N.E.W. Customer, Munder, Provo break; Bass talk emerges; Wyle tweaks deal; PVH approaches agents

By Sara Rosenberg

New York, March 22 - N.E.W. Customer Service Cos. Inc., Munder Capital Management and Provo Craft saw their credit facilities allocate and free up for trading during Monday's market hours, with all of the companies' term loans quoted above their original issue discount prices.

In more trading happenings, Lear Corp.'s term loan debt was softer followings news of a full repayment with cash on hand and proceeds from a notes offering.

Over in the primary market, Bass Pro Shops began floating price talk on its upcoming term loan, and Wyle Services Corp. came out with changes to the size and pricing on its oversubscribed credit facility.

Also, Phillips-Van Heusen Corp. (PVH) started to present its pro rata credit facility debt to banks as part of a senior managing agents syndication round that is taking place in both the United States and Europe, and word is that Lyondell Chemical Co.'s term loan B has been met with so much demand that the books are already more than full.

N.E.W. Customer frees to trade

N.E.W. Customer Service's credit facility hit the secondary market, with both the first-lien and the unsecured term loans trading above the discount prices at which they were sold during syndication, according to a trader.

The $700 million six-year first-lien term loan was quoted at 99½ bid, par offered on the break and remained there throughout the day, the trader said.

And, the $300 million seven-year unsecured term loan was quoted at 98 ½ bid, 99 offered on the break and held at those levels, the trader continued.

Pricing on the first-lien term loan is Libor plus 425 basis points with a 1.75% Libor floor, and it was sold at an original issue discount of 99, and pricing on the unsecured loan is Libor plus 750 bps with a 2% Libor floor, and it was sold at an original issue discount of 98.

The unsecured loan is non-callable for three years, then at 103 in year four and 101 in year five.

N.E.W. Customer getting revolver

N.E.W. Customer Service's $1.02 billion credit facility also includes a $20 million five-year revolver.

During syndication, the unsecured term loan was downsized from $400 million, pricing was increased from Libor plus 725 bps, and the original issue discount firmed at the wide end of initial talk of 98 to 981/2.

Also, during syndication, the call protection on the unsecured term loan was modified from non-callable for two years, then at 103 in year three, and 101 in year four.

Bank of America, Barclays and Deutsche Bank are the lead banks on the deal that will be used to fund a dividend payment, which was reduced as a result of the unsecured loan downsizing, and to refinance existing debt.

N.E.W. Customer Service is a Sterling, Va.-based provider of extended service plans and product protection programs for consumer products.

Munder breaks

Munder Capital's credit facility was another deal to start trading on Monday, with the $80 million term loan quoted at 99 bid, par offered on the break and then moving up to 99½ bid, par ¼ offered, according to a market source.

Pricing on the term loan is Libor plus 400 bps with a 2% Libor floor, and it was sold at an original issue discount of 981/2.

The company's $85 million credit facility also includes a $5 million revolver that is also priced at Libor plus 400 bps with a 2% Libor floor, and was sold at 981/2.

During syndication, the original issue discount on the tranches was reduced from 98.

Credit Suisse is the lead bank on the deal that will be used by the Birmingham, Mich., provider of investment advice and asset management services to refinance existing debt.

Provo Craft begins trading

Also breaking for trading was Provo Craft's credit facility with its $130 million term loan quoted at 97½ bid, 98½ offered, according to a trader who said that allocations went out on Friday night, but the paper wasn't quoted until Monday morning.

The term loan is priced at Libor plus 600 bps with a 2% Libor floor, and it was sold at an original issue discount of 97. There is call protection of 102 in year one and 101 in year two.

The company's $170 million facility (B1/B+) also includes a $40 million revolver.

During syndication, the term loan was upsized from $120 million while the revolver was downsized from $50 million, pricing on the term loan was increased from the Libor plus 550 bps area, the term loan discount firmed at the wide end of the 97 to 97½ talk and the call protection was added to the term loan.

Provo Craft being acquired

Proceeds from Provo Craft's credit facility, along with $65 million of mezzanine debt, will be used to help fund the buyout of the company by BAML Capital Partners.

Bank of America is the left lead bank on the deal.

Senior leverage is around 2.3 times and total leverage is around 3.6 times.

Provo Craft is a Spanish Fork, Utah-based manufacturer and distributor of craft, hobby and education products.

Lear dips on repayment

Lear's term loan debt headed closer to par in trading after the company revealed that it plans to repay its first-lien and second-lien credit facilities in full using cash on hand and proceeds from a $700 million senior unsecured notes offering, according to traders.

The first-lien term loan was quoted by one trader at par ¼ bid, par ¾ offered, down from par ½ bid, 101 offered, and by a second trader at par bid, par ¼ offered.

As for the second-lien term loan, that was quoted by the first trader at par bid, par ½ offered, unchanged on the day, and by the second trader at par bid, par ¼ offered, down from par ¼ bid, 101 offered.

Currently, there is $375 million outstanding under the first-lien loan and $550 million outstanding under the second-lien loan.

Lear wraps revolver, amendment

Also on Monday, Lear revealed that it completed its credit facility amendment and restatement, which provides for a new $110 million three-year revolver.

When first launched, the revolver size was described by the company as being somewhere in the range of $100 million to $125 million.

Pricing on the revolver is initially set at Libor plus 450 bps, but once the first-and second-lien term loans are paid in full, pricing on the will be reduced by 25 bps.

JPMorgan is the administrative agent on the revolver that will be used for general corporate and working capital purposes.

In addition, the company's amendment allows for the issuance of the newly announced notes as long as proceeds repay second-lien debt.

Lear is a Southfield, Mich.-based automotive parts supplier.

Bass Pro Shops floats talk

Switching to the primary, pricing guidance on Bass Pro Shops's proposed $400 million term loan started making its way around the market as the deal is gearing up for its Tuesday bank meeting, according to sources.

The term loan is being talked at Libor plus 375 bps with a 1.5% Libor floor and an original issue discount that is still to be determined, sources said.

The company's $700 million credit facility also includes a $300 million ABL revolver.

JPMorgan is the lead bank on the facility that will be used to refinance existing debt.

Bass Pro Shops is a Springfield, Mo.-based outdoor retailer.

Wyle revises loan

Wyle Services reworked its credit facility by increasing the size of the term loan, lowering the original issue discount and reducing pricing, according to a market source.

The term loan is now sized at $95 million, up from $90 million, and it is being sold at an original issue discount of 99, down from the 98½ area, the source said.

Additionally, pricing on the term loan and the $25 million revolver is now initially set at Libor plus 400 bps, down from Libor plus 425 bps.

The leverage-based pricing grid on the two tranches was cut by 25 bps across the board so that it now ranges from Libor plus 400 bps to 500 bps, instead from Libor plus 425 bps to 525 bps, the source remarked.

Both tranches still include a 2% Libor floor.

Wyle lead banks

Barclays and JPMorgan are the lead banks Wyle Services' now $120 million deal (Ba2/BB), up from $115 million.

Proceeds will be used primarily to refinance existing mortgage debt.

Closing on the deal is expected to take place at the end of this week.

Wyle is an engineering firm specializing in high-tech testing, life sciences and technical-support services to federal government agencies, including the Department of Defense and NASA.

PVH starts SMA round

Phillips-Van Heusen kicked off the senior managing agent round on its $450 million revolver and $500 million term loan A with a meeting on Monday, and there will be another meeting taking place on Tuesday, according to a market source.

These tranches, along with a $1.5 billion term loan B, will also be launched to retail investors, with the expectation being that the meeting for that syndication round will take place in mid-April, the source remarked.

Barclays Capital and Deutsche Bank are the global debt coordinators and bookrunners on the $2.45 billion senior secured deal, with Barclays the left lead. Other bookrunners include Bank of America, Credit Suisse and RBC Capital Markets.

PVH buying Hilfiger

Proceeds from Phillips-Van Heusen's credit facility will be used to help fund the acquisition of Tommy Hilfiger BV from Apax Partners LP for €2.2 billion, or about $3 billion, plus the assumption of €100 million in liabilities, and to refinance Phillips-Van Heusen's $300 million of existing senior unsecured notes due in 2011 and 2013.

The consideration to be paid to Apax includes €1.924 billion in cash and €276 million in Phillips-Van Heusen common stock.

Other funding for the acquisition and the refinancing will come from $600 million of senior unsecured notes that could be issued in both dollar and euro tranches.

Also, the company will issue $200 million in perpetual convertible preferred stock and about $200 million in common stock, and use $385 million of cash on hand.

PVH expects paydowns

Phillips-Van Heusen anticipates generating a minimum of $300 million annually in free cash flow to pay down debt.

At close, the pro forma debt to EBITDA ratio is anticipated to be 3.6 times. However, based on the free cash flow estimate, the company expects debt to EBITDA to drop to 2.0 times at the end of fiscal 2012 due to deleveraging.

Pro forma for the transaction, 2010 revenue is estimated to be $4.8 billion, and 2010 EBITDA is estimated at $755 million.

Closing of the transaction is anticipated for the company's second fiscal quarter, subject to receipt of financing and other customary conditions, including receipt of required regulatory approvals.

New York-based Phillips-Van Heusen and Tommy Hilfiger are apparel companies.

Lyondell overfills

Lyondell Chemical's $1 billion six-year senior secured term loan B (Ba3) has received so much interest since launching at the start of last week that it is already oversubscribed, according to a market source.

Price talk on the term loan B is in the Libor plus 425 bps area with a 2% Libor floor and an original issue discount that is still to be determined.

Covenants under the term loan B include a maximum first-lien leverage ratio and a minimum interest coverage ratio.

UBS, Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, JPMorgan, Morgan Stanley and Wells Fargo are the joint bookrunners on the term loan B, and they are asking for commitments by late this week.

Lyondell funding exit

Proceeds from Lyondell's credit facility, $2.25 billion of 71/2-year senior secured notes, a new European securitization facility and a $2.8 billion rights offering will be used to repay and replace existing debt, including the company's debtor-in-possession facilities and an existing European securitization facility and to make related payments, when the company exits bankruptcy.

The $2.75 billion credit facility also includes a $1.75 billion ABL revolver that is being talked at Libor plus 375 bps with a 2% Libor floor.

Citigroup is the left lead on the ABL revolver.

The hearing to confirm the company's plan of reorganization will begin on April 23.

Lyondell is a U.S. subsidiary of LyondellBasell Industries AF SCA, a Netherlands-based polymer, petrochemicals and fuels company.

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