LPL breaks; Cincinnati Bell, Styron talk emerges; Pabst sets structure; U.S. Gas tweaks deal

By Sara Rosenberg

New York, May 24 - LPL Financial's incremental term loan freed up for trading on Monday, with levels quoted a touch higher than the original issue discount price, and the extended term loan tranche began trading, too.

Over in the primary, Cincinnati Bell Inc. and Styron came out with price talk on their credit facilities as the deals were presented to lenders during the session, and Pabst Brewing Co. revealed the structure on its proposed credit facility as it gears up for launch, but left price talk as still to be determined.

In addition, U.S. Gas & Electric Inc. announced changes to price talk on its second-lien term loan, including going to a fixed-rate structure from a floating-rate structure.

Also, New Development Holdings LLC, the Calpine Corp. subsidiary, narrowed down talk on its term loan as ratings emerged, and chatter is that investors are showing good interest in the deal, and Oxford Mining Co. is circulating spread guidance ahead of its bank meeting.

LPL incremental frees to trade

LPL Financial's $580 million incremental term loan due in 2017 hit the secondary market on Monday, with levels quoted at 99 1/8 bid, 99 5/8 offered, according to traders.

Pricing on the term loan is Libor plus 375 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 99.

During syndication, pricing on the term loan firmed at the high end of the initial Libor plus 350 bps to 375 bps talk.

Proceeds will be used to refinance out the company's 10¾% senior subordinated notes.

Leverage is around 3.2 times.

In connection with the new deal, the company sought an amendment to its credit facility to allow for the incremental loan and to permit the repayment of subordinated debt with senior debt.

LPL extended debt trades, too

LPL Financial also extended $500 million of its roughly $817 million term loan D to 2015 from 2013, and this debt started trading on Monday as well, with levels quoted at 96¾ bid, 97¾ offered, whereas the non-extended debt was quoted at 94¾ bid, 95¾ offered, traders said.

The extended tranche was oversubscribed, so accounts had to be cut back pro rata, one source remarked.

Pricing on the extended is Libor plus 275 bps with a 1.5% Libor floor, compared to pricing on the non-extended tranche of Libor plus 175 bps with no Libor floor.

LPL Financial did not need to get permission from lenders to extend its term loan D since an amendment was already completed last year, allowing for the maturity change.

Morgan Stanley and Bank of America are the lead banks on the deal.

LPL Financial is a business-to-business brokerage firm for independent financial advisors, banks and credit unions, and broker/dealers at financial services companies.

Cincinnati Bell releases guidance

Switching to the primary, Cincinnati Bell held a bank meeting on Monday to kick off syndication on its proposed $970 million senior secured credit facility (BB), and in connection with the launch, price talk was announced, according to a market source.

The $760 million seven-year term loan was presented to lenders with talk of Libor plus 375 bps with a 1.5% Libor floor and an original issue discount in the 98 to 99 area, the source said.

This price talk is a little different than what the company discussed in a conference call upon first announcing the deal. Officials had said in the call that the term loan was expected to be priced in the Libor plus 350 bps area, compared to pricing of Libor plus 150 bps on its existing term loan, which will be refinanced in connection with this transaction.

As for the company's $210 million four-year revolver, that was launched with talk of Libor plus 350 bps with a 75 bps unused fee, the source continued.

Cincinnati Bell lead banks

Bank of America, Morgan Stanley and Barclays are the lead banks on Cincinnati Bell's credit facility, with Bank of America the left lead.

In addition to refinancing the existing roughly $200 million term loan, the new deal will be used to fund the $525 million acquisition of CyrusOne, a data center operator, and for general corporate purposes.

Closing on the transaction is targeted by the end of the second quarter, subject to customary conditions, including regulatory approvals.

Pro forma LTM leverage will be 5.1 times.

Cincinnati Bell is a Cincinnati, Ohio-based provider of integrated communications services.

Styron price talk

Styron was another company to hold a bank meeting on Monday, and along with its credit facility launch, price talk as well as tranching details surfaced, according to sources.

The facility consists of a $240 million revolver, a $675 million first-lien term loan talked at Libor plus 475 basis points with a 1.75% Libor floor, and a $125 million second-lien term loan talked at Libor plus 775 bps with a 1.75% Libor floor, sources said.

Prior to launch, all that was know was that there would be $800 million in term loan debt and a revolver with a size yet to be determined.

The second-lien term loan has call protection of 103 in year one, 102 in year two and 101 in year three.

Original issue discounts on the first-and second-lien term loans are not out yet, sources added.

Styron being acquired

Proceeds from Styron's credit facility will be used to help fund the acquisition of the company by Bain Capital from Dow Chemical for $1.63 billion.

The transaction is expected to close by August, subject to the completion of customary conditions and regulatory approvals.

Commitments towards the credit facility are due from lenders on June 7.

Deutsche Bank, Barclays and HSBC are the lead banks on the $1.04 billion deal, with Deutsche the left lead.

Styron is a diversified chemicals and plastics company that is expected to have $3.5 billion in revenue based on 2009.

Pabst details structure

Pabst Brewing revealed that its proposed five-year senior credit facility will be sized at $100 million, comprised of a $10 million revolver and a $90 million term loan, according to a market source.

The deal is scheduled to launch with a bank meeting in Chicago on Wednesday, at which time formal price talk will be announced, the source said.

The term loan features amortization of $10 million per year.

Expected ratings are B2/B.

GE Capital is the lead bank on the deal that will be used to help fund the acquisition of the company by Dean Metropoulos.

Milwaukee-based Pabst is the third largest brewer in the United States, with 37 beer and malt liquor brands.

U.S. Gas modifies pricing

U.S. Gas & Electric revised talk on its $125 million five-year second-lien term loan to a fixed rate of 10% to 11% cash plus 3% to 4% PIK, for pricing in the 14% area, while leaving the original issue discount of 98 unchanged, according to a market source.

By comparison, at launch the loan was being talked at Libor plus 750 bps to 850 bps with a 2% Libor floor.

Call protection and covenants under the loan are to be determined, amortization on the loan is $10 million annually and there is a 50% excess cash flow sweep.

Macquarie Capital is the lead arranger and bookrunner on the deal that will be used to refinance existing debt and back the acquisition of a similar company.

U.S. Gas & Electric, an MVC Capital portfolio company, is a provider of energy supply to commercial and residential consumers.

New Development zeroes in on talk

New Development Holdings, the Calpine subsidiary, has narrowed down price talk on its $1.3 billion seven-year term loan to Libor plus 350 bps as ratings of Ba3/BB- were announced on Monday, a market source told Prospect News. As was disclosed at launch, if ratings were lower, the term loan would have been talked at Libor plus 375 bps.

And, the source said that the deal has "good momentum with this rating."

The term loan includes a 1.5% Libor floor and is being offered at an original issue discount of 98.

Credit Suisse, Citigroup and Deutsche Bank are the lead banks on the $1.4 billion credit facility, which also includes a $100 million revolver (Ba3/BB-).

Since the new debt is at a subsidiary, Calpine does not need to obtain an amendment from existing term loan holders to complete the transaction.

New Development funding acquisition

Proceeds from New Development's credit facility, along with $535 million of corporate cash, will be used to help finance Calpine's acquisition of 4,490 MW of power generation assets from Pepco Holdings Inc. for $1.65 billion plus adjustments.

Pro forma net debt to adjusted EBITDA as of Dec. 31 is 4.8 times.

And, pro forma adjusted EBITDA for 2010 is estimated between $1.625 billion and $1.725 billion, while for 2011, it is estimated between $1.685 billion and $1.885 billion.

Closing on the acquisition is expected to take place by June 30, subject to customary conditions, approval from the Federal Energy Regulatory Commission and antitrust review under the Hart-Scott-Rodino Act. No shareholder approval is required.

Calpine is a Houston-based power generation company.

Oxford Mining floats talk

In more primary happenings, Oxford Mining is talking its $150 million credit facility at Libor plus 425 bps, with details on Libor floor and fees expected to emerge at the deal's Tuesday bank meeting, according to a market source.

Tranching on the facility is comprised of a $50 million three-year revolver and a $100 million four-year term loan, the source said.

Citigroup and Barclays are the lead banks on the deal that will be used to refinance existing debt.

Oxford Mining is a producer of coal.

Schumacher readies close

Schumacher Group is expected to close on its $120 million credit facility this week, according to a market source.

The facility consists of a $50 million revolver and a $70 million term loan, with both tranches priced in line with initial talk at Libor plus 400 bps with a 1.75% Libor floor and an original issue discount of 981/2.

GE Capital is the lead bank on the deal that will be used to refinance existing debt and fund a dividend.

Schumacher is a Lafayette, La.-based emergency medical staffing and management company.

Wendy's/Arby's closes

Wendy's/Arby's Restaurants LLC closed on its $650 million senior secured credit facility (Ba2/BB), consisting of a $150 million five-year revolver and a $500 million seven-year term loan, according to a news release.

Pricing on the facility is Libor plus 350 bps with a 1.5% Libor floor. The term loan was issued at an original issue discount of 99½ and includes 101 soft call protection for one year.

During syndication, pricing on the term loan firmed at the high end of the Libor plus 325 bps to 350 bps talk, the discount tightened from 99 and the call protection was added.

Banc of America and Citigroup acted as the joint lead arrangers and bookrunners on the deal, with Wells Fargo and Credit Suisse co-managers.

Proceeds are being used to refinance the company's existing credit facility, redeem $200 million of Wendy's International Inc. 6¼% senior notes due 2011 and for general corporate purposes.

Wendy's/Arby's is an Atlanta-based quick-service restaurant company.

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