Boart Longyear frees to trade; Lear slips on profit taking; DaVita trades higher

By Sara Rosenberg

New York, Oct. 18 - Boart Longyear Co.'s credit facility hit the secondary during Wednesday's market hours, with the first-lien term loan B tranche trading around in the upper-par context.

In other secondary happenings, Lear Corp.'s term loan B softened a little after a decent run-up in the previous session, and DaVita Inc.'s term loan was stronger on market technicals.

Boart Longyear's credit allocated a freed for trading on Wednesday afternoon, with the $790 million six-year first-lien term loan B quoted at par ½ bid, 101 offered, according to a market source.

The first-lien term loan B is priced with an interest rate of Libor plus 325 basis points. During syndication, the tranche was upsized twice - most recently from $770 million and before that from $650 million - with something like $1.1 billion in orders from more than 80 accounts received on the deal.

The term loan B requires that the company amortize $120 million of the debt within the first 18 months.

Boart's $1.395 billion facility also includes a $125 million five-year revolver priced at Libor plus 325 bps, a $280 million seven-year second-lien term priced at Libor plus 700 bps and a $200 million senior unsecured 18-month holdco term loan priced at Libor plus 850 bps cash pay.

The second-lien term loan carries call premiums of 102 in year one and 101 in year two and was sold to investors with an original issue discount of 991/2.

The holdco term loan was sold to investors with an original issue discount of 98.

During syndication, the second-lien term loan was downsized from $300 million with the addition of the original issue discount, and the holdco term loan was added to the capital structure after a $320 million 18-month first-lien capital markets term loan that was being talked at Libor plus 325 bps was eliminated from the transaction.

Trading levels on the second-lien term loan and the holdco term loan were unavailable since the tranches were put away with big tickets, and therefore, were quiet in the secondary, the source added.

First-lien leverage is 3.5 times, and operating company leverage is 4.8 times. Originally, first-lien leverage was 4.4 times, but it was reduced with the changes to the tranche sizes. Operating leverage was originally 5.7 times, but it too was reduced with the tranching modifications.

Credit Suisse is bookrunner on the deal that will be used to help fund the acquisition of a majority interest in Boart Longyear by an investor group led by Macquarie Bank Ltd.

Macquarie's investor group will own a 51% stake in the business, while existing sponsors Advent International, Bain Capital and management will roll over $200-plus million and retain a 49% stake in the company.

Concurrently, Boart Longyear is acquiring two businesses, Northwest Drilling and Drillcorp, increasing Sept. 30 last-12-month EBITDA to $225 million.

Boart Longyear is a Salt Lake City-based drilling-services provider.

Lear slides lower

Also in trading, Lear's term loan B weakened during market hours as investors took advantage of Tuesday's rally by deciding to take profits, according to a trader.

The term loan B closed the day quoted at 99½ bid, par offered, down from previous levels of 99¾ bid, par ¼ offered, the trader said.

On Tuesday, the bank debt moved up by almost a point from 98 7/8 bid, 99 3/8 offered after the company announced that it will issue $200 million of common stock in a private placement to affiliates of and funds managed by Carl C. Icahn.

Lear said that it plans on using the proceeds from the stock sale for strategic investments and to increase financial and operating flexibility.

In conjunction with the Icahn announcement, Lear released preliminary third-quarter numbers, including expected net sales of $4.1 billion, core operating earnings in the range of $44 million to $48 million and a pretax loss in the range of $60 million to $70 million.

The expected pretax loss takes into account costs related to restructuring actions of about $17 million and a loss on sale of about $29 million.

Lear is a Southfield, Mich.-based supplier of automotive interior systems and components.

DaVita stronger

DaVita's term loan B saw an improvement of about an eighth of a point in trading on no specific news, leaving sources to attribute the rise to market technicals.

The term loan B closed the day at par 5/8 bid, par 7/8 offered, up from Tuesday's levels of par ½ bid, par ¾ offered, according to a trader.

DaVita is an El Segundo, Calif.-based operator of dialysis centers.

Gold Toe sees strong interest

Gold Toe Investment Corp.'s first- and second-lien term loans are both several times oversubscribed ahead of Thursday's upcoming commitment deadline, according to a market source.

The $225 million first-lien term loan (B1/B) is being talked at Libor plus 300 bps, and the $105 million second-lien term loan (Caa1/CCC+) is being talked at Libor plus 650 bps.

Gold Toe's $380 million credit facility also includes a $50 million revolver (B1/B) talked at Libor plus 300 bps.

Bear Stearns is the lead bank on the deal that will be used to help fund the leveraged buyout of Gold Toe by The Blackstone Group and simultaneous merger with Moretz Inc.

The LBO/merger transaction is valued at about $400 million.

Total leverage will be around six times on an 8.3 times valuation. Adjusted EBITDA is around $55 million, and interest coverage is around two times.

In connection with the deal, the outstanding debt and preferred stock of Gold Toe's wholly owned subsidiary, Gold Toe Corp., will be refinanced, including its 10 1/8% senior subordinated notes due 2008 and 12½% senior exchangeable preferred stock due 2010.

As a result of its investment, Blackstone will be the majority owner of the company, John Moretz, chief executive officer, will be the second largest shareholder and an affiliate of Vestar Capital Partners, the current majority owner of Gold Toe, will retain a minority stake.

Gold Toe is a New York-based hosiery company. Moretz is a Newton, N.C.-based sockwear manufacturer and private labeler for the sporting goods market and retailers.

Nusil oversubscribed

Nusil Technology's $125 million term loan B is another transaction that has been well-received by the market, as the tranche was about two times oversubscribed ahead of Wednesday's commitment deadline, according to a market source.

The term loan B is being talked at Libor plus 275 bps.

Nusil's $135 million credit facility also includes a $10 million revolver talked at Libor plus 275 bps.

RBS Securities is the lead bank on the deal that will be used to refinance existing debt and fund a small dividend to existing shareholders.

Nusil is a Carpinteria, Calif., silicone compounds manufacturer.

Beacon Roofing readies allocations

Beacon Roofing Supply Inc. is determining the final pricing details on its $350 million seven-year term loan, with the anticipation being that the spread will firm up and the deal will allocate during the Thursday session, according to a market source.

Currently, the term loan is being talked at Libor plus 175 to 200 bps, with it categorized as well-oversubscribed at the high end of that talk, the source remarked.

Beacon Roofing's $513.5 million credit facility also includes a $163.5 million asset-based revolver talked at Libor plus 100 bps.

The revolver is secured by a first lien on receivables, and the term loan is secured by a first lien on inventory and plant property and equipment.

General Electric Capital Corp. is the lead bank on the deal that will be used to refinance the company's existing credit facility.

Leverage will be around the mid-two times area.

Beacon is a Peabody, Mass., distributor of roofing materials and complementary building products.

Sanmina-SCI cuts pricing

Sanmina-SCI Corp. reverse flexed pricing on its $600 million senior unsecured term loan (Ba2/BB-/BB+) due Jan. 31, 2008 to Libor plus 250 bps from original talk at launch of Libor plus 300 bps, according to a market source.

Bank of America, Citigroup and Deutsche Bank are the lead banks on the deal.

Proceeds from the loan, which already funded, were used to refinance the about $525 million of 3% convertible subordinated notes due 2007 issued by SCI Systems, Inc. and will be available for working capital and general corporate purposes.

Sanmina-SCI is a San Jose, Calif., provider of customized, integrated electronics manufacturing services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.