ATI Physical OID emerges; Ardent Health sets talk; General Growth up on Brookfield agreement

By Sara Rosenberg

New York, Feb. 24 - ATI Physical Therapy came out with an original issue discount on its proposed credit facility as the deal was presented to lenders on Wednesday morning, and Ardent Health Services LLC released official talk on its newly launched loan that is a bit higher than what was previously being whispered.

Also on the new deal front, Revlon Consumer Products Corp. announced plans to come to market with a new credit facility that will refinance its existing debt and result in extended maturities.

Over in trading happenings, General Growth Properties Inc.'s term loan was stronger with news of a proposed equity investment by Brookfield Asset Management Inc., and Hertz Global Holdings Inc.'s strip of bank debt was steady with earnings results.

ATI sets OID talk

ATI Physical Therapy held a "very well attended" bank meeting on Wednesday morning to kick off syndication on its $170 million credit facility, and in connection with the launch, the original issue discount was announced, according to a market source.

Both the $25 million revolver and the $145 million term loan are being offered at a discount price of 98, the source remarked.

And, official price talk on the tranches came right in line with the unofficial talk that has been floating around since the start of this week at Libor plus 500 basis points with a 2% Libor floor, the source added.

ATI being acquired

Proceeds from ATI Physical Therapy's credit facility will be used to help fund the buyout of the company by GTCR Golder Rauner LLC.

Barclays and GE Capital are the lead banks on the deal, with Barclays the left lead.

Senior leverage is around 3.4 times and total leverage is around 4.6 times.

ATI Physical Therapy is a Bolingbrook, Ill.-based rehabilitation provider.

Ardent official talk surfaces

Another company to hold a bank meeting on Wednesday was Ardent Health Services, and with the launch of its $475 million credit facility (B1/B), official price talk was released, according to a market source.

The $400 million six-year term loan was presented to lenders with price talk of Libor plus 450 bps with a 1.5% Libor floor, 101 soft call protection for one year and an original issue discount of 981/2, the source said.

And, the $75 million five-year revolver was presented with talk of Libor plus 425 bps, the source continued.

Prior to the bank meeting, there was some unofficial guidance circulating around the market that had the term loan talked at Libor plus 400 bps and the revolver talked at Libor plus 375 bps.

Ardent lead banks

Ardent Health Services' credit facility is being led by Bank of America, Barclays and GE Capital, with Bank of America the left lead.

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

Ardent Health is a Nashville, Tenn.-based operator of acute care hospitals and specialty care facilities.

Revlon readies launch

Revlon Consumer Products revealed that it will be launching a new $940 million credit facility to lenders through a bank meeting on Thursday, according to a market source.

The facility consists of a $140 million asset-based revolver and an $800 million term loan, the source said, adding that price talk is not yet available.

Citigroup is the left lead bank on the deal that will be used to refinance the company's existing credit facility, which, at Dec. 31, had $815 million outstanding under the term loan and zero drawn under the revolver.

Revlon is a New York-based cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirants/deodorants and beauty care products company.

General Growth rises

Moving to the secondary market, General Growth Properties' term loan gained some ground on Wednesday as the company announced that it reached an agreement in principle with Brookfield Asset Management on a proposed recapitalization, according to a trader.

The term loan was quoted at 101¾ bid, 102¾ offered, up from 101 1/8 bid, 101 5/8 offered, the trader said.

The company's revolver, meanwhile, was only up on the bid side moving to 101½ bid, 102 offered from 101¼ bid, 102¼ offered, the trader added.

Under the proposed recapitalization, Brookfield would provide $2.625 billion of equity to General Growth Properties.

The company said that the proposed plan is designed to maximize value for all stakeholders and enable it to emerge from bankruptcy on a standalone basis with a diverse portfolio of high-quality income-producing assets, strong cash flow and a solid balance sheet capitalized principally with long-term non-recourse debt.

General Growth plan details

Specifically, the proposed plan would provide General Growth Properties' existing shareholders with one share of new common stock with an initial value of $10.00 per share, plus one share of General Growth Opportunities with an initial value of $5.00 per share, for total consideration of $15.00 per share.

General Growth Opportunities will be a new company that will own certain non-core assets, such as all of the company's master planned communities and landmark developments like South Street Seaport and others.

Also, General Growth Properties' unsecured creditors will receive par plus accrued interest.

And, Brookfield will invest $2.5 billion at $10.00 per share for new General Growth Properties common stock and up to $125 million at $5.00 per share for General Growth Opportunities common stock

The plan is subject to definitive documentation, approval of the Bankruptcy Court and higher and better offers pursuant to a bidding process to be approved by the Bankruptcy Court.

General Growth Properties is a Chicago-based owner and manager of regional shopping malls, planned community developments and commercial office buildings.

Hertz steady with numbers

Hertz's strip of bank debt was pretty flat on Wednesday on the back of the company's release of fourth-quarter results, according to traders.

The strip was quoted by one trader at 97½ bid, 98½ offered and by a second trader at 97¾ bid, 98¼ offered, with both traders describing the debt as unchanged on the day.

For the fourth quarter, Hertz reported a net loss of $27.6 million, or $0.08 per share, compared to a net loss of $1.21 billion, or $3.77 per share, in the prior year.

Adjusted pre-tax income for the quarter was $39.2 million versus adjusted pre-tax loss of $103.7 million in the same period in 2008, and adjusted diluted earnings per share for the quarter was $0.06, versus a loss per share of $0.22 in the previous year.

Revenues for the quarter were $1.74 billion, a decrease of 2.7% from $1.79 billion in the fourth quarter of 2008.

Hertz EBITDA improves

Hertz also revealed that its corporate EBITDA for the fourth quarter was $221 million, an 89.1% increase from the previous year.

The company ended the fourth quarter with total debt of $10.4 billion and net corporate debt of $3.6 billion, both similar to Sept. 30, 2009.

"Our strong performance in the fourth quarter of 2009 was based on continued improvement in the U.S. car rental business, our largest market, and sustained progress throughout the year to develop new revenue sources and further reduce overall costs," said Mark P. Frissora, chairman and chief executive officer, in a news release.

"For the full year 2009, we cut costs by $760 million, and by over $1.2 billion from 2007 through 2009. We also generated over $170 million of incremental revenues last year from new products and services, which helped offset recession-related pressure on our core businesses," Frissora added.

Hertz is a Park Ridge, N.J.-based general use car rental brand.

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