Van Wagner frees up; Select Medical slides; Level 3, Dunkin', Patriot Coal update deals

By Sara Rosenberg

New York, Aug. 1 - Van Wagner Communications LLC's credit facility emerged in the secondary market on Wednesday, with the term loan quoted above its original issue discount price, and Select Medical Corp.'s term loan retreated as details on the company's proposed incremental loan surfaced.

Over in the primary, Level 3 Communications Inc. firmed sizes on its term loan tranches and made some issuer-friendly changes to pricing, Patriot Coal Corp. cut the spread and discount on its term loan, and Dunkin' Brands Inc. nailed down the original issue discount on its add-on loan at the low end of guidance.

In addition, Regent Seven Seas Cruises and One Call Medical Inc. released price talk as their credit facilities were presented to lenders during the session, and Fairway Group Acquisition Co. and Sabre Industries Inc. announced new deal plans.

Van Wagner breaks

Van Wagner Communications' credit facility broke for trading on Wednesday, with the $175 million six-year term loan B quoted at 99 bid, according to a market source.

Pricing on the term loan B is Libor plus 700 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 98. There is 101 hard call protection for one year.

A few days ago, pricing on the loan was lifted from guidance of Libor plus 600 bps to 625 bps, the call protection was changed from a soft call, the maturity was shortened from seven years and amortization was set at 2% per annum, as opposed to at 1%.

The out-of-home advertising company's $200 million senior secured credit facility, which also includes a $25 million five-year revolver, is being led by Barclays Capital Inc. and GE Capital Markets.

Proceeds from the deal that will result in net senior secured leverage of 5.2 times will refinance existing debt, fund an upfront cash payment for an acquisition and fund general corporate purposes.

Select Medical softens

Also in trading, Select Medical's term loan fell to 98 bid, 99 offered, from 99 bid, par offered, as the company set a conference call for 2 p.m. ET on Thursday to launch its previously announced incremental loan, which is coming in the form of a $150 million add-on term loan B due June 1, 2018, according to a trader.

Pricing on the add-on matches existing term loan B pricing at Libor plus 375 bps with a 1.75% Libor floor, a source said, adding that the original issue discount is still to be determined.

J.P. Morgan Securities LLC, Goldman Sachs & Co., Bank of America Merrill Lynch, Morgan Stanley & Co. Inc., Wells Fargo Securities LLC and RBC Capital Markets are leading the new loan that will be used to call some of the company's 7 5/8% senior subordinated notes due 2015.

Select Medical is a Mechanicsburg, Pa.-based operator of specialty hospitals and outpatient rehabilitation clinics.

Level 3 restructures

Switching to the primary, Level 3 Communications set sizes on its short-and long-term loan tranches, and adjusted pricing based on high demand, according to sources who said that the debt will free up for trading on Thursday.

The 31/2-year term loan is now $600 million, up from a minimum of $300 million, and pricing is Libor plus 325 bps with a 1.5% Libor floor and an original issue discount of 991/2, whereas before the discount was 99, sources remarked.

Meanwhile, the seven-year term loan is now $815 million, up from a maximum amount of around $1.1 billion, and pricing is Libor plus 375 bps, down from Libor plus 400 bps, sources continued. The 1.5% Libor floor and original issue discount of 99 are unchanged.

Level 3 repaying debt

Proceeds from Level 3's $1.415 billion in new term loans (Ba3/B+) will be used to refinance a roughly $1.4 billion senior secured term loan A due in March 2014.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are the lead banks on the deal.

In connection with the new loans, the company is seeking consents to amend its existing senior secured credit facility to, among other things, allow for the refinancing.

Level 3 is a Broomfield, Colo.-based provider of fiber-based communications services.

Patriot Coal flexes

Patriot Coal trimmed pricing on its $375 million super-priority senior secured first-out term loan to Libor plus 775 bps from Libor plus 800 bps and tightened the original issue discount to 98½ from 98, according to a market source. There is still a 1.5% Libor floor.

Recommitments are due at noon ET on Thursday, the source added.

The company's $802 million debtor-in-possession credit facility also includes a $125 million super-priority senior secured revolver priced at Libor plus 325 bps with a 75 bps upfront fee, and a $302 million second-out roll-up of letters-of-credit loan priced at Libor plus 800 bps with a 1.5% floor when fully drawn with a 450 bps fee on unfunded letters of credit.

Patriot Coal extension fee

Along with the term loan pricing changes, Patriot Coal reduced the fee that it will pay if it opts to use the three-month maturity extension option to 25 bps from 50 bps, the source added. Without the maturity extension, the DIP matures in 15 months.

Citigroup Global Markets Inc., Barclays Capital Inc. and Bank of America Merrill Lynch are the lead banks on the deal.

Proceeds will be used to fund operations, working capital needs and general corporate purposes during the company's Chapter 11 reorganization.

Patriot Coal is a St. Louis-based miner, producer and seller of thermal coal primarily to electricity generators.

Dunkin' updates OID

Dunkin' Brands set the original issue discount on its $400 million add-on senior secured term loan B-2 due Nov. 23, 2017 at 99, the tight end of the 98½ to 99 guidance, and eliminated the delayed-draw option so that it will now fund onto the balance sheet, a market source told Prospect News.

Pricing on the loan is Libor plus 300 basis points with a 1% Libor floor, in line with existing term loan B pricing.

Barclays Capital Inc., J.P. Morgan Securities LLC and Morgan Stanley Funding Inc. are leading the deal that will be used to return capital to shareholders and for general corporate purposes.

In connection with the add-on, the company is seeking an amendment to its credit facility that would revise the accordion, the restricted payments basket and the excess cash flow sweep leverage level trigger points and would create a dividend basket.

Dunkin' Brands is a Canton, Mass.-based franchisor of quick-service restaurants.

Regent talk emerges

Regent Seven Seas Cruises held a bank meeting on Wednesday to kick off syndication on its credit facility, and in connection with the launch, price talk on the term loan was announced, according to a market source.

The $300 million 61/2-year term B is being talked at Libor plus 500 bps to 525 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source said.

Deutsche Bank Securities Inc., Barclays Capital Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC are leading the $340 million credit facility (Ba2), which also includes a $40 million five-year revolver.

Regent Seven Seas, a Miami-based cruise ship company, will used proceeds from the credit facility to refinance existing bank debt, and is asking for lender commitments by Aug. 14.

One Call guidance

Another deal to launch in the morning was One Call Medical, and talk on its $415 million seven-year covenant-light term loan emerged at Libor plus 500 bps to 525 bps with a 1.25% Libor floor and an original issue discount of 99, according to a market source.

The company's $465 million credit facility also includes a $50 million six-year revolver.

Leads, Jefferies & Co. and GE Capital Markets, are seeking commitments by Aug. 15.

Proceeds, along with $210 million of unsecured debt that is being provided by GSO and equity, will be used to fund the acquisition of MSC Care Management.

Closing is expected within the next 30 to 60 days, subject to satisfaction of customary conditions.

One Call Medical is a Parsippany, N.J.-based provider of specialty services to insurance payers. MSC is a Jacksonville, Fla.-based provider of medical products and services to post-discharge and post-injury workers' compensation claimants.

Fairway coming soon

Fairway set a bank meeting for 2 p.m. ET on Thursday to launch a $300 million credit facility that will be used to refinance existing debt and add cash to the balance sheet, according to a market source.

Credit Suisse Securities (USA) LLC is leading the deal that consists of a $40 million five-year revolver, and a $260 million six-year first-lien term loan talked at Libor plus 700 bps with a 1.5% Libor floor, an original issue discount of 98 and 101 repricing protection for one year, the source said.

Fairway is a supermarket chain with locations in New York, New Jersey and Connecticut.

Sabre readies loan

Sabre Industries scheduled a bank meeting for Thursday to launch a proposed $190 million credit facility that consists of a $60 million revolver and a $130 million term loan, according to a market source.

BNP Paribas Securities Corp. and PNC Capital Markets LLC are leading the deal that will be used to help fund the acquisition of the company by Kohlberg from Corinthian Capital Group LLC.

Net leverage is 2.8 times through the credit facility and 4.3 times total, the source added.

Sabre is an Alvarado, Texas-based tower, pole and shelter manufacturer.

Hologic closes

In other news, Hologic Inc. completed its acquisition of Gen-Probe Inc., a San Diego-based developer, manufacturer and marketer of molecular diagnostic products and services, for $82.75 per share in cash, or about $3.8 billion, according to a news release.

For the transaction, Hologic got a new $2.8 billion senior secured credit facility (Ba2/BBB-) consisting of a $300 million five-year revolver and a $1 billion five-year term loan A, both priced at Libor plus 300 bps, and a $1.5 billion seven-year term loan B priced at Libor plus 350 bps with a 1% Libor floor. The B loan was sold at an original issue discount of 99 and has 101 soft call protection for one year.

During syndication, pricing on the term loan B was reduced from Libor plus 400 bps and the size was trimmed from $1.75 billion, and before that from $2 billion, as the company's senior notes offering was lifted to $1 billion from $750 million, and prior to that from $500 million.

Goldman Sachs & Co., J.P. Morgan Securities LLC and Citigroup Global Markets Inc. led the deal Bedford, Mass.-based povider of diagnostics products, medical imaging systems and surgical products.

Wolverine wraps

Wolverine Worldwide Inc. closed on its $1.1 billion senior secured credit facility (Ba2/BB) that is comprised of a $200 million five-year revolver, a $550 million five-year term loan A and a the $350 million seven-year term loan B, according to an 8-K filed with the Securities and Exchange Commission.

Both the revolver and term loan A are priced at Libor plus 225 bps, and pricing on the term loan B is Libor plus 375 bps with a step-down to Libor plus 350 bps at less than 3.25 times total net leverage, but only after the delivery of June 30, 2013 financials. The B loan, which was sold at a discount of 99, has a 1% Libor floor, a ticking fee of 50% of the drawn spread starting on July 16, stepping up to 100% of the drawn spread plus the Libor floor on Oct. 16, and 101 soft call protection for one year.

The spread on the B loan firmed at the low side of revised talk of Libor plus 375 bps to 400 bps talk during syndication, but in line with initial talk, the step-down and ticking fee were added and the tranche was downsized from $500 million.

Wolverine lead banks

J.P. Morgan Securities LLC and Wells Fargo Securities LLC led Wolverine's deal that is being used to help fund the $1.23 billion purchase of Collective Brands Inc.'s Performance + Lifestyle Group.

The Performance + Lifestyle business operates from Lexington, Mass. and includes the wholesale and retail operations of the Sperry Top-Sider, Saucony, Stride Rite and Keds brands.

Closing on the acquisition is expected late in the third quarter or early in the fourth quarter, subject to customary conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and Collective Brands' shareholder approval.

Wolverine Worldwide is a Rockford, Mich.-based marketer of branded casual, active lifestyle, work, outdoor sport and uniform footwear and apparel.

Booz Allen completes deal

Booz Allen Hamilton Inc.'s $2.25 billion senior secured credit facility (Ba3/BB) closed as well, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

The facility consists of a $725 million term loan A and a $500 million revolver, both priced at Libor plus 275 bps, and a $1.025 billion term loan B priced at Libor plus 350 bps with a 1% Libor floor. The B loan was sold at an original issue discount of 99 and has 101 soft call protection for one year.

During syndication, the A loan was upsized from $500 million as the B loan was downsized from $1.25 billion, and pricing on the B tranche was reduced from talk of Libor plus 375 bps to 400 bps.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Barclays Capital Inc., Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc. and SMBC were the bookrunners on the deal that is being used to refinance bank debt and fund an up to $1 billion dividend.

Booz Allen is a McLean, Va.-based provider of management and technology consulting services.

GNC loan closes

General Nutrition Centers Inc. wrapped its $200 million incremental term loan B due 2018, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

Pricing on the loan is Libor plus 300 bps with a 1.25% Libor floor, in line with existing term loan B pricing, and it was sold at an original issue discount of 991/2.

J.P. Morgan Securities LLC led the deal that is being used with $100 million of cash to fund a share buyback.

General Nutrition is a Pittsburgh-based specialty retailer of health and wellness products.

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