Hertz retranches, reprices; AmeriPath, Harlan trim pricing; JohnsonDiversey, Sears Canada break

By Sara Rosenberg

New York, Dec. 15 - The Hertz Corp. revamped its credit facility, cutting the term loan tranche into a funded and delayed-draw piece, reducing pricing on the term loan and synthetic letter-of-credit facility, and adding a pricing step down to these institutional tranches.

In other primary doings, AmeriPath Inc. reverse flexed pricing on its term loan by 25 basis points, Harlan Sprague Dawley Inc. reduced spreads on its entire credit facility complex and Network Solutions Inc. downsized its term loan, while increasing pricing on both its term loan and revolver tranches.

On the secondary side, JohnsonDiversey Holdings Inc. allocated and freed for trading on Thursday, with its funded term loan wrapped around 101 and its delayed-draw piece quoted atop par. Also breaking for trading was Sears Canada Inc., with its term loan quoted in the upper-par to 101 context.

Hertz made a round of changes to the institutional portion of its credit facility, including creating a $293 million delayed-draw term loan piece and reducing the funded term loan tranche to $1.707 billion - whereas before the entire $2 billion was expected to be funded, according to a market source.

In addition, pricing on the term loan (Ba2/NA/BBB-) and the $250 million synthetic letter-of-credit facility (Ba2/NA/BBB-) was reduced to Libor plus 225 basis points from original price talk at launch of Libor plus 250 to 275 basis points, and a step down was added under which the spread can drop to Libor plus 200 basis points upon the company meeting a leverage test, the source said.

The new delayed-draw term loan tranche will have a 112.5 basis point ticking fee, and once it is funded it will carry the same terms and pricing as the other term loan debt.

The creation of the delayed draw was necessitated by the fact that $293 million of bonds were not redeemed in the company's tender offer.

Last week, Hertz had already reduced pricing on its $1.6 billion asset-based revolver (Ba2/NA/BBB) to Libor plus 200 basis points from original talk at launch of Libor plus 225 basis points.

Deutsche Bank, Lehman Brothers and Merrill Lynch are the lead banks on the $3.85 billion credit facility, with Deutsche the left lead.

Proceeds from the loan, along with bond proceeds, will be used to help fund the acquisition of Hertz by Clayton, Dubilier & Rice Inc., The Carlyle Group and Merrill Lynch Global Private Equity.

The equity sponsors are purchasing the Park Ridge, N.J, vehicle rental organization from Ford Motor Co. in a transaction valued at $15 billion.

AmeriPath cuts spread

AmeriPath reduced pricing on its $203.5 million term loan by 25 basis points on Thursday, resulting in a new interest rate of Libor plus 200 basis points as opposed to the Libor plus 225 basis point pricing level that the deal was launched with last month, according to a market source.

Pricing on the company's $95 million revolver was left unchanged at Libor plus 225 basis points, the source added.

Wachovia, Citigroup, Deutsche Bank and UBS are the lead banks on the $298.5 million credit facility (B1/BB-).

Proceeds from the term loan, about $50 million of revolver borrowings, cash on hand and a $45.9 million equity contribution will be used to fund the approximately $305 million acquisition price for Special Laboratories Inc. and refinance the company's existing senior secured credit facility.

Through this transaction, the company is increasing its debt level by about $140 million by essentially increasing its term loan by $103 million and drawing funds under the proposed revolver.

Under the terms of the merger agreement, AmeriPath will acquire all common shares of Specialty Laboratories for $13.25 per share.

The acquisition is expected to be completed by the first quarter of 2006, with the exact timing being dependent on the completion and review of necessary SEC and other filings.

AmeriPath is a Riviera Beach, Fla.-based provider of physician-based anatomic pathology, dermatopathology and molecular diagnostic services. Specialty Laboratories is a Valencia, Calif.-based hospital-focused clinical reference laboratory.

Harlan reverse flexes

Harlan Sprague Dawley lowered pricing on all tranches contained in its $190 million credit facility (B2/B+) by 25 basis points, according to sources.

The $15 million five-year dollar-denominated revolver and the $15 million five-year euro-equivalent revolver are now both priced at Libor plus 225 basis points, down from original price talk at launch of Libor plus 250 basis points, sources said.

In addition, the $160 million six-year term loan is now priced at Libor plus 250 basis points, down from original price talk at launch of Libor plus 275 basis points, sources added.

The revolvers contain - and have since launch - a 37.5 basis point commitment fee.

UBS and Credit Suisse First Boston are the lead banks on the deal that will be used to help finance Genstar Capital LLC's acquisition of the company.

Harlan is an Indianapolis-based provider of laboratory animals and services to support the scientific community.

Network Solutions tweaks deal

Network Solutions made a number of changes to its credit facility, including reducing the size of its term loan by $40 million and increasing pricing on its term loan and revolver by 100 basis points, according to a syndicate document.

The six-year term loan B is now sized at $100 million, down from $140 million, and pricing is set at Libor plus 500 basis points, up from original price talk of Libor plus 400 basis points, the document said.

Meanwhile, the $10 million five-year revolver was left unchanged in terms of size but pricing on the tranche was flexed up to Libor plus 500 basis points from Libor plus 400 basis points as well, the document added.

The revolver contains a 50 basis point commitment fee.

Credit Suisse First Boston is the sole lead bank on the now $110 million credit facility that will be used for acquisition financing.

Network Solutions is a Herndon, Va., seller of internet domain names and provider of related services.

JohnsonDiversey breaks

JohnsonDiversey's new credit facility began trading on Thursday, with the $775 million six-year funded term loan B closing out the session at par ¾ bid, 101 3/8 offered and the $100 million delayed-draw term loan closing out the session at par bid, par 5/8 offered, according to a trader.

Both the funded and the delayed-draw term loans moved, and closed out the day, about an eighth of a point higher from levels seen on the break, the trader added.

The funded and delayed-draw term loans are priced with an interest rate of Libor plus 250 basis points. Both tranches were flexed up from Libor plus 225 basis points during syndication.

The delayed-draw is available for one year, with a five-year final maturity. There is a 200 basis point ticking fee, which was raised from 175 basis points during syndication.

JohnsonDiversey's $1.025 billion credit facility (B1/B+/BB-) also contains a $150 million revolver with an interest rate of Libor plus 250 basis points and an undrawn fee of 75 basis points. Pricing on this tranche was also raised during syndication from Libor plus 225 basis points.

Citigroup is the lead bank on the deal that will be used to refinance existing debt and provide extra liquidity as the company proceeds with its restructuring plan that includes some job cuts, plant closures and possible selling of non-core assets.

JohnsonDiversey is a Sturtevant, Wis., provider of commercial cleaning, sanitation and hygiene solutions.

Sears Canada hits high-pars

Sears Canada's credit facility freed for trading, with the C$300 million U.S dollar-equivalent seven-year delayed-draw term loan B quoted at par ½ bid, 101 offered immediately on the break and then moving up to par ¾ bid, 101 offered where it closed out the session, according to a trader.

The term loan, which was upsized from the U.S. dollar equivalent of C$200 million, is priced with an interest rate of Libor plus 175 basis points. At the time of the upsizing, a step down was added to the tranche under which pricing can drop to Libor plus 150 basis points upon the company meeting a leverage test.

The delayed-draw term loan contains a ticking fee of 75 basis points that was reduced during syndication from 100 basis points.

Sears Canada's C$500 million credit facility (Ba1/BB+) also contains a C$200 million five-year revolver that was downsized from C$300 million when the term loan was upsized. Revolver pricing is initially set at Libor plus 150 basis points.

The Bank of Nova Scotia is the lead bank on the deal.

Proceeds from the revolver will be used for general corporate purposes.

Term loan borrowings will be used refinance some medium term notes that come due on March 15, 2006. It will be on that note expiration date that the term loan will be drawn upon in full.

Sears Canada is a Toronto-based department store chain that is 54% owned by U.S.-based Sears Holdings.

Kodak trades up

Eastman Kodak Co.'s bank debt traded up by about an eighth to a quarter of a point on Thursday, as solid buying interest continues to create nice flow and stronger levels in the name, according to a trader.

The funded term loan closed out the day quoted at par 1/8 bid, par ½ offered and the delayed-draw term loan closed out the day quoted at 99½ bid, 99¾ offered, the trader said.

Kodak is a Rochester, N.Y.-based digital imaging products, services and solutions company.

Morris closes

Morris Publishing Group LLC closed on its new $350 million credit facility due 2012 (Ba2/BB+) consisting of a $175 million revolver and a $175 million term loan A, with both tranches priced at Libor plus 100 basis points.

JPMorgan was the lead bank on the deal.

The revolver has a 37.5 basis point commitment fee.

The new facility replaces the company's previous $100 million term loan A due 2010, $150 million term loan C due 2011 and $150 million revolver due 2010.

Pricing on the new revolver is 150 basis points lower than pricing on the previous revolver, and pricing on the new term loan A is 50 basis points lower than pricing on the previous term loan A and 75 basis points lower than pricing on the previous term loan C, according to a company news release.

Morris Publishing is an Augusta, Ga., newspaper and magazine publisher.

Pinnacle closes

Pinnacle Entertainment Inc. closed on its new $750 million credit facility (B1/BB-/BB) consisting of a $200 million six-year funded term loan at Libor plus 200 basis points, a $450 million five-year revolver at Libor plus 225 basis points and a $100 million delayed-draw term loan that is available for 18 months with a six-year final maturity at Libor plus 225 basis points.

Pricing on the funded term loan was reverse flexed from Libor plus 225 basis points during syndication.

Ticking fees on the delayed-draw term loan are 75 basis points for the first 12 months and 100 basis points thereafter.

There is an accordion feature that allows the company to increase the total facility size to $1 billion.

Lehman Brothers and Bear Stearns acted as the joint lead arrangers on the deal, with Lehman the left lead.

Proceeds are being used to refinance existing bank debt and to fund development of the company's casino projects in St Louis.

Pinnacle Entertainment is a Las Vegas-based owner and operator of gaming entertainment facilities.

Midwest Generation closes

Midwest Generation LLC completed a repricing of both its term loan and revolver, under which pricing was reduced on the tranches to Libor plus 175 basis points from Libor plus 200 basis points.

In addition, the amendment combined the $200 million revolver due 2009 and the $300 million revolver due 2011 into one $500 million revolver facility due 2011.

Lastly, the company's consolidated interest coverage ratio for the immediately preceding four consecutive fiscal quarters was changed to a minimum of 1.40 to 1 (increased from 1.25 to 1), and its secured leverage ratio for the 12-month period ended on the last day of the immediately preceding fiscal quarter was changed to a maximum of 7.25 to 1 (reduced from 8.75 to 1).

Citigroup acted as the lead bank on the Chicago-based electric company's deal.

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