Fidelity, Michaels Stores, NPC, Ocwen break; Valeant tweaks deal; 99 Cents shutting early

By Sara Rosenberg

New York, Dec. 9 - Fidelity National Information Services Inc. freed up for trading late Friday, with levels on the term loan B wrapping around par, and Michaels Stores Inc., NPC International Inc. and Ocwen Financial Corp. emerged in the secondary market as well.

Over in the primary, Valeant Pharmaceuticals International Inc. made a change to its incremental term loan, increasing the size because of strong demand, which means the company will use less cash and revolver borrowings for its acquisition of iNova.

Additionally, 99 Cents Only Stores accelerated the commitment deadline on its credit facility, and Kronos Inc. came out with plans for a new incremental first-lien term loan B and will also be asking lenders to amend and extend its existing credit facility.

Furthermore, Capital Safety, Six Flags Entertainment Corp. and Endurance International Group have all been well received by investors, resulting in the oversubscription of the transactions ahead of their upcoming commitment deadlines.

Fidelity frees up

Fidelity National Information Services' $1.335 billion term loan B allocated and started trading on Friday, with levels quoted at 99½ bid, par ¼ offered on the open and then moving up to 99 7/8 bid, par 3/8 offered, according to a trader.

Pricing on the term loan B due July 2016 is Libor plus 325 basis points with a 1% Libor floor, and it was sold at an original issue discount of 99. There is 101 repricing call protection for 18 months.

As was previously reported, the deal was so well received that the commitment deadline had been accelerated to 10 a.m. ET on Friday from 5 p.m. ET on Monday.

In addition to the term loan B, the company is seeking a $315 million add-on term loan A-2 due July 2014. Commitments on this tranche continue to be due at 5 p.m. ET on Monday.

Fidelity lead banks

J.P. Morgan Securities LLC and Bank of America Merrill Lynch are the lead banks on Fidelity National's $1.65 billion of new term loans.

Proceeds, along with $150 million of 7 5/8% senior notes that priced on Tuesday at 105.375, will be used to refinance an existing $1.485 billion term loan B due July 18, 2016 and up to the entire $315 million of term loan A-1 borrowings due Jan. 18, 2012.

The existing term loan B is priced at Libor plus 375 bps with a 1.5% Libor floor and was sold at an original issue discount of 99 when obtained in July 2010. As of Sept 30, pricing on the existing term loan A-1 was Libor plus 100 bps and pricing on the existing term loan A-2 was Libor plus 225 bps.

Fidelity National is a Jacksonville, Fla.-based provider of financial institution core processing and card-issuer and transaction-processing services.

Michaels B-3 trades

Michaels Stores' extended term loan B-3 emerged in the secondary market after the size was increased to $575 million from $400 million, according to a trader.

The term loan B-3, which was sold at an original issue discount of 99, was quoted at 97 bid, 97¾ offered, as was the company's existing term loan B-2 that shares the same maturity of July 2016 and pricing of Libor plus 450 bps. On Thursday, the term loan B-2 was quoted at 97 bid, 98 offered.

During syndication, pricing on the B-3 firmed at the tight end of the Libor plus 450 bps to 475 bps talk and the wide end of the 99 to par offer price.

Before the extension, the debt matured on Oct. 31, 2013 and was priced at Libor plus 225 bps.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading the deal for the Irving, Texas-based retailer of arts, crafts, framing, floral, wall decor and seasonal merchandise.

NPC hits secondary

Also breaking for trading was NPC International's credit facility, with its $375 million term loan quoted at 98¾ bid, 99¾ offered on the open, and then it moved up to 99¼ bid, par ¼ offered, according to a trader.

Pricing on the term loan is Libor plus 525 bps with a 1.5% Libor floor, and it was sold at an original issue of 98. There is 101 soft call protection for one year.

During syndication, pricing on the term loan was lowered from Libor plus 550 bps and the discount tightened from the 97 area. Like Fidelity, the commitment deadline had been moved up due to strong demand, going to this past Wednesday from Dec. 13.

The company's $465 million senior credit facility (Ba3/B) also includes a $90 million, upsized from a launch size of $85 million and an originally anticipated amount of $75 million.

NPC funding buyout

Proceeds from NPC's credit facility, $190 million of senior notes due 2020 and about $240 million of equity will be used to fund the acquisition of the company by Olympus Partners and to refinance all existing debt.

The bonds priced on Thursday at par to yield 10½%, and replaced an originally planned roughly $190 million mezzanine financing.

Barclays Capital Inc. and Goldman Sachs & Co. are leading the credit facility.

Closing on the buyout is expected by Dec. 28, subject to regulatory approvals and customary conditions.

NPC, an Overland Park, Kan.-based Pizza Hut franchisee, will have secured leverage of 3.3 times, net total leverage of 5.0 times and net lease adjusted leverage of 5.9 times.

Ocwen breaks

Ocwen was another name to begin trading on Friday, with its $200 million incremental senior secured term loan due Sept. 1, 2016 quoted at 98 5/8 bid, 99 offered, while the existing term loan was flat on the day at 99 bid, par offered, according to a trader.

Pricing on the loan is the same as the existing term loan at Libor plus 550 bps with a 1.5% Libor floor, and there is 101 soft call protection until Sept. 1, 2012. The incremental loan was sold at an original issue discount of 981/2, while the existing loan was sold at 98 when completed in September.

Barclays Capital Inc. is leading the deal that will be used for general corporate purposes, including funding the acquisitions of Saxon Capital Holdings LLC from Morgan Stanley Mortgage Capital Holdings LLC and a mortgage servicing portfolio from J.P. Morgan.

Pro forma debt to run-rate adjusted EBITDA is 1.68 times and total debt to equity is 4.33 times.

Ocwen, an Atlanta-based provider of residential and commercial loan servicing, special servicing and asset management services, expects to close on the loan on Feb. 1.

Valeant ups loan

Switching to the primary, Valeant Pharmaceuticals decided to lift the size of its incremental term loan due April 2016 to $500 million from $350 million and use less balance sheet cash/revolver draw for its purchase of iNova, according to a market source.

As before, pricing on the incremental loan matches the company's existing $1.725 billion term loan A at Libor plus 275 bps, with a step to Libor plus 250 bps at 3.25 times or less leverage and a step to Libor plus 300 bps at greater than 4.0 times leverage.

Goldman Sachs & Co., Bank of America Merrill Lynch and J.P. Morgan Securities LLC are the joint bookrunners on the deal that was offered to new and existing lenders at upfront fees based on commitment tier.

Valeant closing soon

Upon announcing the transaction in late November, Valeant said in a news release that it expects to close on the incremental term loan sometime this month, subject to market and other customary conditions.

Under the acquisition agreement, Valeant is paying iNova shareholders A$625 million upfront and up to an additional A$75 million for potential milestones based on the success of pipeline activities, product registrations and overall revenue.

iNova, a private pharmaceutical group, is being purchased from Archer Capital, Ironbridge and other minority management shareholders.

Valeant is a Mississauga, Ont.-based specialty pharmaceutical company.

99 Cents moves deadline

99 Cents Only Stores revised the commitment deadline on its credit facility to 5 p.m. ET on Monday from Wednesday being that the deal is oversubscribed, according to a market source.

The $675 million facility includes a $525 million seven-year term loan talked at Libor plus 550 bps, with a 1.5% Libor floor, an original issue discount of 98 and 101 soft call protection for one year. There is also a $150 million five-year ABL revolver.

Prior to launch, the company has said in filings with the Securities and Exchange Commission that term loan pricing would be Libor plus 600 bps with a 1.5% Libor floor. Revolver pricing was outlined at Libor plus 200 bps with a 37.5 bps unused fee. The revolver coupon is expected to range from Libor plus 175 bps to 225 bps, and the unused fee from 37.5 bps to 50 bps, based on average excess availability.

RBC Capital Markets, BMO Capital Markets and Deutsche Bank Securities Inc. are leading the credit facility.

99 Cents being acquired

Proceeds from 99 Cents' credit facility will be used to help fund its buyout by Ares Management LLC and Canada Pension Plan Investment Board for $22.00 per share in cash in a transaction with a total equity value of about $1.6 billion.

Other funds for the transaciton will come from $635.9 million of equity and a $250 million of senior notes backed by a $250 million bridge loan commitment priced initially at Libor plus 950 bps with a 1.5% Libor floor.

Closing is anticipated in the first quarter of 2012, subject to shareholder approval. Regulatory approvals have already been obtained.

99 Cents is a City of Commerce, Calif.-based operator of extreme value retail stores.

Kronos readies deal

Kronos emerged with plans to launch with a conference call at 11 a.m. ET on Monday a new $370 million incremental first-lien term loan B and an amendment and extension of its existing credit facility, according to sources.

Proceeds from the incremental debt will be used for a distribution to shareholders, sources said.

Meanwhile, the existing credit facility that will be amended and extended consists of a $60 million revolver, a $635 million first-lien term loan B and a $355 million second-lien term loan B.

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, Jefferies & Co. and Deutsche Bank Securities Inc. are the bookrunners on the deal, for which price talk is not yet available.

Kronos is a Chelmsford, Mass.-based provider of workforce management software.

Capital Safety well met

In other news, Capital Safety's $420 million senior secured credit facility has already reached oversubscription levels since launching on Dec. 7, and investors still have until Thursday to place their orders, according to a market source.

The facility consists of a $45 million five-year revolver and a $375 million seven-year term loan B, with both tranches talked at Libor plus 525 bps and offered at an original issue discount of 98. The revolver has no Libor floor, while the term loan B has a 1.25% Libor floor and 101 soft call protection for one year.

UBS Investment Bank, Morgan Stanley Senior Funding Inc., Mizuho Securities USA Inc. and KKR Capital Markets are leading the deal.

Capital Safety junior debt

In addition to the credit facility, Capital Safety is getting $175 million of junior capital. The company had previously said that KKR Capital Markets would be arranging financing in the form of senior unsecured notes with Crescent Capital Group.

Proceeds will be used to help fund the $1.12 billion acquisition of the company by Kohlberg Kravis Roberts & Co. LP from Arle Capital Partners.

Closing is expected in January, subject to customary conditions, including regulatory approval.

Capital Safety is a Red Wing, Minn.-based provider of fall protection equipment.

Six Flags nets interest

Also oversubscribed is Six Flags' $700 million seven-year term loan B, which is talked at Libor plus 325 bps with a 1% Libor floor and an original issue discount of 99 and includes 101 soft call protection for one year, a market source told Prospect News.

The company's $1.15 billion credit facility (B1/BB+) also provides for a $200 million five-year revolver and a $250 million five-year term loan A, both talked at Libor plus 225 bps.

Lead banks Wells Fargo Securities LLC, Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and Goldman Sachs & Co. are seeking commitments by Wednesday.

Proceeds will be used by the Grand Prairie, Texas-based regional theme park company to refinance an existing credit facility.

Endurance fills out

Endurance International's $400 million credit facility (B1/B) is another deal that has overfilled its books with orders ahead of its Wednesday commitment deadline, according to a market source.

The facility consists of a $50 million five-year revolver and a $350 million six-year term loan B both launched talked at Libor plus 650 bps with a 1.5% Libor floor. The B loan is being offered at an original issue discount of 97½ and has 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to help fund the purchase of a majority interest in the company by Warburg Pincus and GS Capital Partners from Accel-KKR.

With this transaction, Endurance, a Burlington, Mass.-based provider of web hosting and online services to small- and medium-sized businesses, will have secured leverage of 3.5 times.

HMS wraps up

HMS Holdings Corp. completed syndication of its $450 million credit facility at initial terms, and the plan is to close during the week of Dec. 12. Allocations already went out this past Thursday, a source remarked.

The facility consists of a $350 million term loan and a $100 million revolver, both priced at Libor plus 300 bps.

Citigroup Global Markets Inc. is the lead bank on the deal that will be used, along with cash on hand and the assumption of about $16 million of unvested options, to fund the roughly $400 million purchase of HealthDataInsights Inc., a Las Vegas-based technology-enabled health care services company focused on ensuring claims integrity.

HMS, a New York-based coordinator of benefits and program integrity services for health care payers, will have total leverage of 2.5 times and net leverage of 1.7 times.

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