J. Crew, Roundy's, MarkWest, Doane, Alpha spreads emerge; Neiman up on sales numbers

By Sara Rosenberg

New York, Oct. 6 - J. Crew Group Inc. posted price talk on its recently launched, but already oversubscribed, term loan on the heels of Moody's Investors Service rating announcement. Also, Roundy's Supermarkets Inc., MarkWest Energy Partners LP and Doane Pet Care Co. came out with opening price talk, and Alpha Natural Resources Inc. firmed up opening pricing, as syndication on all four deals kicked off during market hours.

In secondary happenings, The Neiman Marcus Group Inc.'s term loan B ticked higher as the company announced that September same-store sales were up.

J. Crew came out with opening price talk of Libor plus 225 to 250 basis points Thursday on its $295 million seven-year term loan after Moody's publicly announced the assignment of a Ba3 rating to the deal, according to a market source.

Standard & Poor's has already been out with its B+ rating on the term loan since Monday of this week.

The term loan had already reached the point of oversubscription since launching into syndication on Monday without the help of pricing information, the source said.

And, once the pricing guidance hit the market early Thursday afternoon, momentum only continued to grow as within one hour of posting the information additional orders for size had been placed, the source added.

Goldman Sachs and Bear Stearns are the lead banks on the deal, with Goldman the left lead.

New York-based apparel and accessories retailer, J. Crew, is getting the new term loan in connection with its initial public offering of common stock. Its existing $170 million asset-based revolver will remain in place as is.

Proceeds from the term loan, along with proceeds from the IPO, will be used to redeem all $92.8 million 14½% cumulative preferred stock, all $32.5 million 14½% cumulative redeemable preferred stock, all $21.7 million 13 1/8% senior discount debentures due 2008 and all or a portion of the 9¾% senior subordinated notes due 2014.

Roundy's sets spreads

Roundy's launched its proposed $825 million credit facility on Thursday with opening price talk of Libor plus 300 basis points on both its $125 million five-year revolver and its $700 million six-year term loan, according to a market source.

The term loan is being offered to investors at par.

Bear Stearns and Goldman Sachs are the lead banks on the deal, with Bear the left lead.

Proceeds will be used to repay the company's existing senior credit facility, fund the tender for its $300 million of 8 7/8% senior subordinated notes due 2012 and fund a $550 million dividend to its shareholder.

Roundy's is a Pewaukee, Wis., food retailer and wholesaler.

MarkWest Energy price talk

MarkWest Energy Partners released price talk of Libor plus 300 basis points across the board on its $500 million credit facility - which contains a $100 million revolver and a $400 million term loan - as the deal launched via a bank meeting Thursday, according to a market source.

RBC Capital Markets is the lead bank on the deal.

Proceeds from the facility will be used to help fund the acquisition of the Javelina Gas Processing and Fractionization facility in south Texas.

MarkWest is a Denver-based publicly traded master limited partnership focused on processing natural gas in the Northeast, from the Appalachian basin and from Michigan.

Doane sets talk on upsized deal

Doane Pet Care announced opening price talk of Libor plus 250 basis points on all three tranches contained in its upsized $220 million credit facility as it too launched via a bank meeting Thursday, according to a market source.

The facility went out to investors as a $65 million revolver, up from initial size expectations of a $50 million revolver, a $100 million term loan and a $55 million dollar-equivalent euro term loan, the source said.

Lehman is the lead bank on the deal that will be used to help fund Teachers' Private Capital's leveraged buyout of the company.

Originally, the deal was expected to launch last Thursday, but the meeting was pushed off until this Thursday so as to allow more time to get material together.

Under the acquisition agreement, Teacher's Private Capital will purchase Doane for total cash consideration of $840 million from JPMorgan Partners, Bruckman, Rosser, Sherrill & Co., CapStreet Group LLC and DLJ Merchant Banking Partners LP.

As part of the transaction, Teachers' Private Capital and Doane plan to complete a recapitalization, under which the company will undergo a significant deleveraging. As a result of the substantial equity investment being made by Teachers' Private Capital, proceeds from the transaction will allow Doane to retire all of its outstanding preferred stock and reduce the amount of funded debt on its balance sheet.

Doane is a Brentwood, Tenn.-based manufacturer of private label pet food.

Alpha firms guidance

Alpha Natural Resources launched its $500 million credit facility (B2/BB-) on Thursday with price talk of Libor plus 200 basis points on both the $250 million five-year revolver and the $250 million seven-year term loan B, according to a market source.

Previously, company officials had said that they estimated interest rates on the loans to range in the Libor plus 175 to 200 basis points area.

Citigroup and UBS are joint bookrunners on the deal, with Citi the left lead.

Proceeds from the facility will be used to help fund the acquisition of coal reserves and operations affiliated with the privately held Nicewonder coal group in southern West Virginia and southwestern Virginia for an aggregate purchase price of $316.2 million and to refinance the company's existing $175 million revolver.

Under the purchase agreement, Alpha subsidiaries will issue Nicewonder affiliates $60 million of Alpha common stock and pay $256.2 million in cash and seller notes.

Closing is anticipated by late October, subject to the satisfaction of conditions outlined in the purchase agreements including the securing of financing and necessary regulatory approvals.

Alpha Natural Resources if an Abingdon, Va., Appalachian coal producer.

Reliant pulls repricing

In other primary doings, Reliant Energy Inc. recently pulled its term loan repricing amendment as investor resistance to the proposal was just too strong to overcome, according to a market source.

Under the repricing, the company was looking to take the term loan spread down to Libor plus 200 basis points from Libor plus 237.5 basis points.

Bank of America was leading the transaction.

Reliant is a Houston-based provider of electricity and energy services.

Neiman up on numbers

Neiman Marcus' $1.975 billion 71/2-year term loan B (B1/B+/B) inched its way higher as the company released pretty favorable September same-store sales numbers, according to a trader.

The term loan moved to par 5/8 bid, par 7/8 offered from previous levels of par ½ bid, par ¾ offered, the trader said.

According to Neiman, in the five-week September period, comparable revenues in the Specialty Retail Stores segment, which includes Neiman Marcus Stores and Bergdorf Goodman, increased 10.5% and comparable revenues at Neiman Marcus Direct in the five-week September period increased 10.4%.

Total revenues for the September period were $397 million compared to $363 million last year, a difference of 9.2%, and comparable revenues for the period were $390 million, compared to $356 million last year, a difference of 9.6%.

Prior to the release of these financials, the term loan had been steadily treading lower since breaking for trading on Monday at 101 bid, 101½ offered because of selling pressure.

The term loan is priced with an interest rate of Libor plus 250 basis points and contains 101 soft call protection for one year against voluntary repayments.

Neiman also announced Thursday that it closed on its $2.575 billion credit facility, which in addition to the term loan, includes a $600 million five-year asset-based revolver (//BB-) with an interest rate of Libor plus 175 basis points and a 37.5 basis point commitment fee.

The term loan was originally sized at $1 billion with price talk of Libor plus 300 basis points, but was upsized and reverse flexed during syndication.

In connection with the bank upsizing, the company decided to downsize its bond offering by $975 million by dropping its $850 million senior secured notes offering, reducing its senior notes tranche to $700 million from $750 million and reducing its senior subordinated notes tranche to $500 million from $575 million.

Credit Suisse First Boston and Deutsche Bank acted as the joint lead arrangers on the credit facility.

Proceeds from the credit facility, the bonds and an equity contribution were used to fund the approximately $5.1 billion leveraged buyout of Neiman Marcus by Texas Pacific Group and Warburg Pincus LLC, and for general corporate purposes.

Neiman Marcus is a Dallas-based high-end specialty retailer.

Ventiv closes

Ventiv Health Inc. completed its acquisition of inChord Communications Inc. for $185 million in cash and stock, plus closing adjustments and earn-out payments for exceeding specified financial targets, according to a company news release.

To fund the acquisition, Ventiv got a new $225 million senior secured credit facility (Ba3/BB-) consisting of a $175 million six-year term loan B with an interest rate of Libor plus 150 basis points and a $50 million five-year revolver.

The term loan B was originally launched with price talk of Libor plus 175 basis points, but was reverse flexed during syndication.

UBS and Bank of America acted as the joint lead arrangers on the deal, with UBS also acting as sole bookrunner and Bank of America acting as syndication agent.

Ventiv is a Somerset, N.J., provider of outsourced clinical, sales, marketing, and compliance solutions for the pharmaceutical, biotechnology and life sciences industries. inChord is a Westerville, Ohio, health care marketing and communications company.

DaVita closes

DaVita Inc. completed its acquisition of Gambro Healthcare's U.S. assets for about $3.1 billion, according to a company news release.

To help fund the acquisition, DaVita got a new $3.15 billion credit facility (B1/BB-) consisting of a $250 million six-year revolver with an interest rate of Libor plus 200 basis points, a $250 million six-year term loan A with an interest rate of Libor plus 200 basis points and a $2.65 billion seven-year term loan B with an interest rate of Libor plus 225 basis points and a step down to Libor plus 200 basis points under certain conditions.

The term loan contains 101 soft call protection for one year.

JPMorgan acted as the bookrunner on the deal, and Credit Suisse First Boston was involved in the transaction as well.

DaVita is an El Segundo, Calif., provider of dialysis services.

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