Dunkin', AZ Chem, Hanger, Rural break; Burlington pulled, loan slides; Petco revises deal

By Sara Rosenberg

New York, Nov. 18 - Dunkin' Brands Inc., Arizona Chemical Inc. (AZ Chem), Hanger Orthopedic Group Inc. and Rural/Metro Corp. freed up for trading during Thursday's market hours, and all of the companies' term loans were quoted above par.

In more trading happenings, Burlington Coat Factory Warehouse Corp.'s term loan dropped as the company pulled its new deal from market, and Valeant Pharmaceuticals International Inc.'s term loan headed lower on news of a repayment.

Over in the primary market, Petco Animal Supplies Inc. came out with a new round of changes to its term loan, this time reverse flexing the spread and tightening the original issue discount, as the tranche has been well received by lenders.

Also, Mactec Inc. released original issue discount talk on its credit facility as the deal was presented to lenders, and Applied Systems Inc., Kenan Advantage Group and Saxco International disclosed pricing guidance on their deals as they too launched.

Dunkin' Brands frees up

Dunkin' Brands' credit facility hit the secondary market on Thursday, with the $1.25 billion seven-year term loan B quoted at par bid, 101 offered on the open and then it moved up to 101 bid, 101¼ offered, according to traders.

Pricing on the term loan B is Libor plus 425 basis points with step-downs to Libor plus 400 bps at less than 6.0 times leverage and to Libor plus 375 bps at less than 5.0 times leverage. There is a 1.5% Libor floor and 101 soft call protection for one year. The tranche was sold at an original issue discount of 991/2.

During syndication, the pricing step-downs were added and the discount tightened from 99.

The $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.

Dunkin' 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.

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.

AZ Chem starts trading

Arizona Chemical also broke for trading, with the $470 million term loan B quoted at par ¼ bid, par ¾ offered on the break and then it climbed to par ½ bid, 101 offered, according to a trader.

Pricing on the term loan B is Libor plus 500 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 981/2. There is 101 soft call protection for one year.

The company's $530 million credit facility (B1/B+) also includes a $60 million revolver priced at Libor plus 500 bps with a 1.75% Libor floor.

During syndication, pricing on the facility was reduced from initial talk of Libor plus 525 bps to 550 bps, the discount on the B loan came in from 98 and the revolver was upsized from $50 million.

AZ Chem being acquired

Proceeds from Arizona Chemical's credit facility will be used to help fund American Securities' purchase of a controlling interest in the company from Rhone Capital, which, along with other current investors and the management team, will retain 25% of the company's ownership.

The acquisition is expected to close in the fourth quarter, subject to regulatory approvals and customary conditions.

Goldman Sachs is the left lead bank on the bank deal. Early on, GE Capital and KeyBank put in sizeable commitments towards the transaction, so they were both named joint bookrunners and GE got the title of administrative agent.

Arizona Chemical is a Jacksonville, Fla., supplier of pine chemicals to the adhesives, inks and coatings and oleochemicals markets.

Hanger Orthopedic breaks

Another deal to free up for trading was Hanger Orthopedic, with the $325 million term loan B quoted at par 3/8 bid, par 7/8 offered on the open and then it moved up to par 5/8 bid, 101 offered, according to traders.

Pricing on the term loan B is Libor plus 375 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

During syndication, pricing on the B loan was reverse flexed from Libor plus 400 bps and the original issue discount was tightened from 99.

The $425 million credit facility (Ba3/BB-) that also includes a $100 million revolver.

Hanger funding acquisition

Proceeds from Hanger Orthopedic's credit facility will be used to help fund the acquisition of Accelerated Care Plus, a Reno, Nev.-based provider of integrated clinical programs for sub-acute and long-term care rehabilitation providers, for about $155 million in cash and to refinance existing bank debt.

Other funds for the transaction will come from cash on hand and $200 million of senior notes.

Bank of America, Jefferies, Oppenheimer, SunTrust and RBC are the lead banks on the credit facility.

Hanger, an Austin, Texas-based provider of orthotic and prosthetic patient care services, expects to close on the transaction around Dec. 1, subject to regulatory approvals and financing.

Rural/Metro trades atop par

Rural/Metro's credit facility was yet a fourth deal to start trading on Thursday, with the $270 million term loan quoted at par ½ bid, 101 offered on the break and then it moved up to par 7/8 bid, 101 3/8 offered, according to a market source.

Pricing on the term loan is Libor plus 425 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 991/2.

During syndication, the term loan was upsized from $75 million as the decision was made not to move forward with a $200 million senior notes offering, the spread firmed from talk of Libor plus 425 bps to 450 bps and the discount firmed from talk of 99 to 991/2.

Rural/Metro finalizes revolver

In addition, Rural/Metro determined the size of its revolving credit facility to be $85 million, which is in line with recent expectations and in the $75 million to $100 million range that the company was discussing, the source said.

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.

RBC Capital Markets is the lead bank on the $355 million secured credit facility (B1/B+).

Rural/Metro refinancing debt

Proceeds from Rural/Metro's credit facility will be used to repay 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.

Burlington falls as deal pulled

Burlington Coat Factory's term loan dropped to 96½ bid, 97½ offered from 99¼ bid, par offered as the company took its new $1 billion term loan (B3/B-) and $500 million of notes out of market, according to a trader.

The trader said that the deal was a hard one to sell since, "given the company's history" and business profile, some people just didn't want to get stuck with the paper, even for the short-term.

Price talk on the new term loan has been Libor plus 525 bps with a 1.75% Libor floor and an original issue discount of 981/2.

JPMorgan and Goldman Sachs were the joint bookrunners on the deal that was going to be used with the notes to repay an existing term loan, redeem 11 1/8% senior notes due 2014 and 14½% senior discount notes due 2014, make a distribution to the equity holders and for general corporate purposes.

Burlington Coat Factory is a Burlington, N.J.-based discount retailer.

Valeant down with paydown

Valeant Pharmaceuticals' term loan B retreated in trading as the company revealed that it will use proceeds from a $700 million senior unsecured notes offering to repay the debt, according to a trader.

The term loan B was quoted at 99 7/8 bid, par ¼ offered, down from 101¼ bid, 101¾ offered, the trader said.

Remaining proceeds from the bonds will be used for general corporate purposes, including acquisitions, debt repayment and share repurchases.

Valeant is a Mississauga, Ont.-based specialty pharmaceutical company.

Petco reworks pricing

Moving to the primary, Petco revised pricing on its $1.225 billion term loan (B1/B), lowering the spread to Libor plus 450 bps from talk of Libor plus 475 bps to 500 bps and trimming the original issue discount to 99 from 981/2, according to a market source.

As before, the term loan has a 1.5% Libor floor and 101 soft call protection for one year.

Recommitments are due from lenders by noon ET on Friday.

This is the second time that the deal has seen changes since its launch on Nov. 9. Just this past Monday, the term loan was upsized from $1.1 billion as the company's bond offering was reduced to $500 million from $625 million.

Petco getting revolver

In addition to the term loan, Petco is working on a $250 million ABL revolver that was launched to investors on Nov. 3 and has pricing that can range from Libor plus 225 bps to 275 bps and an unused fee can that can range from 37.5 bps to 62.5 bps, based on availability.

Lenders are being offered 50 bps upfront for commitments of $35 million or more toward the revolver and 37.5 bps upfront for commitments of less than $35 million.

Credit Suisse, JPMorgan, Bank of America, Wells Fargo, Morgan Stanley and Goldman Sachs are the lead banks on the credit facility.

Proceeds from the $1.475 billion facility and the notes will be used to refinance existing debt and to fund a dividend.

Petco is a San Diego-based specialty retailer of pet food, supplies and services.

Mactec OID emerges

Mactec held a bank meeting on Thursday to launch its proposed $130 million five-year senior credit facility, and in connection with the event, lenders were told that the deal is being offering at an original issue discount of 983/4, according to a market source.

As was previously reported, the facility consists of a $20 million revolver and a $110 million term loan, with both tranches talked at Libor plus 425 bps with a 1.5% Libor floor.

GE Capital and Bank of America are the lead banks on the deal that will be used to refinance existing debt and to pay a dividend to owners.

Mactec is an Atlanta-based consulting firm providing engineering, environmental and construction services.

Applied Systems price talk

Also launching with a bank meeting was Applied Systems' credit facility, at which time price talk on the first- and second-lien term loans was announced, according to a market source.

The $280 million first-lien term loan is being talked at Libor plus 450 bps to 475 bps with a 1.5% Libor floor and an original issue discount of 99, while the $175 million second-lien term loan is being talked at Libor plus 825 bps with a 1.5% Libor floor and an original issue discount of 981/2, the source said.

The second-lien term loan has call protection of 103 in year one, 102 in year two and 101 in year three, the source added.

Credit Suisse and JPMorgan are the lead banks on the $485 million credit facility, which also includes a $30 million revolver.

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

Applied Systems is a University Park, Ill.-based provider of insurance agency management systems.

Kenan guidance revealed

Kenan Advantage released price talk of Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 99 for new money on its $375 million term loan B and $125 million delayed-draw term loan, according to a market source.

The company's $600 million credit facility also includes a $100 million revolver.

This facility is basically an amendment and restatement of the company's existing facility - comprised of a $250 million term loan B, a $125 million delayed-draw term loan, of which some has been drawn, and a $75 million revolver - for the purpose of increasing the term loan B and revolver, and resetting the delayed-draw term loan.

Pricing on the existing term loans is Libor plus 450 bps with a 1.75% Libor floor, and they were sold at a discount of 98, and pricing on the existing revolver is Libor plus 400 bps with a 1.75% Libor floor.

Kenan led by KeyBanc

KeyBanc Capital Markets is the lead arranger, bookrunner and administrative agent on Kenan Advantage's credit facility and is asking for commitments by Dec. 9.

Existing lenders are being given the option to roll over and even upsize their current commitments, and new lenders are being offered the chance to participate as well.

The tranches will retain their existing maturities.

Kenan Advantage is a North Canton, Ohio-based logistics and liquid bulk transportation services provider to the fuels, chemical and food end-markets.

Saxco sets talk

Saxco International launched its $95 million credit facility on Thursday with price talk of Libor plus 550 bps to 575 bps with a 1.75% Libor floor and an original issue discount of 981/2, according to a market source.

The facility consists of a $15 million revolver and an $80 million term loan.

BNP Paribas is the lead bank on the deal that will be used to help fund the buyout of the company by the Sterling Group.

Saxco is a Horsham, Pa.-based provider of packaging products and services to the liquor, wine, craft brewing and specialty food industries.

Seneca Gaming closes

In other news, Seneca Gaming Corp. completed its $225 million five-year senior secured credit facility (BB), consisting of a $175 million term loan and a $50 million revolver, according to a news release.

Initial pricing on the facility is Libor plus 275 bps. Pricing can range from Libor plus 125 basis points to 275 bps based on leverage.

Bank of America is the administrative agent on the deal.

Proceeds from the facility, along with $325 million of notes, were used to refinance an existing $50 million revolver and fund the purchase of the company's $500 million of 7¼% senior notes due 2012.

Seneca Gaming is a Niagara Falls, N.Y.-based owner, developer and operator of gaming operations.

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