Dunkin', Gymboree, SI Organization tweak deals; Rural firms pricing; Renal talk surfaces

By Sara Rosenberg

New York, Nov. 16 - Dunkin' Brands Inc. made some changes to its well-oversubscribed term loan B on Tuesday, including tightening the original issue discount and adding two step-downs in pricing based on leverage.

Also, Gymboree Corp. revised the original issue discount on its B loan and added call protection, SI Organization reduced pricing and discount on its term loan, and Rural/Metro Corp. firmed pricing on its term loan at the low end of guidance and is close to finalizing the size of its revolver.

Furthermore, Renal Advantage and Allied Specialty Vehicles Inc. released price talk on their credit facilities as the deals were launched to lenders, and Smile Brands Group Inc. kicked off syndication on its transaction as well.

As for the secondary market, traders remarked that things in general felt softer with more sellers than buyers as equities retreated.

Dunkin' revises B loan

Dunkin' Brands announced some modification to its $1.25 billion seven-year term loan B in the morning, including moving the original issue discount to 99½ from 99 and adding a pricing grid, according to a market source.

Under the new grid, pricing can drop to Libor plus 400 basis points at less than 6.0 times leverage and to Libor plus 375 bps at less than 5.0 times leverage, the source said. Initial pricing on the loan was left unchanged at Libor plus 425 bps.

Also left intact is the term loan B's 1.5% Libor floor and 101 soft call protection for one year.

Recommitments from lenders were due at 5 p.m. ET on Tuesday.

Syndication of the term loan B has been going very well from the start, with the deal described by sources last week as being a blowout. And, as a result of the demand, the original commitment deadline had been accelerated to Monday at 5 p.m. ET from Thursday.

Dunkin' Brands lead banks

Barclays, JPMorgan, Bank of America and Goldman Sachs are the joint lead arrangers and joint bookrunners on Dunkin' Brands' deal, with Barclays the left lead.

The company's $1.35 billion senior credit facility (B1/B+) also includes a $100 million five-year revolver priced at Libor plus 425 bps with a 1.5% Libor floor.

Proceeds from the credit facility, along with $625 million of 9 5/8% senior notes that priced on Monday at 98½ to yield 9.9%, will be used to repay in full the company's outstanding securitization debt and to pay a cash dividend to stockholders.

Following completion of the transactions, senior leverage will be 4.2 times and total leverage will be 6.5 times.

Canton, Mass.-based Dunkin' Brands is the parent company of Dunkin' Donuts, a coffee and baked goods restaurant chain, and Baskin-Robbins, an ice cream specialty store chain.

Gymboree trims OID

Gymboree came out with a new round of revisions to its $820 million seven-year term loan B (B1/B+), this time tightening the original issue discount to 99½ from 99 and adding 101 soft call protection (repricing protection) for one year, according to a market source.

Pricing on the term loan B remained at Libor plus 400 bps with a 1.5% Libor floor.

Recommitments are due by noon ET on Wednesday.

Earlier in syndication, the term loan B was upsized from $720 million, the spread flexed down from Libor plus 450 bps, the floor was reduced from 1.75% and the discount was cut from 981/2.

Credit Suisse and Morgan Stanley are the joint lead arrangers and bookrunners on the term loan B, with Credit Suisse the left lead.

Gymboree plans ABL loan

In addition to the term loan B, Gymboree expects to get a $225 million five-year asset-based revolver that is being led by Bank of America.

Based on a commitment letter filed with the Securities and Exchange Commission, the revolver is anticipated to be split into a $213 million A tranche and a $12 million first-in, last-out A-1 tranche. If the company opts to reduce or terminate the A-1 tranche, those commitments can be added to the A tranche.

Initial pricing on the tranche A revolver is expected to be Libor plus 250 bps, and initial pricing on the tranche A-1 revolver is expected to Libor plus 400 bps, the filing said.

The initial commitment fee on the revolver is expected to be 62.5 bps.

Gymboree being acquired

Proceeds from Gymboree's credit facility will be used to fund the acquisition of the company by Bain Capital Partners LLC for $65.40 per share, or $1.8 billion. Bain is in the process of tendering for Gymboree's shares.

Other funds for the transaction will come from equity and $400 million of notes. The bond offering was downsized by $100 million when the term loan B was upsized.

Completion of the buyout is subject to, among other things, the satisfaction of the minimum tender condition of at least 66% of the company's common shares, the receipt of the Federal Trade Commission's approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

Gymboree is a San Francisco-based specialty retailer.

SI reworks pricing

SI Organization also made changes to its term loan, reducing pricing on the $300 million six-year tranche to Libor plus 400 bps from Libor plus 450 bps, tightening the original issue discount to 99 from 98½ and adding 101 soft call protection for one year, according to a market source.

As before, the term loan has a 1.75% Libor floor.

Recommitments are due from investors on Wednesday.

The company's $340 million credit facility also includes a $40 million five-year revolver (Ba3/B+).

SI Organization led by three

JPMorgan, Bank of America and Credit Suisse are the lead banks on SI Organization's credit facility, with JPMorgan the left lead.

Proceeds will be used to help fund Veritas Capital's acquisition of Lockheed Martin Corp.'s Enterprise Integration Group for $815 million.

The Enterprise Integration Group, which will be named SI Organization, is a Valley Forge, Pa.-based provider of mission-critical systems engineering and integration services and modeling, simulation, analysis and risk mitigation services to the U.S. intelligence community.

Rural/Metro sets pricing

Rural/Metro determined pricing on its $270 million term loan, with the well-received deal ending up at Libor plus 425 bps with a 1.75% Libor floor and an original issue discount of 99½ - the tight end of initial talk of Libor plus 425 bps to 450 bps with a 1.75% Libor floor and an original issue discount of 99 to 991/2, according to a market source.

Earlier in the syndication process, the term loan was upsized from $75 million as the decision was made not to move forward with a $200 million senior notes offering.

At the time of the loan upsizing, the company's president and chief executive officer, Michael P. DiMino, said in a news release that the change to an all credit facility structure will provide flexibility for business objectives, while securing lower pricing.

Rural/Metro revolver size

Rural/Metro is still working on finalizing the size of its revolving credit facility, but it is expected that it will end up at $85 million, the source said. Officially, though, it is being talked at $75 million to $100 million.

Pricing on the revolver is Libor plus 450 bps with a 75 bps unused fee, and it is offered with a 100 bps upfront fee.

At launch, the revolver size was expected at $100 million, and price talk had been Libor plus 425 bps to 450 bps with a 75 bps unused fee and a 75 bps upfront fee.

Allocations on the credit facility are anticipated to go out on Wednesday or Thursday, the source added.

RBC Capital Markets is the lead bank on the secured credit facility (B1/B+) that has an expected size of $355 million.

Rural/Metro replacing debt

Proceeds from Rural/Metro's credit facility will be used to refinance its existing senior secured revolver, term loan and letter-of-credit facilities, to fund a tender offer for its senior discount notes and to pay off cash collateralized letters of credit.

Remaining proceeds from the facility will be used for working capital and general corporate purposes.

Total and senior leverage is 3.75 times, or 3.25 times net. Under the original financing plans, including the canceled bond offering, senior leverage was going to be 1.1 times and total leverage was going to be 3.9 times.

Rural/Metro is a Scottsdale, Ariz.-based provider of medical ambulance response services.

Renal talk emerges

Renal Advantage held a bank meeting with a 12:30 p.m. ET start time on Tuesday at the Essex House in New York, and in connection with the event, price talk was announced, according to a market source.

The $50 million revolver and the $350 million term loan were both launched with talk of Libor plus 450 bps with a 1.5% Libor floor, the source said.

The term loan is being offered at an original issue discount of 981/2, the source added.

Barclays and Bank of America are the lead banks on the $400 million credit facility, with Barclays the left lead.

Renal funding merger

Proceeds from Renal Advantage's credit facility, along with $206 million of mezzanine debt, will be used to help fund the company's merger with Liberty Dialysis.

The transaction is expected to be completed by Dec. 31.

Following the close, leverage through the first-lien will be 3.6 times and net leverage through the mezzanine debt will be 5.6 times.

Brentwood, Tenn.-based Renal Advantage and Mercer Island, Wash.-based Liberty Dialysis are providers of dialysis services.

Allied floats guidance

Allied Specialty Vehicles was another company to come out with price talk as it, too, held a bank meeting during the session, according to a market source.

The company's $150 million six-year term loan B is being talked at Libor plus 525 bps to 550 bps with a 1.75% Libor floor and an original issue discount of 98, the source said.

JPMorgan is the left lead bank on the $250 million recapitalization deal that also includes a $100 million five-year asset-based revolver.

Allied Specialty is a manufacturer of specialty vehicles in the recreational vehicle, fire, ambulance, bus, terminal truck and industrial sweeper markets.

Smile Brands launches

Also coming to market via a bank meeting on Tuesday was Smile Brands' $275 million senior secured credit facility, according to a market source.

As was previously reported, the facility consists of a $35 million revolver and a $240 million term loan, with both tranches talked at Libor plus 500 bps with a 1.75% Libor floor and an original issue discount of 981/2.

Credit Suisse is the lead bank on the deal that will be used to help fund Welsh, Carson, Anderson & Stowe's purchase of a majority interest in the company from Freeman Spogli & Co., who will remain as a minority investor.

The transaction is expected to close in December.

Smile Brands is an Irvine, Calif.-based dental support services organization.

Reynolds Group closes

In other news, Reynolds Group Holdings Ltd. closed on its $2.02 billion in new loans (Ba3/BB), according to a news release, which were led Credit Suisse, HSBC and Australia and New Zealand Banking Group and used to help fund the acquisition of Pactiv Corp.

The debt consists of a $1.52 billion term loan D priced at Libor plus 475 bps with a 1.75% Libor floor that was sold at an original issue discount of 99 and a $500 million term loan A priced at Libor plus 450 bps with a 1.75% Libor floor that was also sold at an original issue discount of 99. The term loan D has 101 soft call protection for one year.

During syndication, the term loan D was upsized from $1 billion, pricing was reduced from Libor plus 500 bps and the discount was tightened from 98. Also, the Libor floor on the term loan D and the term loan A was cut from 2%.

Reynolds is a Chicago-based manufacturer and supplier of consumer food and beverage packaging and storage products. Pactiv is a Lake Forest, Ill.-based consumer and foodservice/food packaging company.

MedAssets wraps

MedAssets Inc. completed its $785 million credit facility (Ba3/BB-), consisting of a $635 million six-year term loan B and a $150 million five-year revolver, according to a news release.

Pricing on the term loan B and the revolver is Libor plus 375 bps with a step-down to Libor plus 350 bps when total leverage is less than 4.5 times. There is a 1.5% Libor floor. Also, the term loan B has 101 soft call protection for one year and was sold at an original issue discount of 99.

During syndication, the term loan B was upsized from $600 million when the company's bond offering was downsized to $325 million from $360 million, pricing on the term loan B and the revolver was reduced from talk of Libor plus 400 bps to 425 bps and the step-down was added to the B loan.

Barclays and JPMorgan acted as the joint lead arrangers on the deal that was used to fund the acquisition of the Broadlane Group and to refinance existing bank debt.

MedAssets is an Alpharetta, Ga.-based provider of technology-enabled products and services for hospitals, health systems and ancillary health care providers.

Interline Brands closes

Interline Brands Inc. wrapped its $225 million senior secured asset-based credit facility, according to a news release.

Proceeds were used to refinance existing debt.

Interline is a Jacksonville, Fla.-based direct marketer and distributor of maintenance, repair and operations products.

© 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.