Pre-Paid Legal sets pricing; US Airways tightens talk; multiple issuers ratchet spread talk tighter

By Paul A. Harris

Portland, Ore., May 16 - Pre-Paid Legal Services Inc. set pricing on its $485 million of new term loans, while US Airways Group Inc. tightened price talk on its $1.6 billion of senior secured term loan B debt on Thursday, according to a market source.

Meanwhile, multiple issuers ratcheted spread talk tighter and hacked discounts.

The LCDX 20 index of bank loan credit default swaps finished the day at 104½ bid, 105 offered, up 1/8 of a point, according to a market source.

Pre-Paid Legal pricing

Pre-Paid Legal Services' $375 million six-year first-lien term loan B is talked at Libor plus 475 bps with a 1.25% Libor floor at 99.00, with a 101 12-month soft call and a 2.% annual amortization rate.

A $110 million seven-year second-lien term loan is talked at Libor plus 850 bps with a 1.25% Libor floor at 98.5, with hard calls at 103, 102 and 101.

Morgan Stanley Senior Funding Inc. and RBC Capital Markets are the joint lead arrangers on the deal.

Pre-Paid Legal Services is an Ada, Okla.-based provider of legal services.

US Airways tighter

US Airways Group announced tighter price talk on its $1.6 billion term B, with the $1 billion six-year term loan B-1 talked at Libor plus 325 bps, down from Libor plus 350 to 375 bps. The discount was cut to 99.5 from 99. The deal retains its 1% Libor floor.

A $600 million 31/2-year term loan B-2 that is talked at Libor plus 250 bps, down from 275 to 300 bps. The previously proposed 50-cent discount was eliminated, and the deal is set to price at par. The 1% Libor floor was retained.

The term loans have 101 soft call protection for six months.

Commitments were due on Thursday.

Financial covenants include minimum liquidity of $850 million prior to the merger with AMR and $2 billion post the merger, minimum collateral coverage of 1.5 times and minimum control account cash of $750 million, the source continued.

Citigroup Global Markets Inc., Barclays, Morgan Stanley Senior Funding Inc. and Goldman Sachs & Co. are the lead banks on the deal.

Proceeds will be used to refinance the company's existing term loan due in 2014, to refinance the GECAS spare parts and spare engines loans due 2014, to refinance the DCA slot loan due 2014 and to contribute $248 million of cash to the balance sheet for general corporate purposes.

Commitments are due on May 16, the source added.

US Airways is a Tempe, Ariz.-based airline company.

Pacific cuts spread, discount

Pacific Drilling SA tightened pricing on its $750 million five-year covenant-light senior secured term loan B to Libor plus 350 basis points from 400 bps and cut the discount by 50 cents, to 99.5 from 99.

The deal still has a 1% Libor floor, 101 soft call protection for one year and a 1% per annum amortization rate.

Recommitments were due by Thursday's close.

Citigroup Global Markets Inc., Goldman Sachs & Co., Deutsche Bank Securities Inc. and Barclays are the lead banks on the deal.

Security is a first-priority mortgage in Pacific Bora, Pacific Mistral, Pacific Scirocco & Pacific Santa Ana and a pledge of the stock of the collateral vessel owning entities and related assets.

Proceeds will be used to refinance existing commercial bank debt.

Other funds for the transaction will come from high-yield bonds. The total amount of loan and bond debt being raised is $1.5 billion, so the bonds are expected to be sized at $750 million, sources added.

Pacific Drilling is a Luxembourg-based ultra-deepwater drilling contractor.

Burlington pricing

Burlington Coat Factory Warehouse Corp. finalized pricing on its $871 million term loan B-2 due February 2017 on Thursday, according to a market source.

Commitments were due on Thursday.

J.P. Morgan Securities LLC is the lead bank on the deal.

Price talk on the B-2 loan is Libor plus 325 basis points with a 1% Libor floor and a par offer price, the source said.

The loan has 101 soft call protection for six months.

Proceeds will be used to refinance an existing $871 million term loan B-1 due February 2017 that is priced at Libor plus 425 bps with a 1.25% Libor floor.

Burlington Coat Factory is a Burlington, N.J.-based discount retailer.

Teiine Energy lowers talk

Teine Energy lowered spread talk for its $200 million six-year second-lien term loan to Libor plus 625 basis points from the earlier 650 to 675 bps talk.

Discount talk remains unchanged at 98 1/2.

The deal retains its 1.25% Libor floor and its hard call protection of 102 in year one and 101 in year two.

Commitments were due at Thursday's close.

Barclays is the lead bank on the deal.

Proceeds will be used to refinance existing debt and for general corporate purposes.

In addition to the term loan, the company is getting a C$175 million five-year revolver.

Net debt is 1.6 times.

Teine Energy is a Calgary, Alta.-based company focused on acquiring and developing low-cost, repeatable, long reserve life index, high netback oil and gas assets.

Digital Cinema tightens

Digital Cinema Implementation Partners LLC (Kasima LLC) tightened pricing on its $680 million term loan (Baa2), a market source said on Thursday.

The Libor spread is cut by 25 basis points to 250 bps from 275 bps.

A previously announced discount that would have offered the deal at 99.5 has been eliminated.

Remaining in place are the 0.75% Libor floor and the 101 soft call protection for one year.

Commitments were due by Thursday's close.

Also included in the company's $755 million credit facility is a $75 million revolver.

Barclays and Credit Suisse Securities (USA) LLC are the lead banks on the deal.

Proceeds will be used to refinance existing bank debt.

Commitments are due on May 10, the source added.

Digital Cinema is a Mahwah, N.J.-based digital cinema integrator.

School Specialty moves up

School Specialty Inc. moved up the deadline on its $125 million six-year first-lien term loan, according to a market source.

Commitments were due at Thursday's close; previously the book was expected to remain open until Friday.

Credit Suisse Securities (USA) LLC is the lead bank on the deal.

Price talk on the loan is Libor plus 850 basis points with a 1% Libor floor and an original issue discount of 98.

The loan has call protection of 102 in year one and 101 in year two, the source said.

Covenants include maximum total leverage and interest coverage ratios.

Proceeds will be used to help fund the company's exit from Chapter 11.

In addition to the term loan, the company is getting a $175 million ABL revolver that is being led by Bank of America Merrill Lynch and SunTrust Robinson Humphrey Inc.

School Specialty is a Greenville, Wis.-based education company.

PGT brings $105 million

PGT, Inc. plans to put in place $105 million of new senior secured credit facilities, according to a Thursday press release.

The all pro-rata deal features an $80 million five-year tranche A term loan that will amortize on a basis of 5% annually and a $25 million five-year revolver that will include a $5 million swing line facility and a $10 million letter of credit facility.

Pricing based on a leverage ratio, ranging from Libor plus 300 to 350 basis points.

The North Venice, Fla. window and door company plans to use the proceeds to fund a share repurchase and refinance its existing senior secured credit facilities.

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