Kodak, Cetera, Nuance break; Reynolds and Reynolds, Steinway, Hologic update deals

By Sara Rosenberg

New York, Aug. 2 - Eastman Kodak Co.'s exit financing credit facility made its way into the secondary market on Friday, with both the first- and second-lien term loans quoted above their original issue discount prices, and Cetera Financial Group Inc. and Nuance Communications Inc. began trading too.

Switching to the primary, Reynolds and Reynolds Co. increased the size of its term loan A and decreased the size of its term loan B, and Steinway Musical Instruments Inc. upsized its first-lien term loan while cutting the spread and original issue discount.

Also, Hologic Inc. finalized its repricing at the tight end of guidance, Alcatel-Lucent USA Inc. released talk with launch, and Foresight Energy LLC emerged with new deal plans.

Kodak frees up

Kodak's credit facility broke for trading on Friday, with the $420 million six-year first-lien term loan quoted at 98¼ bid, 98½ offered and the $275 million seven-year second-lien term loan quoted at 99 bid, par offered, according to a market source.

Pricing on the first-lien term loan is Libor plus 625 basis points with a 1% Libor floor and it was sold at an original issue discount of 98. There is hard call protection of 102 in year one and 101 in year two.

The second-lien term loan is priced at Libor plus 950 bps with a 1.25% Libor floor and was sold at 971/2. This debt is non-callable for one year, then at 103 in year two and 101 in year three.

The company's credit facility is also expected to include up to $200 million senior secured asset-based revolver that is priced at Libor plus 300 bps with a 50 bps unused fee.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Barclays are leading the deal.

Kodak funding exit

Proceeds from Kodak's $895 million senior secured credit facility will be used to finance distributions to creditors in accordance with the company's plan of reorganization.

The deal underwent a number of changes during syndication, including seeing pricing on the first-lien term loan firm at the tight end of recent talk of Libor plus 625 bps to 650 bps, but wide of revised talk of Libor plus 550 bps to 575 bps and initial talk of Libor plus 475 bps to 500 bps, the discount change from 99 and the call protection sweetened from a 101 soft call for one year.

Also, pricing on the second-lien loan was lifted from talk of Libor plus 825 bps to 850 bps, the discount was modified from 981/2, and the call protection was increased from 103 in year one, 102 in year two and 101 in year three.

Furthermore, the excess cash flow sweep was increased to 75% at close from 50%, a financial covenant was added beginning in December 2014, and a minimum liquidity test was added through December 2014.

Kodak is a Rochester, N.Y.-based imaging technology products and services provider.

Cetera tops OID

Cetera Financial Group's $210 million six-year term loan B freed up as well, with levels seen at 98½ bid, 99½ offered on the open and then it moved up to 99 bid, par offered, according to a trader.

The loan is priced at Libor plus 550 bps with a 1% Libor floor and was sold at a discount of 98. There is soft call protection of 102 in year one and 101 in year two.

Recently, the term loan was downsized from $265 million, pricing was lifted from talk of Libor plus 475 bps to 500 bps, the discount was changed from 99 and the soft call was increased from just 101 for one year.

J.P. Morgan Securities LLC is leading the deal that is being used to refinance existing debt, fund an acquisition and pay a dividend to shareholders.

Cetera is a Denver-based financial advisor network that provides wealth management and advisory platforms to independent financial advisors.

Nuance finalizes terms, breaks

Nuance Communications firmed pricing on its $483 million six-year senior secured term loan at Libor plus 275 bps with no Libor floor and an original issue discount of 99 3/4, compared to earlier talk of Libor plus 275 bps to 300 bps with no floor and an offer price of 99¾ to par, a market source said.

As before, the loan has 101 soft call protection for six months.

With final terms in place, the deal hit the secondary market with levels quoted at par 1/8 bid, par 3/8 offered, a trader remarked.

Morgan Stanley Senior Funding Inc. and Barclays are leading the deal that will be used to amend and extend an existing term loan due March 2016 that is priced at Libor plus 300 bps.

Nuance is a Burlington, Mass.-based provider of voice and language solutions for businesses and consumers.

BWIC emerges

In more secondary happenings, a roughly $109.5 million Bid Wanted In Competition was announced in the morning, and market participants are being given until 11 a.m. ET on Monday to place their bids, according to a trader.

In the portfolio is about $88.5 million of Kinder Morgan Inc. term loan A debt on offer, the trader said.

The remainder of the portfolio is made up of around $8.2 million of AMC Networks Inc. term loan A debt, around $3.8 million of Las Vegas Sands LLC delayed-draw term loan II-E debt, about $4 million of Crown Americas LLC term loan debt and around $4.9 million of Keypoint Government Solutions term loan B debt.

Reynolds moves funds

Moving back to the primary, Reynolds and Reynolds upsized its five-year first-lien term loan A (Ba3/B+) geared toward CLOs to $650 million from $550 million, according to a market source. Pricing on this tranche is Libor plus 275 bps with a 1% Libor floor and an original issue discount of 991/2.

On the flip side, the seven-year first-lien term loan B (Ba3/B+) was downsized to $1.65 billion from $1.75 billion, the source said. This tranche is priced at Libor plus 325 bps with a 1% Libor floor and an original issue discount of 991/2, and has 101 soft call protection for one year.

Earlier in syndication, pricing on the term loan A was decreased from Libor plus 325 bps, the spread on the B loan firmed at the tight end of revised talk of Libor plus 325 bps to 350 bps and down from initial talk of Libor plus 400 bps, and the discount on the term B was tightened from 99.

Reynolds second-lien

Reynolds and Reynolds' is also getting a $1.1 billion 71/2-year second-lien term loan (Caa1/CCC+) that is priced at Libor plus 700 bps with a 1% Libor floor and a discount of 99, and is non-callable for two years, then at 102 in year three and 101 in year four.

Recently, pricing on the second-lien loan finalized at the low end of the revised Libor plus 700 bps to 725 bps talk and down from original talk of Libor plus 775 bps, and the discount was revised from 981/2.

In addition to the term loans, the company's $3,425,000,000 credit facility provides for a $25 million revolver (Ba3/B+).

Deutsche Bank Securities Inc. is leading the deal that will repay existing debt and fund a capital payout to shareholders via a stock buyback. With the recapitalization, existing holders will roll over $900 million of class B shares.

Reynolds and Reynolds is a Kettering, Ohio-based provider of software, business forms and supplies, and professional services that support automotive retailing for car dealers and automakers.

Steinway revisions surface

Steinway Musical Instruments raised its six-year first-lien term loan to $200 million from $175 million, cut pricing to Libor plus 425 bps from Libor plus 450 bps and moved the discount to 99½ from 99, according to a market source.

As before, the first-lien loan has a 1% Libor floor and 101 soft call protection for one year.

The company's now $350 million credit facility also includes a $75 million ABL revolver, and a $75 million seven-year second-lien term loan that was pre-placed.

Due to the term loan upsizing, the amount drawn under the revolver at close will be reduced, making the changes leverage neutral, the source explained.

Recommitments are due by 5 p.m. ET on Monday.

Macquarie Capital (USA) Inc. and Credit Suisse Securities (USA) LLC are leading the term loans, and GE Capital Markets is leading the revolver.

Steinway being acquired

Proceeds from Steinway's credit facility, along with equity, will be used to fund its buyout by Kohlberg & Co. for $35 per share in cash, or roughly $438 million.

First-lien loan leverage is 3.7 times, or 3.3 times net, and total leverage is 5 times, or 4.6 times net.

Closing is expected in the third quarter, subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and receipt of German antitrust approvals.

Steinway is a Waltham, Mass.-based designer, manufacturer, marketer and distributor of musical instruments.

Hologic firms at low end

Hologic set pricing on its repriced roughly $1,285,000,000 term loan B due Aug. 1, 2019 at Libor plus 275 bps, a news release said, the tight side of the Libor plus 275 bps to 300 bps, and kept the 1% Libor floor intact.

The repricing, which was completed on Friday, along with a $200 million paydown that brought the B loan down to its current size, took pricing on the debt down from Libor plus 350 bps with a 1% floor.

Additionally, with the repricing, the company amended its credit facility to expand the general basket for restricted junior payments to $250 million from $25 million and increase the total net leverage threshold for accessing the excess cash flow builder component to 4 times from 3.5 times.

Goldman Sachs Bank USA led the deal for the Bedford, Mass.-based provider of diagnostics products, medical imaging systems and surgical products.

Alcatel discloses talk

Also in the primary, Alcatel-Lucent held its call in the morning, launching its $1,741,250,000 term loan C with talk of Libor plus 500 bps and its €298.5 million term loan D with talk of Euribor plus 525 bps, according to a market source.

Both loans have a 1% floor, a par offer price and 101 soft call protection for six months, the source remarked.

Proceeds will be used to reprice the existing term loan C from Libor plus 625 bps with a 1% Libor floor and the existing term loan D from Euribor plus 650 bps with a 1% Euribor floor.

Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are leading the deal.

Alcatel is a Paris-based telecommunications services and equipment company.

Foresight Energy readies deal

Foresight Energy set a bank meeting for 2 p.m. ET in New York on Tuesday to launch a new senior secured credit facility, according to a market source.

Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC are leading the deal that will be used to help fund a tender offer for the company's $600 million 9 5/8% senior notes due 2017.

The tender offer expires on Aug. 19.

Foresight is a St. Louis-based producer of thermal coal.

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