Warner Chilcott breaks; Wyle reveals talk, amendment details; K2 overfills; Griffon ups spread

By Sara Rosenberg

New York, Aug. 18 - Warner Chilcott plc's term loans hit the secondary market on Wednesday, with the term loan B quoted above its original issue discount price, and TI Automotive saw the bid/offer on its term loan widen out a little bit from recent breaking levels.

Over in the primary market, Wyle Inc. released price talk on its incremental term loan and information on its amendment proposal as the transactions were launched to investors during the session, and K2 Pure Solutions' credit facility is oversubscribed at revised pricing.

Also, Griffon Corp. increased pricing on its term loan and reduced the size of its ABL revolver, and Reynolds Group Holdings Ltd. came out with more details on its proposed acquisition financing, including that the debt will be comprised of new term loans and bonds.

Warner Chilcott frees up

Warner Chilcott's $1 billion 51/2-year term loan B broke for trading late in the day on Wednesday, with one trader quoting the debt at 99¾ bid, par ¼ offered on the open and then moving up to par bid, par ¾ offered, and a second trader seeing it move up to par 3/8 bid, par ¾ offered.

Pricing on the term loan B is Libor plus 425 basis points with a 2.25% Libor floor, and it was sold at an original issue discount of 99. The tranche has 101 soft call protection for one year.

During syndication, the discount on the term loan B was decreased from 981/2.

The company is also getting a $500 million four-year term loan A that is priced at Libor plus 425 bps as well. This tranche was seen quoted at 99¼ bid, no offers, the second trader added.

JPMorgan, Bank of America and Goldman Sachs are the lead banks on the $1.5 billion deal (Ba3).

Warner Chilcott paying dividend

Proceeds from Warner Chilcott's term loans, along with $750 million of senior unsecured notes, will be used to fund a special dividend to the company's ordinary shareholders of $8.50 per share, or about $2.15 billion.

The transaction is dependent on the completion of an amendment to the company's existing credit facility to allow for the financing and the dividend payment.

As part of the amendment, existing lenders were offered a 50 bps increase in spread, 101 soft call protection on the term loan B and a 37.5 bps consent fee.

Payment of the dividend is expected to take place before the end of the third quarter.

Warner Chilcott is an Ireland-based specialty pharmaceutical company.

TI Automotive offer rises

TI Automotive's $150 million term loan was quoted a little wider at 99½ bid, par ½ offered on Wednesday, compared to levels of 99½ bid, par offered that were seen when the deal freed up for trading late Tuesday, according to a market source.

The term loan is priced at Libor plus 750 bps with a 2% Libor floor, and it was sold at an original issue discount of 98. There is call protection of 102 in year one and 101 in year two.

During syndication, the term loan was downsized from $200 million, pricing was flexed up from initial talk of Libor plus 550 bps, the call protection was sweetened from just 101 soft call for one year and collateral was added.

TI Automotive revolver

TI Automotive's $250 million credit facility also includes a $50 million four-year asset based revolver priced at Libor plus 350 bps.

Citigroup is the lead bank on the term loan, and Citi and UBS are leading the revolver.

Proceeds will be used to refinance existing debt.

TI Automotive is a provider of fluid storage and carrying and delivery technology to automotive manufacturers.

Wyle talk emerges

Switching to the primary market, Wyle held a conference call at 10 a.m. ET on Wednesday to launch its proposed $205 million term loan add-on, and in connection with the event, price talk on the new debt was announced, according to a market source.

The add-on is being talked in line with existing term loan pricing at Libor plus 500 bps, with step-downs tied to leverage and a 2% Libor floor, the source said.

Lenders are being offered the new debt at an original issue discount of 981/2, the source continued.

By comparison, when the original term loan was obtained back in March, it was sold at a discount of 99.

Wyle amending facility

Also on its conference call, Wyle presented lenders with an amendment proposal to the existing credit facility that would revise the accordion so as to permit the term loan add-on, the source remarked.

Additionally, the amendment would increase the revolver size to $35 million from $25 million and reset financial covenants.

There is a 50 bps amendment fee being offered.

Barclays Capital and JPMorgan are the lead banks on the add-on and amendment, with Barclays the left lead.

Commitments towards the add-on and consents for the amendment are due on Aug. 26.

Wyle buying CAS

Proceeds from Wyle's term loan add-on will be used to help fund the acquisition of CAS Inc. from ITT Corp.

Other funding for the transaction will come from cash on hand and about $20 million of equity from the company's controlling shareholder, Court Square Capital Partners.

Closing of the acquisition is subject to review and approval by regulatory authorities, such as the Federal Trade Commission, and other customary conditions.

Following the transaction, pro forma total leverage will be roughly 5.5 times, and the combined entity will have pro forma 2009 revenues of about $1 billion.

Wyle is an El Segundo, Calif.-based provider of high-tech systems engineering, testing and information technology services. CAS is a Huntsville, Ala.-based provider of systems engineering and technical assistance for of military applications.

K2 Pure nets orders

K2 Pure Solutions has received enough interest towards its $121.5 million five-year term loan (B3/B) from lenders since changes were made to pricing to bring the deal to oversubscription levels, according to a market source.

The loan is priced at Libor plus 775 bps with a 2.25% Libor floor and an original issue discount of 94, the source said.

During syndication, the loan was upsized from $115 million, pricing was increased from Libor plus 550 bps, the floor was lifted from 2% and the discount widened from 95.

Also, the loan is now non-callable for one year, then at 101 in year two, as opposed to being non-callable for one year, then at 102 in year two and 101 in year three.

K2 Pure led by two

Credit Suisse and Canaccord Genuity are leading K2 Pure Solutions' term loan, with Credit Suisse the left lead.

Proceeds will be used to help fund the construction of a bleach plant in Pittsburg, Ca.

The new plant will serve municipal water treatment markets in Northern California.

K2 Pure Solutions is a manufacturer of water purification and disinfection products.

Griffon tweaks deal

Griffon revised pricing on its $500 million six-year term loan (B2) to Libor plus 600 bps from talk of Libor plus 450 bps to 500 bps, while leaving the 1.75% Libor floor and original issue discount of 98 unchanged, according to a market source.

In addition, the company downsized its four-year ABL revolver (Ba2) to $100 million from $150 million, the source said.

Goldman Sachs is the lead arranger on the term loan, and JPMorgan is the lead on the revolver.

Proceeds will be used to help fund the acquisition of Ames True Temper Inc. from Castle Harlan Inc. for a total consideration of $542 million, which is expected to close by Sept. 30.

Griffon is a New York-based manufacturing company. Ames True Temper is a Camp Hill, Pa.-based manufacturer and marketer of non-powered lawn and garden tools, wheelbarrows and other outdoor work products.

Reynolds getting loans, notes

Reynolds Group is planning on obtaining $5 billion in new term loans, senior secured notes and senior unsecured notes to help finance its purchase of Pactiv Corp., company officials said in a conference call on Wednesday.

Previously, the company had said that it had a $5 billion debt commitment, but there were no details on structure.

Actual sizes on the new term loans and notes are still to be determined.

Most of the new debt is expected to be raised in the United States, but the company can raise some in Europe too.

Credit Suisse, HSBC and Australia New Zealand Bank are the lead banks on the debt financing.

Reynolds may seek amendment

Reynolds Group currently has a $750 million accordion feature under its existing credit agreement. The company, however, may try to amend that provision if it wants to get more term loans for the acquisition, officials remarked in the call.

It is not yet decided whether an amendment will be sought, and as a result, discussions with existing credit facility lenders have not been initiated as of yet.

Officials added in the call that the financing package will comply with the current credit facility covenant requirements of maximum first-lien leverage of 3.5 times and total leverage of 5.5 times.

Reynolds acquisition details

Under the terms of the agreement, Reynolds group is paying Pactiv shareholders $33.25 in cash per share, for a total purchase price of $4.6 billion, but the transaction is valued at $6 billion.

In addition to the new debt, funds for the acquisition will come from equity from Reynolds and its parent company, Rank Group Ltd.

Closing is targeted by the end of this year, subject to Pactiv shareholder approval, regulatory approvals and customary conditions.

Reynolds is a Chicago-based manufacturer and supplier of consumer food and beverage packaging and storage products. Pactiv is a Lake Forest, Ill.-based consumer and foodservice/food packaging company.

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