Kindred, Rock-Tenn break; Reynolds, Nusil talk surfaces; Jarden , Drew Marine tweak deals

By Sara Rosenberg

New York, March 28 - Kindred Healthcare Inc.'s credit facility freed up for trading on Monday, with the term loan B quoted above its original issue discount price, and Rock-Tenn Co.'s credit facility broke as well.

Also in the secondary market, Rural/Metro Corp.'s term loan headed lower as the company announced that it is being acquired, and Visteon's Corp.'s term loan weakened on repayment news.

Over in the primary, Reynolds and Reynolds Co. released spread guidance on its term loan B as it launched with a call, and NuSil Technology began circulating price talk on its B loan in preparation for an upcoming bank meeting.

Additionally, Jarden Corp. lifted the size of its term loan A as it decided to refinance some additional debt, and Drew Marine reduced pricing on its facility while also adding a leverage-based step-down.

Kindred starts trading

Kindred Healthcare's credit facility made its way into the secondary market on Monday, with the $700 million seven-year term loan B quoted at 99¼ bid, 99¾ offered, according to a trader.

Pricing on the term loan is Libor plus 375 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year and a 375 bps ticking fee.

During syndication, pricing on the B loan was increased from Libor plus 350 bps and the Libor floor firmed at the wide end of the 1.25% to 1.5% talk.

The company's $1.3 billion senior secured credit facility also includes a $600 million five-year asset-based revolver priced at Libor plus 250 bps.

J.P. Morgan Securities LLC, Morgan Stanley & Co. Inc. and Citigroup Global Markets Inc. are the lead banks on the deal.

Kindred buying RehabCare

Proceeds from Kindred Healthcare's credit facility will be used to help fund the acquisition of RehabCare Group Inc., a St. Louis-based provider of physical rehabilitation services, for $26.00 per share in cash and 0.471 of a share of Kindred common stock. The transaction is valued at $1.3 billion, including $400 million of existing debt.

The adjusted leverage of the combined company is projected to be about 4.5 times at the end of 2011.

Closing on the acquisition is expected on June 30, subject to approvals by the stockholders of both companies, completion of financing, clearance under the provisions of the Hart-Scott-Rodino Act of 1976 and the receipt of licensure and regulatory approvals.

Kindred Healthcare is a Louisville, Ky.-based health care services company.

Rock-Tenn frees up

Rock-Tenn's credit facility also began trading on Monday, with the $750 million term loan B quoted at par ½ bid, par 7/8 offered, according to a market source.

Pricing on the term loan B is at Libor plus 275 bps with a 0.75% Libor floor, and it was sold at par.

The company's $3.7 billion senior credit facility also includes a $1.475 billion five-year revolver and a $1.475 billion five-year term loan A, both priced at Libor plus 200 bps with no Libor floor.

During syndication, the term loan B was downsized from $1.25 billion, the revolver was upsized from $1.2 billion and the term loan A was upsized from $1.25 billion.

Wells Fargo Securities LLC, SunTrust Robinson Humphrey Inc., Rabobank, Bank of America Merrill Lynch and J.P. Morgan Securities LLC are the joint bookrunners on the deal.

Rock-Tenn funding acquisition

Proceeds from Rock-Tenn's credit facility will be used to refinance some debt and help fund the acquisition of Smurfit-Stone Container Corp. in a transaction valued at $3.5 billion, consisting of $1.8 billion of cash and the issuance of 30.9 million shares of common stock.

Closing on the transaction is expected in the second quarter, subject to customary conditions, regulatory approvals and approval by both Rock-Tenn and Smurfit-Stone stockholders.

Rock-Tenn is a Norcross, Ga.-based manufacturer of paperboard, containerboard and consumer and corrugated packaging. Smurfit-Stone is a Chicago-based containerboard and corrugated packaging producer, and a paper recycler.

Rural/Metro softens

Rural/Metro's term loan dropped to par bid, par ½ offered from par ¼ bid, par ¾ offered as guys are anticipating being taken out at par upon completion of the company's pending purchase by Warburg Pincus, according to a trader.

On Monday morning, the company revealed that it is being acquired for $17.25 per share of common stock in cash.

Funding for the transaction is expected to come from a new credit facility and high-yield bonds that are being led by Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and Jefferies & Co.

Closing on the buyout is expected to take place by the end of June, subject to customary conditions and regulatory approvals.

Rural/Metro is a Scottsdale, Ariz.-based provider of emergency and non-emergency ambulance services and private fire protection services.

Visteon dips with paydown

Visteon's term loan moved to par bid, par ½ offered from par ¼ bid, 101¼ offered after the company said that it will be repaying the debt with proceeds from a $500 million senior unsecured notes offering, according to a trader.

Other funds for the paydown will come from cash on hand.

Visteon is a Van Buren Township, Mich.-based automotive supplier that designs, engineers and manufactures climate, electronic, interior and lighting products for vehicle manufacturers.

Reynolds spread emerges

Moving to the primary, Reynolds and Reynolds held a 2 p.m. ET conference call on Monday to kick off syndication in its $950 million seven-year term loan B, at which time lenders were told that the debt is being talked in the Libor plus 300 bps area, according to a market source.

Other terms of the loan had already come out on Friday, including that there is a 1% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year.

Commitments are due on April 6.

The term loan B was initially set to launch on March 21, but it had been postponed due to market conditions.

The company is already in market with a $600 million term loan A that is talked at Libor plus 250 bps with no Libor floor. A bank meeting for the A loan was held on March 3, and chatter is that the tranche has filled out at initial terms.

Reynolds refinancing debt

Proceeds from Reynolds and Reynolds' $1.55 billion of new term loan borrowings (Ba2/BB+) will be used to repay existing debt.

In 2010, the company obtained a $1.82 billion seven-year term loan as part of a refinancing transaction that is priced at Libor plus 350 bps with a step-down to Libor plus 325 bps at 3.0 times net total leverage and a 1.75% Libor floor. The loan was sold at an original issue discount of 99¼ and includes 101 soft call protection for one year.

Deutsche Bank Securities Inc. is the lead bank on the new deal.

Pro forma for the transaction, the Dayton, Ohio-based dealer services company will have total leverage of 3.0 times.

NuSil floats talk

NuSil Technology started telling lenders that its $295 million six-year covenant-light term loan B is being talked at Libor plus 450 bps with a 1.5% Libor floor and an original issue discount of 99, according to market sources.

The term loan B, as well as a $10 million five-year revolver, will be launched with a bank meeting on Tuesday at the Le Parker Meridien in New York, sources said.

Credit Suisse Securities (USA) LLC and Jefferies & Co. are the lead banks on the $305 million senior secured deal that will be used, along with $264 million of equity, to fund the buyout of the company by New Mountain Capital from Quad-C Management Inc. and to refinance existing debt.

Following completion of the transaction, total and senior leverage will be 4.5 times.

NuSil is a Carpinteria, Calif.-based manufacturer of silicone-based materials for the health care, aerospace, electronics and photonics industries.

Jarden ups size

In more primary happenings, Jarden increased its five-year term loan A to $525 million from $500 million while leaving pricing intact at Libor plus 225 bps, according to a market source, who said that the additional proceeds would be used to repay a small credit facility at a Canadian subsidiary.

As before, the company's $1.275 billion senior secured facility (Ba1/BB+), up from $1.25 billion, also includes a $250 million five-year revolver priced at Libor plus 225 bps and a $500 million seven-year term loan B priced at Libor plus 300 bps, and there is no Libor floor on any of the tranches.

Upfront fees on the term loan A and revolver are 50 bps for orders of $50 million, 30 bps for orders of $30 million and 20 bps for orders of $20 million, while the term loan B is offered to investors at par.

Allocations on the oversubscribed deal are expected to go out in the first half of this week.

Jarden lead banks

Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC are the lead banks on Jarden's credit facility that will be used to refinance existing debt.

At Dec. 31, the company had about $1.06 billion of term loans outstanding and no borrowings under its revolver. The debt includes a $364 million extended term loan B-5 due January 2015 that was obtained in August at pricing of Libor plus 325 bps. Also, the company had foreign senior debt of $26.5 million, and amounts borrowed under various foreign credit lines and facilities totaling $35.5 million.

Jarden is a Rye, N.Y.-based consumer products company.

Drew Marine trims pricing

Also coming out with changes was Drew Marine, as it flexed pricing on its $90 million credit facility to Libor plus 450 bps from Libor plus 475 bps and added a step-down to Libor plus 425 bps based on leverage, while leaving the 1.5% Libor floor intact, according to a market source. The deal is still being offered at 99 for new money orders and at 99½ for rollover commitments.

BNP Paribas Securities Corp. is the lead bank on the facility that consists of a $15 million revolver and a $75 million term loan.

Proceeds will be used to refinance existing debt and fund a dividend payment.

Drew Marine is a Whippany, N.J.-based provider of technical services to the marine industry.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.