Neiman, Sensata break; Skype dips on buyout; Delphi sets spread, considers pro rata upsize

By Sara Rosenberg

New York, May 10 - Neiman Marcus Group Inc. and Sensata Technologies BV both saw their credit facilities free up for trading on Tuesday, and Skype Global Sarl's term loan softened after the company announced that it is being acquired by Microsoft Corp.

Over in the primary, Delphi Corp. firmed pricing on its term loan B at the low end of revised talk and is thinking about increasing the size of both its revolver and term loan A tranches following a downsizing to its bond offering.

Also, SemGroup Corp. and Twin River Management Group Inc. released price talk on their credit facilities as the deals were presented to lenders during the session, and Smart & Final Inc. began circulating guidance on its upcoming transaction.

Additionally, API Technologies Corp. came out with timing on its credit facility and revealed a slight change to the overall size of the deal, details on Fifth Third Processing Solutions LLC's refinancing/repricing surfaced, and Asurion, infoGROUP Inc., JBS USA and GEO Specialty Chemicals Inc. emerged with new deal plans.

Neiman Marcus starts trading

Neiman Marcus' credit facility made its way into the secondary market on Tuesday, with the $2.06 billion seven-year term loan B (B2/BB-) quoted by one trader at par ¼ bid, par ½ offered on the open. By late afternoon, the loan had traded down to 99 7/8 bid, par 1/8 offered, a second trader remarked.

Pricing on the B loan is Libor plus 350 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 993/4. There is 101 soft call protection for one year.

During syndication, pricing on the term loan B was lowered from talk of Libor plus 375 bps to 400 bps and the original issue discount tightened from 991/2.

The $2.76 billion amended and restated senior secured credit facility also includes a $700 million five-year ABL revolver that is priced at Libor plus 225 bps with a 37.5 bps unused fee.

Neiman refinancing debt

Proceeds from Neiman Marcus' credit facility, along with cash on hand, will be used to take out existing bank debt and to repurchase or redeem $752.4 million 9%/9¾% senior notes due 2015.

Essentially, through the amendment and restatement, the company is increasing its term loan from $1.51 billion and increasing its revolver from $600 million, and it is the incremental loan proceeds that will be used for the notes buyback.

The company previously explained in a news release that the purpose of the refinancing is to lower interest expense going forward by taking advantage of current market conditions.

Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Wells Fargo Securities LLC and Barclays Capital Inc. are the lead banks on the deal.

Neiman Marcus is a Dallas-based high-end specialty retailer.

Sensata frees up

Sensata Technologies' credit facility also began trading, with the $1.1 billion seven-year covenant-light term loan B quoted at par 3/8 bid, par 7/8 offered on the open and then it moved to par ½ bid, 101 offered, according to a trader.

Pricing on the term loan is Libor plus 300 bps with a 1% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

On Monday, the term loan had been downsized from $1.2 billion on the back of the company's bond offering being upsized to $700 million from $600 million, pricing was reduced from talk of Libor plus 350 bps to 375 bps, the offer price widened from par and call protection was extended from six months.

Sensata repaying loan, notes

Proceeds from Sensata's credit facility and notes, which priced on Friday at par to yield 6½%, will be used to repay existing term loans, 8% senior notes due 2014 and 9% senior subordinated notes due 2016 and for general corporate purposes.

The tender offers for the notes expire on May 25.

The company's new $1.35 billion credit facility (Ba3/BB+) also includes a $250 million five-year revolver.

Morgan Stanley & Co. Inc. and Barclays Capital Inc. are the joint lead arrangers on the deal, with Goldman Sachs & Co., BMO Capital Markets Corp. and RBC Capital Markets LLC the bookrunners.

Sensata is an Attleboro, Mass.-based designer and manufacturer of sensors and controls.

Skype term loan slides

Skype's term loan dropped to par bid, par ½ offered from par ¼ bid, par ¾ offered after news emerged that the company is being bought by Microsoft for $8.5 billion in cash, according to a trader.

The selling investor group is led by Silver Lake and includes eBay International AG, CPP Investment Board, Joltid Ltd. in partnership with Europlay Capital Advisors and Andreessen Horowitz.

The acquisition is subject to regulatory approvals and other customary closing conditions. The parties hope to obtain all required regulatory clearances during the course of this year.

Skype is a Luxembourg-based internet communications company. Microsoft is a Redmond, Wash.-based software and services company.

Caesers levels steady

Caesars Entertainment Operating Co. Inc.'s term loans were quoted unchanged to a little tighter on Tuesday as the company reported first-quarter financial results, according to traders.

One trader had the term loan B-1, B-2 and B-3 quoted at 93¾ bid, 94¼ offered, flat on the day, while a second trader was seeing the debt at 93 7/8 bid, 94 1/8 offered, compared to Monday's levels of 93¾ bid, 94¼ offered, the trader said.

For the first quarter, the Las Vegas-based casino entertainment company reported a net loss of $144.8 million, down 25.2% from a net loss of $193.6 million for the year-ago quarter.

Revenues for the quarter were $2.179 billion, down about 0.4% from $2.188 billion in the first quarter of 2010.

And, adjusted EBITDA for the quarter was $469 million, down 2.6% from $481.6 million in the prior year.

Delphi determines spread

Switching to the primary, Delphi finalized pricing on its $1.15 billion six-year term loan B at Libor plus 250 bps, the low end of revised talk of Libor plus 250 bps to 275 bps and down from initial talk of Libor plus 300 bps to 325 bps, according to a market source.

The loan includes a 1% Libor floor and 101 soft call protection for six months and is being sold at an original issue discount of 993/4.

Earlier in syndication, the Libor floor was reduced from 1.25%, the discount tightened from 99½ and call protection was added.

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

Delphi mulls pro rata upsize

Also, Delphi is considering increasing its five-year revolver to somewhere between $1.02 billion and $1.1 billion from $1 billion, and its five-year term loan A to $275 million from $250 million, another source told Prospect News.

Proceeds from the up to $2.525 billion credit facility (Baa3) will be used to help fund $4.4 billion of stock repurchases representing the stakes of General Motors Corp. and the Pension Benefit Guaranty Corp. in Delphi and pay down existing term loan B debt.

Other funds for the transaction will come from $1 billion of senior notes that were downsized from $1.1 billion.

Delphi is a Troy, Mich.-based automotive electronics manufacturer.

SemGroup sets guidance

SemGroup held a bank meeting on Tuesday afternoon to launch its $650 million credit facility (B1) to investors, at which time price talk as well as additional lead banks were disclosed, according to a market source.

The $350 million five-year revolver and $100 million five-year term loan A are being talked at Libor plus 325 bps, subject to a grid, with the revolver having a 50 bps unused fee, and the $200 million seven-year term loan B is being talked at Libor plus 375 bps to 400 bps with a 1.25% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year, the source said.

RBS Securities Inc. is the left lead bank on the deal that will be used to refinance existing debt. In addition, it was revealed that Barclays Capital Inc., BNP Paribas Securities Corp. and Citigroup Global Markets Inc. are on the right of the transaction.

SemGroup is a Tulsa, Okla.-based midstream service company.

Twin River launches

Twin River Management Group also held a bank meeting on Tuesday, and with the launch, price talk on the $260 million 61/2-year term loan came out at Libor plus 400 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the lead banks on the $285 million senior secured credit facility (B1/BB), which also includes a $25 million five-year revolver.

Proceeds will be used to refinance existing debt.

Twin River Management is the owner and operator of the Twin River casino located near Providence, R.I.

Smart & Final floats talk

Smart & Final started distributing price talk on its $400 million of first- and second-lien covenant-light term loans as the debt is gearing up to launch with a bank meeting on Thursday afternoon, according to a market source.

The $325 million seven-year first-lien term loan is being talked at Libor plus 500 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source said.

And, the $75 million 71/2-year second-lien term loan is being talked at Libor plus 875 bps with a 1.25% floor, a discount of 98½ and call protection of 103 in year one, 102 in year two and 101 in year three, the source continued.

Smart & Final plans revolver

In addition to the term loans, Skype is getting a $125 million ABL revolving credit facility led by Bank of America Merrill Lynch.

Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the joint lead arrangers and bookrunners on the term loans, and Morgan Joseph is a co-manager.

Proceeds will be used to refinance existing debt and pay a dividend to shareholders.

Leverage through the first-lien is 3.2 times and total leverage is 3.9 times.

Smart & Final is a Commerce, Calif.-based operator of food and restaurant supplies stores.

API timing emerges

API Technologies nailed down timing on the launch of its proposed $220 million senior credit facility with the scheduling of a bank meeting for Thursday, according to a market source.

The facility consists of a $20 million revolver and a $200 million term loan B, the source said.

This is slightly different than the structure that the company had previously outlined in filings with the Securities and Exchange Commission. In those filings, the deal was described as a $15 million revolver and $200 million in term loans.

Morgan Stanley & Co. Inc. is the lead bank on the deal.

API buying Spectrum

Proceeds from API Technologies' credit facility will be used to help fund the acquisition of Spectrum Control Inc. for $20 per share. The total purchase price is about $270 million.

The transaction is subject to customary closing conditions, including approval pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and approval of Spectrum's shareholders.

There was a go-shop period through May 7.

API is a Ronkonkoma, N.Y.-based provider of secure communications, electronic components and subsystems, and contract manufacturing services to the defense and aerospace industries. Spectrum is a Fairview, Pa.-based designer and manufacturer of high performance, custom services for the defense, aerospace, industrial and medical industries.

Fifth Third reveals details

Fifth Third Processing Solutions saw tranche sizes and pricing come out on its refinancing/repricing transaction on the back of the lender call that was held Monday afternoon to launch the deal, according to a market source.

The company is shopping a $1.621 billion first-lien term loan B-1 due November 2016 at Libor plus 325 bps to 350 bps with a 1.25% Libor floor, a par offer price and 101 soft call protection for one year, the source said.

Additionally, the company is getting a new $150 million first-lien term loan B-2 due November 2017 that is priced at Libor plus 350 bps with a 1.5% Libor floor, a par price and 101 soft call protection for one year, the source remarked, adding that this tranche is already spoken for, and is, therefore, not being marketed.

The term loan B-1 has excess cash flow and mandatory debt sweeps. The term loan B-2 does not.

Fifth Third to repay second-lien

Proceeds from Fifth Third Processing's first-lien term loans will be used to repay an existing $200 million second-lien term loan due November 2017 at a price of 102 and refinance/reprice a roughly $1.575 billion first-lien term loan due November 2016.

The company's goal through this deal is to move to an all first-lien structure but keep its existing maturity profile intact, the source explained.

The existing first-lien term loan as obtained in 2010 at pricing of Libor plus 400 bps, and the second-lien term loan was done at Libor plus 675 bps. Both have a 1.5% Libor floor and were sold at an original issue discount of 99.

Fifth Third lead banks

Goldman Sachs & Co., J.P. Morgan Securities LLC and Fifth Third Securities Inc. are the lead banks on Fifth Third Processing's deal.

Commitments towards the term loan B-1 are due at noon ET on Friday.

The company attempted a transaction like this earlier in the year, but it was pulled in March. At that time, the plan was to get a $1.775 billion first-lien term loan talked at Libor plus 300 bps to 325 bps with a 1.25% Libor floor, a par offer price and 101 soft call protection for one year.

Fifth Third Processing is a Cincinnati-based provider of payment transaction processing and acceptance services.

Asurion plans refi

Asurion has set a call for Thursday to launch a proposed $3.57 billion credit facility that will be used to refinance existing debt, according to a market source.

The facility consists of a $100 million five-year revolver, a $2.48 billion seven-year first-lien term loan B and a $990 million eight-year second-lien term loan, the source said.

Price talk is not yet available.

Bank of America Merrill Lynch, Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. Inc., Goldman Sachs & Co. and Deutsche Bank Securities Inc. are the lead banks on the deal.

Asurion second attempt

Asurion had attempted a larger scale refinancing earlier this year, but it was pulled in March due to market conditions.

That deal consisted of a $120 million five-year revolver (B+), a $3.5 billion seven-year first-lien term loan (B+) and a $1.02 billion eight-year second-lien term loan (B-).

Talk on the first-lien term loan had been Libor plus 375 bps to 400 bps with a 1.5% Libor floor, an original issue discount of 99 to 99½ and 101 soft call protection for one year, and talk on the second-lien loan had been Libor plus 775 bps with a 1.5% Libor floor, an original issue discount of 99 to 99½ and it was non-callable for one year, then at 103 in year two and 101 in year three.

Asurion is a Nashville, Tenn.-based provider of technology protection services.

infoGROUP readies deal

infoGROUP is scheduled to hold a bank meeting on Thursday to launch a proposed $460 million credit facility that is being led by Bank of America Merrill Lynch, according to a market source.

The facility consists of a $50 million five-year revolver and a $410 million seven-year term loan B, the source said.

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

infoGROUP is an Omaha, Neb.-based provider of data-driven and interactive resources for targeted sales, marketing and research services.

JBS coming soon

Also launching with a bank meeting Thursday is JBS' $400 million seven-year term loan B, according to a market source.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to refinance existing debt.

JBS is a Greeley, Colo.-based animal protein processor.

GEO Specialty getting loan

GEO Specialty Chemicals plans to hold small meetings on Wednesday and Thursday to do a club style syndication of its proposed $100 million to $120 million term loan, according to a market source.

Goldman Sachs & Co. is the lead bank on the deal.

Proceeds will be used to refinance existing debt and to fund a potential acquisition.

GEO Specialty Chemicals is a Lafayette, Ind.-based producer of specialty chemicals.

Iron Data wraps deal

In other news, Iron Data LLC closed on its credit facility after downsizing the deal to $85 million from $110 million and lowering pricing to Libor plus 475 bps from Libor plus 500 bps, according to a market source.

The new structure consists of a $7 million revolver and a $78 million term loan, whereas initially the company was proposing a $15 million revolver and a $95 million term loan, the source said.

The 1.5% Libor floor and original issue discount of 99 on the term loan were left unchanged. The revolver has no floor.

SunTrust Robinson Humphrey Inc. acted as the lead bank on the deal that is being used to help fund the acquisition of the company by Arlington Capital Partners.

Iron Data ups equity

As a result of the downsizing to the credit facility, Iron Data is using more equity to fund its buyout.

"Launched deal with less than 30% equity check and investor pushback required higher equity amount," the source explained.

Final senior leverage is 2.6 times and total leverage is 3.6 times, versus senior leverage of around 3.1 times and total leverage just shy of 4.3 times under the original structure.

Iron Data is an Atlanta-based provider of software that assesses, manages and monitors operational process issues for clients in the public sector and transportation/logistics.

MetroPCS closes

MetroPCS Wireless Inc. completed its $1 billion term loan B-3 add-on due March 2018 that is priced at Libor plus 375 bps with no Libor floor and was sold at par, according to an 8-K filed with the SEC on Tuesday. The loan has the same 101 soft call protection through March 2012 as the existing term loan B-3.

The add-on had been upsized from $600 million and the offer price firmed at the tight-end of the 99 7/8 to par talk during syndication.

J.P. Morgan Securities LLC acted the left lead bank on the deal that is being used to repay the company's existing term loan B-1 due 2013 and for general corporate purposes, including opportunistic spectrum acquisitions.

MetroPCS is a Dallas-based provider of unlimited wireless communications service for a flat rate with no annual contract.

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