Aspect Software sets price talk; Supervalu, Constellation Brands break for trading

By Sara Rosenberg

New York, May 30 - Aspect Software Inc. came out with price talk on its credit facility as the deal was officially launched into syndication on Tuesday.

Meanwhile, in the secondary, Supervalu Inc. and Constellation Brands Inc. freed for trading during market hours, with both deals seeing their term loan B's trade in the low-par context.

Aspect Software released price talk on its $1.16 billion credit facility as the deal was presented to lenders through a bank meeting that took place Tuesday afternoon, according to a market source.

The $725 million five-year first-lien term loan B (B2/B+) and the $50 million revolver (B2/B+) were both launched to investors with opening price talk of Libor plus 250 basis points, and the $385 million six-year second-lien term loan (Caa1/CCC+) was launched to investors with opening price talk of Libor plus 600 basis points, the source said.

JPMorgan and Deutsche Bank are the lead banks on the deal, with JPMorgan the left lead.

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

Aspect Software is a Westford, Mass., provider of call center software and equipment.

Supervalu frees to trade

Supervalu allocated its credit facility during Tuesday's session to see its $1.25 billion six-year term loan B break for trading in the low-par region, according to a trader.

The B loan was quoted at par 1/8 bid, par 3/8 offered immediately following the break, traded as low as 99¾ bid, par offered and then settled at par bid, par 3/8 offered where it closed out the day, the trader said.

The term loan B is priced with an interest rate of Libor plus 175 basis points. Late last week, the syndicate had upsized the tranche from $750 million by shifting $500 million out of its term loan A.

The five-year term loan A is sized at $750 million, reduced from an original size of $1.25 billion, and carries pricing of Libor plus 150 basis points.

Supervalu's $4 billion credit facility (NA/NA/BB) also contains a $2 billion five year revolver with an interest rate of Libor plus 150 basis points and a 40 basis point unused fee.

RBS Securities is the lead arranger and bookrunner on the credit facility. Bank of America, Citigroup Corporate and Investment Banking and Rabobank are co-syndication agents, and CoBank and US Bank are co-documentation agents.

Other banks that have signed on to the transaction include Credit Suisse, Merrill Lynch Capital Corp., Sovereign Bank, UBS Investment Bank, Wells Fargo, SunTrust, Fortis, BOTM, Union Bank of California, AgFirst Farm Credit Bank, Farm Credit Bank of Texas, The Bank of New York and General Electric Capital Corp.

Proceeds from the credit facility will be used by the Eden Prairie, Minn., supermarket operator to purchase some assets from Albertson's Inc., including the operations of Acme Markets, Bristol Farms, Jewel-Osco, Shaw's Supermarkets, Star Markets, and Albertsons banner stores in the Intermountain, Northwest and Southern California regions.

Supervalu's total consideration is $12.4 billion in stock, cash and the assumption of $6.1 billion of Albertson's debt.

The credit facility is expected to close on Thursday.

Constellation breaks

Constellation Brands' credit facility also freed for trading during the Tuesday session, with its $2.3 billion term loan B seen quoted at par bid, par ½ offered steadily throughout the day, according to a trader.

The term loan B is priced with an interest rate of Libor plus 150 basis points.

Constellation's $3.5 billion in bank debt (Ba2/BB) also contains a $500 million revolver and a $700 million term loan A, with both pro rata tranches priced at Libor plus 125 basis points.

JPMorgan is the lead bank on the deal that will be used to help fund the acquisition of Vincor International for C$36.50 per share.

The transaction is valued at about C$1.52 billion, which includes approximately C$1.27 billion of equity, based on Vincor's approximately 34.8 million shares outstanding on a fully diluted basis, and the assumption of about C$250 million of Vincor's net debt as of Dec. 31.

Closing is targeted for June 5, subject to customary regulatory approvals and other closing conditions.

Last year, Constellation began a cash takeover bid for Vincor at C$31 per share, which was later upped to C$33 per share before being dismissed altogether.

To fund the takeover bid, Constellation had come to market with a $1.2 billion credit facility consisting of a $300 million term loan A talked at Libor plus 150 basis points and a $900 million term loan C talked at Libor plus 175 basis points that was being led by JPMorgan and Citigroup. This deal had to be pulled in December when the takeover bid failed.

Constellation is a Fairport, N.Y., producer and marketer of beverage alcohol brands. Vincor is a Mississauga, Ont., wine company.

Hanger closes

Hanger Orthopedic Group Inc. closed on its $305 million credit facility (B2/B) consisting of a $230 million term loan with an interest rate of Libor plus 250 bps and a $75 million revolver, according to a company news release.

The term loan contains a step down in pricing to Libor plus 225 basis points if total leverage is less than 5x and corporate ratings are no less than B2/B.

During syndication, pricing on the term loan was reverse flexed from Libor plus 275 basis points, with the addition of the step down.

Lehman and Citigroup acted as the lead banks on the deal, with Lehman the left lead and Citi the administrative agent.

Proceeds were used to help refinance all of the company's outstanding bank debt, bond debt and preferred stock.

The company also used the proceeds from a private placement of $50 million 3.33% convertible perpetual preferred stock to Ares Corporate Opportunities Fund, LP, and $175 million of senior unsecured notes for the refinancing.

The 10¼% bond offering had been downsized from $190 million prior to pricing, with the difference in funds made up by the company through available cash.

Of the total proceeds, Hanger used about $155 million to repay revolver and term loan debt, $223 million to refinance its 10 3/8% senior notes and its 11¼% senior subordinated notes due 2009 and about $65 million to redeem its outstanding 10% redeemable preferred stock.

Hanger is a Bethesda, Md., provider of orthotic and prosthetic patient-care services.

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