Travelport slides with ratings cut; Bojangles flexes pricing higher; Immucor fills out

By Sara Rosenberg

New York, Aug. 16 - Travelport LLC's extended U.S. institutional bank debt headed lower in an overall slightly weaker secondary market on Tuesday as the company's ratings were downgraded by Moody's Investors Service.

Moving to the primary market, Bojangles Restaurants made changes to its term loan, including raising pricing, the Libor floor and original issue discount, and, as result, the deal was able to move into the documentation stage, and Immucor's Inc.'s term loan is oversubscribed at the recently revised terms.

Also, Renaissance Learning Inc. emerged with new deal plans as it announced that it is being bought out, and Open Text Inc. revealed that it is hoping to bring its amended and restated credit facility to market after the Labor Day holiday.

Travelport softens

Travelport's extended U.S. institutional bank debt dropped in light trading to 90½ bid, 92½ offered from 91½ bid, 93½ offered, following news that Moody's lowered the company's ratings, according to a trader.

"Not more active than usual. Kind of surprising. Guess guys have room in the triple-C baskets. Thought for sure there would be some CLOs that would have to sell it. [But] they haven't really come to play today," the trader remarked.

Also working against Travelport on Tuesday was the weaker tone in the market as, overall, things seemed to be down by about a quarter of a point on the day, the trader continued.

He went on to say that the secondary market is still improved from last week's dismal performance, but on a day-over-day basis, things were on the negative side.

Travelport downgrade details

Specifically, Moody's reduced Travelport's corporate family rating to Caa1 from B3, senior secured rating to B1 from Ba3, senior unsecured rating to Caa2 from Caa1 and subordinated instrument rating to Caa3 from Caa2. The outlook remains negative.

Moody's said that the revisions to ratings reflect the further weakening in operating results in the first half of the year, with Travelport's EBITDA falling to $283 million from $295 million in the 2010 year.

Additionally, the downgrade reflects the view that covenant headroom is likely to weaken in coming quarters, as the leverage covenant will move to 5.5 times at December from 5.75 times currently and to 5.25 times at June 2012.

Moody's said that the company's "ability to meet covenants will be challenged both by the recent trend in earnings as well as the gradual step-up in covenant levels."

Travelport is an Atlanta-based provider of transaction processing services to the travel industry.

Bojangles lifts pricing

Switching to the primary, Bojangles Restaurants reworked the coupon, Libor floor and original issue discount on its $190 million term loan and is now close to wrapping up as documentation is in the works, according to a market source.

Final pricing on the term loan is Libor plus 650 basis points with a 1.5% Libor floor and an original issue discount of 98, after widening out from talk of Libor plus 625 bps with 1.25% floor and a discount of 99, the source said.

The company's $215 million credit facility (B1/B) also includes a $25 million revolver.

Jefferies & Co. and RBC Capital Markets LLC are the lead banks on the deal that will be used, along with equity, to fund the buyout of the company by Advent International.

Bojangles is a Charlotte, N.C.-based owner of quick-service restaurants.

Immucor wraps syndication

Immucor's $600 million seven-year term loan B was oversubscribed ahead of Tuesday's 5 p.m. ET commitment deadline as investors got on board with the recently revised transaction, according to a market source who said that allocations should go out later this week.

The term loan B is priced at Libor plus 575 bps with a 1.5% Libor floor and an original issue discount of 96 and includes 101 soft call protection for one year.

On Monday, pricing on the loan was flexed up from talk of Libor plus 450 bps to 475 bps, and the original issue discount widened to 96 from 99.

Furthermore, the previously covenant-light B loan saw the addition of a senior secured net leverage covenant of 5.25 times.

The company's $700 million senior secured credit facility (Ba3/BB-) also includes a $100 million five-year revolver, of which no more than $25 million can be drawn at closing.

Immucor lead banks

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the joint lead arrangers on Immucor's credit facility and bookrunners with UBS Securities LLC.

Proceeds, along with $400 million of senior notes and up to $691 million of equity, will be used to fund the buyout of the company by TPG Capital for $27.00 per share in cash. The transaction has a fully diluted equity value of $1.973 billion.

As part of the buyout agreement, TPG is in the process of tendering for Immucor's common stock shares. The tender offer expires on Aug. 18, and there is a minimum tender condition of 84%.

Closing is also subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and the receipt of approvals under German laws - both of which have been obtained.

Immucor is a Norcross, Ga.-based provider of automated instrument-reagent systems to the blood transfusion industry.

Renaissance readies deal

In more new deal happenings, Renaissance Learning plans on approaching the loan market with a $270 million credit facility that is being led by RBC Capital Markets LLC, according to a market source.

Details on structure and timing on the deal are not yet available, the source said.

Proceeds, along with up to $196.7 million of equity, will be used to help fund the buyout of the company by Permira Funds for $14.85 per share in cash, or roughly $440 million.

Closing is anticipated in the fourth quarter, subject to customary conditions, including shareholder approval and clearance under the Hart-Scott-Rodino Act. It is not subject to financing.

Renaissance Learning is a Wisconsin Rapids, Wis.-based provider of technology-based school improvement and student assessment programs for K-12 schools.

Open Text expected next month

Open Text's proposed $900 million senior secured credit facility (Ba1) is anticipated to launch with a bank meeting sometime in September, according to a market source.

As was previously reported, the facility consists of a $100 million revolver, a $200 million delayed-draw term loan A and a $600 million term loan B.

Barclays Capital Inc. and RBC Capital Markets LLC are leading the deal that will be used to add cash to the balance sheet, refinance existing bank debt and for working capital purposes.

On July 13, the Open Text, a Waterloo, Ont.-based enterprise software company, announced that it acquired Global 360 Holding Corp., a Dallas-based provider of process and case management services, for about $260 million.

The acquisition was funded with revolver borrowings. With this new deal, the company plans on using term loan debt to repay those revolver drawings.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.