Universal Orlando tweaks deal; Hub sets pricing, breaks; NRG Energy, Federal-Mogul slide

By Sara Rosenberg

New York, Oct. 29 - Universal Orlando came out with some changes to its oversubscribed credit facility on Thursday, including reducing the original issue discount on the term loan B and trimming the Libor floor.

In more loan happenings, Hub International Ltd. finalized pricing on its incremental term loan and freed the deal up for trading, with levels seen above the original issue discount price.

Also, Louis Dreyfus Highbridge Energy LLC's recently launched credit facility has already caught the attention of some investors and Michaels Stores Inc.'s amendment and extension was approved by lenders.

Back in the secondary market, NRG Energy Inc. and Federal-Mogul Corp. were both weaker on the day following the release of earnings, and Mylan Inc.'s term loan B was unchanged to stronger on its quarterly results.

Universal Orlando revises loan

Universal Orlando lowered the original issue discount on its term loan B and reduced the size of the Libor floor as a result of the strong demand that the transaction received, according to a market source.

The $900 million five-year term loan B is now being sold to investors at an original issue discount of 981/2, as opposed to at 98, the source said.

In addition, the Libor floor on the term loan B as well as on the $75 million four-year revolver was cut to 2.25% from 2.5%, the source remarked.

The spread on the term loan B and the revolver was left unchanged at Libor plus 425 basis points.

Universal Orlando lead banks

JPMorgan and Bank of America are the joint lead arrangers and bookrunners on Universal Orlando's credit facility, and Barclays, Deutsche Bank, Goldman Sachs and Morgan Stanley are bookrunners as well.

Proceeds from the $975 million deal (Ba2/B+) will be used to help fund the redemption of the company's 11¾% senior notes due in 2010, 8 3/8% senior notes due in 2010 and floating-rate senior notes due in 2010.

Other funds for the redemptions will come from $400 million of senior unsecured notes and $225 million of senior subordinated notes.

Universal Orlando is an Orlando, Fla.-based owner and operator of theme parks.

Hub prices, frees to trade

Hub International set pricing on its $200 million incremental term loan and then broke the deal for trading, according to sources.

The term loan is priced at Libor plus 475 bps, the tight end of initial talk of Libor plus 475 bps to 500 bps, with a 2% Libor floor and was sold at an original issue discount of 98, right in line with talk.

After breaking into the secondary market, the term loan was seen quoted at 98½ bid, 99¼ offered, sources said.

Morgan Stanley and Bank of America are the lead banks on the deal that will be used for general corporate purposes.

Hub is a Chicago-based insurance company.

Louis Dreyfus nabs attention

Louis Dreyfus Highbridge Energy's proposed $350 million credit facility has seen "very good interest already" since launching with a bank meeting in Houston on Wednesday, according to an informed source.

"It is getting lots of good reception," the source said.

The facility consists of a $100 million three-year revolver talked at initial pricing of Libor plus 350 bps and a $250 million five-year term loan B talked at initial pricing of Libor plus 425 bps, the source continued.

Pricing on the tranches is based on a leverage grid, with the revolver pricing able to range from Libor plus 300 bps to 350 bps and the term loan B pricing able to range from Libor plus 325 bps to 425 bps.

Both tranches include a 1% Libor floor.

UBS, Wells Fargo and RBS are the joint bookrunners on the deal that will be used to refinance existing debt, with UBS the left lead.

Louis Dreyfus Highbridge Energy is a Wilton, Conn.-based merchant energy company.

Michaels Stores passes

Michaels Stores' amendment and extension of $1 billion of its term loan B debt through the creation of a term loan C was approved by lenders, according to a market source.

The new $1 billion term loan C (B3) due in July 2016 is priced at Libor plus 450 bps after flexing up from original talk of Libor plus 375 bps. Pricing on the non-extended term loan B debt due on Oct. 31, 2013 is Libor plus 225 bps.

If the company does not meet a senior secured leverage test of 3.25 times, the term loan C will mature 91 days prior to the maturity of the company's senior notes that are due on Nov. 1, 2014.

As part of the amendment, the term loan C has 25 bps of most-favored-nation protection, and lenders are being paid a 5 bps amendment fee.

Consents were due on Wednesday at 5 p.m. ET. This deadline was moved from noon p.m. ET on Tuesday in connection with the pricing change.

Deutsche Bank acted as the lead bank on the amendment for the Irving, Texas-based specialty retailer of arts, crafts, framing, floral, wall décor and seasonal merchandise for the hobbyist and do-it-yourself home decorator.

NRG dips on numbers

Switching back to trading happenings, NRG Energy's strip of institutional bank debt softened on Thursday after the company reported quarterly results that showed a year-over-year decline in earnings, according to traders.

The company's strip of term loan and letter-of-credit facility debt was quoted by one trader at 93½ bid, 94 offered, down a half a point on the day, and by a second trader at 93¼ bid, 94¼ offered, down on the bid side from 93½ bid, 94¼ offered.

For the third quarter, NRG posted net income of $278 million, or $1.02 per diluted common share, compared to $778 million, or $2.81 per diluted common share, for the third quarter last year.

Total operating revenues for the quarter were $2.9 billion, compared to $2.6 billion in the previous year.

Adjusted EBITDA was a record of $906 million for the quarter, compared to $682 million in the 2008 third quarter.

And, total liquidity, excluding counterparty collateral received, decreased $90 million to $3.9 billion during the third quarter driven by a $32 million decrease in cash and cash equivalents and a $65 million reduction in synthetic and revolver credit facilities.

NRG updates guidance

NRG also said on Thursday that is increasing its full year 2009 adjusted EBITDA guidance by $75 million to $2.575 billion.

In addition, cash flow from operations for the full year is now expected at $1.65 billion, up $275 million from prior guidance.

This increase in guidance is attributable to a $225 million improvement in the Reliant Energy outlook driven by higher than expected summer demand and margins, partially offset by a $150 million decline in the wholesale portfolio as a result of a weak commodity pricing environment and higher operating costs.

The company also provided guidance for 2010, including an adjusted EBITDA estimate of $2.2 billion and a cash flow from operations estimate of $1.35 billion.

NRG Energy is a Princeton, N.J.-based owner and operator of diverse power generation portfolios.

Federal-Mogul trades down

Another company to release numbers was Federal-Mogul and in response to the news, the company's term loan debt headed lower, according to traders.

The term loan B was quoted at 76¾ bid, 77¾ offered, down three quarters of a point, and the term loan C was quoted at 76¼ bid, 77¼ offered, down a half a point, one trader said, while a second trader was quoting the strip of term loan B and term loan C debt at 76 bid, 77 offered, down from 77¾ bid, 78¼ offered.

For the third quarter, Federal-Mogul reported net income of $10.4 million, or $0.10 per diluted share, compared to net income of $3.6 million, or $.0.04 per diluted share, last year.

Net sales for the quarter were $1.38 billion, compared to $1.692 billion in the third quarter of 2008.

Operational EBITDA for the quarter was $133.7 million versus $178.8 million in the prior-year period.

And, liquidity at the end of the quarter was about $1.3 billion, including $800 million of cash and an undrawn revolver of over $500 million.

Federal-Mogul Corporation is a Southfield, Mich.-based supplier of powertrain and safety technologies.

Mylan steady to up

Mylan's term loan B was unchanged to stronger on Thursday, depending on which trader was asked, on its earnings results and increased guidance.

The term loan B was quoted by one trader at 97 bid, 98 offered, flat on the day, and by a second trader at 97¼ bid, 97¾ offered, up from 96¾ bid, 97¾ offered.

For the quarter ended Sept. 30, Mylan had a net loss attributable to common shareholders of $40 million, or $0.13, compared to net earnings of $182.3 million last year. Adjusted diluted earnings per share in the quarter were $0.32, compared to $0.23 in the prior year.

Earnings from operations were $61.3 million for the quarter, compared to $560.8 million for the three months ended Sept. 30, 2008.

Total revenues for the quarter were $1.26 billion, compared to $1.66 billion last year.

EBITDA for the quarter $165.1 million and adjusted EBITDA was $300.4 million.

In addition, the company said that it is increasing the range of its full year 2009 adjusted diluted earnings per share guidance to $1.24 to $1.28.

Mylan is a Canonsburg, Pa.-based developer, manufacturer, marketer, licenser and distributor of generic, brand, and branded generic pharmaceutical products and active pharmaceutical ingredients.

Sinclair closes B loan

In other news, Sinclair Television Group Inc. closed on its $330 million six-year term loan B (Ba3) that is priced at Libor plus 450 bps, according to a news release.

The term loan B has a 2% Libor floor and was sold to investors at an original issue discount of 98.

During syndication, the size of the term loan B firmed at $330 million from an originally described size of up to $400 million as a result of the company pricing $500 million of senior secured notes, as opposed to $430 million as was initially expected.

Sinclair sold the upsized notes offering to fund cash tenders for its 3% senior convertible notes due 2027 and 4.875% senior convertible notes due 2018.

JPMorgan acted as the lead bank on the term loan B that was used to repay the company's $78.8 million tranche A term loan due December 2011, $216.6 million tranche A-1 term loan due December 2012 and some revolver borrowings.

Sinclair extends revolver

In addition, Sinclair completed the extension of about $75.4 million in revolver commitments to Dec. 31, 2013 from June 2011.

Pricing on the extended revolver is Libor plus 400 bps with a 2% Libor floor.

About $60.5 million in existing commitments under the revolver will mature in June 2011 and pricing on this debt is Libor plus 75 bps.

The company also amended its credit facility to allow for the issuance of senior secured second-lien notes and permit one or more incremental term loans.

Sinclair Television is a wholly owned subsidiary of Sinclair Broadcast Group Inc., a Hunt Valley, Md.-based television broadcasting company.

GenTek closes

American Securities LLC completed its acquisition of GenTek Inc. for $38 per share, according to a news release.

To help fund the transaction, GenTek got a new $355 million senior secured credit facility (B1/B+), consisting of a $325 million five-year term loan B priced at Libor plus 475 bps with a 2.25% Libor floor and an original issue discount of 98, and a $30 million four-year revolver priced at Libor plus 450 bps with a 75 bps undrawn fee.

During syndication, the term loan B was upsized from $300 million, the Libor floor was reduced from 2.5% and the discount firmed at the tight end of initial talk of 97 to 98.

Goldman Sachs acted as the lead arranger and bookrunner on the deal, KeyBank as the syndication agent and GE Capital as the administrative agent.

GenTek is a Parsippany, N.J.-based provider of specialty inorganic chemical products and valve actuation systems and components for automotive and heavy duty/commercial engines.

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