Atlantic Broadband, Container Store free up; Cengage extended trades; Hawker falls again

By Sara Rosenberg

New York, April 3 - Atlantic Broadband Finance LLC's credit facility made its way into the secondary market on Tuesday, with the term loans quoted above their original issue discount prices, and Container Store Inc. broke as well.

Also, levels surfaced on Cengage Learning Acquisitions Inc.'s extended term loan, and Hawker Beechcraft Inc.'s strip of institutional bank debt continued to slide lower on the back of news of a 10-K filing delay and missed interest payments.

Moving to the primary, Freedom Group Inc. released guidance on its loan with launch, MotorCity Casino Hotel began distributing talk on its proposed term loan B repricing, and Wendy's International Inc. announced plans to come to market later this week with a new credit facility.

Atlantic Broadband tops OID

Atlantic Broadband's credit facility began trading on Tuesday, with the $660 million seven-year first-lien term B (Ba3/B+) quoted at par bid, par ¼ offered on the break, and then it moved up to par ¼ bid, par ½ offered, according to a source.

And, the $350 million 71/2-year second-lien term loan (Caa1/B-) was quoted at par bid, par ½ offered, the source said.

Pricing on the term loan B, as well as on a $50 million five-year revolver (Ba3/B+), is Libor plus 400 bps with a 1.25% Libor floor. The B loan was sold at an original issue discount of 991/2, after tightening recently from 99, and includes 101 soft call protection for one year. The revolver was sold at 99.

The second-lien term loan is priced at Libor plus 850 bps with a 1.25% floor and was sold at a discount of 991/4, which was revised last week from initial talk of 98. This tranche is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four, subject to a carve-out for change of control within the first 24 months.

Atlantic leverage multiples

With this transaction, Atlantic Broadband's leverage is 4.3 times through the first lien and 6.5 times through the second lien.

Credit Suisse Securities (USA) LLC is the lead bank on the $1.06 billion senior secured credit facility that will be used to refinance an existing $25 million revolver due in 2015 and a $485.8 million term loan due in 2016, redeem all of the company's 9 3/8% senior subordinated notes due 2014 and fund a dividend of around $345 million.

Atlantic Broadband is a Quincy, Mass.-based cable provider.

Container Store breaks

Container Store's credit facility also freed up in the afternoon, with the $275 million term loan B (B3/B-) quoted at 98½ bid, 99¼ offered on the open and then it moved up to 98¾ bid, 99½ offered, according to a trader.

Pricing on the B loan is Libor plus 500 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 98. There is 101 soft call protection for one year.

During syndication, pricing firmed at the wide end of the Libor plus 475 bps to 500 bps talk and the discount tightened from 971/2.

The company's $350 million credit facility also includes a $75 million asset-based revolver.

J.P. Morgan Securities LLC, Barclays Capital Inc., Morgan Stanley Senior Funding Inc. and Wells Fargo Securities LLC are leading the deal that will be used to refinance an existing $75 million ABL revolver, a $116 million term loan B and $166 million of mezzanine notes.

Container Store is a Coppell, Texas-based retailer of organization and storage products.

Cengage extended emerges

Cengage's extended term loan due July 2017 started being quoted in the secondary market, with it opening at 89 bid, 90 offered, and then moving to 91½ bid, 92 offered, according to a trader, who said that the levels were pre-paydown.

Pricing on the extended term loan is Libor plus 550 bps, after flexing earlier from talk of Libor plus 500 bps. Lenders were offered a 15 bps extension fee and 10 bps consent fee.

Meanwhile, the non-extended term loan B was quoted at 91 bid, 92 offered, unchanged on the day, the trader added.

Non-extended term loan pricing is Libor plus 225 bps on tranche due in 2014 and Libor plus 375 bps on an incremental tranche due in 2014.

J.P. Morgan Securities LLC is the lead bank on the deal that is conditioned on a partial repayment of the extended term B loans.

Cengage sells notes

To fund the repayment, Cengage sold $725 million of first-lien senior secured notes. In the morning a size range of $650 million to $700 million emerged on the notes, compared to initial expectations for an amount of $575 million.

The bonds then priced in the afternoon at 11½%, the tight end of the revised talk of 11½% to 11¾%, and below initial guidance that was in the 12% area.

The extended term loan lenders elected for a paydown of about $485 million, leaving about $1.3 billion of the tranche outstanding.

The company will seek to use the incremental proceeds from the notes to repay existing first-lien debt, but if unable to do so, then the funds will be used for general corporate purposes, which may include prepayments of existing senior unsecured notes, senior subordinated notes or holdco notes.

Cengage is a Stamford, Conn.-based provider of teaching, learning and research services for the academic, professional and library markets.

Hawker Beechcraft softens

The decline in Hawker Beechcraft's strip of institutional bank debt continued into Tuesday, with the debt seen at 68¼ bid, 69¼ offered, versus Monday's late day levels of 70 bid, 72 offered, according to a trader. Last week, the debt had been seen in the 73½ bid, 75 offered context.

On Monday, the company revealed that it was unable to file its year-end 2011 report with the Securities and Exchange Commission by the March 30 deadline partly because it has been focused on negotiations with senior lenders and other creditors.

The expectation is that the 10-K will be filed by April 16 and will include a going concern warning.

For the 2011 year, the company anticipates losses from operations at around $481.8 million, compared to losses from operations of about $173.9 million in 2010.

Hawker delays payments

Hawker Beechcraft also said on Monday that it will not make interest payments due April 2 on its 8½% senior fixed-rate notes, 8 7/8%/9 5/8% senior PIK election notes and 9¾% senior subordinated notes, but a default won't occur until 30 days passed the payment deadline.

And last week, the company disclosed that it reached a forbearance agreement through June 29 with about 70% of its credit facility lenders to defer interest payments and get covenant relief.

With the forbearance, the company got a $124.5 million senior term loan due June 29 that is priced at Libor plus 1,200 bps with a 2% Libor floor, and will be used to fund ongoing operations.

As a result of all of these actions, Standard & Poor's downgraded the company's corporate rating, secured credit facility and unsecured and subordinated notes to D.

Hawker Beechcraft is a Wichita, Kan.-based manufacturer of business, special mission, light attack and trainer aircraft.

BWIC surfaces

A $134.8 million Bid Wanted In Competition was announced on Tuesday morning, and bids are being sought after by 10:30 a.m. ET on Wednesday, according to a trader.

Some of the larger pieces of debt offered in the portfolio include Celanese's U.S. term loan C, Cequel Communications' term loan, Charter Communications' extended term loan C and Freescale Semiconductor's tranche B-1 loan.

All in all, there are about 45 names in the portfolio.

Investors are being told that bids must be on the entire position amount, and pro rata strips must trade together, the trader added.

Freedom Group guidance

Over in the primary, Freedom Group held a bank meeting on Tuesday to launch its $330 million seven-year covenant-light term loan B (Ba3), at which time talk of Libor plus 450 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year was announced, according to a market source.

Lead banks, Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and RBC Capital Markets LLC, are seeking commitments by April 12.

Proceeds will be used to help repurchase notes. On Friday, the company announced tender offers that expire on April 27 for $245.2 million of 11¼%/11¾% senior PIK notes due 2015 at FGI Holding Co. and $247.5 million of 10¼% senior secured notes due 2015 at FGI Operating Co. LLC.

Freedom Group is a Madison, N.C.-based designer, manufacturer and marketers of firearms, ammunition and related products for the hunting, shooting sports, law enforcement and military markets.

TridentUSA launches

TridentUSA Health Services also held a bank meeting, launching a $325 million credit facility at previously outlined talk, and lenders are being asked to place their orders by April 17, according to a market source.

As was previously reported, the facility consists of a $50 million four-year revolver (Ba3), a $175 million five-year first-lien term loan (Ba3) and a $100 million 51/2-year second-lien term loan (Caa1).

The revolver and first-lien term loan are talked at Libor plus 525 bps with a 1.25% Libor floor and an original issue discount of 981/2, and there is 101 repricing protection for one year on the term loan.

Talk on the second-lien term loan is Libor plus 900 bps with a 1.25% Libor floor and an original issue discount of 97, and the debt is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

TridentUSA recapitalizing

Proceeds from TridentUSA's credit facility will be used to refinance $120 million of existing debt and pay a dividend to sponsors, Audax Group and Frazier Healthcare, of around $140 million.

Credit Suisse Securities (USA) LLC, GE Capital Markets and Madison Capital are the lead banks on the deal.

TridentUSA is a Burbank, Calif.-based provider of bedside diagnostics services offering mobile x-ray, ultrasound, teleradiology and laboratory services to skilled nursing home, assisted living, home health care, hospice and correctional markets.

MotorCity floats talk

MotorCity Casino Hotel released talk on its roughly $590 million term loan B repricing at Libor plus 475 bps with a 1.25% Libor floor ahead of its upcoming Wednesday conference call, according to a market source.

The loan was originally obtained in early 2011 at pricing of Libor plus 500 bps with a 2% Libor floor, and was sold at par.

Bank of America Merrill Lynch is the lead bank on the deal.

MotorCity Casino Hotel is a casino in Detroit.

Wendy's readies deal

Wendy's International emerged with new deal plans, setting a bank meeting for 10 a.m. ET on Thursday to launch a proposed $1.325 billion senior secured credit facility, according to a market source.

The facility consists of a $200 million five-year revolver and a $1.125 billion seven-year term loan B, the source said.

Bank of America Merrill Lynch and Wells Fargo Securities LLC are leading the deal that will be used to refinance a $150 million revolver and a $500 million term loan B, to repurchase $565 million of 10% senior notes due 2016 and for general corporate purposes.

Closing is subject to successful marketing and other conditions.

Wendy's is a Dublin, Ohio-based quick-service hamburger chain.

Prometric well met

Prometric Inc.'s $175 million credit facility (Ba1/BBB) saw strong demand from investors, resulting in the deal being oversubscribed ahead of its Tuesday commitment deadline, according to a market source.

The deal, comprised of a $10 million revolver and a $165 million term loan, is expected to close at initial terms, the source said, which includes initial pricing of Libor plus 200 bps. The spread can range from Libor plus 150 bps to 225 bps based on leverage.

TD Securities (USA) LLC is leading the deal that will be used to refinance existing debt.

Prometric is a Baltimore-based provider of technology-based assessment services, including test development and delivery for government entities, professional organizations, academic institutions, corporations and information technology clients.

United Surgical closes

United Surgical Partners International Inc. completed its refinancing, according to a news release, and for the transaction, the company got a $490 million credit facility (B1/B) consisting of a $125 million five-year revolver and a $365 million incremental first-lien term loan B due 2019.

Pricing on the incremental loan is Libor plus 475 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 981/2. There is 101 soft call protection for one year.

During syndication, the term loan was upsized from $330 million and the coupon firmed at the high side of the Libor plus 450 bps to 475 bps talk.

In addition to refinancing debt, the loan, $440 million of senior notes and cash on hand were used to repay $437.5 million of senior subordinated notes and to fund a $270 million special dividend.

J.P. Morgan Securities LLC and Barclays Capital Inc. led the deal for the Dallas-based owner and operator of ambulatory surgery centers and surgical hospitals.

Expert Global wraps

The creation of Expert Global Solutions Inc. through the merger of APAC Customer Services Inc. and NCO Group has been completed, according to a news release.

To help fund the merger and refinance existing debt, Expert Global got a new $995 million credit facility consisting of a $120 million five-year revolver (Ba3/B), a $675 million six-year first-lien term loan B (Ba3/B) and a $200 million 61/2-year second-lien term loan.

Pricing on the B loan is Libor plus 675 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 98. The tranche is non-callable for one year then at 102 in year two.

During syndication, the call protection was revised from 101 soft call for one year, and amortization increased to 1% in year one, 3% in years two and three and 5% per year thereafter from just 1% per year.

Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and RBS Securities Inc. led the deal for the provider of business process outsourcing and customer care services.

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