Valeant, TransDigm, Blue Coat Systems, CHG break; number of primary deals revised

By Sara Rosenberg

New York, June 27 - Valeant Pharmaceuticals International Inc.'s new bank debt freed up for trading on Thursday, and TransDigm Inc., Blue Coat Systems Inc. and CHG Healthcare Services Inc. broke as well.

Moving to the primary, Drillships Financing Holding Inc. (Ocean Rig) raised pricing on its term loans, modified original issue discounts, sweetened the call premiums on the B-1 tranche and added a covenant to the previously covenant-light deal.

Also, Sapphire Power Holdings cut the size of its term loan, raised pricing guidance and revised the call protection, maturity and covenant structure, and Altice modified spreads, discounts, call premiums and maturities on its term loans.

In addition, Boulder Brands Inc. lifted the coupon on its term loan, Oceania Cruises widened the spread and original issue discount on its B loan, and Data Device Corp. downsized its add-on loan and increased pricing.

Furthermore, Air Canada pulled its loan from market, CLEAResult released details on its credit facility that was presented to lenders during the session, and One Call Medical Inc. came out with original issue discount guidance with launch.

Valeant tops OID

Valeant Pharmaceuaticals' term loans made their way into the secondary market on Thursday, with the $3.2 billion seven-year term loan B quoted by one trader at 99 7/8 bid, par 1/8 offered, by a second trader at 99½ bid, par offered and by a third trader at 99¾ bid, par offered.

Pricing on the term loan B is Libor plus 375 basis points with a 0.75% Libor floor, and it was sold an original issue discount of 981/2. There is 101 soft call protection for six months and a ticking fee of half the spread starting after 30 days and the full spread after 60 days.

The company is also getting an $850 million term loan A due April 2016 that is priced at Libor plus 225 bps, and was sold at a discount of 981/2.

During syndication, the B loan was downsized from $3.55 billion, pricing was increased from talk of Libor plus 325 bps to 350 bps and the discount was revised from 991/2, and the A loan was upsized from $500 million while the discount widened from talk of 99 to 991/2.

Valeant lead banks

Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Barclays, RBC Capital Markets and Morgan Stanley Senior Funding Inc. are leading Valeant's $4.05 billion deal (Ba1/BB).

Proceeds, along with $3,225,000,000 of senior unsecured notes and $2 billion of new equity will be used to fund the $8.7 billion purchase of Bausch + Lomb Holdings Inc.

Of the total purchase price, about $4.5 billion will go to an investor group led by Warburg Pincus, and about $4.2 billion will be used to repay Bausch + Lomb's outstanding debt.

Closing is expected in the third quarter, subject to customary conditions and regulatory approvals.

In connection with this transaction, Valeant expects to amend its existing revolver to increase the size to $1 billion from $450 million and extend the maturity to April 20, 2018 from April 20, 2016.

Valeant is a Laval, Quebec-based specialty pharmaceutical company. Bausch + Lomb is a Rochester-based maker of contact lenses, ophthalmic surgical devices and instruments and ophthalmic pharmaceuticals.

TransDigm frees up

TransDigm's $900 million first-lien covenant-light tack-on term loan C (Ba3/B+) due February 2020 began trading too, with levels seen at 98½ bid, 99½ offered, a market source said.

Pricing on the loan is Libor plus 300 bps with a 0.75% Libor floor, and it was sold at an original issue discount at 98. There is 101 soft call protection for one year.

Earlier in the week, the loan was upsized from $700 million and the discount firmed at the wide end of the 98 to 98½ talk.

Credit Suisse Securities (USA) LLC, UBS Securities LLC, Morgan Stanley Senior Funding Inc. and Citigroup Global Markets Inc. are leading the deal that will be used with $500 million of notes to fund a dividend.

Prior to the term loan upsizing, the bond deal was reduced from an originally expected size of $700 million.

TransDigm is a Cleveland-based designer, producer and supplier of aircraft components.

Blue Coat hits secondary

Another deal to break was Blue Coat Systems' $330 million second-lien term loan (Caa1/CCC+), with levels quoted at 99½ bid, a market source said.

Pricing on the loan is Libor plus 850 bps with a 1% Libor floor, and it was sold at an original issue discount of 99. There is call protection of 103 in year one, 102 in year two and 101 in year three.

Earlier this week, pricing on the loan was flexed up from Libor plus 750 bps.

Jefferies Finance LLC is leading the deal that will be used to fund a dividend.

Blue Coat is a Sunnyvale, Calif.-based web security company.

CHG Healthcare breaks

CHG Healthcare Services' loans freed up as well, with the $110 million add-on covenant-light first-lien term loan due Nov. 19, 2019 quoted at par ¼ bid, 101¼ offered, according to a market source.

Pricing on the add-on first-lien term loan is Libor plus 375 bps with a 1.25% Libor floor, in line with existing first-lien pricing, and the debt was sold at an original issue discount of 991/2. There is 101 soft call protection through November 2013.

The company is also getting a $40 million add-on second-lien term loan due Nov. 19, 2020 that is priced at Libor plus 775 bps with a 1.25% Libor floor, which matches existing second-lien pricing, and this tranche was sold at 99½ too. There is call protection of 103, 102, 101.

Goldman Sachs Bank USA, Barclays, Citigroup Global Markets Inc. and Jefferies Finance LLC are leading the deal that will be used to fund a dividend.

CHG Healthcare amending

In connection with the transaction, CHG Healthcare is amending its existing credit facility to allow for the add-on term loans and the dividend payment.

First-lien lenders were offered a 10 bps amendment fee, and second-lien lenders were offered a 50 bps amendment fee.

Pro forma for the transaction, leverage through the first-lien tranche would be around 4.83 times and total leverage would be about 6.75 times, based on last-12-months through May 31, 2013 EBITDA of $119.7 million.

Closing is targeted for the week of July 8.

CHG is a Salt Lake City-based health care staffing firm.

Drillships reworks loans

In the primary, Drillships Financing raised pricing on its $900 million seven-year and eight-month term loan B-1 to Libor plus 500 bps from the Libor plus 450 bps area, widened the discount talk to 98 to 98½ from 99 and revised the call protection to a hard call of 102 in year one and 101 in year two from just a 101 soft call for one year, according to a market source. The 1% Libor floor was unchanged.

Also, the company flexed up the spread on its $900 million three-year and two-month term loan B-2 to Libor plus 450 bps from the Libor plus 375 bps area and widened the discount to 99 from 991/2, the source said. This tranche still has a 1% Libor floor and 101 soft call protection for one year.

With the pricing adjustments, the term loans saw the addition of a net debt to EBITDA covenant, the source continued, versus being covenant-light at launch.

Commitments are due at 5 p.m. ET on July 1.

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Barclays and Goldman Sachs Bank USA are leading the $1.8 billion first-lien secured deal (B2/B+) that will be used to refinance the existing secured bank debt at both Drillships Holdings Inc. and Drillships Investment Inc.

Parent company Ocean Rig is a Nicosia, Cyprus-based international offshore drilling contractor.

Sapphire changes surface

Sapphire Power reduced its term loan to $250 million from $350 million, lifted price talk to Libor plus 500 bps to 525 bps from Libor plus 400 bps, and modified the call protection to 102 in year one and 101 in year two, from a 101 soft call for one year, according to a market source.

Additionally, the maturity was shortened to five years from seven years, and net leverage and interest coverage covenants were added to the previously covenant-light loan.

The term loan still has a 1% Libor floor and an original issue discount of 99.

The company's now $280 million credit facility (B1) also includes a $30 million revolver that will be pari passu with the term loan instead of having super-priority status, the source remarked.

Recommitments are due at 5 p.m. ET on Friday and allocations are expected early next week.

Goldman Sachs Bank USA and Deutsche Bank Securities Inc. are leading the deal that will be used to refinance existing debt, to fund a debt service reserve account and fund a dividend payment, the amount of which was reduced with the term loan downsizing, the source added.

Sapphire Power is an Austin, Texas-based power company.

Altice modifies terms

Altice increased pricing on its minimum $700 million term loan to Libor plus 450 bps from talk of Libor plus 375 bps to 400 bps, and as a result, the €200 million term loan that was talked 25 bps wide of the U.S. debt will now be priced at Euribor plus 475 bps, according to a market source.

Furthermore, the original issue discount on both term loans widened to 98 from 991/2, the call protection was sweetened to non-callable for one year, then 102 in year two and 101 in year three from non-callable for one year then at 101 in year two, and the tenor was shortened to six years from seven years, the source said.

As before, the term loans have a 1% floor.

Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., Credit Agricole Securities (USA) Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the leading the deal that will be used to refinance existing debt, fund a dividend and finance acquisitions.

Altice is a Luxembourg-based cable and telecommunications investment company.

Boulder Brands flexes

Boulder Brands increased the spread on its $245 million seven-year covenant-light senior secured term loan B to Libor plus 400 bps from Libor plus 350, while keeping the 1% Libor floor, original issue discount of 99 and 101 soft call protection for six months intact, according to a market source.

The company's $320 million credit facility also includes a $75 million five-year revolver.

Recommitments were due at 5 p.m. ET on Thursday, the source said.

Citigroup Global Markets Inc., BMO Capital Markets and Barclays are leading the deal that will be used to refinance existing debt.

Boulder Brands, previously known as Smart Balance Inc., is a Paramus, N.J.-based health and wellness food company.

Oceania revises deal

Oceania Cruises lifted pricing on its $300 million seven-year term loan B to Libor plus 575 bps from talk of Libor plus 400 bps to 425 bps and moved the original issue discount to 99 from 991/2, according to a market source.

The loan has a 1% Libor floor and 101 soft call protection for one year.

Deutsche Bank Securities Inc., Barclays, UBS Securities LLC and HSBC Securities (USA) Inc. are leading the $375 million credit facility (B2/B), which also includes a $75 million revolver.

Proceeds will be used by the Miami-based upper premium cruise line to refinance existing bank debt.

Data Device revised

Data Device cut its add-on term loan to $15 million from $20 million, widened pricing to Libor plus 650 bps from Libor plus 600 bps, added a step-down to Libor plus 600 bps when first-lien leverage is below 3.75 times and modified the discount to 98 from 981/2, a market source said.

In addition, since the add-on is fungible with the existing term loan, the company increased pricing on its existing loan to Libor plus 650 bps from Libor plus 600 bps and added the leverage-based step-down that is included in the add-on, the source said.

The add-on and the existing term loan continue to have a 1.5% Libor floor.

Credit Suisse Securities (USA) LLC is leading the add-on that will be used for acquisition financing.

Data Device is a Bohemia, N.Y.-based supplier of defense electronics.

Air Canada shelved

Air Canada pulled its $1 billion six-year senior secured term loan B (B2/B/BB-) from the primary due to volatile market conditions, according to a market source.

The loan was talked at Libor plus 425 bps to 450 bps with a 1% Libor floor, an original issue discount of 99½ and 101 soft call protection for six months.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc. and TD Securities (USA) LLC were leading the deal that was going to be used to fund tender offers for the company's 9¼% senior secured notes due 2015, 10 1/8% senior secured notes due 2015 and 12% senior second-lien notes due 2016.

Air Canada is Saint-Laurent, Quebec-based full-service airline.

CLEAResult holds meeting

Also on the primary front, CLEAResult hosted a bank meeting on Thursday to launch a $155 million credit facility that is talked at Libor plus 400 bps with a 1% Libor floor, according to a market source.

The facility consists of a $30 million five-year revolver, an $85 million six-year term loan, a C$15 million six-year term loan and a $25 million six-year delayed-draw term loan.

The term loans have an original issue discount of 991/2, and the delayed-draw loan includes a 125 bps ticking fee, the source said.

Societe Generale and KeyBanc Capital Markets are leading the deal that will be used to help fund the company's buyout by General Atlantic.

Pro forma senior and total leverage is 3.73 times.

CLEAResult is an Austin, Texas-based provider of outsourced energy efficiency optimization services primarily for utility clients in the U.S. and Canada.

One Call discloses OID

One Call Medical launched with a call its $145 million add-on first-lien term loan, which is talked with an original issue discount of 993/4, according to a market source.

Pricing on the add-on is Libor plus 425 bps with a 1.25% Libor floor, which matches existing first-lien term loan pricing.

Jefferies Finance LLC is leading the deal that will be used to fund an acquisition.

First-lien leverage will be 3.5 times and total leverage will be 4.9 times.

One Call is a Parsippany, N.J.-based provider of specialty services to insurance payers.

AMR closes

In other news, AMR Corp. closed on its $2.05 billion credit facility that consists of a $1 billion revolver and a $1.05 billion six-year debtor-in-possession term loan that converts into an exit term loan, according to an 8-K filed with the Securities and Exchange Commission.

Pricing on the term loan is Libor plus 375 bps with a 1% Libor floor, and it was issued at a discount of 991/2. There is 101 soft call protection for six months.

During syndication, the term loan was downsized from $1.5 billion and pricing was lifted from talk of Libor plus 325 bps to 350 bps.

Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Barclays, Goldman Sachs Bank USA, J.P. Morgan Securities LLC and Morgan Stanley Senior Funding Inc. led the deal that will be used to help fund the company's plan of reorganization.

As a result of the term loan downsizing, the company put less cash on the balance sheet.

AMR is a Fort Worth, Texas-based airline company.

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