Amerigroup finalizes spreads; SVP tweaks repricing; Delta flex rumored; Network Solutions breaks

By Sara Rosenberg

New York, April 16 - Amerigroup Corp. firmed up pricing on its downsized credit facility at the tight end of initial guidance and SVP Worldwide modified its repricing proposal, reducing the amount of the spread reduction in an attempt to get lender approval.

Also in the primary, speculation is that Delta Air Lines, Inc. may reverse flex pricing on its exit financing credit facility being that the deal was extremely well received by investors and Kinder Morgan Inc.'s term loan B is already oversubscribed since launching late last week.

Meanwhile, in the secondary, Network Solutions Inc.'s credit facility freed up for trading with the term loan B quoted atop par.

Amerigroup finalized pricing on both tranches under its $180 million five-year senior secured credit facility (Ba3/BB) at Libor plus 200 basis points, the low end of original guidance of Libor plus 200 bps to 225 bps, according to a market source.

Tranching on the deal is comprised of a $50 million revolver and a $130 million synthetic letter-of-credit facility.

Originally, the credit facility was expected to carry a total size of $240 million, with the synthetic letter-of-credit facility anticipated at $190 million and the revolver anticipated at $50 million.

However, prior to the actual March 27 bank meeting, the synthetic letter-of-credit facility was downsized to $150 million as a result of the company's decision to come to market with $240 million in 2% convertible senior notes as opposed to $200 million in convertibles.

And then last week, the synthetic letter-of-credit facility was downsized again to its final size of $130 million after the company's convertible underwriters exercised their $20 million over-allotment option in full, raising the size of the deal to $260 million.

Proceeds from the facility, along with the convertibles, will go toward the settlement of the company's Illinois qui tam litigation.

Goldman Sachs and Wachovia are the lead banks on the deal.

Amerigroup is a Virginia Beach, Va., managed health care company.

SVP softens repricing

SVP Worldwide revised its first-lien term loan repricing request so that the company is now seeking a 25 bps cut in spread rather than a 50 bps cut, according to a market source.

Under the modified request, lenders are being asked to reprice the first-lien term loan at Libor plus 275 bps from Libor plus 300 bps, the source said. Originally, the company was looking to reprice the debt to Libor plus 250 bps.

UBS is the lead bank on the deal.

SVP is a manufacturer, marketer and distributor of consumer sewing machines.

Delta may trim pricing

In more primary news, buzz around the market is that Delta Air Lines may lower pricing on its in-market $2.5 billion exit financing credit facility because the books on the transaction are well overfilled, according to a fund manager.

Currently, the $1 billion five-year revolver (B+) and the $500 million five-year first-lien term loan A (B+) are being talked at Libor plus 200 bps to 225 bps, while the $1 billion seven-year second-lien term loan B (B-) is being talked at Libor plus 350 bps.

"It was way oversubscribed," the fund manager said. "Pricing will probably be flexing down."

JPMorgan, Goldman Sachs, Merrill Lynch, Lehman Brothers, UBS and Barclays Capital are the lead banks on the deal, with JPMorgan the left lead on the first-lien debt and Goldman Sachs the left lead on the second-lien debt.

Security will be substantially all of the first-priority collateral in the existing debtor-in-possession facility.

Proceeds will be used to repay the Atlanta-based airline company's $2.1 billion DIP facility led by GE Capital and American Express, to make other payments required upon exit from bankruptcy and to increase its cash balance.

Kinder B loan oversubscribed

Kinder Morgan's $2.3 billion seven-year term loan B was already oversubscribed by Monday afternoon, creating the anticipation that the tranche will get done at the low end of pricing guidance, according to a market source.

The term loan B, which first launched to retail investors on Thursday, is currently being talked at Libor plus 150 bps to 175 bps.

Kinder Morgan's $7.3 billion credit facility (Ba2/NA/BB) also includes a $2 billion 61/2-year term loan A and a $1 billion six-year revolver that are both being talked at Libor plus 162.5 bps, and a $2 billion three-year asset-sale bridge term loan C that is being talked at Libor plus 137.5 bps.

Citigroup, Goldman Sachs, Deutsche Bank, Wachovia and Merrill Lynch are the lead banks on the deal.

Proceeds will be used to help fund the company's public-to-private buyout by management and equity investors.

Under the acquisition, chairman and chief executive officer Richard D. Kinder and other members of management, including co-founder Bill Morgan, current board members Fayez Sarofim and Mike Morgan, and investment partners Goldman Sachs Capital Partners, American International Group, Inc., the Carlyle Group and Riverstone Holdings LLC will acquire all of the outstanding common stock of Kinder Morgan for $107.50 per share in cash.

All in all, the transaction is valued at about $22 billion, including the assumption of about $7 billion of debt.

Kinder Morgan is a Houston-based energy infrastructure provider.

Network Solutions frees to trade

Over in the secondary, Network Solutions' credit facility broke for trading with the $382.5 million seven-year first-lien term loan B quoted at par 1/8 bid, par ½ offered, according to a trader.

The term loan B is priced at Libor plus 250 bps. During syndication, the tranche was upsized from $340 million as the company opted to eliminate an $85 million 71/2-year second-lien term loan (Caa1/CCC+) from its capital structure. A new $42.5 million senior unsecured PIK toggle holdco term loan replaced the other $42.5 million in second-lien funds.

Network Solutions' $407.5 million credit facility (B1/B) also includes a $25 million six-year revolver priced at Libor plus 250 bps.

Deutsche Bank and Bank of America are the joint lead arrangers on the deal.

Proceeds will be used to finance a leveraged buyout of the company by General Atlantic LLP.

Network Solutions is a Herndon, Va., seller of Internet domain names and provider of related services.

Hunter Fan closes

MidOcean Partners completed its acquisition of the Hunter Fan Co. from Lehman Brothers Merchant Banking Group.

To help fund the transaction, Hunter Fan got a new $295 million credit facility consisting of a $60 million revolver (B1/B), a $160 million first-lien term loan (B1/B) priced at Libor plus 250 bps, a $15 million delayed-draw term loan (B1/B) priced at Libor plus 250 bps and a $60 million second-lien term loan (Caa1/CCC+) priced at Libor plus 675 bps.

Call protection on the second-lien term loan is 103 in year one, 102 in year two and 101 in year three.

During syndication, the funded first-lien term loan was upsized from $145 million, the second-lien term loan was downsized from $75 million and pricing on the second-lien loan was flexed higher from original talk at launch of Libor plus 625 bps.

JPMorgan and Goldman Sachs acted as the lead banks on the deal.

Hunter Fan is a Memphis-based home comfort company that offers ceiling fans, portable fans, air purifiers, humidifiers, thermostats and vaporizers.

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