Leslie's, CraftWorks break; Dean Foods dips; MedAssets, Gymboree, Lightower tweak deals

By Sara Rosenberg

New York, Nov. 9 - Leslie's Poolmart Inc. and CraftWorks both hit the secondary market on Tuesday, with levels on their term loans quoted above their original issue discount prices.

In more trading happenings, Dean Foods Co.'s extended term loans softened after numbers were released and management changes were announced, HCA Inc.'s term loan were weaker as plans for a large dividend emerged, and Mylan Inc.'s term loan came in on paydown news.

Over in the primary, MedAssets Inc. reduced pricing and added a step-down to its term loan B, Gymboree Corp. upsized its B loan, while trimming spread, floor and discount, Lightower Fiber Networks reduced its original issue discount, and Precision Drilling Corp. downsized its revolver.

Also, Petco Animal Supplies Inc., MLM Information Services LLC and Northland Communications released price talk on their term loans as the deals were launched to lenders, and Atlantic Broadband Finance LLC and GT Solar International Inc. began circulating price talk on their upcoming credit facilities.

Furthermore, Race Point Power, Armstrong World Industries Inc. and Renal Advantage announced plans for new deals, and Gavilon LLC's term loan is on track to being oversubscribed.

Leslie's Poolmart frees up

Leslie's Poolmart's credit facility started trading, with the $310 million seven-year term loan (B+) quoted at 101 bid, 101½ offered, according to a trader.

Pricing on the term loan is Libor plus 450 basis points, with a step-down to Libor plus 425 bps at less than 4.5 times leverage, and a 1.5% Libor floor. The tranche was sold at an original issue discount of 99 and includes 101 soft call protection for one year.

During syndication, the term loan was upsized from $225 million, pricing was reduced from Libor plus 475 bps, the step-down was added and the discount tightened from 981/2.

Leslie's Poolmart banks

Bank of America, Wells Fargo and Goldman Sachs are the lead banks on Leslie's Poolmart's credit facility, with Bank of America the left lead.

The $380 million credit facility also provides for a $70 million revolver that was downsized from $75 million during syndication.

Proceeds will be used to refinance existing bonds and an existing revolver and to pay off a shareholder that is exiting the investor group.

Leslie's Poolmart is a Phoenix-based retailer of swimming pool supplies and related products.

CraftWorks breaks

Also freeing up on Tuesday was CraftWorks' credit facility, with the $125 million term loan quoted at 98½ bid, 99 offered, according to a trader.

Pricing on the term loan, and on a $25 million revolver, is Libor plus 525 bps with a 1.75% Libor floor, and the tranches were sold at an original issue discount of 981/2.

Wells Fargo and GE Capital are the lead banks on the $150 million deal that will be used to help fund Centerbridge Partners' acquisition of restaurant brands, Rock Bottom Brew Pubs and Gordon Biersch Brewery.

Dean Foods slides

Dean Foods' extended term loan B-1 and B-2 headed lower in trading as the company released third-quarter numbers and revealed that its chief financial officer is leaving, according to traders.

The extended term loan B-1 was quoted by one trader at 99½ bid, par offered, down from par bid, par ½ offered, and by a second trade rat 99 3/8 bid, 99 7/8 offered, down from par bid, par 3/8 offered.

And, the extended term loan B-2 was quoted by the first trader at 99 5/8 bid, par 1/8 offered, down from par 1/8 bid, par 5/8 offered, and by the second trader at 99 5/8 bid, par 1/8 offered, down from par 1/8 bid, par ½ offered.

For the third quarter, Dean Foods reported net income of $24.3 million, or $0.13 per diluted share, compared to net income of $49.7 million, or $0.27 per diluted share, last year.

Net sales for the quarter totaled $3.1 billion, an increase of 11% from net sales of $2.8 billion in the third quarter of 2009.

Dean Foods declines

Dean Foods also disclosed that its net cash provided by continuing operations for the nine months ended Sept. 30 totaled $379.3 million, compared to $500.9 million for the comparable period in 2009.

And, free cash flow provided by operations totaled $198.7 million for the nine-month period, compared to $330.1 million in the first three quarters of 2009.

"These results are clearly disappointing for us and reflect continued significant challenges in our largest business, Fresh Dairy Direct-Morningstar," said Gregg Engles, chairman and chief executive officer, in a news release.

"In addition to ongoing adverse conditions in the conventional milk business, weak consumer spending led to soft volumes in conventional fluid milk and other beverage and cultured products within our Fresh Dairy Direct-Morningstar business. Our results were also impacted by much higher than anticipated butterfat costs," Engles added.

Dean Foods CFO resigns

In more Dean Foods news on Tuesday, it was announced that the company's executive vice president and chief financial officer, Jack Callahan, is resigning to accept a position as chief financial officer at another publicly traded company.

Shaun Mara will take over as the company's chief financial officer starting Dec. 1, when Callahan leaves.

Mara is currently the company's senior vice president and chief accounting officer.

Dean Foods is a Dallas-based food and beverage company.

HCA inches lower

HCA's term loans moved downwards following news that the company will pay a $2 billion distribution to stockholders using borrowings under its senior secured revolving credit facility, along with $1.525 billion of senior unsecured notes, according to traders.

The term loan A was quoted by one trader at 98 ¾ bid, 99 offered, down from 98 7/8 bid, 99 1/8 offered, while a second trader had it unchanged at 98 5/8 bid, 99 offered.

The term loan B-1 was quoted by the first trader at 98¾ bid, 99¼ offered, unchanged on the day, while the second trader had it at 98 ¾ bid, 99 1/8 offered, down from 99 bid, 99¼ offered.

And, the term loan B-2 was quoted by the first trader at 99 1/8 bid, 99 5/8 offered, down from 99¼ bid, 99¾ offered, while the second trader had it at 99 ¼ bid, 99 5/8 offered, down from 99 3/8 bid, 99 ¾ offered.

HCA releases earnings

Also on Tuesday, HCA announced third quarter results, including net income of $243 million, compared to $196 million in the prior year.

Revenues for the quarter increased 1.5% to $7.647 billion, compared to $7.533 billion in the third quarter of 2009.

Adjusted EBITDA for the quarter increased 6.6% $1.357 billion, compared to $1.273 billion in the previous year.

And, cash flows from operations increased $219 million to $1.26 billion.

HCA is a Nashville-based hospital and healthcare services company.

Mylan down with paydown

Mylan's term loan moved closer to par as the company said that it would be repaying a portion of the debt, according to traders.

The term loan was quoted by one trader at par 1/16 bid, par 3/16 offered, down from par ¼ bid, par ¾ offered, and by a second trader at par bid, par ¼ offered, down from par 3/8 bid, par ¾ offered.

Funds for the paydown will come from an $800 million senior notes offering.

Mylan is a Canonsburg, Pa.-based generic and specialty pharmaceutical company.

MedAssets flexes lower

Moving to the primary, MedAssets lowered the spread on its $785 million credit facility (Ba3/BB-) to Libor plus 375 bps from talk of Libor plus 400 bps to 425 bps, while leaving the 1.5% Libor floor intact, as well as the term loan B's original issue discount of 99 and 101 soft call protection for one year, according to a market source.

Pricing on the B loan and the revolver can step-down to Libor plus 350 bps when total leverage is less than 4.5 times, the source said. This step-down was just added to the B loan, but the revolver always provided for a 25 bps step based on leverage.

The six-year B loan is sized at $635 million, after being upsized on Monday from $600 million when the company's bond offering was downsized to $325 million from $360 million, and the five-year revolver is sized at $150 million.

MedAssets shuts books

Following the changes, lenders were asked to recommit by 5 p.m. ET on Tuesday, with the hope being that allocations will go out this week, the source remarked.

As a result of the recent credit facility upsizing, senior leverage is 3.3 times, up from 3.2 times under the original structure, and total leverage remains at 5.1 times.

Barclays and JPMorgan are the joint lead arrangers on the deal that will be used, along with the notes, to fund the acquisition of the Broadlane Group and to refinance existing bank debt.

Under the acquisition agreement, MedAssets is buying Broadlane, a Dallas-based end-to-end cost-management partner for health care providers, for roughly $850 million in cash, with $725 million to be paid at closing and $125 million to be paid in January 2012.

MedAssets is an Alpharetta, Ga.-based provider of technology enabled products and services for hospitals, health systems and ancillary health care providers.

Gymboree reworks B loan

Gymboree made a number of issuer-friendly changes to its well oversubscribed seven-year term loan B (B1/BB-), including increasing the size, and reducing the spread, the Libor floor and the original issue discount, according to a market source.

The term loan B is now sized at $820 million and is priced at Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 99, the source said. By comparison, at launch, the loan was sized at $720 million and talked at Libor plus 450 bps with a 1.75% Libor floor and an original issue discount of 981/2.

Commitments towards the term loan B continue to be due at 5 p.m. ET on Wednesday.

Credit Suisse and Morgan Stanley are the joint lead arrangers and bookrunners on the B loan, with Credit Suisse the left lead.

Gymboree downsizes notes

As a result of the term loan B upsizing, Gymboree reduced its senior unsecured notes offering to up to $420 million from up to $520 million, the source continued.

The notes are backed by a commitment for a one-year senior unsecured bridge loan that is priced at Libor plus 800 bps, increasing by 50 bps every three months, with a 1.75% Libor floor.

Proceeds from the debt financings, and from $524 million of equity, will be used to fund the acquisition of the company by Bain Capital Partners LLC for $65.40 per share, or $1.8 billion. Bain is in the process of tendering for Gymboree's shares.

Completion of the transaction is subject to, among other things, the satisfaction of the minimum tender condition of at least 66% of the company's common shares, the receipt of the Federal Trade Commission's approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

Gymboree getting revolver

In addition to the term loan B and the notes, Gymboree, a San Francisco-based specialty retailer, plans on getting a $225 million five-year asset-based revolver that is being led by Bank of America.

Based on a commitment letter filed with the Securities and Exchange Commission, the revolver is expected to be split into a $213 million A tranche and a $12 million first-in, last-out A-1 tranche. If the company opts to reduce or terminate the A-1 tranche, those commitments can be added to the A tranche.

Initial pricing on the tranche A revolver is expected to be Libor plus 250 bps, and initial pricing on the tranche A-1 revolver is expected to Libor plus 400 bps, the filing said. Pricing on the tranche A can range from Libor plus 225 bps to 275 bps, and pricing on the A-1 can range from Libor plus 375 bps to 425 bps, based on average daily excess availability.

The initial commitment fee on the revolver is expected to be 62.5 bps. This fee can range from 37.5 bps to 62.5 bps based on average daily used percentage.

Lightower revises OID

Lightower Fiber Networks reduced the original issue discount on its $230 million five-year credit facility to 99½ from 99, added a three step leverage-based pricing grid and asked for recommitments by Friday, according to a market source.

Initial pricing on the facility, which consists of a $40 million revolver and a $190 million term loan A, remained at Libor plus 400 bps.

GE Capital and SunTrust are the lead banks on the deal that will be used to fund the acquisition of Lexent Metro Connect, a New York-based provider of custom built dark fiber networks.

Closing is expected in the fourth quarter, subject to regulatory approval.

Following the transaction, leverage will be 2.4 times.

Lightower Fiber Networks is a Boxborough, Mass.-based metro fiber network and bandwidth service provider.

Precision revolver reduced

Precision Drilling trimmed its senior secured revolving credit facility due in 2013 to $550 million from $650 million, according to a market source.

On the flip side, the company increased its senior unsecured notes offering to $650 million from $550 million.

Proceeds will be used to repay the company's existing credit facility and for general corporate purposes.

Precision is a Calgary, Alberta-based provider of energy services to the oil and gas industry.

Sports Authority ups pricing

Continuing on the topic of changes, Sports Authority Inc. increased pricing on its $300 million seven-year covenant-light term loan to Libor plus 600 bps from Libor plus 525 bps to 550 bps, increased the original issue discount to 97 from talk of 98 to 99 and changed the soft call protection to 102 in year one and 101 in year two, from just 101 in year one, according to a market source.

As before, the term loan includes a 1.5% Libor floor.

Bank of America and JPMorgan are the lead banks on the deal, which is expected to allocate on Wednesday.

Proceeds will be used by the Englewood, Colo.-based sporting goods retailer to refinance existing debt.

Petco sets guidance

Also in the primary, Petco held a bank meeting on Tuesday to launch its proposed $1.1 billion term loan (B1/B), and in connection with the event, price talk was announced, according to market sources.

The term loan is being talked at Libor plus 475 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 981/2, sources said, adding that there is 101 soft call protection for one year.

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

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

Petco seeks revolver

As part of its dividend recapitalization, Petco is also getting a $250 million ABL revolver that was launched to investors on Nov. 3.

Pricing on the revolver can range from Libor plus 225 bps to 275 bps and the unused fee 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.

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

MLM comes to market

MLM Information Services LLC also launched its credit facility on Tuesday, and its $150 million six-year term loan is being talked at Libor plus 525 bps with a 1.75% Libor floor and an original issue discount of 981/2, according to a market source.

The $165 million credit facility also includes a $15 million five-year revolver.

Credit Suisse and Morgan Stanley are the lead banks on the deal that will be used for a dividend recapitalization.

MLM Information Services is a New York-based provider of corporate tax software services.

Northland price talk

Northland Communications launched its proposed $110 million credit facility on Tuesday with price talk of Libor plus 550 bps with a 1.75% floor and an original issue discount of 98, according to a market source.

The cable company's facility consists of a $15 million 51/2-year revolver and a $95 million six-year term loan.

GE Capital is the sole lead bank on the deal that will be used to refinance existing debt.

Commitments are due in early December, with closing and funding targeted for Dec. 7.

Atlantic Broadband talk

Atlantic Broadband revealed that its $575 million five-year term loan B is being talked at Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

The term loan B, along with a $25 million four-year revolver, is set to launch with a conference call at 9 a.m. ET on Wednesday.

Credit Suisse and SunTrust are the lead banks on the $600 million senior secured credit facility (B+) that will be used to replace an existing $40 million revolver due in 2012 and a $436.5 million term loan due in 2013, to fund a $110 million cash dividend payment and to pay $39 million to redeem preferred stock.

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

GT Solar floats talk

GT Solar released price talk of Libor plus 425 bps with an original issue discount of 98 on its $200 million pro rata senior secured credit facility as the deal is getting ready to launch with a bank meeting on Monday, according to a market source.

Credit Suisse is the lead bank on the facility that consists of a $75 million revolver and a $125 million term loan.

Proceeds will be used to purchase 26.5 million shares of the company's common stock from private equity investors for a total purchase price of roughly $203 million.

The share repurchase is expected to close on Nov. 12 and will initially be funded with cash on hand. Closing on the credit facility is expected before the end of the quarter.

GT Solar is a Merrimack, N.H.-based provider of polysilicon production technology, and sapphire and silicon crystalline growth systems and materials for the solar, LED and other specialty markets.

Race Point deal emerges

Regarding the forward calendar, Race Point Power has scheduled a bank meeting for Wednesday to launch a proposed $370 million term loan, according to a market source.

Price talk on the loan is not yet available, the source said.

Barclays and Credit Suisse are the lead banks on the deal that will be used to refinance existing debt, for acquisition financing and to fund a dividend payment.

Race Point Power is an enterprise that holds interests in a number of power plants and is owned by ArcLight Capital Partners LLC.

Armstrong coming Wednesday

Another deal set to launch with a bank meeting on Wednesday is Armstrong World Industries' proposed $1.05 billion senior secured credit facility, according to a market source.

The facility consists of a $250 million five-year revolver, a $250 million five-year term loan A and a $550 million 61/2-year term loan B, the source said.

Price talk has not yet been released, the source added.

Bank of America, Barclays and JPMorgan are the lead banks on the deal, with Bank of America the left lead.

Armstrong dividend recap

Proceeds from Armstrong's credit facility will be used to help fund a special cash dividend of $13.74 per share to common shareholders, or about $800 million in the aggregate, and refinance an existing $430 million credit facility.

Previously, it was known that the company would be getting new bank debt for the dividend recapitalization, but details on size and timing were unavailable.

Completion of the transaction is expected by year-end.

Armstrong is a Lancaster, Pa.-based designer and manufacturer of floors, ceilings and cabinets.

Renal Advantage launch

Renal Advantage is expected to hold a bank meeting during the week of Nov. 15 to launch a credit facility that will be led by Barclays and Bank of America, according to a market source.

Details on structure of the facility and a firm launch date are anticipated to come out soon, the source said.

Proceeds will be used to help fund the company's merger with Liberty Dialysis.

Closing on the merger is expected to occur by Dec. 31.

Brentwood, Tenn.-based Renal Advantage and Franklin, Tenn.-based Liberty Dialysis are providers of dialysis services.

Gavilon bookbuilding

In other news, Gavilon has been getting more and more interest from lenders, creating the expectation that the $900 million term loan (Ba3/BB+) will get done at initial terms, according to a market source.

"Commitments that have soft circled in that show the deal will be oversubscribed," the source said, adding that lenders have until Friday to place their orders.

Price talk on the term loan is Libor plus 425 bps with a 1.75% Libor floor and an original issue discount on 981/2. There is 101 soft call protection for one year.

BNP Paribas, Bank of America, JPMorgan and Morgan Stanley are the lead banks on the deal, with BNP the left lead.

Gavilon may up revolver

In addition to the term loan, Gavilon is considering upsizing its existing asset-based revolver to somewhere in the $2.25 billion to $2.5 billion range from the current size of $1.7 billion.

Pricing on the revolver will remain unchanged at Libor plus 275 bps with a 50 bps unused fee.

Proceeds will be used to help fund the acquisition of DeBruce Cos.

Closing on the acquisition is expected in November, subject to receipt of certain regulatory approvals.

Gavilon is an Omaha-based commodity management firm. DeBruce is a Kansas City, Mo.-based agricultural firm.

Hersha closes

Hersha Hospitality Trust completed its $250 million three-year senior secured revolving credit facility, according to a news release, which was upsized from an originally anticipated size of $225 million.

TD Securities acted as the lead arranger, bookrunner and administrative agent on the deal.

Pricing on the revolver can range from Libor plus 350 bps to 375 bps based on leverage. There is a 0.75% Libor floor.

Proceeds were used to replace the company's current $135 million senior secured credit facility.

Hersha Hospitality Trust is a Harrisburg, Pa.-based real estate investment trust that owns select service and upscale hotels.

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