AMC B-1, B-2 move around as new B-3 launches; Rocket breaks; Microsemi rises on paydown

By Sara Rosenberg

New York, Feb. 7 - AMC Entertainment Inc. revealed the reason behind its morning call as the company launched a new term loan B-3 to investors, and with the news, its extended term loan B-1 softened, while its non-extended B-2 loan strengthened.

In more trading happenings, Rocket Software Inc. freed up above its original issue discount price, Microsemi Corp.'s term loan B was better on news of a repayment through a repricing transaction, and Gentiva Health Services Inc.'s term loan was steady with earnings results.

Back over on the new deal front, Roundy's Supermarkets Inc. made changes to its term loan B, reverse flexing pricing and trimming the size of the discount offered, NEW Asurion came out with new deal plans as well as early pricing guidance, and Community Health Systems Inc. is getting ready to bring a pro rata transaction to market.

AMC details emerge

AMC Entertainment had told investors that it would be holding a conference call on Tuesday morning, and the purpose of the call was revealed early in the day as being a platform to launch a new $300 million senior secured term loan B-3 (Ba2) due 2018, according to a market source.

Price talk on the B-3 loan is Libor plus 350 basis points with a 1% Libor floor and an original issue discount of 99, and there is 101 soft call protection for one year, the source remarked.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and J.P. Morgan Securities LLC, the lead banks on the deal, are asking for commitments by Feb. 15.

Proceeds, along with cash on hand, will be used to fund a tender offer that expires on March 6 for up to $160 million of the company's $300 million of 8% senior subordinated notes due 2014 and to repay term loans due in 2013.

AMC extended trades down

After investors found out that AMC Entertainment will be layering in a new term loan B-3 that will mature at a later date than the extended term loan B-2, levels on the B-2 came under pressure, according to a trader.

The extended B-2 tranche was quoted at 97½ bid, 98½ offered, down from 98¾ bid, 99¼ offered, the trader said.

Meanwhile, the non-extended term loan B-1 saw an improvement in levels since it is being paid down in full, with the trader quoting it at 99¾ bid, par ¼ offered, up from 99 5/8 bid, par 3/8 offered on Monday.

The company's non-extended term loan B-1 due 2013 has $141 million outstanding and the extended term loan B-2 has $472 million outstanding.

AMC Entertainment is a Kansas City, Mo.-based theatrical exhibition and entertainment company.

Rocket hits secondary

Rocket Software's credit facility broke for trading on Tuesday, with both the $300 million six-year first-lien term loan B (B1/BB) and the $105 million seven-year second-lien term loan (Caa1/B+) quoted at 99½ bid, par ¼ offered on the open, according to a trader, who said that he then saw the debt move up to 99 7/8 bid.

Pricing on the first-lien term loan B, as well as on a $25 million five-year revolver (B1/BB), is Libor plus 550 bps and pricing on the second-lien term loan is Libor plus 875 bps. All tranches have a 1.5% Libor floor and were sold at an original issue discount of 98.

During syndication, the spread on the revolver and term loan B was lowered from talk of Libor plus 575 bps to 600 bps, second-lien pricing was lowered from guidance of Libor plus 925 bps to 950 bps, and the discount on all tranches tightened from 971/2.

The first-lien B loan has a 101 soft call for one year and the second-lien loan is non-callable for one year, then at 103 in year two and 101 in year three.

Rocket lead banks

Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC and Jefferies & Co. are the lead banks on Rocket Software's $430 million credit facility.

Proceeds will be used to refinance existing debt and fund a dividend.

Total leverage will be 3.9 times, and first-lien leverage will be 2.9 times. Prior to the transaction, the company's total leverage was 1.0 times.

Rocket Software, a Court Square portfolio company, is a Newton, Mass.-based software development firm.

Microsemi gains ground

Microsemi's term loan B headed up to 101 bid, 101½ offered, from par ¾ bid, 101¼ offered, as investors learned that they will be taken out at their 101 soft call protection level because the company is coming to market with a repricing transaction, according to a source.

The company will launch its proposed $810 million term loan B with a call on Wednesday, and talk of Libor plus 300 bps to 325 bps with a 1% Libor floor and 101 soft call protection for one year has already emerged on the deal.

By comparison, the existing term loan B, sized at $798 million, is priced at Libor plus 450 bps with a 1.25% Libor floor.

Remaining proceeds from the new term loan will be used to pay related fees.

Morgan Stanley Senior Funding Inc. is leading the deal for the Aliso Viejo, Calif.-based provider of semiconductor services.

Gentiva holds firm

Also in the secondary market, Gentiva's term loan held in at 92½ bid, no offered as quarterly results were announced and expected covenant breaches were disclosed, according to a trader.

For the fourth quarter, Gentiva reported net income of $4.6 million, or $0.15 per diluted share, compared to net income of $15.8 million, or $0.52 per diluted share, in the previous year.

Total net revenues for the quarter were $449.2 million, a decrease of 2% compared to $456.8 million for the 2010 fourth quarter.

Adjusted EBITDA for the quarter was $47.1 million, down 26% from $63.9 million in the prior year.

And, at Dec. 31, the company had cash and cash equivalents of $164.9 million and outstanding debt of $988.1 million. During the quarter, the company repaid $20 million of term loan debt.

Gentiva covenant issues

Gentiva went on to say on Tuesday that it expects to be unable to comply with its credit facility financial covenants this year as a result of the Medicare reimbursement rate decreases and the reduction in the maximum consolidated leverage ratio.

The company disclosed that it is in talks with the lead bank on the credit facility about an amendment to avoid a covenant breach.

In November of last year, the company amended its consolidated leverage ratio to loosen it to 4.75 to 1.00 from 4.50 to 1.00 through Dec. 31 and change the definition of consolidated EBITDA in the fourth quarter of 2011.

At that time, it was said that the amendment was needed because of fourth-quarter charges related to cost savings initiatives such as severance, lease terminations and other items.

As of Dec. 31, 2011, Gentiva, an Atlanta-based provider of home health and hospice services, had a consolidated leverage ratio of 4.41 times.

Caesars flat to lower

Caesars Entertainment Operating Co. Inc.'s bank debt was unchanged to weaker as the company's bond offering was announced, according to traders.

One trader had the non-extended B-1, B-2 and B-3 debt quoted at 91½ bid, 92 offered, versus 92 bid, 92¾ offered, the non-extended B-4 quoted at 102¼ bid, 103¼ offered, down from 102½ bid, 103½ offered and the extended B-5 quoted at 86¼ bid, 87¼ offered, down from 86½ bid, 87½ offered.

A second trader, however, quoted the non-extended debt at 91¾ bid, 92½ offered, flat on the day.

On Tuesday, the Las Vegas-based diversified casino-entertainment company launched its $1.25 billion senior secured notes offering that will be used to repay a portion of its credit facility debt and for general corporate purposes. Pricing of the notes will take place on Wednesday.

The notes are being done in connection with the company's amendment and extension offer, and the loans to be repaid with up to $1 billion of the proceeds will go to those held by extending lenders. Non-extended B-1, B-2 and B-3 borrowings held by extending lenders would be repaid first, followed by the repayment of extended term loans.

Caesars extension details

Under the amend and extend, which launched with a call on Monday, Caesars is looking to push out the maturity on up to $4 billion of term loan B-1, B-2 and B-3 debt by three years to Jan. 28, 2018 through the creation of a new term loan B-6 that would be priced at Libor plus 450 basis points if less than $3.25 billion is extended and Libor plus 475 bps if more than $3.25 billion is extended.

By comparison, pricing on the roughly $5 billion of non-extended term loans is Libor plus 300 bps. Currently, the company also has about $1.2 billion in existing extended term loans due Jan. 28, 2018 that are priced at Libor plus 425 bps.

In addition, the company is asking to convert original maturity revolver commitments to extended term loans and that revolver commitments that aren't being converted be extended by three years to Jan. 28, 2017. The revolver is sized at about $1.2 billion and priced at Libor plus 300 bps with a 50 bps unused fee.

Lead bank, Bank of America Merrill Lynch, is seeking commitments toward the term loan extension and amendment consents by Feb. 10. Lenders are offered a 10 bps consent and a 15 bps extension fee.

BWIC surfaces

A $28.2 million Bid Wanted In Competition (BWIC) was announced on Tuesday, and investors are being asked to place their bids by 11 a.m. ET on Wednesday, according to a trader.

The portfolio includes about 22 issuers.

Some of the larger pieces of debt being offered are Tribune Co.'s initial tranche B, Springleaf Financial Funding Co.'s initial loan and Anchor Glass Container Corp.'s second-lien term loan, the trader added.

Roundy's cuts pricing

Moving back to the primary, Roundy's Supermarkets went out with revisions to its $675 million seven-year term loan B, including lowering pricing to Libor plus 450 bps from Libor plus 500 bps and moving the original issue discount to 98½ from 98, a market source told Prospect News.

The 1.25% Libor floor and 101 repricing protection for one year were left unchanged, the source added.

Recommitments were due at 5 p.m. ET on Tuesday and allocations are expected later this week.

Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are the lead banks on the $800 million senior credit facility (B1/BB-), which also includes a $125 million five-year revolver.

The new facility is being done along with the company's initial public offering of common stock and proceeds from the transactions will be used to repay existing loan borrowings that, as of Oct. 1, included $689 million of first-lien loan debt and $150 million of second-lien debt.

Roundy's is a Milwaukee, Wis.-based supermarket chain.

Asurion readies loan

NEW Asurion has set a bank meeting for Thursday to launch a proposed $1 billion 71/2-year senior unsecured term loan and preliminary price talk on the tranche has begun making its way around the market, according to a market source.

Early guidance on the loan is in the context of Libor plus 950 bps with a 1.5% Libor floor and an original issue discount of 96, and the debt is expected to be non-callable for two years, then at 102 in year three and 101 in year four, the source said.

Morgan Stanley & Co. Inc. is the lead bank on the deal that is expected to be used to buy back equity.

Asurion is a Nashville-based provider of technology protection services.

Community Health sets launch

Community Health Systems will be launching on Wednesday a $1.2 billion credit facility that consists of a $700 million revolver and a $500 million term loan A, according to a market source.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to pay down non-extended term loan borrowings.

Community Health is a Nashville, Tenn.-based operator of hospitals.

Station sets deadline

Station Casinos LLC came out with a commitment deadline of Nov. 14 on its $1.066 billion credit facility that was launched with a bank meeting on Tuesday, according to a market source.

The facility, due June 17, 2016, consists of a $125 million revolver, a $195 million term loan B-1 talked at Libor plus 300 bps with step ups to Libor plus 550 bps over time and a $746 million term loan B-2 term loan talked at Libor plus 400 bps.

There is no Libor floor, and the original issue discount is still to be determined.

The deal includes two one-year extension options subject to a 100 bps extension fee.

Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are the lead banks on the deal that will be used by the Las Vegas-based casino company to refinance existing debt.

Jarden fills out

In other news, Jarden Corp.'s $250 million of incremental term loans (Ba1) were fully subscribed ahead of Tuesday's commitments deadline, according to a market source.

The debt consists of a $125 million add-on term loan A talked at Libor plus 225 bps with a 25 bps upfront fee and a $125 million add-on term loan B talked at Libor plus 300 bps with an original issue discount of 991/2. The actual coupons are in line with existing term loan pricing.

Barclays Capital Inc. is the lead arranger on the deal for the Rye, N.Y.-based consumer products company, and a joint bookrunner with Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC and SunTrust Robinson Humphrey Inc.

Proceeds will be used to fund a modified Dutch auction for up to $500 million of the company's common stock at a price of $30 to $33 per share that expires on Feb. 23.

With the incremental loans, Jarden is asking lenders to amend its existing credit facility to refresh the restricted payments basket, and to keep the accordion size intact instead of reducing it by the $250 million incremental term loan amount.

Alexion wraps deal

Alexion Pharmaceuticals Inc. completed its acquisition of Enobia Pharma Corp. for which it obtained a $440 million five-year credit facility priced at Libor plus 137.5 bps, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

The facility consists of a $240 million term loan and a $200 million revolver.

Bank of America Merrill Lynch and J.P. Morgan Securities LLC led the deal.

Alexion is a Chesire, Conn.-based biopharmaceutical company focused on patients with severe and ultra-rare disorders. Enobia is a Montreal-based biopharmaceutical company focused on the development of therapies to treat patients with ultra-rare and life-threatening genetic metabolic disorders.

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