ConvaTec, Syniverse, Earthbound, iHealth, Saxco break; A&P cuts term loan spread and discount

By Sara Rosenberg

New York, Dec. 21 - ConvaTec Healthcare, Syniverse Technologies, Earthbound Farm, iHealth Technologies Inc. and Saxco International all freed up for trading during Tuesday's market hours, and all of the companies' term loans were quoted above their original issue discount prices.

Over in the primary market, Great Atlantic & Pacific Tea Co. Inc. (A&P) reduced the spread on its debtor-in-possession term loan and tightened the original issue discount as the tranche has been well received by investors.

ConvaTec frees up

ConvaTec Healthcare's credit facility made its way into the secondary market on Tuesday, with the $500 million term loan B quoted at par ¾ bid, 101¼ offered on the open, according to a trader. The loan was then seen quoted by one source at 101 bid, no offers, and by a second source at par 7/8 bid, 101¼ offered.

Meanwhile, the company's €550 million term loan B was quoted at par ¼ bid, par 5/8 offered, the trader added.

Pricing on the roughly $1.2 billion U.S. and Euro six-year term loan B is Libor/Euribor plus 425 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 991/2.

During syndication, pricing on the B loan was reduced from initial talk of Libor/Euribor plus 450 bps, the floor was trimmed from 1.75% and the discount was tightened from 99. Also, the euro tranche was upsized from €260 million as about €75 million was moved out of the company's senior unsecured notes offering and about €215 million was moved out of its senior secured notes offering.

ConvaTec getting revolver

ConvaTec Healthcare's $1.45 billion credit facility (Ba3/B+) also includes a $250 million five-year revolver.

JPMorgan and Goldman Sachs are the lead banks on the deal that will be used, along with the notes, to refinance substantially all of the company's debt under its existing senior secured and mezzanine facilities.

As a result of the upsizing to the credit facility, senior secured leverage will be 3.7 times at close, up from 3.5 times under the original structure.

ConvaTec is a Skillman, N.J.-based developer, manufacturer and marketer of medical technologies for community and hospital care.

Syniverse starts trading

Syniverse was another deal that allocated and freed up for trading, with the $1.025 billion term loan quoted at par ¾ bid, 101 3/8 offered on the break, according to a market source. A second source saw the loan move to par 7/8 bid, 101 3/8 offered a little later in the afternoon.

Pricing on the term loan, as well as on a $150 million revolver, is Libor plus 375 bps with a 1.5% Libor floor. The term loan was sold at an original issue discount of 99, while the revolver was sold at 981/2. There is 101 soft call protection for one year on the term loan.

During syndication, pricing on the entire $1.175 billion senior secured credit facility (B1/BB-) was reduced from Libor plus 425 bps, and the term loan saw the addition of the call protection.

Barclays Capital, Credit Suisse and Goldman Sachs are the lead banks on the deal, with Barclays the left lead.

Syniverse being bought

Proceeds from Syniverse's credit facility, $475 million of 9 1/8% senior notes and up to $1.245 billion of equity will be used to fund the buyout of the company by the Carlyle Group for $31 per share. The transaction is valued at $2.6 billion.

Closing is expected in the first quarter of 2011, subject to customary conditions, including stockholder approval, which will be sought at a special meeting on Jan. 12, and various regulatory approvals. The company has already been granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Syniverse is a Tampa, Fla.-based provider of technology and business services for the telecommunications industry.

Earthbound trades atop OID

Also breaking was Earthbound Farm's credit facility, with the $225 million six-year term loan B quoted at 99¾ bid, par ¼ offered on the open and then it moved up to par 5/8 bid, 101 1/8 offered, according to a trader.

Pricing on the term loan B is Libor plus 500 bps with a 1.75% Libor floor, and it was sold at a discount of 981/2, after firming up at the tight end of talk of Libor plus 500 bps to 525 bps with a discount of 98 to 981/2.

The company's $250 million credit facility (B1/B+) also includes a $25 million five-year revolver.

RBC is the lead bank on the deal that will be used by the San Juan Bautista, Calif.-based organic food company to refinance existing debt and to fund a dividend payment.

iHealth Technologies breaks

iHealth Technologies' credit began being quoted in the secondary market as well, with the $175 million six-year term loan quoted at 98½ bid on the break and then moving up to 99 bid, with no offers, according to traders.

Pricing on the term loan is Libor plus 600 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 98. There is 101 soft call protection for one year.

Recently, the term loan was downsized from $250 million, pricing was lifted from talk of Libor plus 525 bps to 550 bps and the discount widened from 981/2.

The company's $205 million credit facility also includes a $30 million five-year revolver, which was downsized from $50 million and is priced at Libor plus 575 bps with no Libor floor.

iHealth funding recap

Proceeds from iHealth Technologies' credit facility will be used to refinance existing debt and fund a dividend payment.

As a result of the downsizing of the loan, the size of the dividend is being reduced.

Goldman Sachs and SunTrust are the lead banks on the deal, with Goldman Sachs the left lead.

Ratings on the credit facility under the original structure were B2/BB-. On Tuesday, Moody's upgraded the credit facility to B1 as a result of the changes.

iHealth Technologies is an Atlanta-based provider of payment policy services to health care payers.

Saxco bid above par

Saxco International's $85 million term loan was quoted at par ¼ bid, no offers when it broke for trading on Tuesday, according to a market source.

Pricing on the term loan, as well as on a $15 million revolver, is Libor plus 475 bps with a 1.5% Libor floor, and the tranches were sold at a discount of 991/2.

During syndication, the term loan was upsized from $80 million as the company's mezzanine debt was downsized to $23 million from $28 million. Also, pricing on the entire facility was reduced from talk of Libor plus 550 bps to 575 bps, the floor was cut from 1.75% and the discount tightened from 981/2.

BNP Paribas is the lead bank on the $100 million deal that is being used, along with the mezzanine financing, to fund the buyout of the company by the Sterling Group.

Saxco is a Horsham, Pa.-based provider of packaging products and services to the liquor, wine, craft brewing and specialty food industries.

A&P revises pricing

Switching to the primary, Great Atlantic & Pacific Tea lowered pricing on its $350 million term loan to Libor plus 700 bps from Libor plus 750 bps and cut the original issue discount tightened to 99 from 98, according to a market source.

The 1.75% Libor floor and 101 soft call protection for one year were left unchanged, the source remarked.

The Montvale, N.J.-based supermarket chain's $800 million 18-month debtor-in-possession financing facility also includes a $450 million revolver that is expected at Libor plus 300 bps with a 50 bps unused fee.

JPMorgan is the lead arranger, bookrunner and administrative agent on the deal that will be used to refinance the company's pre-petition senior secured credit facility, to provide incremental liquidity and for working capital and general corporate purposes.

Ball Corp. closes

In other news, Ball Corp. completed its roughly $1.4 billion five-year senior credit facility (Ba1/BBB-), according to a news release.

The facility consists of a $1 billion revolver, a $200 million term loan, a €100 million term loan and a £55 million term loan, with all tranches priced at Libor plus 175 bps.

Deutsche Bank, Bank of America, JPMorgan, Goldman Sachs and Barclays acted as the lead banks on the deal that was used to refinance existing debt.

Ball is a Broomfield, Colo.-based supplier of rigid metal packaging products and services, primarily to the beverage and food industries.

CNO wraps refi

CNO Financial Group Inc. closed on its $375 million senior secured term loan due in September 2016 that was used to help refinance an existing $652.1 million senior secured term loan that matures in October 2013, according to a news release.

Pricing on the term loan is Libor plus 600 bps with a 1.5% Libor floor and an original issue discount of 983/4.

During syndication, the loan was upsized from $325 million as the company's bonds were downsized to $275 million from $300 million, the spread was reduced from the Libor plus 625 bps area, the floor was cut from 1.75% and the discount firmed from talk of 98 to 99.

Morgan Stanley and Barclays acted as the lead banks on the deal for the Carmel, Ind.-based holding company for insurance companies.

Transtar buyout completed

The acquisition of Transtar Industries Inc. by Friedman Fleischer & Lowe from Linsalata Capital Partners closed, according to a news release, as did the $425 million credit facility that was used to help fund the transaction.

The facility consists of a $50 million five-year revolver (Ba3/BB-), a $240 million six-year first-lien term loan (Ba3/BB-) and a $135 million seven-year second-lien term loan (B3/B-).

RBC and GE Capital acted as the joint lead arrangers on the first-lien debt, and RBC was the lead arranger on the second-lien loan.

Transtar pricing details

Pricing on Transtar's revolver is Libor plus 475 bps, the low end of the initial Libor plus 475 bps to 500 bps talk, with a 1.75% Libor floor, and it was sold at a discount of 981/2.

The first-lien term loan is priced at Libor plus 450 bps with a step-down to Libor plus 425 bps at less than 4.5 times leverage. There is a 1.75% Libor floor and 101 soft call protection for one year, and it was sold at an original issue discount of 99. During syndication, pricing was lowered from Libor plus 475 bps to 500 bps, the step-down and call protection were added, and the discount moved from 981/2.

And, pricing on the second-lien loan is Libor plus 850 bps with a 1.75% Libor floor, and it was sold at 981/2, after firming from talk of 98 to 981/2. Call protection is 103 in year one, 102 in year two and 101 in year three.

Transtar is a Cleveland-based transmission parts provider.

American Commercial closes

Platinum Equity wrapped its buyout of American Commercial Lines Inc. for $33 in cash per share, according to a news release.

To help fund the transaction, American Commercial got a new $550 million senior secured asset-based revolving credit facility led by Wells Fargo Capital Finance.

American Commercial Lines is a Jeffersonville, Ind.-based inland marine transportation and service company.

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