Energy Transfer, Armstrong, HHI break; Centaur, Getty, Telesat, inVentiv update terms

By Sara Rosenberg

New York, March 21 - Energy Transfer Equity LP's term loan B hit the secondary market on Wednesday, with levels wrapping right around the original issue discount price, and Armstrong World Industries Inc. and HHI Holdings LLC saw their incremental term loans begin trading.

Over in the primary, Centaur LLC reworked its credit facility, downsizing the first-lien term loan, raising pricing and widening the original issue discount, and it is now expected that the existing second-lien term loan will remain in place, subject to it being repriced at a higher level.

Also, Getty Images Inc. lifted the size of its term loan B-1, Telesat Canada firmed up its U.S. and Canadian term loan B amounts, and inVentiv Health revised its amendment request, increasing the consent fee and adding call protection to existing borrowings.

Furthermore, Lawson Software Inc. revealed price talk and TASC Inc. came out with original issue discount guidance as both deals were presented to lenders during the session, and 99 Cent Only Stores nailed down timing on the launch of its repricing transaction.

Energy Transfer frees up

Energy Transfer's $2 billion five-year senior secured term loan B (Ba2/BB-) emerged in the secondary market on Wednesday, with levels quoted at 98¼ bid, 98 5/8 offered, according to a market source.

The non-amortizing loan is priced at Libor plus 300 basis points with a 0.75% Libor floor and was sold at an original issue discount of 98. There is 101 soft call protection for one year.

During syndication, the size of the loan firmed from initial talk of up to $2.25 billion, the spread was reduced from Libor plus 350 bps, the floor was trimmed from 1%, the discount widened from 981/2, and the 1% per annum amortization was removed.

Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, BNP Paribas Securities Corp., RBS Securities Inc. and SunTrust Robinson Humphrey Inc. are the lead banks on the deal that is expected to close on Friday and fund on Monday.

Energy Transfer funds purchase

Proceeds from Energy Transfer's term loan B will be used to help fund the acquisition of Southern Union Co. for $44.25 in cash or one common unit per Southern Union share, repay revolver borrowings and for general partnership purposes.

The final amount of the term loan B was determined by how many Southern Union shareholders elected to receive cash in exchange for their shares. Based on preliminary results, holders of about 55% of outstanding Southern Union shares, or around 68.6 million Southern Union shares, chose cash, and the remaining 45% of outstanding Southern Union shares chose common units.

Other funds for the transaction will come from a portion of the proceeds from Southern Union's contribution of its 50% interest in Citrus Corp. to Energy Transfer Partners LP in exchange for $2 billion.

Energy Transfer Equity is a Dallas-based provider of energy-related services. Southern Union is a Houston-based transporter, gatherer, processor and distributor of natural gas.

Armstrong tops OID

Another deal to free up was Armstrong World Industries' $250 million add-on term loan B (B1/BB-), with levels quoted at 99 3/8 bid, 99 7/8 offered on the break, and then it moved up to 99 5/8 bid, par 1/8 offered, according to a trader. The add-on trades with the existing term loan.

Pricing on the add-on and the existing term loan is Libor plus 300 bps with a 1% Libor floor. The new debt was sold at an original issue discount of 99, after tightening earlier in the day from 981/2.

Bank of America Merrill Lynch, J.P. Morgan Securities Inc. and Barclays Capital Inc. are leading the deal that will be used to help fund a special cash dividend of about $500 million, or about $8.55 per share.

Armstrong is a Lancaster, Pa.-based designer and manufacturer of floors, ceilings and cabinets.

HHI starts trading

HHI Holdings' $50 million add-on term loan also broke for trading, with levels quoted at 99½ bid, par ½ offered on the open and then it moved up to 99¾ bid, par ½ offered, according to a trader.

The add-on trades with the existing loan, which was quoted at 99½ bid, par ½ offered on Tuesday, the trader added.

Pricing on the add-on term loan, and the existing loan is Libor plus 550 bps with a 1.5% Libor floor. The add-on, which was upsized from $30 million, was sold at an original issue discount of 993/4.

Bank of America Merrill Lynch is the lead bank on the deal that will be used to fund a dividend.

HHI is a Royal Oak, Mich.-based manufacturer of forged parts for power train and wheel-end applications, wheel bearings and engine timing systems for the automotive industry.

Centaur restructures

Switching to the primary, Centaur made a number of changes to its credit facility, including decreasing the first-lien term loan size to $170 million from $230 million and shortening the maturity to five years from six years, according to a market source.

Also, pricing on the first-lien term loan, as well as on a $10 million five-year revolver (size unchanged), was increased to Libor plus 675 bps from talk of Libor plus 575 bps and the original issue discount widened to 97 from 98, the source said. A step-down was added to the tranches to Libor plus 625 bps is first-lien leverage is 3.0 times.

As before, the term loan has a 1.25% Libor floor and 101 soft call protection for one year, while the revolver has no Libor floor.

Proceeds will be used to refinance existing debt, including the repayment of an existing $160 million first-lien term loan that is priced at Libor plus 650 bps with a 1.5% Libor floor.

Centaur second-lien

As part of the revisions, Centaur now plans on leaving its existing $62.7 million second-lien term loan in place, but the six-year debt will be repriced at Libor plus 700 bps cash plus 500 bps PIK from AFR plus 499 bps, the source continued. There will be no Libor floor.

Credit Suisse Securities (USA) LLC and Macquarie Capital are the lead banks on the deal.

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

For the refinancing, first-lien debt to pro forma adjusted EBITDA is 3.8 times, versus 3.6 times as of Dec. 31, 2011, and total debt to pro forma adjusted EBITDA is 5.3 times, versus 5.0 times at year-end.

Additionally, net debt to pro forma adjusted EBITDA is 4.4 times, compared to 4.2 times at year-end, and pro forma adjusted EBITDA to net cash interest expense is 2.5 times, versus 3.2 times at year-end. Centaur is an Indianapolis-based casino operator.

Getty ups loan

Getty Images raised its term loan B-1 (Ba3/BB-) to $350 million from $275 million, while leaving pricing at Libor plus 375 bps with no Libor floor and an original issue discount of 991/2, according to a market source.

Bank of America Merrill Lynch, GE Capital Markets, BMO Capital Markets Corp., RBC Capital Markets LLC and SunTrust Robinson Humphrey Inc. are the lead banks on the deal that will be used to fund a dividend.

Commitments were due on Wednesday.

Getty Images is a Seattle-based creator and distributor of visual content and other media.

Telesat updates tranching

Telesat firmed up the structure of its $1.9 billion seven-year term loan B, setting the U.S. tranche at $1.75 billion and the Canadian tranche at $150 million equivalent, according to a market source.

Pricing on the Canadian tranche will be 50 bps higher than pricing on the U.S. piece, which is talked at Libor plus 350 bps, the source remarked, adding that both have a 1.25% Libor floor and are being sold at an original issue discount of 99.

The $2.55 billion senior credit facility (Ba3/BB-) also includes a $150 million five-year U.S. and Canadian revolver priced at Libor plus 300 bps and a $500 million five-year Canadian dollar-equivalent term loan A priced at BA plus 300 bps.

Telesat lead banks

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and UBS Securities LLC are leading Telesat's term loan B, and CIBC and JPMorgan are leading the term loan A and revolver.

Proceeds will be used to refinance an existing credit facility, to fund a roughly C$705 million distribution to shareholders and for general corporate purposes.

Total secured debt is 3.9 times, total debt is 5.6 times and net debt is 5.5 times.

Telesat, an Ottawa-based fixed satellite services operator, expects to close on the new credit facility sometime this month.

inVentiv tweaks amendment

inVentiv Health modified its amendment proposal, lifting the consent fee to 100 bps from 50 bps and adding 101 soft call protection for one year to the existing term loan, according to a market source.

The amendment is being sought after to increase for four quarters allowable add-backs to EBITDA to 25% from 10%.

As part of the changes, the company will not be allowed to use the credit agreement's accordion feature during the time that it is getting the 25% add-backs, the source added.

Consents were due at 5 p.m. ET on Wednesday.

In the secondary market, the company's term loan was quoted at 94¾ bid, 95¾ offered with the news, versus levels of 95½ bid, 96½ offered earlier in the week, a trader remarked.

Citigroup Global Markets Inc. is leading the amendment for the Burlington, Mass.-based provider of clinical, consulting and commercial services to the health care industry.

Lawson discloses guidance

In more primary happenings, Lawson Software held its New York bank meeting on Wednesday, and with the launch, price talk on its 3.5 billion in term loans was announced, according to market sources.

The $3.1 billion six-year term loan B is talked at Libor plus 450 bps to 475 bps, and the $400 million 41/2-year term loan B-1 is talked at Libor plus 400 bps to 425 bps, with both having a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, sources said.

The company's $3.65 billion senior secured credit facility (Ba3/B+), for which commitments are due on March 29, also includes a $150 million five-year revolver.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc., Barclays Capital Inc., Deutsche Bank Securities Inc., RBC Capital Markets LLC and KKR Capital Markets are the lead banks on the deal.

Lawson refinancing debt

Proceeds from Lawson's credit facility and $1.15 billion equivalent senior notes will be used to refinance existing debt in connection with its merger with Infor Global Solutions Holdings Ltd. The debt being replaced includes credit facilities and Lawson's 11½% senior notes due 2018.

With the merger, 100% of the outstanding capital stock of Infor Global Solutions Intermediate Holdings Ltd. and 100% of the outstanding capital stock of Lawson will be contributed to a new Cayman Islands exempted company referred to as ComboCo.

Lawson launched a change-of-control notice and offer to purchase its outstanding 11½% senior notes that expires on April 4. And, a consent solicitation was launched that expires on March 21 to amend the indenture to waive the requirement for a change-of-control offer.

Lawson is a St. Paul, Minn.-based provider of enterprise software. Infor Global is a New York-based provider of business software. They are both currently owned by Golden Gate Capital.

TASC OID talk

TASC launched its $65 million incremental term loan (B1/BB-) with a call on Wednesday morning, and told lenders that the debt is being shopped with an original issue discount of 98 to 981/2, a market source told Prospect News.

As was previously reported, pricing on the new debt matches existing term loan pricing at Libor plus 325 bps with a 1.25% Libor floor.

Barclays Capital Inc., RBC Capital Markets LLC, KKR Capital Markets and Deutsche Bank Securities Inc. are leading the deal that will be used to repay some mezzanine notes.

Commitments are due at 5 p.m. ET on Friday.

TASC is a Chantilly, Va.-based provider of advanced systems engineering and technical assistance to the defense, intelligence, federal and homeland security markets.

Sprouts launches

Sprouts Farmers Market launched its $100 million add-on term loan in the afternoon, but left original issue discount talk as still to be determined, according to a market source.

The add-on loan is priced at Libor plus 475 bps with a 1.25% Libor floor, in line with existing term loan pricing.

Commitments are due on March 30.

Jefferies & Co. and Apollo Global Securities are leading the deal that will be used to help fund the acquisition of Sunflower Farmers Market.

Closing is expected in mid-Spring, subject to regulatory approval.

Sprouts Farmers Market is a Phoenix-based grocer that operates in the farmers market specialty segment of the retail food industry. Sunflower Farmers Market is a chain of full-service grocery stores.

99 Cent timing emerges

99 Cent Only Stores firmed up the launch of its $525 million senior secured term loan repricing, as a conference call has been set for 2:30 p.m. ET on Thursday, according to a market source.

Price talk on the repriced term loan is not yet available, the source said.

The existing term loan was done late last year at pricing of Libor plus 550 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 98.

Lenders under the loan are getting paid down at 102 with the repricing due to the presence of soft call protection.

RBC Capital Markets, BMO Capital Markets and Deutsche Bank Securities Inc. are the lead banks on the deal.

99 Cent is a City of Commerce, Calif.-based operator of extreme value retail stores.

Beacon well met

In other news, Beacon Roofing Supply Inc.'s $500 million five-year credit facility was fully subscribed ahead of Wednesday's commitment deadline, according to a market source.

The facility consists of a $300 million revolver and a $200 million term loan A, with both tranches talked at Libor plus 175 bps. The revolver has a 37.5 bps unused fee.

Wells Fargo Securities LLC, J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Union Bank and GE Capital Markets are the leads on the deal that will be used to refinance existing debt.

Beacon Roofing is a Peabody, Mass.-based distributor of residential and non-residential roofing and complementary building products.

TowerCo wraps repricing

TowerCo Finance LLC's repricing amendment has wrapped, a market source said, with the $397 million term loan B now priced at Libor plus 350 bps with a 1% Libor floor, compared to pricing of Libor plus 375 bps with a 1.5% Libor floor when it was obtained in January 2011.

With the repricing, the 101 soft call protection will be extended for one year.

Morgan Stanley Senior Funding, Inc. is the lead arranger on the deal and a joint bookrunner with TD Securities (USA) LLC and Fifth Third Securities Inc. TD is the administrative agent.

TowerCo is a Cary, N.C.-based owner and leaser of communication towers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.