Open Solutions, Brickman, Tube City set talk; Aramark downsizes ahead of launch; Tropicana breaks

By Sara Rosenberg

New York, Jan. 4 - Open Solutions Inc., Brickman Group Holdings Inc. and Tube City IMS Corp. came out with price talk on their credit facilities as the deals were all launched with bank meetings during the Thursday session.

In other primary news, Aramark Corp. decided to reduce the size of its upcoming credit facility through a downsizing of the term loan B tranche as a little more existing debt than previously expected will now remain in place.

Meanwhile, the secondary market saw Tropicana Entertainment LLC's credit facility free for trading, with the operating company term loan quoted atop 101.

Open Solutions held a bank meeting during Thursday's market hours to launch its proposed $605 million senior secured credit facility (B+), and in conjunction with that launch, price talk on the transaction was revealed, according to a market source.

Both the $530 million seven-year term loan and the $75 million six-year revolver were presented to lenders with opening talk of Libor plus 250 basis points, the source said.

A portion of the revolver may be borrowed by a Canadian subsidiary in Canadian dollars.

Wachovia and JPMorgan are the joint lead arrangers and joint bookrunners on the credit facility. Wachovia is administrative agent, JPMorgan is syndication agent and Merrill Lynch is documentation agent.

Proceeds from the credit facility, along with $325 million of high-yield senior subordinated notes, will be used to fund the leveraged buyout of the company by The Carlyle Group and Providence Equity Partners for $38.00 in cash for each share. The enterprise value of the transaction, including assumption of debt, is more than $1.3 billion.

Other LBO financing will come from a $560 million equity commitment.

Open Solutions is a Glastonbury, Conn., provider of integrated enabling technologies for financial institutions.

Brickman floats guidance

Brickman Group announced opening price talk in the Libor plus 225 to 250 bps area on its $350 million term loan B as it was launched with a bank meeting as well, according to a market source.

In addition to the term loan B, the $400 million credit facility also includes a $50 million revolver tranche.

Lehman is the lead bank on the deal that will be used, along with $225 million of mezzanine senior subordinated notes committed by TCW/Crescent Mezzanine Management IV, LLC and $272 million of equity, to fund Leonard Green & Partners LP's acquisition of a controlling interest in the company.

In connection with the acquisition, the company plans to redeem all of its 11¾% senior subordinated notes due 2009.

Brickman is a Gaithersburg, Md., provider of landscape design and maintenance services.

Tube City talk surfaces

Continuing on the price talk front, Tube City IMS released guidance on its proposed $325 million credit facility as it too launched with a bank meeting during the session, according to a market source.

The $150 million six-year last-in, first-out ABL revolver was launched with talk of Libor plus 150 bps, the $15 million first-in, last-out ABL revolver was launched with talk of Libor plus 250 bps, and both the $140 million seven-year term loan B (Ba3/BB-) and $20 million seven-year synthetic letter-of-credit facility were launched with talk of Libor plus 275 bps, the source said.

Both ABL revolver tranches carry a commitment fee of 25 bps.

Credit Suisse and UBS are joint lead arrangers on the deal, with Credit Suisse the left lead.

Proceeds will be used to fund Onex Corp.'s acquisition of the company in a transaction valued at about $720 million.

Tube City is a Glassport, Pa., provider of outsourced services to steel mills.

Aramark tweaks tranching

Also in primary happenings, Aramark reduced the size of its proposed term loan B ahead of the upcoming Monday general syndication bank meeting since the company decided to keep more of its existing debt in place, according to a market source.

The seven-year term loan B is now sized at $3.66 billion, down from an originally expected size of $3.755 billion, the source said.

Although no official price talk on the term loan B has been announced, various filings with the Securities and Exchange Commission have said that the tranche is expected at Libor plus 225 bps if the deal is rated B1/B+ or better, otherwise at Libor plus 250 bps.

The company's now $4.51 billion credit facility (down from $4.605 billion) also includes a $600 million six-year revolver and a $250 million seven-year synthetic letter-of-credit facility - with these tranche sizes unchanged from previous expectations.

Like the term loan B, no official talk is out on these tranches either, but according to SEC filings, the revolver is expected at Libor plus 200 bps if the deal is rated B1/B+ or better, otherwise Libor plus 225 bps, and the synthetic letter-of-credit facility is expected at Libor plus 225 bps if the deal is rated B1/B+ or better, otherwise Libor plus 250 bps.

Although the retail launch for the credit facility has not yet taken place, orders from lenders have already begun "pouring in" to the books, the source added.

Goldman Sachs and JPMorgan are joint bookrunners, joint lead arrangers and co-syndication agents on the deal.

Proceeds from the facility, along with $2.27 billion of bonds, will be used to help fund the buyout of Aramark by chairman and chief executive officer Joseph Neubauer and a group of investors.

Originally, the bond offering was expected to be sized at $2.47 billion but was scaled back as the sponsors decided to contribute an additional $200 million of equity.

Under the acquisition agreement, Neubauer and investment funds managed by GS Capital Partners, CCMP Capital Advisors and J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus LLC will acquire Aramark in a transaction valued at $8.3 billion, including the assumption or repayment of about $2 billion of debt.

In connection with the buyout, Aramark will redeem about $300 million of its 6.375% notes due February 2008, $300 million of its 7% notes due May 2007 and $31.6 million of its 7.25% notes and debentures due August 2007.

The transaction is expected to be completed at the end of January.

Aramark is a Philadelphia-based professional services company that provides food, hospitality, facility management services as well as uniform and work apparel.

Tropicana frees to trade

Moving to the secondary market, Tropicana Entertainment's credit facility broke for trading with the $1.53 billion five-year opco senior secured term loan (Ba3/B+) quoted at 101 1/8 bid, 101 3/8 offered, according to a trader.

The opco term loan is priced at Libor plus 250 bps. During syndication, the tranche was upsized from $1.49 billion and pricing was reverse flexed from original talk at launch of Libor plus 275 bps.

Tropicana's $2.15 billion credit facility also includes a $180 million opco senior secured revolver (Ba3/B+) priced at Libor plus 275 bps and a $440 million 18-month senior secured loan (B2/B+) to be borrowed by LV Tropicana priced at Libor plus 250 bps. During syndication, pricing on the LV Tropicana 18-month loan was reverse flexed from original talk at launch of Libor plus 300 bps.

Proceeds from the deal were used to fund Columbia Entertainment's recently completed acquisition of Aztar Corp. for about $54.00 per share in cash.

The 18-month senior secured debt is being borrowed by LV Tropicana, which will indirectly hold Aztar's 34-acre parcel situated on the Las Vegas "Strip," has two six-month extension options. It is expected that the loan will be refinanced with permanent financing for the redevelopment of the property.

Credit Suisse acted as the lead bank on the deal.

Columbia is a Fort Mitchell, Ky., owner, developer and operator of hotel properties and casinos. Aztar is a Phoenix-based gaming company.

Herbst closes

Herbst Gaming Inc. closed on its acquisition of The Sands Regent, paying approximately $119 million in cash for the outstanding securities of The Sands Regent, according to a company news release.

In connection with the transaction, Herbst got a new $875 million senior secured credit facility (Ba3/B+) consisting of a $175 million five-year revolver priced at Libor plus 200 bps, a $375 million seven-year funded term loan B priced at Libor plus 187.5 bps and a $325 million one-year, with seven-year final maturity, delayed-draw term loan priced at Libor plus 187.5 bps with a 50 bps unused fee.

During syndication, pricing on the two term loans was reverse flexed from original talk at launch of Libor plus 225 bps.

Proceeds from the delayed-draw loan will be used for the acquisition of MGM Mirage's Buffalo Bill's, Primm Valley and Whiskey Pete's hotel-casinos, which are located in Primm, Nev., for $400 million. This acquisition is expected to close by the end of the first quarter of 2007, subject to customary closing conditions, including receipt of necessary regulatory and governmental approvals.

In addition to helping fund the acquisitions, the new credit facility was used to refinance existing bank debt and be used for working capital and general corporate needs.

Herbst is a Las Vegas-based slot route operator.

Boston Generating closes

Boston Generating LLC closed on its dividend recapitalization transaction, according to a news release, which consisted of a new $1.8 billion credit facility and a $300 million 10-year holding company mezzanine tranche.

The credit facility is comprised of a $1.13 billion first-lien seven-year term loan B (B1/B+) priced at Libor plus 225 bps with 101 soft call protection for one year, a $250 million seven-year synthetic letter-of-credit facility (B1/B+) priced at Libor plus 225 bps with 101 soft call protection for one year, a $350 million 71/2-year second-lien term loan (B3/B-) priced at Libor plus 425 bps with call protection of 102 in year one and 101 in year two and a $70 million seven-year synthetic revolver (B1/B+) priced at Libor plus 225 bps.

During syndication, the term loan B was upsized from $1.08 billion, pricing on the term loan B and synthetic letter-of-credit facility was reverse flexed from original talk at launch of Libor plus 300 bps, the second-lien loan was downsized from $400 million and reverse flexed from original talk of Libor plus 500 bps, and the revolver was changed to a synthetic tranche with the tenor revised from five years and pricing reduced from original talk at launch of Libor plus 300 bps.

The company's 10-year holding company mezzanine tranche is priced at Libor plus 700 bps pay in kind with call protection of non-callable for two years, then at 103 in year three, 102 in year four and 101 in year five.

During syndication, pricing on the mezzanine debt was lowered from original talk of Libor plus 850 bps PIK.

Credit Suisse and Goldman Sachs acted as the lead banks on the power plant's deal, with Credit Suisse the left lead.

As part of the recapitalization, Boston Generating repaid about $800 million of existing debt. The recapitalization returned about $1 billion to equity holders.

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