KAR Auction breaks; Primedia up on buyout; Asset Acceptance softens; FTD dips on refi

By Sara Rosenberg

New York, May 16 - KAR Auction Services Inc.'s senior secured credit facility freed up for trading during Monday's market hours, with the term loan B quoted above its original issue discount price.

Also in trading, Primedia Inc.'s term loan rallied as the company announced that it is being bought out by TPG Capital, Asset Acceptance Capital Corp.'s term loan weakened with the withdrawal of its proposed credit facility, and FTD's term loan dropped with refinancing news.

Over in the primary, Scotsman Industries Inc. upsized its term loan add-on and tightened the offer price due to strong demand, and Gibson Energy ULC, SRAM International Corp., Toys 'R' Us Inc. and Lumen released pricing guidance as their transactions were launched to lenders during the session.

Furthermore, Walter Investment Management Corp. set timing and talk on its proposed credit facility, Drake Beam Morin began circulating early guidance on its newly announced upcoming deal, and AES Corp. and Barbri surfaced with new loan plans.

KAR starts trading

KAR Auction Services' credit facility made its way into the secondary market on Monday, with the $1.7 billion term loan B quoted at par bid, par ¼ offered on the open and then it moved up to par 5/8 bid, par 7/8 offered, according to a trader.

Pricing on the B loan is Libor plus 375 basis points with a step-down to Libor plus 350 bps when secured leverage is less than 2.75 times. There is a 1.25% Libor floor as well as 101 soft call protection for one year, and the paper was sold at an original issue discount of 991/2.

During syndication, the term loan B was upsized from $1.5 billion, pricing firmed at the tight end of the Libor plus 375 bps to 400 bps with a discount of 99 to 99½ talk, and the step-down and call protection were added.

The company's $1.95 billion credit facility (Ba3/BB-) also includes a $250 million revolver.

KAR refinancing debt

Proceeds from KAR Auction's credit facility will be used to repay existing senior secured revolver and term loan B borrowings, 10% senior subordinated notes due 2015 and 8¾% senior notes due 2014.

Because of the change to the term loan B size, the company will repurchase more of its notes than originally planned.

J.P. Morgan Securities LLC, Goldman Sachs & Co., Barclays Capital Inc. and Deutsche Bank Securities Inc. are the lead banks on the deal.

KAR Auction is the Carmel, Ind.-based holding company for Adesa, Inc., a provider of wholesale used vehicle auctions.

Primedia term loan rises

Primedia's term loan jumped up in trading to 97 bid, 99 offered from 89 bid, 92 offered following news that the company is being acquired by TPG Capital, according to a trader.

Under the terms of the agreement, Primedia shareholders will receive $7.10 per share in cash, representing a transaction enterprise value of about $525 million.

The transaction is expected to close in the third quarter, subject to customary closing conditions, including expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. There is no financing contingency.

Stockholders holding roughly 58% of Primedia's common stock have executed a written consent approving the deal. Therefore, no additional stockholder action is required.

Primedia is a Norcross, Ga.-based provider of Internet, mobile and print guides to help people find apartments, houses for rent or new homes for sale.

Asset Acceptance slides

Asset Acceptance Capital's term loan was quoted at 98 bid, no offers on Monday, compared to 99½ bid, par ½ offered mid-last week because the company has decided not to move forward with its new deal right now, according to a trader.

Back in April, the company had launched a $275 million credit facility (B1/BB+), consisting of a $175 million six-year term loan B talked at Libor plus 400 bps to 425 bps with a 1.5% Libor floor, an original issue discount of 99 and 101 soft call protection in year one, and a $100 million five-year revolver

J.P. Morgan Securities LLC was acting as the lead bank on the deal that would have replaced the company's existing credit facility, comprised of a $100 million revolver due June 5, 2012 and a roughly $133 million term loan due June 5, 2013.

Asset Acceptance is a Warren, Mich.-based purchaser and collector of defaulted or charged-off accounts receivable portfolios from consumer credit originators.

FTD softens with refi

FTD's term loan moved to 99 7/8 bid, par 3.8 offered from par ¼ bid, 101 offered after word surfaced that the company will be refinancing the debt with a new credit facility, according to a market source.

The new deal will launch with a bank meeting on Tuesday and is being led by Wells Fargo Securities LLC. It is a $315 million credit facility comrpised of a $50 million revolver and a $265 million term loan, the source said.

FTD is a Downers Grove, Ill.-based floral company.

Scotsman revises add-on

In more loan happenings, Scotsman Industries lifted its term loan add-on (B1/B+) to $70 million from $60 million and moved the offer price to par from 991/2, according to a market source.

Pricing on the add-on is in line with existing term loan pricing at Libor plus 425 bps with a step-down to Libor plus 400 bps when total net leverage is less than 2.50 times and a 1.5% Libor floor.

When the existing $115 million term loan was obtained last year is was sold at a discount of 99.

GE Capital Markets is the lead bank on the deal that will be used to fund a dividend.

Scotsman Industries is a Vernon Hills, Ill.-based manufacturer of commercial ice machines and related products.

Gibson Energy launches

Gibson Energy held a bank meeting on Monday morning to launch a $950 million senior secured credit facility that is comprised of a $700 million seven-year term loan and a $250 million five-year revolver, according to a market source.

With the launch, talk on the term loan emerged as Libor plus 350 bps to 375 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source said.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and UBS Securities LLC are the lead banks on the deal and are asking for commitments by May 31.

Proceeds, along with an initial public offering, will be used to refinance $560 million of 11.75% first-lien senior secured notes due 2014 and $200 million of 10% senior unsecured notes due 2018, to repay borrowings under an asset-based credit facility and for general corporate purposes.

Gibson, a Calgary, Alberta-based midstream energy company, crude oil transporter and retail propane distributor, set an expiration date of June 13 on its notes tender offers.

SRAM discloses guidance

SRAM came out with price talk on Monday as it too launched with a bank meeting, according to a market source, who said that the $575 million seven-year first-lien term loan (Ba2/B+) is being talked at Libor plus 400 bps with a 1.25% Libor floor and an original issue discount of 991/2, and the $215 million 71/2-year second-lien term loan (B3/B-) is being talked at Libor plus 750 bps with a 1.5% floor and a discount of 98.

The Chicago-based bicycle components manufacturer's $840 million credit facility, led by J.P. Morgan Securities LLC, also includes a $50 million five-year revolver (Ba2/B+).

Proceeds will be used to repay all of the company's existing bank debt, which as of Dec. 31, included a $235 million term loan and a $25 million revolver priced at Libor plus 350 bps with a 1.5% Libor floor, and acquire all of the 3.64 million class A units of SRAM Holdings LLC held by Trilantic and its co-investors.

The company then plans on doing an initial public offering of class A common stock and using proceeds from that offering to repay some debt under the new credit facility.

Toys 'R' Us price talk

Also launching during the day was Toys 'R' Us' $400 million seven-year term loan B-2, and lenders were told that talk is Libor plus 325 bps to 350 bps with a 1.25% to 1.5% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year, according to a market source.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Goldman Sachs & Co., Wells Fargo Securities LLC, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are the lead banks on the deal that will be used to refinance existing debt.

The Wayne, N.J.-based toy retailer tried, but then pulled, a transaction back in March, under which it was looking to get an amended $700 million term loan B-1 due Sept. 1, 2016 and a new $400 million 71/2-year term loan B-2, both talked at Libor plus 300 bps to 325 bps with a 1.25% to 1.5% Libor floor, a par offer price and 101 soft call protection for six months.

Proceeds were going to be used to refinance an existing term loan due September 2016 priced at Libor plus 450 bps with a 1.5% Libor floor and to repay $500 million of 7 5/8% notes due August 2011.

Lumen comes to market

Lumen was another deal to launch, with its $113.3 million senior secured credit facility talked at Libor plus 500 bps with a 1.5% Libor floor and an original issue discount of 981/2, according to a market source.

The facility consists of a $10 million revolver and a $103.3 million term loan and is being led by Bank of Ireland and Madison Capital.

Proceeds will be used to merge the financing of Danville, Ill.-based Watchfire and Ventura, Calif.-based SloanLED, both providers of LED lighting and owned by Harbour Group, and to fund a dividend payment. The two companies will continue to operate as separate entities.

Other funds for the transaction will come from $36.9 million of mezzanine debt from Golub Capital.

Leverage through the credit facility is 3.5 times and total leverage if 4.75 times.

Walter timing emerges

Walter Investment Management has set a bank meeting for Thursday afternoon to launch its previously announced $810 million senior secured credit facility, according to a market source.

Credit Suisse Securities (USA) LLC and RBS Securities Inc. are the joint bookrunners and lead arrangers on the deal, with Credit Suisse the administrative agent. Bank of America Merrill Lynch is a bookrunner and a co-documentation agent, and Morgan Stanley Senior Funding Inc. is as a co-documentation agent.

The facility consists of a $45 million five-year revolver, a $500 million five-year first-lien term loan and a $265 million 51/2-year second-lien term loan.

Initially, the deal was expected to be sized at $795 million, but it was recently increased through the upsizing of the revolver from $30 million.

Walter releases guidance

With timing, Walter Investment also established official price talk on its credit facility, the source said, outlining the revolver and first-lien term loan talk at Libor plus 525 bps and the second-lien term loan at Libor plus 900 bps.

All tranches include a 1.5% Libor floor and are being offered at an original issue discount of 99, the source continued, adding that the first-lien term loan has 101 soft call protection for one year, and the second-lien term loan has call protection of 103 in year one, 102 in year two and 101 in year three.

Spread guidance and Libor floor came out in line with what the company had described in filings with the Securities and Exchange Commission, as did the discount price on the revolver and the first-lien term loan, and first-lien term loan call protection. What's different is that the filings had put the discount price on the second-lien loan at 98 and second-lien call protection as non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

Walter buying Green Tree

Proceeds from Walter Investment's credit facility will be used to help fund the acquisition of GTCS Holdings LLC (Green Tree), a St. Paul, Minn.-based fee-based business services company, which provides high-touch, third-party servicing of credit-sensitive consumer loans, in a transaction valued at $1.065 billion.

Other funds for the acquisition will come from cash on hand and the issuance of 1.8 million shares of common stock to the seller.

Leverage through the first-lien is 2.22 times and through the second-lien is 3.36 times.

Closing on the transaction is expected in the third quarter, subject to customary conditions, including receipt of governmental approvals and third-party consents.

Walter Investment is a Tampa, Fla.-based asset manager, mortgage servicer and mortgage portfolio owner specializing in less-than-prime, non-conforming and other credit-challenged mortgage assets.

Drake Beam floats talk

Drake Beam Morin started going out with early price talk on its proposed $115 million credit facility ahead of the 10 a.m. ET Thursday bank meeting that will kick off syndication, according to a market source.

Both the $10 million five-year revolver and the $105 million six-year term loan are being talked at Libor plus 500 bps, with the term loan having a 1.5% Libor floor and an original issue discount of 99, the source said.

SunTrust Robinson Humphrey Inc. is the lead bank on the non-rated deal that will be used to refinance existing debt, fund a dividend to shareholders and for general corporate purposes.

Drake Beam Morin is a New York-based provider of strategic human resources services, focusing on outplacement and transition services.

AES readies launch

AES, an Arlington, Va.-based generator and distributor of electricity, has set a call for Tuesday to launch a $1.05 billion seven-year term loan B that is being led by Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Morgan Stanley & Co. Inc., according to a market source.

Proceeds will be used to help fund the acquisition of Dayton, Ohio-based power supplier DPL Inc., the parent company of the Dayton Power & Light Co., for $3.5 billion in cash, plus the assumption of $1.2 billion of net debt.

Previously, the company had said that its expects to issue $3.3 billion of new debt for the transaction, comprised of $2.05 billion of unsecured notes and/or a term loan at AES Corp. and $1.25 billion of senior unsecured notes at DPL.

Closing is expected in late 2011 or early 2012, subject to approval by DPL's shareholders and receipt of certain regulatory approvals.

Barbri coming Wednesday

Barbri has set a bank meeting for Wednesday to launch a proposed credit facility, according to a market source.

GE Capital Markets is the lead bank on the deal that will be used to help fund the buyout of the company.

Barbri is a provider of bar review courses and law student support.

Epicor closes

In other news, the buyouts by Apax Partners of Epicor Software Corp. for $12.50 per share in cash and of Activant Solutions Inc. from Hellman & Friedman LLC, Thoma Bravo, LLC and JMI Equity, have been completed, creating one company called Epicor Software Corp., according to a news release.

To help fund the transactions, Epicor got a new $945 million senior secured facility (Ba3/B+), consisting of an $870 million seven-year covenant-light term loan and a $75 million five-year revolver.

Pricing on the term loan is Libor plus 375 bps with a 1.25% Libor floor, and it was sold at a discount of 99 after firming at the high end of the 99 to 99½ talk. There is 101 soft call protection for one year that was added during syndication. Revolver pricing is Libor plus 375 bps with a 75 bps unused fee.

Bank of America Merrill Lynch and RBC Capital Markets LLC led the deal.

Epicor is an Irvine, Calif.-based provider of enterprise business software services. Activant is a Livermore, Calif.-based technology provider of ERP and point-of-sale software.

Neiman wraps refi

Neiman Marcus Group Inc. closed on its amended and restated senior secured credit facility on Monday that is being used to take out existing bank debt and to repurchase or redeem $752.4 million 9%/9¾% senior notes due 2015, according to an 8-K filed with the SEC.

The $2.76 billion deal consists of a $700 million five-year ABL revolver priced at Libor plus 225 bps with a 37.5 bps unused fee, and a $2.06 billion seven-year term loan B (B2/BB-) priced at Libor plus 350 bps with a 1.25% Libor floor. The B loan was sold at an original issue discount of 99¾ and has 101 soft call protection for one year.

During syndication, pricing on the Dallas-based high-end specialty retailer's term loan B was lowered from talk of Libor plus 375 bps to 400 bps and the original issue discount tightened from 991/2.

Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Wells Fargo Securities LLC and Barclays Capital Inc. led the deal.

Manitowoc completes deal

Manitowoc Co. Inc. wrapped its $1.25 billion senior secured credit facility (Ba2/BB), consisting of a $500 million five-year revolver, a $350 million five-year term loan A and a $400 million 61/2-year term loan B, according to a news release.

Pricing on the revolver and A loan is Libor plus 300 bps with no Libor floor, and pricing on the B loan is Libor plus 300 bps with a 1.25% Libor floor and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year on the term loan B.

During syndication, the B loan was upsized from $350 million, pricing was lowered from Libor plus 350 bps, and the discount tightened from 99, and the term loan A was upsized from $300 million.

J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Bank of America Merrill Lynch and Wells Fargo Securities LLC led the deal that was used to refinance existing bank debt.

Manitowoc is a Manitowoc, Wis.-based manufacturer and seller of cranes and related products and foodservice equipment.

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