Novelis breaks; Arizona Chem rises; Capital Safety, Datatel, Lord & Taylor set launches

By Sara Rosenberg

New York, Dec. 2 - Novelis Inc.'s incremental term loan B-2 emerged in the secondary market on Friday, with levels quoted above its original issue discount price, and Arizona Chemical Inc.'s term loan B was stronger on refinancing news.

Over in the primary, Capital Safety came out with size, structure and timing on its proposed credit facility, Datatel Inc. nailed down a meeting date for the general syndication round for its loan and Lord & Taylor emerged with new deal plans.

Novelis starts trading

Novelis' $225 million incremental term loan B-2 (BB-) due March 2017 freed up for trading on Friday afternoon, with levels seen at 98 bid, 98½ offered, according to traders.

Meanwhile, the company's existing term loan B was quoted at 98¼ bid, 99¼ offered, unchanged on the day, traders said.

Pricing on the add-on matches existing term B pricing at Libor plus 275 basis points with a 1% Libor floor. There is a step-up to Libor plus 300 bps at 3.5 times net leverage.

The new debt was sold at an original issue discount of 971/2. By comparison, the existing roughly $1.49 billion term loan B was sold at par when obtained earlier this year.

The incremental loan was first announced on Thursday morning with a size of $200 million and an original issue discount that was still to be determined. It then launched that afternoon and, shortly thereafter, was upsized by $25 million with the discount set at the final level.

Novelis funding acquisition

Proceeds from Novelis' incremental loan will be used to help fund the $350 million acquisition of 31.2% of the outstanding shares of Novelis Korea Ltd. from Taihan Electric Wire Co. Ltd. and other minority shareholders.

With this transaction, Novelis' ownership in Novelis Korea will increase to more than 99% of the outstanding shares.

J.P. Morgan Securities LLC is the left lead bank on the new term loan that is expected to close by Dec. 31.

Novelis is an Atlanta-based aluminum-rolled products and beverage can recycling company.

Arizona Chem up on refi

Arizona Chemical's term loan B moved up to par ¾ bid, 101¼ offered from 99¾ bid, par ¾ offered as the company surfaced with a refinancing transaction that will result in the repayment of the term loan at a price of 101 due to call protection, according to a trader.

The existing B loan, obtained earlier this year at a size of $430 million, is priced at Libor plus 325 bps with a 1.5% Libor floor and had been sold at par.

For the refinancing, the company will launch with a bank meeting on Tuesday an $810 million credit facility that consists of a $60 million five-year revolver and a $750 million six-year term loan B.

Remaining funds from the Goldman Sachs & Co.-led credit facility will be used to pay a dividend.

Leverage is 1.75 times.

Arizona Chemical is a Jacksonville, Fla., supplier of pine chemicals to the adhesives, inks and coatings and oleochemicals markets.

Capital Safety details emerge

Switching to the primary, the size and structure on Capital Safety's proposed senior secured credit facility surfaced, with the $420 million deal set to consist of a $45 million revolver and a $375 million term loan B, according to a market source.

These details came out as the company scheduled a bank meeting for Wednesday to launch the transaction to investors, the source said.

UBS Investment Bank, Morgan Stanley Senior Funding Inc. and KKR Capital Markets are the lead banks on the deal that will be used, along with $175 million of junior capital, to fund the $1.12 billion acquisition of the company by Kohlberg Kravis Roberts & Co. LP from Arle Capital Partners.

KKR Capital Markets is arranging the senior unsecured notes with Crescent Capital Group.

Capital Safety, a Red Wing, Minn.-based provider of fall protection equipment, anticipates closing on the buyout in January, subject to customary conditions, including regulatory approval.

Datatel firms timing

Datatel zeroed in on timing for its general syndication round, setting a bank meeting for Tuesday to launch its proposed $1.195 billion credit facility (B+), according to sources.

The facility, which consists of a $1.07 billion 61/2-year term loan B and a $125 million revolver, already launched to a select group of investors in an early round effort that kicked off last month.

At the time of the early round launch, talk was that the yield on the term loan was being discussed in the high-6% area. Official price talk on the loan is not yet available.

Bank of America Merrill Lynch, Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are the lead banks on the deal.

Proceeds will be used to help fund the $1.775 billion acquisition of SunGard Higher Education by Hellman & Friedman LLC from SunGard Data Systems Inc. and the concurrent merger with Datatel, an existing Hellman & Friedman portfolio company.

Datatel plans notes

In addition to the credit facility, Datatel plans on issuing high-yield bonds for the buyout/merger transaction, and these notes are backed by commitment for a $530 million senior unsecured bridge loan.

The credit facility and bridge financing commitment was obtained by an entity named Sophia LP.

Once SunGard Higher Education is merged with Datatel, the combined company will operate under a new name that will be announced by the parties at the closing of the transactions.

Closing is subject to customary conditions, including applicable regulatory clearances.

Datatel is a Fairfax, Va.-based provider of technology products, services and insight to higher education. SunGard Higher Education is a Malvern, Pa.-based provider of software and services to the higher education community.

Lord & Taylor coming soon

Also joining the near-term calendar on Friday was Lord & Taylor, as the company scheduled a bank meeting for Tuesday to launch a proposed $450 million term loan, according to a market source.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to help refinance the company's commercial mortgage-backed securities.

Leverage is 3.9 times.

Lord & Taylor is a New York-based upscale, specialty-retail department store chain.

Document Technologies closes

In other news, Harvest Partners completed its purchase of Document Technologies Inc. from Quad-C Management Inc., according to a news release.

For the transaction, Document Technologies got a new $145 million five-year senior secured credit facility consisting of a $120 million term loan and a $25 million revolver, and priced at Libor plus 500 bps with a 1.5% Libor floor. The facility was sold at an original issue discount of 99.

During syndication, the term loan was upsized from $115 million, and pricing on the entire was lowered from Libor plus 550 bps while the discount tightened from 981/2.

GE Capital Markets and Golub Capital led the deal.

Document Technologies is an Atlanta-based end-to-end provider of litigation support and document management services.

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