Level 3 loans rise; Pharmaceutical Product sets launch, talk; Asset Acceptance tweaks deal

By Sara Rosenberg

New York, Nov. 4 - Level 3 Financing Inc.'s new term loan B III headed up on Friday from its recent breaking levels as the paper had its first real day of trading, and its term loan B II regained some of the losses posted upon news of the B III.

Over in the primary, Pharmaceutical Product Development Inc. nailed down timing on the general syndication launch of its credit facility, as well as official price talk on the first-lien term loan, and talk is that the early round look given to some guys has already resulted in the attraction of a lot interest.

Also, Asset Acceptance Capital Corp. updated pricing details on its term loan, firming the coupon at the low end of guidance and tightening the original issue discount price on good demand.

Furthermore, B&G Foods Inc. came out with structure on its credit facility on the back of launching the pro rata portion of the deal to lenders and expects to start syndication on the institutional tranche later this month, and Young Broadcasting emerged with new deal plans.

Level 3 strengthens

Level 3 Financing's term loan B III (Ba3) due Sept. 1, 2018 moved up to 96½ bid, 97½ offered, from its opening level of 96 bid, 97 offered on Thursday evening, as Friday was the first day accounts really had to try to shift their positions post allocations, according to a trader.

In addition, the company's existing term loan B II was quoted at 96¾ bid, 97¾ offered, up from 96 bid, 97 offered. The tranche traded down on Thursday as news of the B III hit the market. Prior to the news, the loan was seen by one trader at 98½ bid, 99 offered and by a second trader at 97¾ bid, 98¾ offered.

The new $550 million term loan B III, which was upsized from $250 million, is priced at Libor plus 425 basis points with a 1.5% Libor floor - in line with pricing on the B II.

The original issue discount on the B III is 95, whereas the B II was obtained at an original issue discount of 99 when it was done last month. Both tranches have 101 soft call protection until October 2012.

Level 3 repaying debt

Proceeds from Level 3's term loan B III, along with cash on hand, will be used to repay a $280 million term loan priced at Libor plus 850 bps and $274 million of 3.5% convertible senior notes due 2012.

Pro forma for this transaction, the balance under the company's senior secured credit facility will be $2.6 billion.

Bank of America Merrill Lynch and Citigroup Global Markets Inc. are the joint lead arrangers on the B III loan and joint bookrunners. Other bookrunners include Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC.

The deal was first announced on Thursday morning, quickly launched to lenders with a conference call that day, upsized and allocated by the evening. Closing is expected on Nov. 10.

Level 3 is a Broomfield, Colo.-based provider of fiber-based communications services.

Univision levels mixed

Also in trading, Univision Communications Inc.'s bank debt had a varied reaction as the company released quarterly results, with volume in the name described by a trader as being very light.

The company's extended term loan was quoted at 90¾ bid, 91¾ offered, down from 91 bid, 92 offered, while its non-extended term loan was quoted at 96¾ bid, 97¾ offered, up from 96½ bid, 97½ offered, the trader said.

For the third quarter, Univision reported net income of $290 million, compared to net income of $44.1 million in the prior year, net revenue of $584.6 million, up 1.7% from $575 million in the 2010 third quarter, and OIBDA of $236.2 million, up 1.9% from $231.7 million last year.

Univision is a New York-based Spanish-language media company.

Pharmaceutical Product timing

Switching to the primary, Pharmaceutical Product Development zeroed in on timing for its $1.5 billion senior secured credit facility with the scheduling of a bank meeting at 10 a.m. ET in New York on Tuesday, according to market sources. Previously, timing was labeled as expected for the week of Nov. 7 but a specific date had been unavailable.

The facility consists of a $175 million revolver and a $1.325 billion term loan, which is talked at Libor plus 550 bps with a 1.25% Libor floor, an original issue discount of 97 and 101 soft call protection for one year, sources remarked.

By comparison, earlier rumors had unofficial guidance on the term loan in the area of Libor plus 575 bps with a 1.5% Libor floor.

Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Goldman Sachs & Co. and UBS Securities Inc. are leading the deal, and are seeking commitments by Nov. 16.

Pharmaceutical nets interest

As was already reported, Pharmaceutical Product Development's credit facility has been shown to senior managing agents and some institutional lenders ahead of the retail launch, and sources have heard that guys have been very receptive to the transaction.

Proceeds, along with $700 million of senior unsecured notes backed by a senior unsecured bridge loan commitment, $1.76 billion of equity and cash on hand, will be use to fund the purchase of the company by Carlyle Group and Hellman & Friedman for $33.25 per share. The all-cash deal is valued at $3.9 billion.

Closing is expected in the fourth quarter, subject to shareholder approval, which will be sought at a meeting on Nov. 29, and regulatory approval.

Pharmaceutical Product Development is a Wilmington, N.C.-based product development and management services provider to the pharmaceutical research industry.

Asset Acceptance sets pricing

Asset Acceptance Capital finalized pricing on its $175 million six-year term loan B at Libor plus 725 bps with a 1.5% Libor floor and an original issue discount of 931/2, versus initial talk of Libor plus 725 bps to Libor plus 750 bps with a 1.5% floor and a discount of 93, according to a market source.

As before, the loan has soft call protection of 102 in year one and 101 in year two.

The company's $275 million credit facility, led by J.P. Morgan Securities LLC, also includes a $100 million five-year revolver.

Asset Acceptance, a Warren, Mich.-based purchaser and collector of defaulted or charged-off accounts receivable portfolios from consumer credit originators, is seeking recommitments by noon ET on Monday.

Asset Acceptance refinancing

Proceeds from Asset Acceptance's credit facility will be used to repay an existing senior secured credit facility that consists of a $100 million revolver due June 5, 2012 and a term loan due June 5, 2013. As of June 30, there was $132.6 million outstanding under the term loan and $38.5 million drawn on the revolver.

Pricing on the existing facility can range from Libor plus 300 bps to 350 bps based on liquidity.

A refinancing deal was already tried by the company earlier this year, but in May, the decision was made to pull that transaction due to market conditions.

The withdrawn facility consisted of a $175 million six-year term loan B talked at Libor plus 400 bps to 425 bps with a 1.5% Libor floor, an original issue discount of 99 and 101 soft call protection in year one and a $100 million five-year revolver.

B&G structure, talk

B&G Foods disclosed to investors that its proposed senior secured credit facility is sized at $500 million, comprised of a $100 million five-year revolver, a $100 million five-year term loan A and a $300 million term loan B, according to a market source.

A bank meeting to launch the revolver and term loan A took place on Thursday, and syndication on the term loan B has not yet started, but the tranche is anticipated as November business.

Now that the pro rata launch has taken place, price talk on the debt emerged at Libor plus 300 bps, the source said. The revolver has a 50 bps unused fee.

Also, both the revolver and the term loan A are being offered with a 50 bps upfront fee, the source added.

Price talk on the term loan B is still to be determined.

B&G funding acquisition

Proceeds from B&G Foods' credit facility will be used to fund the purchase of six brands from Unilever United States Inc., including Mrs. Dash, Molly McButter, Sugar Twin, Baker's Joy, Static Guard and Kleen Guard, for $325 million.

Additionally, the new credit facility will refinance the company's existing senior secured credit facilities.

Credit Suisse Securities (USA) LLC, Barclays Capital Inc. and RBC Capital Markets LLC are leading the new deal.

Closing is expected before the end of the year.

B&G Foods is a Parsippany, N.J.-based manufacturer, seller and distributor of shelf-stable food.

Young Broadcasting readies

Young Broadcasting emerged with plans for a new $175 million five-year senior secured credit facility, and has set a bank meeting for Monday afternoon to launch the transaction, according to a market source.

The facility consists of a $25 million revolver and a $150 million term loan A, the source said.

Wells Fargo Securities LLC is the lead bank on the deal that will be used for general corporate purposes.

Young Broadcasting, a New York-based owner of television stations, will have total and senior leverage of around 3.1 times.

Baja Broadband fills out

In other news, Baja Broadband successfully syndicated its $103 million credit facility at initial terms, and closing is pending regulatory approval for the acquisition of U.S. Cable, a market source told Prospect News.

The facility consists of a $10 million five-year revolver and a $78 million five-year first-lien term loan, both priced at Libor plus 550 bps with a 1.5% Libor floor and an original issue discount of 98, and a $15 million six-year second-lien term loan.

GE Capital Markets is the lead bank on the deal.

In addition to funding the acquisition, proceeds from the facility will be used to refinance existing debt.

Baja Broadband is a Fort Mill, S.C.-based full-service telecommunications company.

Kinetic buyout closes

Kinetic Concepts Inc.'s purchase by Apax Partners, Canada Pension Plan Investment Board and the Public Sector Pension Investment Board has been completed for $68.50 per share in cash in a transaction valued at $6.1 billion, including outstanding debt, according to a news release.

For the transaction, Kinetic got a new roughly $2.5 billion senior secured credit facility (Ba2/BB-), consisting of a $1.63 billion 61/2-year term loan B, a €250 million 61/2-year term loan B, a $325 million five-year term loan C and a $200 million five-year revolver.

Pricing on the B loans is Libor/ Euribor plus 575 bps with a 1.25% Libor floor. The U.S. tranche was sold at a discount of 96½ and the euro loan was sold at 951/2. Both are non-callable for one year then have 101 soft call protection in year two.

The term loan C is priced at Libor plus 525 bps with a 1.25% Libor floor, and sold at a discount of 97. The tranche has 101 soft call protection for one year.

Kinetic lead banks

Bank of America Merrill Lynch, Morgan Stanley & Co. Inc., Credit Suisse Securities (USA) LLC and RBC Capital Markets LLC led the Kinetic Concepts' credit facility.

During syndication, the term loan B was downsized from $2 2billion, call protection was changed from soft call protection of 102 in year one and 101 in year two, the discount on the U.S. piece tightened from talk of 95½ to 96, and the discount on the euro piece firmed at the high end of the guidance.

Also, the term loan C was added to the capital structure, the discount tightened from talk of 95½ to 96, and pricing came 25 bps wider than expected as, at first, it was talked 75 bps inside the term loan B.

Kinetic Concepts is a San Antonio-based medical technology company.

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