Cumulus Media loans trade up; Sealed Air reveals structure; C.H.I., Steak 'n Shake plan deals

By Sara Rosenberg

New York, July 25 - Cumulus Media Inc.'s first-lien term loan and second-lien term loan on Monday both saw an improvement in trading levels from where they were seen after breaking for trading during the previous session.

Over on the primary, Sealed Air Corp. came out with the official structure on its credit facility and price talk on its pro rata debt, as the revolver and term loan A were launched to lenders, and C.H.I. Overhead Doors and Steak 'n Shake revealed that they will be bringing new deals to market later this week.

Cumulus gains ground

Cumulus Media's first-lien term loan was quoted at 99 5/8 bid, par offered, versus 99¼ bid, 99¾ offered on the break Friday and on the open on Monday, the trader said.

And, the second-lien term loan was quoted at par ½ bid, 101½ offered, compared to 99½ bid, no offers on the break Friday and 99¾ bid, par ¾ offered on the open on Monday, the trader continued.

J.P. Morgan Securities LLC, UBS Securities LLC, Macquarie Capital, RBC Capital Markets LLC and ING Financial Markets LLC are the lead banks on the deal.

Cumulus sizes, pricing

Cumulus' $1.325 billion seven-year first-lien term loan (Ba2/BB) is priced at Libor plus 450 basis points with a 1.25% Libor floor and an original issue discount of 99. There is 101 soft call protection for one year and a 225 bps ticking fee from allocation.

As for the $790 million 71/2-year second-lien term loan (B2/B-), that is priced at Libor plus 600 bps with a 1.5% Libor floor and a discount of 981/2. This tranche is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

The company's $2.415 billion facility also includes a $300 million five-year revolver (Ba2/BB).

At launch, the deal consisted of a $2.04 billion first-lien term loan talked at Libor plus 375 bps to 400 bps with a 1.25% Libor floor, a discount of 99 to 99½ and 101 soft call protection for one year along with a $375 million revolver. Then the second-lien loan was added, and the first-lien term loan was downsized to $1.25 billion with revised talk of Libor plus 425 bps to 450 bps.

Finally, the revolver size was reduced as the first-lien loan was increased, and pricing on the first-lien loan firmed at the high end of talk.

Cumulus buying Citadel

Proceeds from Cumulus' credit facility, along with $500 million of equity from Crestview Partners and Macquarie Capital, will be used to fund the acquisition of Citadel Broadcasting Corp. for $37 per share, or $2.4 billion, and to refinance outstanding debt.

Under the agreement, Citadel stockholders have the option to receive the per-share payment in cash or get 8.525 shares of Cumulus common stock, subject to proration.

Closing on the acquisition is expected by the end of this year, subject to customary conditions, including Citadel stockholder approval, expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and regulatory approval from the Federal Communications Commission.

Cumulus is an Atlanta-based radio broadcaster. Citadel is a Las Vegas-based radio company.

Sealed Air sets structure

Switching to the primary, Sealed Air held a bank meeting on Monday afternoon to launch its pro rata bank debt, and in connection with the event, it was announced that the revolver is sized at $700 million and the term loan A is sized at $1 billion, according to a market source.

The company's term loan B, which is expected to launch with a bank meeting post-Labor Day, is sized at $1.3 billion, the source said.

By comparison, prior to launch, it was thought that the term loan A would be $750 million and the term loan B would be $1.55 billion, based on filings with the Securities and Exchange Commission. The official revolver size is unchanged from earlier expectations.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, BNP Paribas Securities Corp. and RBS Securities Inc. are the lead banks on the $3 billion credit facility.

Sealed Air pro rata talk

Price talk on Sealed Air's revolver and term loan A was officially released as Libor plus 250 bps, in line with what the company disclosed in the filings with the SEC.

Official talk on the B loan is not yet available, but the filings said that the debt is expected at Libor plus 275 bps on the U.S. piece and Euribor plus 300 bps on the euro piece, with the entire tranche having a 1% Libor/Euribor floor.

Proceeds will be used to fund the acquisition of Diversey Holdings Inc. from the Johnson family and Clayton, Dubilier & Rice LLC for $2.1 billion in cash and an aggregate of 31.7 million shares of Sealed Air common stock. The transaction is valued at $4.3 billion.

Closing is expected to take place this year, subject to customary regulatory approvals, and, as part of the acquisition, $1.4 billion of Diversey net debt will be refinanced.

Sealed Air plans notes

In addition to the new credit facility, Sealed Air plans on selling $1.5 billion of senior unsecured notes for the buyout, and backing those notes is a commitment for a $1.5 billion one-year senior unsecured bridge loan, of which $1 billion will be available in dollars and $500 million will be available in euros.

Pricing on the bridge loan is Libor plus 575 bps on the U.S. piece and Euribor plus 600 bps on the euro piece, with the spread on both pieces stepping up by 50 bps after three months and every three months thereafter. There is a 1% Libor floor on the U.S. tranche and a 1.25% Euribor floor on the euro tranche.

Pro forma leverage will be 4.4 times.

Sealed Air is an Elmwood Park, N.J.-based manufacturer of packaging and performance-based materials and equipment systems that serve food, industrial, medical and consumer applications. Diversey is a Sturtevant, Wis.-based provider of cleaning, sanitization and hygiene products.

C.H.I. readies deal

Also on the new primary front, C.H.I. Overhead Doors has set a bank meeting for Wednesday to launch a proposed $203.5 million credit facility that is being led by GE Capital Markets and Wells Fargo Securities LLC, according to a market source.

The facility consists of a $25 million five-year revolver, a $127.5 million six-year first-lien term loan and a $51 million 61/2-year second-lien term loan, the source said, adding that price talk is not yet available.

Proceeds will be used to help fund the buyout of the company by Friedman Fleischer & Lowe from JLL Partners.

C.H.I. Overhead Doors is a garage door company and a manufacturer of residential sectional garage doors, as well as commercial sectional and rolling steel.

Steak 'n Shake coming soon

Steak 'n Shake will be holding a bank meeting on Thursday to launch a proposed $160 million credit facility that consists of a $20 million three-year revolver and a $140 million four-year term loan, according to a market source.

Jefferies & Co. is the lead bank on the deal that will be used to refinance existing debt and fund a return of capital to the parent.

Senior leverage is 3.2 times.

Steak 'n Shake is a quick service restaurant chain founded in Normal, Ill.

Fogo changes launch time

In other news, Fogo De Chão Churrascaria (Holdings) LLC moved its Tuesday bank meeting in New York to 2 p.m. ET from 11 a.m. ET, according to a market source.

As was previously reported, the company will be launching a $205 million credit facility, comprised of a $10 million five-year revolver and a $195 million seven-year term loan B.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to finance the acquisition of shares from current shareholders.

Fogo De Chão is a Dallas-based steakhouse chain in the U.S. and Brazil.

Reynolds shuts books

Reynolds Group closed the books on its $2 billion senior secured term loan due August 2018 (Ba3/BB-), and the expectation is that allocations will go out on Tuesday or Wednesday, according to a market source.

The oversubscribed term loan is talked at Libor plus 525 bps with a 1.25% Libor floor and an original issue discount of 99, and includes two years of 101 soft call protection - a feature that was added during syndication. There is a delayed-draw fee that is the full spread for 90 days from closing. The fee had been revised about a week ago from half the spread for 30 days and the full spread thereafter.

With the new deal, the company's existing term loan due February 2018 is being repriced at Libor plus 525 bps with a 1.25% Libor floor from Libor plus 325 bps with a 1% floor, and is getting 101 soft call protection for one year.

Reynolds lead banks

Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. are leading Reynolds' new deal that will be used to help fund the acquisition of Graham Packaging Co. Inc. for $25.50 per share, or a total of about $4.5 billion, including assumed debt.

Other funds for the transaction will come from $1.5 billion of senior secured notes, $1 billion of senior unsecured notes, upsized from $500 million, and cash on hand.

Proceeds from the additional notes will be used to repurchase Graham's senior notes that are tendered in connection with change of control offers at 101, and any remaining proceeds will be used to repay other debt.

Some holders of Graham's senior notes have objected to the proposed financing for the acquisition and claim that it will violate covenants in the senior notes indentures. These holders have threatened litigation, and Reynolds said in a news release that it will contest the claims "vigorously" if necessary.

Reynolds amending loan

In order to allow for the new financing structure, Reynolds has to amend its existing credit facility, and as already reported, this amendment was approved by lenders.

The amendment is still subject to final documentation.

Lenders are being paid a 5 bps amendment fee. Originally, there was no fee, but that was changed during the negotiation process.

Closing on the acquisition is expected in the second half of this year, subject to customary regulatory approvals and conditions, including the approval of Graham's stockholders.

Reynolds is an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products. Graham is a York, Pa.-based supplier of plastic containers.

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