KCA, Texas Competitive, PSC break; TransDigm dips in trading; MAG/Tucker, Albaugh revised

By Sara Rosenberg

New York, May 13 - KCA Deutag, Texas Competitive Electric Holdings Co. LLC and PSC Industrial Services all hit the secondary market on Tuesday, and TransDigm Inc.'s term loan C traded a bit lower as the company launched incremental bank debt and an amendment to investors.

In more happenings, MAG/Tucker Rocky (Velocity Pooling Vehicle LLC) reduced the size of its ABL revolver and first-lien term loan and updated pricing and widened original issue discounts on it first- and second-lien tranches, and Albaugh Inc. increased price talk on its term loan, modified the original issue discount and extended the call protection.

Additionally, Liquidnet Holdings Inc., Zayo Group LLC and Choice Cable released talk with launch, Post Holdings Inc. disclosed timing on its term loan, and Otter Products LLC and Encompass Digital Media Inc. emerged with new deal plans.

KCA sets terms, breaks

KCA Deutag set pricing on its $375 million six-year secured term loan (B3/B) at Libor plus 525 basis points with a 1% Libor floor and an original issue discount of 99, which is the tight end of initial talk of Libor plus 525 bps to 550 bps with a 1% floor and a discount of 98½ to 99, according to a market source.

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

With final pricing in place, the debt broke for trading on Tuesday and levels were seen at 99¾ bid, par ¼ offered, the source said.

Goldman Sachs Bank USA, J.P. Morgan Securities LLC, HSBC Securities (USA) Inc. and Lloyds Securities LLC are leading the loan that will be used with $375 million of secured notes to refinance existing bank debt and add a small amount of cash to the balance sheet.

KCA Deutag is a Scotland-based drilling contractor, managing platform drilling rigs and owning and operating a fleet of jack-up, self-erect tender and land rigs.

Texas Competitive trading

Texas Competitive Electric Holdings' debtor-in-possession facility also emerged in the secondary, with the strip of $1,425,000,000 funded and $1.1 billion delayed-draw covenant-light term loan debt quoted at par ¼ bid, par ½ offered on the open and then it moved up to par ½ bid, par ¾ offered, according to a market source.

Pricing on the term loans is Libor plus 300 bps with a 0.75% Libor floor and they were sold at an original issue discount of 99 5/8. The delayed-draw term loan has a ticking fee of half the spread from days 61 through 90 after close. If the delayed-draw term loan is terminated during the 90-day availability window, the original issue discount on the debt will be paid to lenders.

During syndication, the Libor floor was revised from 1% and the discount was tightened from 991/2.

The company's $4,475,000,000 24-month DIP facility (Baa3/BB+) also includes a $1.95 billion revolver.

Proceeds will be used for liquidity, adequate protection payments, restructuring costs and general corporate purposes. The delayed-draw loan will backstop letters-of-credit posted to the Railroad Commission of Texas.

Citigroup Global Markets Inc. is leading the deal for the Dallas-based energy company.

PSC tops OID

PSC Industrial Services' credit facility began trading as well, with the $175 million six-year term loan B quoted at 99½ bid, par offered, a trader remarked.

Pricing on the B loan is Libor plus 450 bps with a 1% Libor floor and it was sold at an original issue discount of 99. There is 101 soft call protection for one year, which was extended during syndication from six months.

The company's $215 million credit facility also includes a $40 million five-year revolver.

RBC Capital Markets and Jefferies Finance LLC are leading the deal that will be used to fund a shareholder distribution.

PSC is a Houston-based integrated industrial services company.

TransDigm weakens

TransDigm's term loan C fell in trading to 99¾ bid, par 1/8 offered from par bid, par ½ offered as the company launched a new term loan D, a revolver add-on and an amendment to its existing credit facility, according to a trader.

The proposed $625 million seven-year first-lien covenant-light term loan D (Ba3) is talked at Libor plus 325 bps with a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, a source said.

And, the $122 million add-on to the company's existing $278 million revolver due February 2018, is talked at Libor plus 300 bps with a 0.75% Libor floor.

Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., Barclays, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., RBC Capital Markets and UBS AG are leading the deal that launched with a call at 11 a.m. ET.

Commitments are due on Monday, the source added.

TransDigm plans dividend

Proceeds from TransDigm's new bank debt will be used to help fund a special cash dividend in the range of $900 million to $1.5 billion and the repurchase of any and all of its outstanding $1.6 billion 7¾% senior subordinated notes due 2018.

The company said in a news release that it may also use $2.35 billion of new subordinated debt, about $200 million of trade receivables securitization facility borrowings and/or cash on hand to fund the dividend and notes refinancing.

In connection with this transaction, the company is looking to amend its existing senior secured credit facility to permit the dividend, new term loan and revolver upsize, and to modify certain ratios.

Lenders are being offered a 10 bps amendment fee, the source added.

TransDigm is a Cleveland-based designer, producer and supplier of highly engineered aircraft components.

MAG/Tucker reworked

Back in the primary, MAG/Tucker Rocky reduced its seven-year covenant-light first-lien term loan to $295 million from $305 million, set the spread at Libor plus 400 bps, the wide end of the Libor plus 375 bps to 400 bps talk, and moved the original issue discount to 94½ from 99, according to a market source.

In addition, pricing on the company's $85 million eight-year covenant-light second-lien term loan is now Libor plus 725 bps, the high end of the Libor plus 700 bps to 725 bps talk, the original issue discount was changed to 93½ from 99 and the call protection was modified to 103 in year one, 102 in year two and 101 in year three from 102 in year one and 101 in year two, the source said.

As before, both term loans have a 1% Libor floor and the first-lien term loan has 101 soft call protection for one year.

Regarding the ABL revolver, it was downsized to $150 million from $175 million, and at close, $45 million will drawn, up from $35 million, to compensate for the first-lien term loan size reduction.

MAG changes incremental

Other revisions made to the MAG/Tucker credit agreement included making the unlimited incremental capacity subject to 4.25 times first-lien net leverage, instead of 4.50 times, and 5 times net total leverage, instead of 5.25 times, and setting the excess free cash flow sweep at 75%, changed from 50%, if first-lien net leverage is above 3.5 times, with step-downs.

Recommitments are due at 5 p.m. ET on Friday, the source added.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, GE Capital Markets and KeyBanc Capital Markets are leading the now $530 million credit facility.

Proceeds will be used to help fund the merger of Motorsport Aftermarket Group with Tucker Rocky.

Irvine, Calif.-based Motorsport Aftermarket Group (MAG) and Fort Worth-based Tucker Rocky are providers of aftermarket parts and accessories for the powersports industry.

Albaugh revisions surface

Albaugh increased price talk on its $300 million term loan B to Libor plus 425 bps to 450 bps from talk of Libor plus 350 bps to 375 bps, changed the original issue discount to 99 from 99½ and pushed out the 101 soft call protection to one year from six months, according to a market source.

Furthermore, a total net leverage covenant was added to the previously covenant-light loan and the MFN sunset provision was eliminated, setting the 50 bps MFN for life, the source said.

The 1% Libor floor on the term loan was unchanged.

The company's $400 million credit facility (B1/BB-) also includes a $100 million revolver.

Recommitments are due on Thursday, the source added.

HSBC Securities (USA) Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are leading the deal that will be used to refinance existing debt and for general corporate purposes.

Albaugh is an Ankeny, Iowa-based producer of generic crop protection products.

Liquidnet reveals talk

Also in the primary, Liquidnet Holdings held its lender call on Tuesday, launching its $175 million five-year term loan with talk of Libor plus 675 bps with a 1% Libor floor, an original issue discount of 98½ to 99 and 101 soft call protection for one year, a market source remarked.

Jefferies Finance LLC is leading the deal that will be used to refinance existing debt, to fund the acquisition of Vega-Chi and to add cash to the balance sheet.

The acquisition is subject to regulatory approval.

Net leverage will be 0.4 times at close, the source added.

Liquidnet is a New York-based institutional equities trading network. Vega-Chi is a bond trading platform.

Zayo OID guidance

Zayo Group came out with original issue discount talk of 99¼ to 99½ on its fungible $275 million incremental term loan B (B1) due July 2, 2019 that launched with a call in the afternoon, according to a market source.

Pricing on the incremental loan matches the existing roughly $1.74 billion term loan B at Libor plus 300 bps with a 1% Libor floor, and there is 101 soft call protection that expires on May 26.

Commitments are due by 5 p.m. ET on Thursday, the source said.

Barclays, RBC Capital Markets and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to fund the acquisition of Neo Telecoms, a Paris-based bandwidth infrastructure company, and for general corporate purposes.

Zayo is a Boulder, Colo.-based provider of fiber-based bandwidth infrastructure and network-neutral colocation and interconnection services.

Choice Cable launches

Choice Cable approached lenders with a $33.5 million five-year second-lien term loan that is talked at Libor plus 850 bps with a 1% Libor floor, an original issue discount of 98½ and call protection of 102 in year one and 101 in year two, according to a market source.

Also, the company launched an amendment to its existing credit facility to allow for the new second-lien term loan and revise covenants, the source said.

Proceeds from the second-lien loan will be used by the Puerto Rico-based cable operator to fund a dividend.

Post sets meeting

Post Holdings released timing on its $635 million senior secured term loan, with the deal slated to launch with a bank meeting at 10:30 a.m. ET on Thursday, a market source said.

Barclays, Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, Goldman Sachs Bank USA, BMO Capital Markets and Nomura are leading the loan.

Senior secured leverage is 1.1 times and net total leverage is 6.2 times, the source added.

Proceeds will help fund the $2.45 billion acquisition of Michael Foods, a Minnetonka, Minn.-based producer and distributor of food products, from GS Capital Partners, Thomas H. Lee Partners and other owners.

Recent filings with the Securities and Exchange Commission said that other funds for the transaction would come from about $630 million of newly issued senior unsecured debt securities and around $500 million of newly issued common and/or equity-linked securities.

The St. Louis-based consumer packaged goods holding company expects to close on the acquisition in the second quarter, subject to the expiration of waiting periods required under antitrust laws.

Otter Products coming soon

Otter Products scheduled a bank meeting for Thursday to launch a $725 million credit facility, a market source said.

The facility consists of a $100 million revolver and a $625 million six-year term loan B, the source added.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc. and KeyBanc Capital Markets are leading the deal that will be used to refinance existing debt and fund a dividend.

Otter Products is a Fort Collins, Colo.-based provider of protective cases for mobile devices.

Encompass readies deal

Encompass Digital Media set a bank meeting for 10 a.m. ET on Thursday to launch a $370 million credit facility, according to a market source.

The facility consists of a $30 million five-year revolver, a $265 million seven-year first-lien term loan and a $75 million eight-year second-lien term loan, the source said.

BMO Capital Markets and Macquarie Capital are leading the deal that will be used to refinance existing debt and prefund payments related to a 2012 acquisition.

Encompass is a provider of mission-critical media capture, management and distribution services.

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