K2 breaks; Ford up with numbers; Burger King steady on sale buzz; Vertis tweaks size again

By Sara Rosenberg

New York, Sept. 1 - K2 Pure Solutions' credit facility allocated and freed up for trading during Wednesday's session, and Ford Motor Co.'s term loans were a little stronger after the company came out with monthly sales numbers even though they showed a decline when compared to last year's results.

Also in the secondary market, Burger King Holdings Inc.'s term loan B held firm despite rumors that the company may be sold to a private equity firm as the debt is already trading right around paydown levels.

Moving to the primary market, Vertis Holding Inc. revised the size of its first-lien term loan for a second time, Illumination and Detection Solutions and AbitibiBowater Inc. revealed that they are getting ready to launch new deals, and structure emerged on HGI Holdings Inc.'s proposed credit facility.

K2 frees to trade

K2 Pure Solutions' $121.5 million five-year term loan (B3/B) hit the secondary market on Wednesday, with levels quoted at 95 bid, no offers, according to a trader.

Pricing on the term loan is priced at Libor plus 775 basis points with a 2.25% Libor floor, and it was sold at an original issue discount of 94. The loan is non-callable for one year, then at 101 in year two.

During syndication, the loan was upsized from $115 million, pricing was increased from Libor plus 550 bps, the floor was lifted from 2%, the discount widened from 95, and call protection was changed from non-callable for one year, then at 102 in year two and 101 in year three.

Credit Suisse and Canaccord Genuity are leading the term loan that will be used to help fund the construction of a bleach plant in Pittsburg, Ca.

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

Ford gains ground

Ford's term loans moved higher in trading after sales results for the month of August were released as the company continued to grow its retail market share, according to traders.

The term loan B-1 was quoted by one trader at 96½ bid, 97 offered, up from 96 1/8 bid, 96 5/8 offered, and by a second trader at 96 5/8 bid, 97 offered, up from 96 ½ bid, 96 7/8 offered.

And, the term loan B-2 was quoted by the first trader at 96¼ bid, 97 offered, up from 95½ bid, 96½ offered.

"Ford continues to outperform the overall industry," said Ken Czubay, vice president, U.S. Marketing, Sales and Service, in a news release.

"In this market, consumers are looking for vehicles that offer industry-leading quality, fuel economy, safety and technologies, and growing numbers of them are turning to Ford."

Ford sales results

For the month of August, Ford reported total sales of 157,503, down 10.7% from 176,323 in August 2009, when the "Cash for Clunkers" program was being offered.

Total car sales for the month were 56,487, down 14% from 65,654 in the comparable previous year period.

And, total truck sales for the month were 64,265, up 5% from 61,229 in August of last year.

Year to date, the company has posted sales of 1.28 million, up 18%, which according to Ford, is double the growth of the overall industry.

Ford is a Dearborn, Mich.-based manufacturer and distributor of automobiles.

Burger King unmoved by rumors

Burger King's term loan B was steady in trading even with chatter that the company is considering its own sale to a private equity firm, according to traders.

The term loan B was quoted by one trader at 99½ bid, par ¼ offered, unchanged on the day, being that if a buyout were to occur and the debt is taken out, it would be repaid at par anyway, the trader explained.

A second trader, meanwhile, had the term loan B quoted at 99¾ bid, par ¼ offered, also flat on the day.

Burger King is a Miami-based fast food hamburger chain.

Vertis upsizes term loan

Switching to new deal happenings, Vertis increased the size of its first-lien term loan (B2) to $500 million from a most recent size of $365 million and an initial size at launch of $425 million, according to a market source.

Previously, price talk on the term loan was Libor plus 900 bps with a 2% Libor floor and an original issue discount of 97. There was call protection of 104 in year one, 103½ in year two, 102 in year three and 101 in year four. It was unclear prior to press time whether any of these terms have been changed.

When the deal was first launched, the company was planning on also getting a $150 million second-out term loan that was going to be backstopped by existing holders. At the time of the first-lien downsizing, however, the second-out loan was removed from the capital structure. It was said that the company's mezzanine debt was going to be upsized to replace the lost funds.

Vertis still getting revolver

As before, Vertis is also seeking a $190 million senior secured asset-based revolver that is being clubbed up with relationship banks.

Initially, the revolver was expected to be sized at $200 million, but it was reduced earlier this summer.

Credit Suisse and Citadel are leading the term loans, and GE Capital, Bank of America and Citibank have provided commitments toward the revolver, with GE the left lead.

Proceeds from the $690 million credit facility will be used to refinance an existing term loan and $225 million revolver and fund the cash consideration for an exchange offer for the company's 18½% senior secured second-lien notes due 2012.

Vertis is a Baltimore-based marketing communications company.

Illumination and Detection readies launch

Illumination and Detection Solutions is anticipated to hold a bank meeting in early September to launch a proposed $193 million credit facility that consists of a $15 million five-year revolver and a $178 million six-year term loan, according to a market source.

UBS is the lead bank on the facility that will be used, along with $90 million of mezzanine financing, to help fund the buyout of the company by Veritas Capital from PerkinElmer Inc. for about $500 million in cash.

Closing is expected by the end of the year, subject to customary conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Illumination and Detection Solutions is a provider of custom-designed specialty lighting and sensor components, subsystems and integrated products.

AbitibiBowater on Tuesday

AbitibiBowater is scheduled to hold a bank meeting on Tuesday to launch its proposed $600 million four-year asset-based revolving credit facility, according to a market source.

Citigroup, Barclays and JPMorgan are the lead banks on the deal that will be used for exit financing.

The company also plans on selling $750 million of notes to fund its emergence, but there is also the option to get some term loan debt in place of the notes.

AbitibiBowater is a Montreal-based producer of newsprint, commercial printing papers, market pulp and wood products.

HGI structure surfaces

Details on the structure of HGI Holdings' proposed $365 million credit facility (B+) were revealed, with tranching split between a $50 million five-year revolver and a $315 million six-year term loan, according to a market source.

Goldman Sachs, Jefferies and Morgan Stanley are the lead banks on the deal that is expected to launch with a bank meeting in the early-to-mid September.

Proceeds from the credit facility, along with $150 million of mezzanine debt, will be used to fund the acquisition of the company by Clayton, Dubilier & Rice LLC and GS Capital Partners from the Jordan Co. and members of the Harrington family.

The transaction is expected to close in the beginning of the fourth quarter.

HGI is a Cleveland-based mail-order, direct-to-home provider of specialty medical products for chronic disease patients.

AMN Healthcare closes

In other news, AMN Healthcare Services Inc. closed on its $77.5 million term loan B add-on (Ba2/BB) due June 23, 2015 and $40 million second-lien term loan (B1/B+) due Sept. 1, 2016 on Wednesday, according to an 8-K filed with the Securities and Exchange Commission.

The B loan add-on is priced at Libor plus 550 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 98. There is 101 soft call protection for one year.

Pricing on the second-lien term loan is Libor plus 1,000 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 97. The loan is non-callable for 1½ years, then at 103, 102, 101.

During syndication, the add-on was upsized from roughly $68 million and pricing firmed at the high end of the initial Libor plus 525 bps to 550 bps talk.

Also during syndication, the second-lien was downsized from $50 million, pricing moved up from the Libor plus 900 bps area, the Libor floor tightened from 2%, the discount came at the wide end of the 97 to 98 talk, and call protection was changed from non-callable for one year, then at 102, 101.

AMN extends loans

In addition to getting the incremental term loans, AMN Healthcare extended its existing term loan B to June 23, 2015 from Dec.23, 2013.

Pricing on the extended term loan B is also Libor plus 550 bps with a 1.75% Libor floor, as compared to prior pricing of Libor plus 400 bps with a 2.25% Libor floor. This debt includes 101 soft call protection for one year as well.

Furthermore, the company extended its revolving credit facility to Aug. 31, 2014 from Dec. 23, 2012 at pricing of Libor plus 550 bps with no Libor floor.

Pricing on the extended term loan B and revolver finalized at the wide end of the Libor plus 525 bps to 550 bps talk.

The amendment of the existing facility also added a minimum liquidity and first-lien leverage ratio and allowed for the new second-lien loan.

AMN refinances debt

Proceeds from AMN Healthcare's incremental loans were used to refinance Nursefinders Inc.'s $132 million of bank debt in connection with the acquisition of the company, which was also completed on Wednesday.

Funds for the actual acquisition will come from the sale of roughly 6.3 million shares of AMN common stock and about 5.7 million shares of AMN series A conditional convertible preferred stock.

Bank of America, GE Capital and SunTrust acted as the lead banks on the new debt and extension, with Bank of America the left lead.

AMN Healthcare is a San Diego-based health care staffing and workforce services company. Nursefinders is an Arlington, Texas-based provider of clinical workforce managed services programs.

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