Claire's Stores rises with paydown; Valeant dips on acquisition; FoxCo, Ikaria set talk

By Sara Rosenberg

New York, Sept. 4 - Claire's Stores Inc.'s term loan B strengthened during Tuesday's trading session on repayment chatter, and Valeant Pharmaceuticals International Inc.'s term loan B was softer with news of an acquisition that will be financed with debt.

Moving to the primary, FoxCo Acquisition Sub LLC and Ikaria Acquisition Inc. began distributing price talk on their upcoming term loans, and Par Pharmaceutical Cos. Inc. firmed up timing on its credit facility.

In addition, CPG International Inc. and United Central Industrial Supply Co. LLC (United Distribution Group) surfaced with new deal plans.

Claire's heads higher

Claire's Stores' term loan B gained some ground in the secondary market on Tuesday after word emerged that the debt will be repaid in full, according to a trader.

Funds for the paydown will come from a $500 million add-on 9% senior secured first-lien notes deal and cash on hand.

With the news, the term loan B was quoted at 99½ bid, versus previous levels of 98¼ bid, 98¾ offered, the trader said.

Claire's is a Pembroke Pines, Fla.-based specialty retailer of accessories and jewelry.

Valeant slides

Meanwhile, Valeant Pharmaceuticals' term loan B was a little weaker as the company announced that it is buying Medicis Pharmaceutical Corp. and that funds for the transaction will come from a new term loan and bonds, according to traders.

One trader had the term loan B quoted at par bid, par ¾ offered, down from par 3/8 bid, par 7/8 offered, while a second trader had it quoted at par bid, par ¾ offered, down from par 5/8 bid, 101 1/8 offered.

To back the proposed debt, the company has a commitment for a $2.75 billion unsecured bridge loan that is priced at Libor plus 612.5 basis points with a 1.25% Libor floor. The spread steps up every three months by 50 bps until it hits a cap, the company disclosed in an 8-K filed with the Securities and Exchange Commission.

J.P. Morgan Securities LLC is leading the debt.

Valeant acquisition details

Under the agreement, Valeant is buying Medicis for $44 per share in cash, or about $2.6 billion, and, with the transaction, it plans to pay the conversion consideration for or repurchase Medicis' $168.9 million of 2.5% contingent convertible senior notes due 2032, $200,000 of 1.5% contingent convertible senior notes due 2033 and $422.2 million of 1.375% convertible senior notes due 2017.

Closing is expected in the first half of 2013, subject to customary conditions, including approval by Medicis stockholders and expiration of any applicable regulatory waiting period.

Leverage will be around 4.2 times.

Because of the expected increase to leverage, Moody's Investors Service placed Valeant's ratings on review for downgrade, including the Ba3 corporate family rating,.

Valeant is a Mississauga, Ont.-based specialty pharmaceutical company. Medicis is a Scottsdale, Ariz.-based specialty pharmaceutical company focused primarily on the treatment of dermatological and aesthetic conditions.

BWIC surfaces

Also in the secondary market, a roughly $164 million Bid-Wanted-In-Competition emerged in the morning, and market participants are being asked to place their bids by 11:30 a.m. ET on Wednesday, according to a trader.

Some of the larger pieces of debt being offered include Berry Plastics Group Inc.'s term loan C, Biomet Inc.'s dollar term loan, Cinemark USA Inc.'s extended term loan, Consolidated Communications Inc.'s initial term-1 loan, CSC Holdings Inc.'s incremental b-3 extended term loan, Federal-Mogul Corp.'s term loan B, Freescale Semiconductor Inc.'s term loan B-1, Huntsman International LLC's dollar term loan B, Servicemaster Co.'s closing date loan, SunGard Data Systems Inc.'s U.S. term loan B and Texas Competitive Electric Holdings' non-extended term loan, the trader said.

All-in-all, the portfolio includes just shy of 100 issuers.

FoxCo reveals guidance

Over in the primary, FoxCo Acquisition disclosed price talk on its $715 million covenant-light term loan that is getting ready to launch with a bank meeting on Thursday morning, according to sources.

The loan is talked at Libor plus 450 bps to 475 bps with a 1% Libor floor and an original issue discount of 99 and includes 101 soft call protection for one year, sources said.

Deutsche Bank Securities Inc. and UBS Securities LLC are leading the deal that will be used to refinance existing term loan borrowings and bonds and to fund a dividend.

FoxCo is a Fort Wright, Ky.-based owner and operator of television stations.

Ikaria floats talk

Continuing on the topic of guidance, Ikaria Acquisition released talk of Libor plus 650 bps with a 1.5% Libor floor, an original issue discount of 98 and 101 soft call protection for one year on its proposed $125 million five-year first-lien term loan that is set to launch with a bank meeting at 1 p.m. ET on Thursday, according to a market source.

Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc. and Fifth Third Securities Inc. are leading the deal that will be used for a dividend recapitalization.

Ikaria is a Hampton, N.J.-based biotherapeutics company in the critical care market.

Par Pharma sets timing

Par Pharmaceutical nailed down timing for its $1.13 billion senior secured credit facility, scheduling a bank meeting for this Thursday, according to a market source. Previously, the deal was just labeled as expected September business.

The facility consists of a $150 million revolver and a $980 million term loan, with price talk not yet out, the source said.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Goldman Sachs & Co., RBC Capital Markets LLC and Citigroup Global Markets Inc. are leading the deal that will be used to help fund the buyout of the company by TPG for $50 per share in cash, or about $1.9 billion.

Par Pharma plans notes

Along with the credit facility, Par Pharmaceuticals expects to issue $490 million of high-yield bonds that are backed by a commitment for a $490 million senior unsecured bridge loan.

Closing on the buyout is subject to shareholder approval, which will be sought at a special meeting on Sept. 27, clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which has already been received, and other customary conditions. It is not subject to a financing condition.

Par Pharmaceutical is a Woodcliff Lake, N.J.-based specialty pharmaceutical company.

CPG coming soon

CPG International invited investors to attend a bank meeting at 10 a.m. ET on Thursday in New York, at which a $465 million credit facility will be launched, according to a market source.

The facility consists of a $355 million seven-year first-lien term loan that has 101 repricing protection for one year and a $110 million five-year ABL revolver, the source remarked.

Credit Suisse Securities (USA) LLC and Barclays are the lead banks on the term loan, and Wells Fargo Securities LLC, Credit Suisse and Barclays are leading the revolver.

Proceeds will be used to help fund the purchase of TimberTech and to refinance existing debt.

Closing is expected late this month.

CPG is a Scranton, Pa.-based manufacturer of synthetic building products. Timbertech is a Wilmington, Ohio-based subsidiary of the Crane Group that manufactures low maintenance decking, railing and accessory products.

United Central readies deal

United Central Industrial Supply scheduled a bank meeting for Wednesday to launch a $435 million senior secured covenant-light credit facility that is being led by Barclays and Goldman Sachs & Co., according to a market source.

The facility consists of a $50 million five-year revolver, a $285 million six-year term loan and a $100 million 61/2-year second-lien term loan, the source said, adding that price talk is not yet available.

Proceeds will be used to help fund the acquisition of GHX Holdings from CapStreet Group LLC.

Senior secured leverage is 3.9 times and total leverage is 5.25 times total, excluding synergies, the source remarked.

United Central is a Bristol, Tenn.-based distributor of industrial supplies and services. GHX is a Houston-based distributor of industrial gaskets, hoses and related fluid sealing products.

Sabre Industries closes

In other news, the purchase of Sabre Industries Inc. by Kohlberg & Co. LLC from Corinthian Capital Group LLC has been completed, according to a news release.

For the transaction, Sabre got a new $190 million credit facility (B1/B+) consisting of a $60 million revolver and a $130 million term loan.

Pricing on the term loan is Libor plus 575 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 981/2.

During syndication, the spread on the term loan was raised from guidance Libor plus 500 bps to 525 bps.

BNP Paribas Securities Corp. and PNC Capital Markets LLC led the deal.

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

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