AMF shifts funds, cuts first-lien pricing; Lear eyes OID; Rite Aid, Advanstar free to trade

By Sara Rosenberg

New York, June 1 - AMF Bowling Worldwide Inc. made some changes to its credit facility, including upsizing the first-lien term loan B while lowering pricing and adding a step down and downsizing the second-lien term loan and the revolver.

Also in the primary, Lear Corp. is now considering adding an original issue discount to its term loan B on top of the flex up in pricing that was recently done.

Meanwhile, on the secondary front, Rite Aid Corp.'s term loan broke for trading, with levels seen atop par, and Advanstar Holdings Corp.'s credit facility freed up as well, with levels on its first-lien loan seen atop par and its second-lien loan seen atop 101.

AMF Bowling made a round of changes to its credit facility, including modifying first- and second-lien tranche sizes and reworking first-lien term loan B pricing, according to a market source.

With the revisions, the six-year first-lien term loan B (Ba3/B) is now sized at $245 million, up from $210 million, pricing was reverse flexed to Libor plus 250 basis points from original talk at launch of Libor plus 275 bps and a step down was added under which the spread can drop to Libor plus 225 bps when leverage is less than 3.25 times, the source said.

On the flip side, the 61/2-year second-lien term loan (Caa1/CCC+) is now sized at $80 million, down from $105 million, while pricing was left in line with original talk at Libor plus 625 bps, the source remarked.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

Lastly, the five-year revolver (Ba3/B) is now sized at $40 million, down from $60 million, the source added.

The revolver has a 50 bps commitment fee.

Credit Suisse is the lead bank on the now $365 million (down from $375 million) deal, which will be used to refinance existing debt and to fund a dividend payment.

AMF Bowling is a Richmond, Va., operator of bowling centers.

Lear may add OID

Lear started talking about adding an original issue discount in the range of 99½ to 99¾ to its $2.6 billion seven-year term loan B on Friday, according to a market source.

This potential discount is coming on the heels of an increase in pricing on the term loan tranche to Libor plus 275 bps from original talk of Libor plus 225 bps to 250 bps, the source said.

Lear's $3.6 billion senior secured deal (B2/B) also includes a $1 billion five-year revolver, with a 50 bps commitment fee.

Bank of America is the lead arranger and bookrunner on the deal that will be used to help fund American Real Estate Partners, LP's acquisition of Lear for $5.3 billion, including the assumption of debt. Lear shareholders will receive $36 per share in cash.

Lear is a Southfield, Mich.-based supplier of automotive seating, electronics and electrical distribution systems. American Real Estate Partners is a New York-based diversified holding company engaged in a variety of businesses and an affiliate of Carl C. Icahn.

Rite Aid breaks

Moving to trading news, Rite Aid's $1.105 billion seven-year senior secured term loan (Ba3/BB-) allocated and freed up for trading on Friday, with levels quoted at par 3/8 bid, par ¾ offered steadily throughout the session, according to a trader.

The term loan is priced at Libor plus 175 bps.

Citigroup is the lead bank on the deal.

Proceeds will be used to help fund the acquisition of Jean Coutu Group USA Inc. from Longueuil, Quebec-based Jean Coutu Group Inc.

The acquisition, which is expected to close on June 4, includes about 1,850 Brooks and Eckerd stores and six distribution centers, primarily located on the East Coast and in the Mid-Atlantic states.

Rite Aid is a Camp Hill, Pa., national drugstore chain.

Advanstar frees to trade

Advanstar's credit facility also allocated and broke for trading on Friday, with the $515 million seven-year first-lien term loan B (B1/B) quoted at par ¼ bid, par ½ offered and the $245 million 71/2-year second-lien term loan (Caa2/CCC+) quoted at 101 1/8 bid, 101 5/8 offered, according to a trader.

The first-lien term loan B is priced at Libor plus 225 bps, and the second-lien term loan is priced at Libor plus 500 bps.

During syndication, pricing on the first-lien term loan B was reverse flexed from original talk of Libor plus 250 bps and pricing on the second-lien term loan firmed up at the low end of original guidance of Libor plus 500 bps to 550 bps.

Advanstar's $835 million credit facility also includes a $75 million six-year revolver (B1/B), with a 50 bps commitment fee.

Proceeds from the credit facility, along with a $75 million holdco PIK loan, were used to fund the recently completed acquisition of the company by Veronis Suhler Stevenson for $1.142 billion in cash.

Credit Suisse and Barclays Capital acted as the lead banks on the deal.

Advanstar is a New York-based media company.

LCDX up in morning trading

In other secondary news, LCDX ended Friday's session unchanged on a day-over-day basis after seeing a small rally in the morning hours, according to a trader.

The index went out at 100.56 bid, 100.58 offered, in line with Thursday's closing levels, the trader said.

However, in the morning, the index was seen at 100.60 bid, 100.62 offered, with the positive momentum attributed to stock markets being higher, the trader added.

"There's just not much going on [in loan trading] period so the index settled back in," the trader explained.

IPC closes

IPC Information Systems completed its acquisition of WestCom Corp., according to a company news release.

To help fund the transaction, IPC got a new $1.23 billion credit facility consisting of an $840 million first-lien term loan B (B1/B) priced at Libor plus 225 bps, a $75 million revolver (B1/B) priced at Libor plus 225 bps and a $315 million second-lien term loan (Caa1/CCC+) priced at Libor plus 525 bps, with call protection of 102 in year one and 101 in year two.

During syndication, pricing on the second-lien term loan was reverse flexed from talk of Libor plus 550 bps and the previous step down to Libor plus 525 bps was eliminated.

JPMorgan, Goldman Sachs and UBS acted as the joint bookrunners banks on the deal, with JPMorgan the left lead on the first lien and Goldman the left lead on the second lien.

IPC is a New York-based communications services provider. WestCom is a New York-based telecommunications company.

Psychiatric Solutions closes

Psychiatric Solutions Inc. closed on its $225 million term loan B add-on (Ba3/B+), according to a news release.

The add-on is priced at Libor plus 175 bps.

Citigroup and Merrill Lynch acted as the lead banks on the deal.

Proceeds from the add-on, along with $250 million of senior subordinated notes, were used to fund the acquisition of Horizon Health Corp. for $426 million, consisting of cash of $20 per share totaling $321 million and the assumption of Horizon's outstanding debt.

Psychiatric Solutions is a Franklin, Tenn., provider of inpatient behavioral health care services. Horizon Health is a Lewisville, Texas, provider of various health care services.

VCA closes

VCA Antech Inc. closed on its $160 million term loan add-on (Ba3/BB-) that is priced at Libor plus 105 bps, in line with existing term loan pricing, according to a news release.

Goldman Sachs and Wells Fargo acted as the lead banks on the deal.

Proceeds were used to fund the acquisition of Healthy Pet Corp., a Shelton, Conn.-based operator of animal hospitals, for $152.9 million.

VCA Antech is a Los Angeles-based animal health care services company.

Infor closes

Infor Global Solutions completed its acquisitions of Hansen Information Technologies and Workbrain Corp., according to a news release.

To fund the transactions, Infor got $225 million in incremental term loan debt consisting of a $55 million first-lien term loan add-on (Ba1/B-) and a $170 million second-lien term loan add-on (Caa2/CCC).

JPMorgan, Credit Suisse and Merrill Lynch acted as the lead banks on the deal.

Infor is an Atlanta-based deliverer of fully integrated enterprise services as well as standalone products.

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