VNU tweaks amendment; Paetec rises on paydown; Manitowoc ticks higher; LCDX heads lower

By Sara Rosenberg

New York, June 16 - VNU Group BV (Nielsen Co. BV) revised its amendment proposal that would extend some term loan debt by adding a fee for consents and changing allocations so as to try to get lenders on board with the transaction.

Over in the secondary market, Paetec Holding Corp.'s term loan B gained some ground as investors are expecting a repayment, Manitowoc Co. Inc.'s term loan debt strengthened and the LCDX 12 index fell with equities.

In other news, QVC Inc. is getting ready to kick off syndication on a new term loan B and, as a result, price talk on the deal has been floating around the market.

VNU sweetens amendment

VNU came out with some changes to its amendment proposal after the company was unable to get enough consents from lenders by Monday's deadline for the original plan to pass, according to a market source.

As before, the company is looking to extend $1.25 billion of its term loan to May 2016 from August 2013, and is offering higher pricing of Libor plus 375 bps on the extended debt, with no Libor floor.

However, under the new terms, lenders are now being offered a 10 basis point amendment fee as opposed to getting no amendment fee, the source said.

In addition, the suggestion for non-pro rata allocation on the extended term loan was removed, the source remarked.

Following the changes, lenders were being asked to get their consents in by 3 p.m. ET on Tuesday. By late day, the source had still not heard whether the amendment had passed.

Citigroup is the lead bank on the amendment.

VNU notes a sore spot

The source explained that one of the major issues that loan guys were having with VNU's amendment is that it allows for a $500 million senior secured notes offering that is ranked pari passu with the bank debt.

VNU placed $500 million of senior secured notes with Goldman Sachs and needs the amendment to finalize the deal. The notes are priced at 8.5% cash pay plus an original issue discount of 98.

"Bank lenders weren't happy with the note deal. They have the same risk profile, but return is much higher than the bank. A lot of people weren't happy," the source remarked.

All of the proceeds from the notes will be used to pay down non-extended term loan debt. If the company issues more than $500 million of new debt, only 90% of the excess amount will go towards bank debt repayment. The remaining 10%, the company gets to keep, the source continued.

VNU term loan steady

Despite all the commotion surrounding the amendment, VNU's term loan managed to hold firm in the secondary market.

The term loan was quoted at 90 bid, 93 offered, unchanged on the day, the source said.

He explained that since people were still unsure as to whether the amendment passed, the loan was pretty much just sitting still.

VNU is a New York-based, Netherlands-based information and media company.

Paetec trades higher

Also in trading, Paetec's term loan B was stronger on Tuesday after news emerged that the company would be paying down a portion of the debt, according to a trader.

The term loan B was quoted at 98½ bid, no offers, up from 94 bid, 95 offered on Monday, the trader remarked.

Early in the day, the company announced plans to sell $350 million of senior secured notes and said that proceeds from that offering will be used to repay term loan borrowings.

Paetec is a Fairport, N.Y.-based provider of integrated communications services.

Manitowoc heads up

Manitowoc's term loan debt moved back into higher ground after bouncing around the past couple of days on amendment news, according to a trader.

The term loan B was quoted at 93 bid, 94 offered, up from 90¾ bid, 92¾ offered, and the term loan A was quoted at 92 bid, 93½ offered, up from 91 bid, 93 offered, the trader said. On Friday, the term loan B was 91½ bid, 93½ offered.

"It was around these levels last week [around June 10] when the amendment was being considered. Then it came back in a little and now it looks like it's back up," the trader added.

On Monday, the company announced that it successfully amended its credit facility, modifying covenants, increasing pricing and eliminating the option to increase the borrowing capacity of the revolver or term loan A.

Manitowoc amendment details

As was previously reported, under Manitowoc's amendment, the minimum consolidated interest coverage ratio was reduced for each fiscal quarter ending between Sept. 30, 2009 and June 30, 2012, the maximum consolidated total leverage ratio was increased for each fiscal quarter ending between June 30, 2009 and Sept. 30, 2012, a new consolidated senior secured leverage ratio was added for each fiscal quarter ending on or after June 30, 2011 and a new covenant limiting capital expenditures was added.

In addition, pricing on the facility was increased to a range of Libor plus 375 bps to 500 bps based on total leverage from a range of Libor plus 200 bps to 325 bps, and pricing on the term loan B was increased to Libor plus 450 bps with a step up to Libor plus 500 bps based on leverage.

The amendment also added or increased mandatory prepayment requirements upon the sale of equity from excess cash flow or in connection with the sale of long-term debt or accounts receivable in securitization transactions, and further restricted the company's ability to pay dividends and distributions and to make acquisitions.

Lenders were paid a 50 bps amendment fee and the amendment was completed on June 12.

Manitowoc is a Manitowoc, Wis.-based manufacturer and seller of cranes and related products, and foodservice equipment.

LCDX slides

The LCDX 12 index posted some losses on Tuesday in sympathy with the stock market, according to a trader.

The index was quoted at 86.50 bid, 86.80 offered, down from 87.10 bid, 87.40 offered, the trader said.

Meanwhile, Nasdaq was down 20.2 points, or 1.11%, Dow Jones Industrial Average was down 107.46 points, or 1.25%, S&P 500 was down 11.75 points, or 1.27%, and NYSE was down 80.50 points, or 1.35%.

QVC readies launch

In more loan happenings, QVC has scheduled a bank meeting for Wednesday to launch its proposed $500 million term loan B and has begun telling investors what to expect on the price talk front, according to a market source.

The loan is being guided at Libor plus 350 basis points with a 2% Libor floor, the source said, adding that original issue discount talk is not yet available.

Bank of America and JPMorgan are the lead banks on the deal.

Proceeds will be used for general corporate purposes.

QVC is a West Chester, Pa.-based multimedia retailer.

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