch's credit facility freed up too, with the U.S. first-lien term loan quoted at par ½ bid, 101 ½ offered, and the $150 million second-lien term loan (B3/B-) quoted at 101 bid, 102½ offered, a source remarked.

The U.S. first-lien term loan is priced at Libor plus 325 bps with a 1.25% Libor floor, and was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

Pricing on the second-lien loan is Libor plus 700 bps with a 1.25% Libor floor, and it was sold at a discount of 991/2. The loan has call protection of 103 in year one, 102 in year two and 101 in year three.

The U.S. first-lien term loan is part of a $655 million loan (Ba3/B+) that also includes a €200 million tranche priced at Euribor plus 350 bps with a 1.25% floor, and sold at a discount of 99. This debt also has 101 soft call protection for one year.

During syndication, the first-lien term loan was upsized from $565 million, the euro tranche was added and pricing on the U.S. piece was trimmed from Libor plus 350 bps. And, the second-lien loan was downsized from $200 million, pricing was cut from Libor plus 750 bps and the discount firmed at the low end of revised talk of 99 to 99½ and tight of initial talk of 99.

Monarch lead banks

Deutsche Bank Securities Inc., Bank of America Merrill Lynch and Nomura Securities International Inc. are leading Monarch's $925 million credit facility, which also provides for a $120 million revolver (Ba3/B+).

Proceeds, along with equity, will help fund Advent International's acquisition of Cytec Industries Inc.'s Brussels-based coating resins business for about $1.15 billion. The amount of equity being used for the transaction was reduced by $40 million when the first-lien term loan was upsized.

Closing is expected this quarter, subject to the satisfaction of regulatory requirements and other customary conditions.

Travelport rises

In more trading happenings, Travelport's 2015 term loan was seen at 99 bid, par offered, up from 98½ bid, 99½ offered, as the company announced a "comprehensive capital refinancing plan", according to a trader.

Under the plan, holders of the company's 9 7/8% fixed-rate notes due 2014, floating-rate notes due 2014 and euro floating-rate notes due 2014, and 9% senior notes due 2016, agreed to exchange their notes for 13 7/8% senior fixed-rate notes due 2016 or senior floating-rate notes due 2016 priced at Libor plus 862.5 bps.

With the notes exchange offers, the company entered into an up to $630 million second-lien loan agreement with Credit Suisse AG. The loan, due Jan. 31, 2016, is priced at Libor plus 800 bps with a 1.5% Libor floor and has call protection of 102 through Aug. 23, 2014. This loan is being offered to senior noteholders who tender their notes in the exchange offers and will be used to refinance $175 million of senior secured bank debt and for general corporate purposes.

And, holders of the company's second-priority senior secured notes due 2016 are being offered the ability to exchange their notes for 8 3/8% tranche 2 second-priority secured loans due Dec. 1, 2016.

Travelport PIK refi

Also part of Travelport's refinancing plan is an offer to tranche B holdco PIK loan holders to exchange the debt for 34.6% of the outstanding equity of the company on a pro forma and fully-diluted basis after giving effect to the restructuring plan.

The company's tranche A holdco loan lenders are being offered a consent fee to agree to amendments to the PIK credit facility that allow for the restructuring. These lenders are also being given the chance to exchange up to $25 million of the debt for series A second-priority senior secured notes due 2016 that will be automatically exchanged for a separate series of newly issued 11 7/8% senior subordinated notes due 2016 and 43.3% of the outstanding equity of the company on a pro forma and fully-diluted basis.

Travelport is an Atlanta-based provider of critical transaction processing services and data to companies operating in the travel industry.

Duff & Phelps reworked

Moving to the primary, Duff & Phelps cut the spread on its $349 million seven-year first-lien covenant-light term loan to Libor plus 350 bps from Libor plus 375 bps, lowered the Libor floor to 1% from 1.25% and changed the original issue discount to 99¾ from 991/2, according to a market source.

Furthermore, the 101 soft call protection was shortened to six months from one year, the source remarked.

In addition to the term loan, the company's $424 million senior secured credit facility (B1/B) includes a $75 million five-year revolver.

Commitments were due at 5 p.m. ET on Tuesday, the source added.

Credit Suisse Securities (USA) LLC, Barclays and RBC Capital Markets are leading the deal.

Duff & Phelps to be acquired

Proceeds from Duff & Phelps' credit facility and equity will be used to fund its buyout by the Carlyle Group, Stone Point Capital LLC, Pictet & Cie and Edmond de Rothschild Group for $15.55 per share in cash. The transaction is valued at about $665.5 million.

Closing is expected in the first half of this year, subject to customary conditions including the receipt of stockholder and regulatory approvals.

Duff & Phelps is a New York-based financial advisory and investment banking firm.

Salem updates terms

Salem Communications firmed the coupon on its $300 million term loan B (B2/B) at Libor plus 350 bps, the wide end of the Libor plus 325 bps to 350 bps guidance, moved the original issue discount to 99½ from 99 and added leverage and interest coverage covenants so that the debt is no longer covenant-light, according to a market source.

The 1% Libor floor and 101 soft call protection for one year were unchanged.

Wells Fargo Securities LLC and SunTrust Robinson Humphrey Inc. are leading the $325 million senior credit facility, which also includes a $25 million revolver (Ba2).

Proceeds will fund a cash tender offer that expires on March 22 for the company's $213.5 million of 9 5/8% senior secured second-lien notes due 2016.

Salem Communications is a Camarillo, Calif.-based radio broadcaster, internet content provider, and magazine and book publisher.

EMI finalizes coupon

EMI Music Publishing set pricing on its $1,144,250,000 term loan B at Libor plus 325 bps, the high end of the Libor plus 300 bps to 325 bps talk, while keeping the 1% Libor floor, par offer price and 101 soft call protection for six months intact, according to a market source.

Proceeds will be used to refinance an existing term loan that is priced at Libor plus 425 bps with a 1.25% Libor floor.

UBS Securities LLC and Bank of America Merrill Lynch are leading the deal for the New York-based music publisher.

Reddy Ice discloses talk

Reddy Ice held its bank meeting Tuesday, launching its $225 million six-year covenant-light first-lien term loan (B1/B) with talk of Libor plus 550 bps to 575 bps with a 1.25% Libor floor, an original issue discount of 98½ and 101 soft call protection for one year, according to a market source.

Meanwhile, the $120 million 61/2-year covenant-light second-lien term loan was launched at Libor plus 950 bps to 975 bps with a 1.25% Libor floor, a discount of 98 and call protection of 103 in year one, 102 in year two and 101 in year three, the source said.

The company's $395 million credit facility, for which commitments are due on March 26, also includes a $50 million five-year revolver.

J.P. Morgan Securities LLC and Jefferies Finance LLC are leading the deal that will be used to refinance existing debt and for general corporate purposes.

Reddy Ice is a Dallas-based manufacturer and distributor of packaged ice products.

Doncasters readies meetings

Doncasters set a bank meeting for 2 p.m. ET on Wednesday in New York and one for 9:30 a.m. GMT on Friday in London to launch roughly $1.1 billion in covenant-light term loans, according to a market source.

The debt includes a $515 million seven-year first-lien term loan talked at Libor plus 425 and a €200 million seven-year first-lien term loan talked at Libor plus 475 bps, with both of these tranches having a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source said.

In addition, the company is seeking a $325 million 71/2-year second-lien term loan that is talked at Libor plus 825 bps with a 1.25% floor, a discount of 98 and call protection of 103 in year one, 102 in year two and 101 in year three, the source continued.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch and J.P. Morgan Securities LLC are leading the deal that will be used to refinance existing debt.

Doncasters is a U.K.-based manufacturer of complex precision components.

United coming soon

United Continental announced plans for a 3:30 p.m. ET conference call on Wednesday to launch a $900 million term loan B due 2019 that is talked at Libor plus 325 bps to 350 bps with a 1% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year, according to a market source.

J.P. Morgan Securities LLC and Morgan Stanley Senior Funding Inc. are leading the loan.

Proceeds will be used by the Chicago-based airline operator to refinance an existing term loan B due 2014.

The borrowers are United Air Lines Inc. and Continental Airlines Inc.

Panda Temple II on deck

Panda Temple II will host a bank meeting at 10 a.m. ET on Wednesday to launch a $372 million six-year term loan B that is non-callable for two years, then at 102 in year three and 101 in year four, according to a market source.

Goldman Sachs & Co. and Credit Suisse Securities (USA) LLC are leading the deal.

Commitments will be due on March 26, the source said.

Proceeds will be used to construct a new 758-megawatt natural gas-fueled, combined-cycle power plant in Temple, Texas.

Fender plans refi

Fender Musical scheduled a conference call for 2:30 p.m. ET on Wednesday to launch a $200 million six-year term loan B that will be used to refinance an existing term loan B, according to a market source.

J.P. Morgan Securities LLC is the lead bank on the deal.

Fender is a Scottsdale, Ariz.-based maker of music instruments.

SRAM joins calendar

Another deal to emerge was SRAM, as the company set a bank meeting for 10 a.m. ET in New York on Thursday to launch a $675 million term loan B due 2020, according to a market source.

J.P. Morgan Securities LLC is leading the transaction that will be used to refinance an existing first-lien term loan and some of a second-lien term loan.

SRAM is a Chicago-based bicycle components company.

Twin River deal emerges

Twin River Management set a bank meeting for Thursday to launch a $285 million credit facility that is being led by Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC, according to sources.

The facility consists of a $25 million five-year revolver and a $260 million 5½ year term loan B, sources said.

Proceeds will be used to refinance existing debt and fund a dividend.

Twin River Management is the owner and operator of the Twin River casino located near Providence, R.I.

Heinz timing, talk surfaces

Heinz revealed that the bank meeting for U.S. lenders for its $12 billion senior secured credit facility (Ba2/BB/BB+) will take place at 1:30 p.m. ET in New York on Thursday, according to a market source.

The facility consists of a $1.5 billion revolver, $8.5 billion of six-year term loan B-1 and seven-year term loan B-2 debt, up to $1.4 billion euro equivalent in six-year term loan B-1 and seven-year term loan B-2 debt, and up to $600 million in GBP six-year term loan B-1 and seven-year term loan B-2 debt, the source said.

The U.S. term loan B-1 and B-2 are talked at Libor plus 275 bps to 300 bps with a 1% Libor floor and an original issue discount of 991/2, and talk on the euro and GBP term loan B-1 and B-2 is Libor plus 300 bps to 325 bps with a 1% Libor floor and a discount of 991/2, the source continued.

There is 101 soft call protection for one year on the term loan B-1 debt and soft call protection of 101 for two years on the B-2 debt.

Heinz being purchased

Proceeds from Heinz's credit facility, $16.24 billion of equity and $2.1 billion in senior secured second-lien notes will be used to fund the company's buyout by Berkshire Hathaway and 3G Capital for $72.50 in cash per share. The deal, which includes the assumption of Heinz's outstanding debt, is valued at about $28 billion.

J.P. Morgan Securities LLC, Well Fargo Securities LLC, Barclays and Citigroup Global Markets Inc. are leading the deal.

Closing is expected in the third quarter, subject to shareholder approval and regulatory approvals.

Heinz is a Pittsburgh-based food product company.

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