Level 3, Ipreo, Inmar break for trading; Hawker Beechcraft, Clear Channel dip with numbers

By Sara Rosenberg

New York, Aug. 3 - Level 3 Financing Inc.'s term loan B II made its way into the secondary market on Wednesday with levels quoted slightly above its original issue discount price, and Ipreo Holdings LLC and Inmar Inc. started trading as well.

Also, Hawker Beechcraft Acquisition Co. LLC's strip of bank debt weakened in trading after the company released quarterly results, and Clear Channel Communications Inc.'s term loan B also fell with earnings news.

Over in the primary, Metropolitan Health Networks Inc. came out with guidance as its deal was presented to lenders during the session, price talk on Steak 'n Shake's in market deal surfaced, and Garden Ridge nailed down timing on the launch of its credit facility.

Level 3 hits secondary

Level 3's $650 million six-year senior secured covenant-light term loan B II (B+) broke on Wednesday, with levels quoted at 99 1/8 bid, 99 3/8 offered on the open and into the later afternoon, according to a trader.

Pricing on the term loan is Libor plus 425 basis points with a Libor that firmed at 1.5%, the wide end of the 1.25% to 1.5% talk. The loan was sold at an original issue discount of 99 and includes 101 soft call protection for one year.

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

Level 3 funding acquisition

Proceeds from Level 3's credit facility will be used to help fund the acquisition of Global Crossing Ltd. for 16 shares of Level 3 stock per share and to refinance existing debt. Based on Level 3's closing stock price on April 8, the transaction is valued at $23.04 per Global Crossing share, or about $3 billion, including the assumption of $1.1 billion of net debt as of Dec. 31.

Net debt-to-adjusted EBITDA, post synergies, is anticipated to be 4.4 times, and gross debt-to-adjusted EBITDA after synergies is expected to be 5.0 times.

Closing is expected before the end of this year, subject to regulatory approvals and the approval of the stockholders of each company.

Level 3 is a Broomfield, Colo.-based provider of fiber-based communications services. Global Crossing is a Florham Park, N.J.-based IP, ethernet, data center and video services provider.

Ipreo frees up

Ipreo Holdings' credit facility started trading in the morning, with the $115 million term loan quoted at 98¼ bid, 99¼ offered on the break and then it moved up to 99 bid, 99¾ offered, according to a trader.

Pricing on the term loan, as well as on a $20 million revolver, is Libor plus 650 bps with a 1.5% Libor floor. The term loan was sold at an original issue discount of 98 and has 101 soft call protection for one year, and the revolver was sold at 99.

During syndication, the term loan was downsized from $150 million as the company's mezzanine debt was increased to $105 million from $70 million.

RBC Capital Markets LLC is the lead bank on the $135 million credit facility that will be used to fund the acquisition of the company by Kohlberg Kravis Roberts & Co. LP from Veronis Suhler Stevenson.

Ipreo is a New York-based capital markets and corporate analytics firm.

Inmar tops OID

Another deal to free up was Inmar, with its $210 million term loan B quoted at 99 ¼ bid, par offered, according to a trader.

Pricing on the B loan is Libor plus 525 bps, after flexing earlier from Libor plus 475 bps. There is a 1.25% Libor floor and 101 soft call protection for one year, and the debt was sold at an original issue discount of 99.

The company's $240 million senior secured credit facility (B1/B+) also includes a $30 million revolver.

Wells Fargo Securities LLC and J.P. Morgan Securities LLC are leading the deal that will be used to refinance existing debt and fund a dividend.

Inmar is a Winston-Salem, N.C.-based connecter of trading partners through consulting, software services and operations.

Hawker Beechcraft plummets

In more trading happenings, Hawker Beechcraft's strip of term loan and letter-of-credit facility debt headed lower in trading as the company came out with second quarter results, according to traders.

The strip was quoted by one trader at 77¼ bid, 78¼ offered, down from 79½ bid, 80½ offered. This trader saw the strip go as low as 75½ bid, 77 offered before rebounding a bit. A second trader, meanwhile, had the strip quoted at 77¼ bid, 78¼ offered, down from 80 bid, 80¾ offered.

For the quarter, the company reported a net loss of $51.3 million, bringing total net loss for the past 12 months to $310.7 million.

Net sales for the quarter were $581.7 million, a decrease of $57.6 million as compared to net sales of $639.3 million in the same period of 2010.

And, adjusted EBIDTA for the quarter was $39.8 million, bringing total adjusted EBITDA for the last 12 months to $70.6 million.

Hawker draws on revolver

Hawker Beechcraft also said in its earnings release on Wednesday that it borrowed $25 million under its revolving credit facility on July 21 to keep a "prudent amount of cash on hand as it works through the supply issues, seasonal slowdown and working capital swings driven by transformative projects."

The company expects to make further draws on the revolver, which currently has about $214 million of availability, in order to maintain a cash supply.

"Overall, we continue to operate in a very difficult environment," said Bill Boisture, chairman and chief executive officer, in the release.

"We face aggressive foreign competition and forecasted weak market demand. Despite this, we are continuing to invest in projects to transform ourselves into a leaner and more efficient manufacturer and in our people through training and education programs."

Hawker Beechcraft is a Wichita, Kan.-based manufacturer of business, special-mission and trainer aircraft.

Clear Channel softens

Clear Channel's term loan B also took a hit on Wednesday after the release of second quarter numbers, even though the company reduced its net loss and improved revenues on a year-over-year basis, according to traders.

The term loan B was quoted by one trader at 79½ bid, 80 offered, down from Wednesday's opening levels of 81 bid, 82 offered, and Tuesday's opening levels of 81¾ bid, 82¾ offered, and by a second trader at 80 bid, 80½ offered, down from 81½ bid, 82½ offered.

For the second quarter, the San Antonio-based media and entertainment company reported a net loss of $38 million, compared to a net loss of $77 million in the prior year.

Revenues for the quarter were $1.6 billion, up 8% from $1.49 billion in the 2010 quarter.

And, OIBDAN for the quarter was $503 million, up 10% from $457 million last year.

Metropolitan Health guidance

Moving to the primary, Metropolitan Health Networks held a bank meeting on Wednesday to launch its $355 million senior secured credit facility, and in connection with the event, price talk was revealed, according to a market source.

The $25 million five-year revolver (BB-) and $240 million five-year first-lien term loan (BB-) are being talked at Libor plus 475 bps with a 1.5% Libor floor, and the revolver has a 50 bps unused fee. The term loan is being offered at an original issue discount of 99, the source said.

As for the $90 million six-year second-lien term loan (B-), that is being talked at Libor plus 900 bps with a 1.75% Libor floor, and an original issue discount that is still to be determined. There is call protection of 103 in year one, 102 in year two and 101 in year three.

Based on filings with the Securities and Exchange Commission, revolver and first-lien term loan pricing was expected in line with official talk, while second-lien pricing was expected at Libor plus 850 bps.

Metropolitan, Continucare

Proceeds from Metropolitan Health's credit facility, along with cash and investments, will be used to fund the acquisition of Continucare Corp. for $6.25 in cash and 0.0414 of a share of Metropolitan common stock per share. The transaction is valued at roughly $416 million.

Closing is expected in the third quarter, subject to shareholder approval and clearance under the Hart-Scott-Rodino Act.

GE Capital Markets Inc. is the lead arranger and bookrunner on the facility and is asking for commitments by Aug. 17.

Metropolitan Health is a Boca Raton, Fla.-based health care organization that provides health care services for Medicare Advantage members and other patients in Florida. Continucare is a Miami-based provider of primary care physician services on an outpatient basis.

Steak 'n Shake talk emerges

Price talk on Steak 'n Shake's $140 million four-year term loan came out at Libor plus 450 bps with a 1% Libor floor and an original issue discount of 99, according to a market source.

The company's $160 million credit facility also includes a $20 million three-year revolver.

The deal launched with a bank meeting on July 28 and commitments are due on Aug. 17.

Jefferies & Co. is the lead bank on the facility that will be used to refinance existing debt and fund a return of capital to the parent.

Senior leverage is 3.2 times.

Steak 'n Shake is a quick service restaurant chain founded in Normal, Ill.

Garden Ridge firms launch

Garden Ridge zeroed in on timing for its proposed $330 million credit facility, with the scheduling of a bank meeting for Monday, according to a market source. The deal was previously just being labeled as August business.

The facility consists of an $80 million ABL revolver and a $250 million six-year term loan B. Price talk is not yet available.

Bank of America Merrill Lynch and UBS Securities LLC are the lead banks on the deal that will be used to fund the buyout of the company by AEA Investors LP.

Garden Ridge is a Houston-based seller of mattresses, ready-to-assemble furniture, discount apparel and handbags, and books.

Insight Global well-met

In other news, Insight Global Inc.'s $177 million credit facility (B1/B+) has received strong interest from lenders, resulting in oversubscription of the deal, according to a market source.

The facility consists of a $20 million revolver, and a $157 million term loan B talked at Libor plus 500 bps with a 1.5% Libor floor. The new money portion of the B loan is being offered at an original issue discount of 991/2.

BNP Paribas Securities Corp. is the lead bank on the deal that will be used by the Atlanta-based information technology employment firm to refinance senior and mezzanine debt.

Pro forma leverage is 2.95 times.

Clement shuts books

Commitments were due on Clement Pappas and Co. Inc.'s credit facility on Wednesday and, ahead of the deadline, the deal was oversubscribed at talk, a market source told Prospect News.

The $280 million facility consists of a $230 million six-year term loan B (B2) talked at Libor plus 525 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, and a $50 million five-year ABL revolver.

Jefferies & Co. and BMO Capital Markets Corp. are the lead banks on the deal, with Jefferies running the term loan and BMO running the revolver.

Clement being acquired

Proceeds from Clement Pappas' credit facility will be used to help fund its buyout by Lassonde Industries Inc. for a total cash consideration of $390 million payable at closing, subject to adjustments for working capital and other items.

Closing is expected in August, subject to customary conditions, including regulatory approvals.

Pro forma for the transaction, senior leverage is around 4.25 times.

Clement Pappas is a Carneys Point, N.J.-based producer of store brand ready-to-drink fruit juices, drinks and sauces. Lassonde Industries is a Quebec-based developer, manufacturer and marketer of fruit and vegetable juices and drinks as well as specialty food products.

Amneal fills out

Amneal Pharmaceuticals LLC also shut its books, with its $250 million credit facility oversubscribed as well, according to a market source.

The facility, comprised of a $70 million revolver and a $180 million term loan A, is talked at Libor plus 325 bps with no Libor floor.

GE Capital Markets and RBS Citizens are the lead banks on the deal that will be used to refinance existing debt.

Leverage is 3.1 times.

Amneal Pharmaceuticals is a Bridgewater N.J.-based generic pharmaceuticals company.

Phillips nets attention

Phillips Plastics Corp.'s $245 million credit facility (B1/B) was well oversubscribed by its Wednesday commitment deadline, leaving some to believe that changes may be coming, according to a source.

The facility consists of a $45 million revolver and a $200 million term loan, with both tranches talked at Libor plus 500 bps with a 1.5% Libor floor and an original issue discount of 99.

GE Capital Markets and BNP Paribas Securities Corp. are the lead banks on the deal that will be used to fund an acquisition.

Phillips Plastics is a Hudson, Wis.-based outsource provider of design and manufacturing services to the commercial and medical device and drug delivery markets.

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