Novelis dips with add-on news; Global Tel breaks; 99 Cents, Liqui-Box, VeriFone set talk

By Sara Rosenberg

New York, Dec. 1 - Novelis Inc.'s term loan B was a little softer in trading on Thursday after the company announced and then quickly launched an incremental tranche, and Ocwen Financial Corp. came out with an add-on as well, but its term loan held firm in the secondary market.

Also in trading, Global Tel*Link Corp.'s credit facility freed up, with the first-lien term loan B quoted above its original issue discount price.

Moving to the primary, 99 Cents Only Stores came out with price talk on its term loan, and guidance on Liqui-Box's and VeriFone Systems Inc.'s credit facilities and Hoffmaster Group Inc.'s second-lien term loan emerged, as all of these deals were presented to lenders during the session.

Furthermore, Deluxe Entertainment Services Group Inc. is getting ready to bring a refinancing to market and has even begun circulating price talk on the term loan in preparation for the launch.

Novelis slides in trading

Novelis' existing term loan B weakened on Thursday to 98¼ bid, 99¼ offered, from 98½ bid, 99½ offered in reaction to the company's quick-to-market add-on loan that launched with a conference call in the afternoon, according to a trader.

Pricing on the $225 million incremental term loan B due March 2017 will match that of the existing term loan B at Libor plus 275 basis points with a step-up to Libor plus 300 bps at 3.5 times net leverage, and a 1% Libor floor.

The new debt was sold at an original issue discount of 971/2, whereas the existing roughly $1.49 billion term loan B was sold at par when obtained earlier this year.

Upon announcing the add-on in the morning, it was said that the size would be $200 million, but by the afternoon, it had already been increased by $25 million.

Novelis allocating shortly

Novelis wrapped syndication on the incremental loan rather quickly, with commitments due by 5 p.m. ET on Thursday, and the plan is to give out allocations on Friday, the source remarked.

Proceeds will be used to help fund the $350 million acquisition of 31.2% of the outstanding shares of Novelis Korea Ltd. from Taihan Electric Wire Co. Ltd. and other minority shareholders.

With this transaction, Novelis' ownership in Novelis Korea will increase to more than 99% of the outstanding shares.

J.P. Morgan Securities LLC is the left lead bank on the new term loan that is expected to close by Dec. 31.

Novelis is an Atlanta-based aluminum-rolled products and beverage can recycling company.

Ocwen holds firm

Ocwen Financial was another company to announce/launch an incremental term loan, but its existing term loan remained flat at 99½ bid, par ½ offered in trading even after the news hit, according to a trader.

The company's $200 million incremental senior secured term loan due Sept. 1, 2016 is being offered to investors at an original issue discount of 981/2, compared to the 98 price that the existing loan was sold at when obtained in September.

Pricing on the add-on loan is the same as the existing term loan at Libor plus 550 bps with a 1.5% Libor floor, and there is 101 soft call protection until Sept. 1, 2012.

Barclays Capital Inc. is the sole arranger and bookrunner on the deal.

Ocwen capitalization

Ocwen disclosed in a filing with the Securities and Exchange Commission that its pro forma corporate debt to run-rate adjusted EBITDA is 1.68 times, total debt to tangible equity is 4.53 times, total debt to equity is 4.33 times, and corporate interest coverage is 5.82 times.

Proceeds from the incremental term loan will be used for general corporate purposes, including financing the purchases of Saxon Capital Holdings LLC from Morgan Stanley Mortgage Capital Holdings LLC and a mortgage servicing portfolio from J.P. Morgan.

Commitments are due on Dec. 8, with closing expected on Feb. 1.

Ocwen is an Atlanta-based provider of residential and commercial loan servicing, special servicing and asset management services.

Global Tel frees up

Global Tel*Link's credit facility made its way into the secondary market on Thursday, with the $635 million six-year term loan B quoted at 98½ bid, 99½ offered, according to a market source.

Pricing on the B loan is Libor plus 550 bps with a 1.5% floor, and it was sold at an original issue discount of 98. There is 101 soft-call protection for one year.

During syndication, the term loan was upsized from $605 million, the spread was flexed lower from Libor plus 600 bps and the discount tightened from 97.

The company's $685 million credit facility (B2/B) also includes a $50 million five-year revolver priced at Libor plus 550 bps, after flexing from Libor plus 600 bps as well, with a 1.5% Libor floor.

Global Tel lead banks

Credit Suisse Securities (USA) LLC, UBS Securities LLC, GE Capital Markets and Nomura are the lead banks on Global Tel*Link's credit facility.

Proceeds will help fund the company's buyout by American Securities from Veritas Capital and GS Direct.

The equity funding for the transaction was downsized by $30 million as a result of the term loan B upsizing.

Global Tel*Link, a Mobile, Ala.-based correctional communications technology company, has leverage of 4.25 times.

99 Cents sets guidance

In more loan happenings, 99 Cents Only Stores held a bank meeting on Thursday morning to launch its proposed credit facility, at which time price talk on the $525 million seven-year term loan was announced, according to a market source.

The term loan is talked at Libor plus 550 bps, with a 1.5% Libor floor and an original issue discount of 98, and has 101 soft call protection for one year, the source remarked.

By comparison, the company had previously outlined term loan pricing at Libor plus 600 bps with a 1.5% Libor floor in filings with the Securities and Exchange Commission, and said that the deal would have 101 soft call protection for one year, a maximum total leverage ratio covenant and amortization of 1% per annum.

The City of Commerce, Calif.-based operator of extreme value retail stores is seeking commitments from lenders by Dec. 14.

99 Cents getting revolver

99 Cents Only Stores' $675 million credit facility also includes a $150 million five-year ABL revolver. According to the regulatory filings, pricing on the ABL revolver is expected at Libor plus 200 bps with a 37.5 bps unused fee. The coupon is expected to range from Libor plus 175 bps to 225 bps, and the unused fee from 37.5 bps to 50 bps, based on average excess availability.

RBC Capital Markets, BMO Capital Markets and Deutsche Bank Securities Inc. are leading the deal that will be used, along with $635.9 million of equity and a $250 million bridge loan commitment, to fund the buyout of the company by Ares Management LLC and Canada Pension Plan Investment Board for $22.00 per share in cash in a transaction with a total equity value of about $1.6 billion.

Pricing on the one-year bridge loan is expected at Libor plus 950 bps with a 1.5% Libor floor. After three months, the spread will increase by 50 bps each full fiscal quarter thereafter.

Closing is anticipated in the first quarter of 2012, subject to shareholder approval and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

VeriFone launches

VeriFone Systems launched its $1.6 billion senior secured credit facility (Ba3), with price talk on the $350 million five-year revolver and the $1 billion five-year term loan A coming out at Libor plus 275 bps, according to a market source.

Meanwhile, pricing on the $250 million seven-year term loan B is talked at Libor plus 350 bps to 375 bps with a 1% Libor floor and an original issue discount of 99, the source said.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Wells Fargo Securities LLC, Barclays Capital Inc. and RBC Capital Markets LLC are the lead banks on the deal.

Leverage will be around 3 times.

VeriFone buying Point

Proceeds from VeriFone's credit facility will help fund the purchase of Point Group from Nordic Capital and to refinance an existing $217 million term loan and $277 million of convertible notes that come due in June 2012.

Under the acquisition agreement, VeriFone is paying about €770 million for Point, consisting of cash to shareholders of €600 million and repayment of Point debt of €170 million.

Closing is targeted by the end of the year, subject to customary conditions.

VeriFone is a San Jose, Calif.-based secure electronic payment services company. Point is a Stockholm-based provider of multichannel electronic payment services.

Liqui-Box pricing

Also launching with a bank meeting in the morning was Liqui-Box's $105 million credit facility, and price talk was released at Libor plus 575 bps with a 1.5% Libor floor and an original issue discount of 98, according to a market source.

The facility consists of a $20 million five-year revolver and an $85 million six-year term loan B.

BNP Paribas Securities Corp. and BMO Capital Markets Corp. are leading the deal that will be used, along with roughly $25 million of mezzanine debt, to fund the buyout of the company by the Sterling Group from DuPont.

Liqui-Box, a manufacturer of bag and box flexible packaging for the beverage, dairy and foodservice markets, will have senior leverage of 3.1 times and total leverage of 4.1 times.

Hoffmaster second-lien talk

Continuing on the price talk front, Hoffmaster Group came out with guidance on its $64 million seven-year second-lien term loan of Libor plus 975 bps with a 1.5% Libor floor and an original issue discount of 97 to 98 as the deal launched with a bank meeting in the morning, according to a market source.

The company also launched its $235 million six-year first-lien term loan, for which price talk emerged on Wednesday at Libor plus 550 bps with a 1.5% Libor floor and an original issue discount of 98.

In addition to the term loans, the company's $334 million credit facility also includes a $35 million five-year revolver.

GE Capital Markets, Jefferies & Co. and Macquarie Capital (USA) Inc. are the lead banks on the deal that will be used to help fund the buyout of the company by Metalmark Capital from Kohlberg & Co.

Hoffmaster is an Oshkosh, Wis.-based producer of specialty disposable tabletop products.

Deluxe readies deal

Also in the primary, Deluxe Entertainment set a bank meeting for Friday to launch a proposed $600 million credit facility that will be used to refinance existing debt, according to a market source.

The facility consists of a $100 million five-year ABL revolver, and a $500 million 51/2-year term loan talked at Libor plus 650 bps with a 1.5% Libor floor, an original issue discount of 96 and 101 soft call protection for one year, the source said.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Natixis are the lead banks on the deal.

Deluxe is a Los Angeles-based entertainment services provider that processes film, assists in motion picture post-production work and distributes prints to film studios.

HMS well met

HMS Holdings Corp.'s $450 million credit facility has seen good interest from investors, resulting in the deal being oversubscribed by Wednesday's end of day commitment deadline, according to a market source.

The facility consists of a $350 million term loan and a $100 million revolver, both talked at Libor plus 300 bps.

Citigroup Global Markets Inc. is leading the deal that will be used, along with cash on hand and the assumption of about $16 million of unvested options, to fund the roughly $400 million purchase of HealthDataInsights Inc., a Las Vegas-based technology-enabled health care services company focused on ensuring claims integrity.

Total leverage will be 2.5 times, and net leverage will be 1.7 times.

HMS, a New York-based coordinator of benefits and program integrity services for health care payers, expects to close on the acquisition by Dec. 31, subject to regulatory approvals.

AGCO wraps acquisition

AGCO Corp. completed its purchase of GSI Holdings Corp. from Centerbridge Partners LP for $928 million, according to a news release.

To help fund the transaction, and to refinance existing credit lines, the company got a $1 billion five-year unsecured credit facility consisting of a $600 million revolver, which was upsized from $500 million during syndication, and a $400 million term loan A.

Pricing on facility is Libor plus 150 bps, with the revolver having a 25 bps commitment fee.

Rabobank, J.P. Morgan Securities LLC, SunTrust Robinson Humphrey Inc. and Bank of Tokyo led the deal.

AGCO is a Duluth, Ga.-based manufacturer and distributor of agricultural equipment. GSI is an Assumption, Ill.-based manufacturer of grain storage and protein production systems.

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