DS Waters flexes; Language sets talk; MediMedia ups deadline; Michaels, Emmis, Spansion, Matria break

By Sara Rosenberg

New York, Oct. 30 - DS Waters Enterprises LP increased pricing on some tranches under its credit facility as ratings did not fall out where expected, Language Line Inc. came out with price talk as its term loan was launched to investors and MediMedia moved up the commitment deadline on its in-market deal due to strong demand.

In secondary happenings, Michaels Stores Inc., Emmis Communications Corp., Spansion Inc. and Matria Healthcare Inc. all freed for trading during Monday's market hours.

DS Waters flexed pricing higher on its term loan and revolver, while leaving pricing on its asset-based revolver alone, as the Standard & Poor's rating that the deal received last week fell short of expectations, according to a market source.

The $180 million term loan and the $20 million revolver, which are both rated B1/B-, are now priced with an interest rate of Libor plus 250 basis points, the source said, up from original price talk at launch of Libor plus 225 bps.

The source explained that the original price talk had been based on the expectation of B1/B+ ratings, but since S&P rated the tranches at B-, pricing had to be adjusted higher.

The tranches are well-oversubscribed at the new pricing level, the source continued.

DS Waters' $280 million credit facility also includes an $80 million asset-based revolver priced at Libor plus 100 bps.

Allocations on the transaction are expected to go out on Tuesday or Wednesday of this week, with Wednesday being the most probable day, the source added.

General Electric Capital Corp. is the lead bank on the deal that will be used to refinance existing debt.

DS Waters is an Atlanta-based home and office water delivery company.

Language Line spread talk

Language Line announced opening price talk of Libor plus 325 bps on its $240 million term loan (B) as the deal was presented to lenders with a bank meeting on Monday afternoon, according to a market source.

The term loan carries 101 soft call protection for one year.

Merrill Lynch and Bank of America are the lead banks on the deal.

The term loan will be used to refinance the company's existing $240 million term loan that is priced at Libor plus 425 bps.

Language Line is a Monterey, Calif.-based provider of over-the-phone interpretation services from English into more than 150 languages.

MediMedia changes deadline

MediMedia has told lenders that they now only have until the close of business Tuesday to place orders for its $250 million credit facility (Ba3/B+) instead of until Thursday as was originally planned, according to a market source.

Both the $200 million term loan B and the $50 million revolver are still being talked at Libor plus 250 to 275 bps, and the transaction is well-oversubscribed, the source added.

Goldman Sachs and Credit Suisse are the lead banks on the deal, with Goldman the left lead.

Proceeds from the credit facility, along with $150 million in senior subordinated high-yield bonds, will be used to fund the buyout of MediMedia by Vestar Capital Partners and management from Cinven, The Carlyle Group and Apax Partners.

The revolver is expected to be undrawn at closing.

MediMedia is a Chatham, N.J.-based specialty health care communications, publishing and patient education company.

Michaels breaks

Switching to trading news, Michaels Stores' credit facility hit the secondary on Monday, with its $2.4 billion term loan (B2/B-) seen as high as par ½ bid, par ¾ offered before settling in at par 3/8 bid, par 5/8 offered where it closed the day, according to a trader.

The term loan is priced at Libor plus 300 bps, in line with original talk. However, during syndication, two step downs were added to the loan - a 25 bps reduction if total leverage is less than 5.5 times and/or a 25 bps reduction if Moody's upgrades the transaction to B1 or better.

The company's $3.4 billion senior secured credit facility also includes a $1 billion asset-based revolver.

The revolver will be subject to a borrowing base that will be calculated periodically based on specified percentages of the value of eligible credit card receivables and eligible inventory.

Deutsche Bank, JPMorgan, Bank of America and Credit Suisse are the lead banks on the deal.

Proceeds from the credit facility, along with $1.15 billion in bonds, will be used to help fund the leveraged buyout of Michaels by Bain Capital and The Blackstone Group.

Under the LBO agreement, Michaels Stores' shareholders will receive $44.00 per share in cash, representing a transaction value of more than $6 billion.

Michaels Stores is an Irving, Texas, specialty retailer of arts, crafts, framing, floral, wall decor and seasonal merchandise for the hobbyist and do-it-yourself home decorator.

Emmis frees to trade

Emmis' credit facility also broke for trading during market hours, with its $450 million seven-year term loan B quoted at par ½ bid, par ¾ offered, according to a trader.

The term loan B is priced at Libor plus 200 bps. During syndication, pricing on the paper was reverse flexed from original talk at launch of Libor plus 225 bps.

Emmis' $600 million credit facility (B1/B) also includes a $150 million six-year revolver.

Bank of America and Deutsche Bank are the lead banks on the deal that is being used to help fund a special cash dividend and refinance existing debt.

Emmis is an Indianapolis-based diversified media firm.

Spansion atop par

Spansion's $500 million term loan B (Ba3/B+) was another deal to start trading on Monday, with levels on the paper quoted at par ½ bid, par ¾ offered, according to a trader.

The term loan B is priced at Libor plus 300 bps. During syndication, the tranche was upsized from $400 million and pricing was reverse flexed from Libor plus 325 bps.

Bank of America is the lead bank on the deal.

Spansion is a Sunnyvale, Calif., flash memory devices company.

Matria add-on breaks in low par's

Also freeing for trading during the session was Matria Healthcare's $65 million first-lien term loan add-on with levels seen at par 1/8 bid, par 3/8 offered, according to a trader.

Proceeds from the incremental first-lien debt are being used to prepay the company's second-lien facility.

Matria Healthcare is a Marietta, Ga.-based provider of comprehensive health enhancement programs to health plans, employers and government agencies.

Dollar Financial closes

Dollar Financial Corp. closed on its new $475 million credit facility (B3/BB-) consisting of a $75 million five-year U.S. revolver, a $25 million five-year Canadian revolver, a $295 million six-year Canadian term loan and an $80 million six-year U.K. term loan, according to a company news release.

The revolvers carry an interest rate of Libor plus 300 bps, the Canadian term loan carries an interest rate of Libor plus 275 bps and the U.K. term loan carries an interest rate of Libor plus 300 bps.

At launch, all tranches were being talked at Libor plus 275 to 300 bps.

Proceeds were used to refinance the company's existing credit facility and help fund a tender offer for 9.75% senior notes.

Of the total Canadian term loan amount, $125 million is delayed-draw for the acquisition by National Money Mart Co. of 82 National Money Mart locations currently operated by franchise owners. This acquisition is expected to close later this week.

Credit Suisse and Wells Fargo acted as the joint lead arrangers on the deal.

Pep Boys closes

The Pep Boys - Manny, Moe & Jack closed on its $120 million senior secured term loan add-on (Ba3/B+) due Oct. 27, 2013 that is priced at Libor plus 275 bps, according to a company news release.

In addition, the company's existing term loan debt was repriced to Libor plus 275 bps from Libor plus 300 bps and the maturity date was extended to Oct. 27, 2013 from Jan. 27, 2011.

Furthermore, pricing on the existing term loan debt and the incremental term loan debt can drop to Libor plus 250 bps upon the company meeting a specified leverage ratio.

An additional 87 stores (for a total of 241 stores) were added to the collateral pool securing the facility.

Wachovia acted as the lead bank on the deal that was used to discharge $119 million in outstanding convertible notes that mature June 1, 2007.

Pep Boys is a Philadelphia-based automotive aftermarket retail and service chain.

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