Datatel, Six Flags, Capital Safety, 99 Cents break; Hoffmaster, Arizona Chem tweak deals

By Sara Rosenberg

New York, Dec. 16 - Datatel Inc. (Sophia LP) saw its credit facility free up for trading on Friday, with the term loan B trading above its original issue discount price, and Six Flags Entertainment Corp., Capital Safety and 99 Cents Only Stores emerged in the secondary market as well.

Over in the primary market, Hoffmaster Group Inc. revised its second-lien term loan, lowering pricing and setting the original issue discount at the tight end of talk, and Arizona Chemical Inc. reduced its term loan B size while trimming the dividend payment that the debt is funding.

Datatel starts trading

Datatel's credit facility made its way into the secondary market on Friday, with the $1.075 billion 61/2-year term loan B quoted at 99½ bid, par offered on the break and then it moved up to 99 5/8 bid, par 1/8 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 981/2. There is 101 soft call protection for one year.

During syndication, the term loan B was upsized from $1.07 billion to fund the original issue discount, which tightened from 98.

The company's $1.2 billion credit facility (B1/B+) also includes a $125 million five-year revolver priced at Libor plus 475 bps with no Libor floor.

Datatel lead banks

Bank of America Merrill Lynch, Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are the lead banks on Datatel's credit facility.

Proceeds, along with $530 million of notes backed by commitment for a senior unsecured bridge loan, will be used to fund the $1.775 billion acquisition of SunGard Higher Education by Hellman & Friedman LLC from SunGard Data Systems Inc. and the concurrent merger with Datatel, an existing Hellman & Friedman portfolio company.

Once SunGard Higher Education is merged with Datatel, the combined company will operate under a new name that will be announced by the parties at the closing of the transactions.

Datatel is a Fairfax, Va.-based provider of technology products, services and insight to higher education. SunGard Higher Education is a Malvern, Pa.-based provider of software and services to the higher education community.

Six Flags hits secondary

Six Flags' credit facility freed up too, with the $860 million seven-year term loan B quoted at 99½ bid, 99¾ offered, according to a market source.

Pricing on the term loan B is Libor plus 325 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.

The company's $1.135 billion credit facility (B1/BB+) also includes a $75 million five-year term loan A and a $200 million five-year revolver, both priced at Libor plus 225 bps.

During syndication, the term loan B was upsized from $700 million and the term loan A was downsized from $250 million.

Wells Fargo Securities LLC, Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and Goldman Sachs & Co. are leading the deal that will be used to refinance an existing credit facility.

Six Flags is a Grand Prairie, Texas-based regional theme park company.

Capital Safety frees up

Capital Safety's credit facility also broke for trading, with the $425 million seven-year term loan B quoted at 99 bid, 99½ offered on the open and then it moved up to 99¼ bid, 99¾ offered, according to a market source.

The term loan B is priced at Libor plus 500 bps with a 1.25% Libor floor, and was sold at a discount of 98. There is 101 soft call protection for one year.

On Thursday, the B loan was upsized from $375 million as the senior unsecured notes being arranged with Crescent Capital Group were cut to $125 million from $175 million, pricing was lowered from Libor plus 525 bps and the net leverage maintenance coverage ratio was eliminated, making the tranche covenant-light.

As a result of the changes, senior leverage is now 4.25 times, up from 3.75 times previously, while total leverage is unchanged at 5.25 times.

Capital Safety revolver

In addition to the term loan B, Capital Safety's $470 million senior secured credit facility (Ba3/B) includes a $45 million five-year revolver priced at Libor plus 500 bps and sold at a discount of 98.

Pricing on the revolver was also reverse flexed from Libor plus 525 bps.

UBS Investment Bank, Morgan Stanley Senior Funding Inc., Mizuho Securities USA Inc. and KKR Capital Markets are leading the deal.

Proceeds from the credit facility and the junior capital will be used to fund the $1.12 billion buyout of the company by Kohlberg Kravis Roberts & Co. LP from Arle Capital Partners.

Capital Safety, a Red Wing, Minn.-based provider of fall protection equipment, expects to close on its buyout in January, subject to customary conditions, including regulatory approval.

99 Cents seen atop OID

Yet another deal to start trading was 99 Cents Only Stores, with its $525 million seven-year term loan (B2/B) quoted at 99 bid, 99½ offered on the open and then it moved up to 99 1/8 bid, 99 5/8 offered, according to a trader.

Pricing on the term loan is Libor plus 550 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 98. There is soft call protection of 102 in year one and 101 in year two.

Earlier this week, the call protection was sweetened from just 101 in year one and the financial covenants were removed from the term loan.

The company's $675 million facility also includes a $150 million five-year ABL revolver.

Prior to launch, the company has said in regulatory filings that term loan pricing would be Libor plus 600 bps with a 1.5% Libor floor and revolver pricing was outlined at Libor plus 200 bps with a 37.5 bps unused fee.

99 Cents being acquired

Proceeds from 99 Cents' credit facility will be used to help fund the company's buyout by Ares Management LLC and Canada Pension Plan Investment Board for $22.00 per share in cash in a transaction with a total equity value of about $1.6 billion.

Other funds for the purchase will come from $635.9 million of equity and a $250 million of 11% senior notes.

RBC Capital Markets, BMO Capital Markets and Deutsche Bank Securities Inc. are the lead banks on the credit facility.

Closing is anticipated in the first quarter of 2012, subject to shareholder approval. Regulatory approvals have already been obtained.

99 Cents is a City of Commerce, Calif.-based operator of extreme value retail stores.

Hoffmaster second-lien

Moving to the primary, Hoffmaster came out with changes to its $64 million seven-year second-lien term loan (Caa1/CCC+), cutting pricing to Libor plus 950 bps from Libor plus 975 bps and setting the original issue discount at 98, the low end of the 97 to 98 guidance, according to sources.

Libor floor on the second-lien loan was left unchanged at 1.5%. The tranche also includes call protection of 103 in year one, 102 in year two and 101 in year three.

As for the company's $235 million six-year first-lien term loan (B1/B), pricing remained at Libor plus 550 bps with a 1.5% Libor floor and an original issue discount of 98, sources remarked.

GE Capital Markets, Jefferies & Co. and Macquarie Capital (USA) Inc. are the lead banks on the $334 million deal that also provides for a $35 million five-year revolver (B1/B) and is expected to allocate in the middle of the Dec. 19 week.

Proceeds from the credit facility will help fund the buyout of the Oshkosh, Wis.-based producer of specialty disposable tabletop products by Metalmark Capital from Kohlberg & Co.

Arizona Chem cuts size

Also revising its deal was Arizona Chemical, as it trimmed its six-year term loan B to $550 million from $750 million, while leaving talk unchanged at Libor plus 550 bps to 575 bps with a 1.5% Libor floor, an original issue discount of 97 and soft call protection of 102 in year one and 101 in year two, according to sources.

The company's now $610 million credit facility, down from $810 million, still includes a $60 million five-year revolver talked at Libor plus 550 bps to 575 bps with a 1.5% Libor floor.

Goldman Sachs & Co. is the lead bank on the deal, with Jefferies & Co. and Macquarie Capital acting as co-managers.

Proceeds will be used to fund a dividend, the size of which was reduced due to the term B downsizing, and to refinance existing debt.

Arizona Chemical is a Jacksonville, Fla., supplier of pine chemicals to the adhesives, inks and coatings and oleochemicals markets.

Sotera fills out

In other news, Sotera Defense Solutions' $35 million add-on term loan was fully syndicated ahead of its Friday commitment deadline, with pricing firming in line with initial talk at Libor plus 550 bps with a 1.5% Libor floor and an original issue discount of 981/2, according to a market source.

The coupon and floor match that of the existing term loan.

Wells Fargo Securities LLC is the lead bank on the deal that will be used to fund the acquisition of Potomac Fusion Inc., a Chantilly, Va.-based developer of data fusion, data analytics, cyber and visualization services for U.S. Intelligence Community and Department of Defense Tactical ISR mission systems operating in a cloud computing environment.

Closing is expected this month.

Sotera is a McLean, Va.-based provider of mission-critical, technology-based systems and services for national security customers.

A. M. Castle closes

A. M. Castle & Co. completed its acquisition of Tube Supply Inc., a Houston-based distributor of specialty tubular and bar products for the oil and gas industry, for $165 million, according to a news release.

With the transaction, A. M. Castle got a new $100 million four-year senior secured asset-based revolving credit facility led by Jefferies & Co. and Wells Fargo Securities LLC.

Other funds for the acquisition came from $225 million of senior secured notes and $50 million of convertible senior notes.

A. M. Castle is an Oak Brook, Ill.-based distributor of specialty metal and plastic products, value-added services and supply chain services.

Sinclair wraps deal

Sinclair Television Group Inc. completed its $530 million of incremental term loans (Ba1/BB+), comprised of a $372.5 million B tranche due October 2016 and a $157.5 million A tranche due March 2016, according to a news release.

Pricing on the incremental term B debt is Libor plus 300 bps with a 1% Libor floor, and it was sold at an original issue discount of 99. Pricing on the incremental term loan A is Libor plus 225 bps.

During syndication, the incremental B loan was upsized from $280 million and the discount tightened from 981/2, and the incremental A loan was downsized from $250 million.

J.P. Morgan Securities LLC, Wells Fargo Securities LLC and Deutsche Bank Securities Inc. led the deal that will be used to fund the $385 million purchase of Freedom Communications' broadcast assets and the $200 million acquisition of Four Points Media Group LLC from Cerberus Capital Management LP.

Sinclair amends revolver

Also, Sinclair completed the amendment to its existing credit facility, under which the revolver was upsized to $97.5 million, just shy of the initial $100 million target, from $75.4 million. The maturity was extended to March 2016 from 2013.

Pricing on the revolver was reduced to Libor plus 225 bps from Libor plus 400 bps with a 2% Libor floor.

The company may draw on the revolver or use cash on hand to help with the Freedom and Four Points acquisitions.

Closing is expected on Freedom in early January and on Four Points in late March.

Sinclair is a Hunt Valley, Md.-based television broadcasting company. Freedom is an Irvine, Calif.-based media company operating print publications, broadcast television stations and interactive businesses. Four Points is an owner and operator of seven stations.

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