Freescale, DS Waters, Hawaiian Telcom, Sabre break; Cengage up with amend/extend news

By Sara Rosenberg

New York, Feb. 27 - Freescale Semiconductor Inc.'s incremental term loan B emerged in the secondary market on Monday, as did DS Waters of America Inc. and Hawaiian Telcom, and Sabre Holdings' extended loan began being quoted on a when issued basis.

Also in the secondary market, Cengage Learning's term loan was a little stronger following the company's announcement that it will likely launch within the next few weeks an amendment and extension proposal.

Moving to the primary, Capital Automotive made a round of changes to its term loan B add-on, including reducing the size, removing the delayed-draw tranche and increasing pricing, and its amendment request was sweetened as well.

Furthermore, on the new deal front, Go Daddy Operating Co. LLC and BJ's Wholesale Club Inc. launched came out with price talk on their term loans in connection with their launches during the session.

Freescale starts trading

Freescale Semiconductor's $500 million seven-year senior secured incremental term loan B (B1/B/B-) broke for trading on Monday, with levels quoted at 99¼ bid, 99¾ offered, according to a trader.

Pricing on the loan firmed at Libor plus 475 basis points, the high end of the Libor plus 450 bps to 475 bps talk, with the 1.25% Libor floor, 101 soft call protection for one year and original issue discount of 99 unchanged.

J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are the lead banks on the deal that will be used to partially redeem the company's 10 1/8% senior subordinated notes due December 2016 and, at the company's option, a portion of its senior notes due 2014.

Freescale is an Austin, Texas-based designer and manufacturer of embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets.

DS Waters frees up

DS Waters' credit facility also hit the secondary market, with the $365 million 51/2-year first-lien term loan (B2/BB-) quoted at 98 1/8 bid, 99 offered, according to a trader.

Pricing on the first-lien loan is Libor plus 900 bps with a 1.5% Libor floor and an original issue discount of 98, and there is call protection of 103 in year one, 102 in year two and 101 in year three.

The debt is comprised of a $305 million funded piece and a $60 million delayed-draw piece.

Most recently, the funded tranche was upsized from $285 million and the delayed-draw tranche was upsized from $55 million, but both came smaller than their original sizes of $390 million funded and $75 million delayed-draw.

Also, at the time of the first size change, the spread on the first-lien debt had been flexed up from talk of Libor plus 675 bps to 700 bps and call protection was changed from just 101 in year one.

DS Waters second-lien

In addition to the first-lien debt, DS Waters' is getting a $100 million six-year second-lien term loan (Caa1/CCC+) that is priced at Libor plus 950 bps cash pay plus 400 bps PIK, with a 1.5% Libor floor. The debt was sold at an original issue discount of 98 and is non-callable for one year, then at 104 in year two, 103 in year three, 102 in year four and 101 in year five.

Of the total second-lien amount, $85 million is funded and $15 million is delayed-draw.

The second-lien debt was added to the capital structure upon the original revision to the first-lien term loan size. But, as a result of good demand for the first-lien loan after the first round of changes, the second-lien was downsized, with the funded piece being reduced from $105 million and the delayed-draw piece being reduced from $20 million.

DS Waters getting revolver

DS Waters' $535 million credit facility also provides for a $70 million five-year ABL revolver that is priced at Libor plus 200 bps, and is being held by the arrangers.

Total leverage is 3.2 times and first-lien leverage is 2.5 times. When the second-lien loan was originally carved out of the first-lien debt, leverage through the first-lien had been 2.3 times.

Credit Suisse Securities (USA) LLC, GE Capital Markets and Jefferies & Co. are the lead banks on the deal, with Credit Suisse the left on the term loan and GE the left on the revolver.

Proceeds will be used to refinance existing debt, and the delayed-draw term loans are available for acquisition funding.

DS Waters is an Atlanta-based bottled water, water filtration and coffee service company.

Hawaiian Telcom tops OID

Another deal to free up was Hawaiian Telcom's $300 million first-lien five-year term loan (B1), with levels quoted at 99 bid, 99½ offered, according to a market source.

Pricing on the loan firmed in line with talk at Libor plus 575 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 981/2. There is soft call protection of 102 in year one and 101 in year two.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to refinance an existing term loan.

Hawaiian Telcom is a Honolulu-based provider of integrated communications services.

Sabre levels surface

Sabre Holdings' extended term loan started being quoted in the secondary market on a when issued basis, with levels seen at 94 bid, 94½ offered, according to a trader.

The company has received commitments to extend $1.15 billion to $1.2 billion of its term loan by three years to 2017 at pricing of Libor plus 575 bps, versus non-extended pricing of Libor plus 225 bps. The spread on the extended loan was flexed up last week from Libor plus 525 bps, allowing the company to exceed its original target of an extended amount of $750 million.

The Southlake, Texas-based online travel company is offering an 85 bps extension fee, which was increased from 35 bps last week, and there is a 15 bps amendment fee.

In addition, Sabre is looking to extend at least $400 million of its $500 million revolver by 31/2-years to September 2016 at pricing of Libor plus 450 bps, versus non-extended pricing of Libor plus 200 bps.

Bank of America Merrill Lynch is the left lead on the amendment.

Cengage loan rises

In more trading happenings, Cengage Learning's term loan moved up to 92½ bid, 93½ offered, from 92 3/8 bid, 93 1/8 offered with news that an amendment and extension proposal should be coming shortly, according to a trader.

The incremental loan, however, was unchanged at 96½ bid, 98½ offered, the trader said.

Word of the amendment and extension emerged at the J.P. Morgan High Yield & Leveraged Finance Conference on Monday, at which time Cengage's chief financial officer, Dean Durbin, said that the plan is to launch the transaction in the next week or two as a result of improved market conditions.

At Dec. 31, the company had a $300 million revolver, of which $297.4 million was available, roughly $3.29 billion outstanding under its term loan and $597 million outstanding under its incremental term loan.

Cengage is a Stamford, Conn.-based provider of teaching, learning and research services for the academic, professional and library markets.

SuperMedia gains ground

SuperMedia Inc.'s term loan moved to 50 bid, 52 offered on Monday, up from last seen levels of 48 bid, 49 offered on Feb. 21, according to a trader.

As was already reported, the company is offering to repurchase term loan debt in a price range of 48 to 53.

The buyback offer has a cash size of $31 million.

The offer will expire at 5 p.m. ET on Wednesday.

SuperMedia is a Dallas-based directory publisher.

Noranda holds steady

Noranda Aluminum Holding Corp.'s $325 million seven-year term loan (Ba2) was quoted at par bid, par 3/8 offered on Monday, in line with Friday's closing levels, according to a market source.

The loan freed up for trading late Friday at 99 5/8 bid, par offered and had quickly moved up to the current context, the trader added.

Pricing on the term loan is Libor plus 450 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 991/4. There is 101 soft call protection for one year.

Late last week, the loan was upsized from $300 million, the spread firmed at the low end of the Libor plus 450 bps to 475 bps talk and the discount was revised from 99 on strong demand.

The company's $575 million credit facility also includes a $250 million five-year ABL revolver priced at Libor plus 175 bps.

Noranda lead banks

Bank of America Merrill Lynch, Citigroup Global Markets Inc., UBS Securities LLC, Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. are the lead banks on Noranda's credit facility.

Proceeds will be used to repay an existing term loan B and to fund a tender offer for a portion of the company's outstanding senior floating-rate notes due 2015.

Additionally, the new credit facility will fund a dividend of about $1.25 per share and be available for general corporate purposes.

Noranda is a Franklin, Tenn.-based producer of value-added primary aluminum products and rolled aluminum coils.

Bragg wraps par

Bragg Communications Inc.'s $300 million six-year term loan B was quoted at 99 5/8 bid, par 3/8 offered on Monday, in line with where it broke for trading late Friday, according to a trader.

Pricing on the B loan is Libor plus 300 bps with a 1% Libor floor, and it was sold at an original issue discount of 991/4. There is 101 soft call protection for one year.

On Friday, the term B was downsized from $400 million as the company's five-year term loan A was upsized to about C$1.3 billion from C$1.2 billion. Also, B loan pricing was lowered from Libor plus 325 bps and the discount tightened from 99.

The company's roughly C$1.75 billion senior secured deal (BB) also includes a C$150 million five-year revolver, and pricing on the tranche, as well as on the term loan A is BA plus 300 bps. The revolver has an unused fee that is 25% of the drawn margin.

TD Securities (USA) LLC, CIBC World Markets Corp., BMO Capital Markets Corp. and RBC Capital Markets LLC are leading the deal that will be used to refinance existing debt and fund a dividend.

Bragg is a Halifax, N.S.-based cable television and telecommunications company.

Capital Auto reworks deal

Switching to the primary, Capital Automotive revised its add-on term loan B due March 2017, reducing the funded amount to $200 million from $230 million and lifting pricing to Libor plus 375 bps from Libor plus 350 bps, while leaving the 1.5% Libor floor and original issue discount of 99 unchanged, according to a market source.

Also, the proposed $170 million delayed-draw term loan B was eliminated, the source said. Proceeds were going to be used for tuck-in acquisitions and there was a delayed-draw fee of 50 bps from April 1 through May 1, 100 bps until June 1 and the full drawn spread until June 30.

As a result of the pricing flex to the add-on term loan B, the company's existing term loan B will be repriced to Libor plus 375 bps from Libor plus 350 bps, the source continued.

Proceeds will be used to refinance just under $200 million of preferred equity. Because of the downsizing to the funded tranche, the company will no longer be cleaning up some other near-term debt maturities.

Capital Auto ups fee

With the incremental term loan B, Capital Automotive must amend its existing credit facility to allow for the new debt, and some other minor modifications are being sought after as well.

Lenders are being offered a 25 bps amendment fee, which has been increased from the originally proposed 10 bps fee, the source remarked.

Commitments and consents are due at noon ET on Tuesday.

Barclays Capital Inc. is the lead bank on the deal.

Capital Automotive is a McLean, Va.-based provider of sale-leaseback capital to the automotive retail industry.

Go Daddy talk emerges

In more primary news, Go Daddy, a Scottsdale, Ariz.-based provider of web hosting and domain names, held a conference call on Monday afternoon to launch its $748 million senior secured term loan, and a few hours before the launch took place, price talk began circulating around the market, according to a source.

The term loan is talked at Libor plus 425 bps with a 1.25% Libor floor and 101 soft call protection for one year and will be used to reprice an existing loan that is at Libor plus 575 bps with a 1.25% floor.

There is no original issue discount being offered on the repriced loan, but lenders are getting repaid at 101 as a result of existing soft call protection.

When obtained last year, the existing term loan was sold at an original issue discount of 93.

Lead banks, Barclays Capital Inc., Deutsche Bank Securities Inc. and RBC Capital Markets LLC, are seeking commitments towards the repricing by Friday.

BJ's releases guidance

Also launching was BJ's Wholesale Club's $1.075 billion first-lien term loan, and talk on the tranche emerged at Libor plus 400 bps to 425 bps with a 1.25% Libor floor and 101 soft call protection for one year, according to a market source.

Proceeds will be used to reprice/refinance an existing first-lien term loan that was completed in 2011 at pricing of Libor plus 575 bps with a 1.25% Libor floor.

The existing deal was sold at an original issue discount of 95.

Like Go Daddy, the repriced loan is being offered without a discount, but lenders will get repaid at 101 because of call protection.

Commitments towards the repricing are due on Monday.

Deutsche Bank Securities Inc. is the lead bank on the deal for the Westborough, Mass.-based operator of warehouse clubs.

ATP fills out

ATP Oil & Gas Corp.'s $140 million add-on first-lien senior secured term loan was fully subscribed ahead of Monday's commitment deadline, and the expectation is that the deal will close at initial terms, according to a market source.

Pricing is Libor plus 750 bps with a 1.5% Libor floor and an original issue discount of 99.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used for general corporate purposes.

ATP said in a recent news release that it expects to be able to do the upsizing since pre-tax PV10 of proved reserves are anticipated to be no less than $4 billion, based on preliminary estimates of its year-end 2011 reserve report.

The funds are targeted to be available after the company files in mid-March its year-end 2011 annual and reserve reports.

ATP Oil & Gas is a Houston-based offshore oil and gas development and production company.

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