Sealed Air, Blackboard first-lien, Buffalo break; BJ's tweaks OID; DigitalGlobe sets talk

By Sara Rosenberg

New York, Sept. 23 - Sealed Air Corp.'s credit facility made its way into the secondary market on Friday with levels on the U.S. term loan B quoted in the par context, and Blackboard Inc.'s first-lien term loan and Buffalo Gulf Coast Terminals' loan broke as well.

Moving to the primary, BJ's Wholesale Club Inc. made another change to its credit facility, sweetening the original issue discount price on the first-lien term loan for a second time.

Also, DigitalGlobe released guidance on its term loan B as the deal was launched to lenders in the morning, and price talk on Valeant Pharmaceuticals International Inc.'s in market credit facility emerged.

Furthermore, Open Text Inc. nailed down timing on the launch of its credit facility and settled on an all pro rata structure instead of approaching the institutional loan market as was originally planned.

Sealed Air tops OID

Sealed Air's credit facility started trading on Friday, with the $790 million seven-year U.S. term loan B quoted by one trader at 99½ bid, par ½ offered on the open and then he saw it move to par bid, par ½ offered. Meanwhile, a second trader had levels on the loan at par ¼ bid, par ¾ offered.

Pricing on the U.S. term loan B is Libor plus 375 basis points with a 1% Libor floor, and it was sold at an original issue discount of 98. There is 101 soft call protection for one year.

The company is also getting a $410 million seven-year U.S. dollar equivalent euro term loan B that is priced at Euribor plus 450 bps with a 1% Euribor floor and was sold at an original issue discount of 97. This tranche also includes 101 soft call protection for one year.

During syndication, the U.S. term loan B was downsized from $925 million while the euro tranche was upsized from $275 million. Additionally, pricing on the U.S. debt was reduced from Libor plus 400 bps and the discount price tightened from 97.

Sealed Air pro rata debt

Sealed Air's $3 billion senior secured credit facility (Ba1/BB+) also includes a $700 million five-year revolver - split between a $500 million U.S. tranche and a $200 million multi-currency tranche - and a $1.1 billion five-year term loan A, which is split into a $900 million U.S. piece, a $140 million U.S. dollar equivalent JPY piece and a $60 million U.S. dollar equivalent Canadian piece.

Syndication of the revolver and term loan A was launched in late July and was such a success that the total amount of term A debt was upsized from $1 billion, resulting in the downsizing of the B loan from $1.3 billion. And originally, based on regulatory filings, it was expected that the term A would total $750 million and the term B would total $1.55 billion, but a revised structure emerged at the pro rata launch.

Pricing on the A loan and revolver is Libor plus 250 bps. The revolver has a 50 bps unused fee that can step down to 37.5 bps based on net total leverage.

Sealed Air funding acquisition

Proceeds from Sealed Air's credit facility, along with $1.5 billion of senior unsecured notes, will be used to fund the purchase 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.

Pro forma leverage will be 4.3 times, with closing expected in the fourth quarter, subject to customary regulatory approvals.

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

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

Blackboard first-lien trades

Blackboard's $780 million seven-year first-lien term loan (B1/B+) also hit the secondary, with levels quoted at 92¼ bid, 93¼ offered, according to a trader.

Pricing on the first-lies term loan is Libor plus 600 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 92. There is soft call protection of 102 in year one and 101 in year two.

During syndication, pricing was flexed up from Libor plus 550 bps, and the discount moved from revised talk of 94 to 95 and initial talk at launch of 96½ to 97.

Initially, when the company detailed its financing plans in filings with the Securities and Exchange Commission, it was said that the first-lien term loan would be sized at $700 million. However, there was also room to upsize by $80 million if 100% of the outstanding equity interests of a portfolio company of Providence Equity Partners were to be contributed to the company.

Blackboard second-lien

In addition to the first-lien term loan, Blackboard is getting a $350 million eight-year second-lien term loan (Caa1/CCC+). This tranche is expected to break for trading early in the week of Sept. 26.

Price talk on the second-lien term loan is Libor plus 975 bps with a 1.5% Libor floor and an original issue discount of 97½ to 98. This tranche is non-callable for one year, then at 102 in year two and 101 in year three.

The company's $1.23 billion senior secured credit facility also includes a $100 million five-year revolver (B1/B+).

Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc. are the lead banks on the deal.

Blackboard being acquired

Proceeds from Blackboard's credit facility, which is expected to close and fund on Oct. 4, will be used to help fund the buyout of the company by Providence Equity Partners for $45 per share in cash. The transaction is valued at $1.64 billion, plus the assumption of $130 million of net debt.

Other funds for the transaction will come from $850 million of equity.

Completion of the buyout is subject to stockholder approval, which was obtained on Sept. 16, other customary conditions and regulatory approvals.

Blackboard is a Washington, D.C.-based provider of enterprise software applications and related services to the education industry.

Buffalo Gulf frees up

Another deal to break for trading was Buffalo Gulf Coast Terminals' $275 million secured term loan (Ba1), with levels quoted at 98¾ bid, 99¾ offered on the open and then moving up to 99½ bid, par ¾ offered, according to a market source.

Pricing on the term loan cleared in line with initial talk at Libor plus 600 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 98. The tranche is non-callable for one year, then at 102 in year two and 101 in year three.

Barclays Capital Inc. is the lead bank on the deal that will be used to help fund the acquisition of Houston Fuel Oil Terminal Co. LLC, a provider of crude and residual fuel oil storage in the Gulf of Mexico, from ArcLight Capital Partners.

With this transaction, the existing revolver at the operating company is staying in place.

BJ's revises OID

Over in the primary, BJ's Wholesale Club widened the discount on its $1.075 billion covenant-light seven-year first-lien term loan to 95, while leaving pricing at Libor plus 575 bps with a 1.25% Libor floor and keeping the 101 soft call protection for one year intact, according to a market source.

Earlier in syndication, the loan was downsized from $1.125 billion as a result of additional cash generated from operations, pricing was flexed up from talk in the Libor plus 525 bps area and the discount moved from 971/2.

Other changes made Friday included adjusting the most-favored-nation language to 25 bps from 50 bps on the first-lien accordion feature and eliminating the $75 million second-lien loan accordion.

The $200 million 71/2-year covenant-light second-lien term loan is priced at Libor plus 875 bps with a 1.25% Libor floor and an original issue discount of 95, after flexing a few days ago from Libor plus 850 bps to 875 bps with a discount of 97. The debt is non-callable for one year, then at 102 in year two and 101 in year three, after being revised earlier from 103 in year one, 102 in year two and 101 in year three.

BJ's ABL facility

BJ's $2.175 billion senior secured credit facility still includes an $850 million five-year ABL revolver talked at Libor plus 200 bps, subject to a grid, and a $50 million last-out ABL term loan talked at Libor plus 350 bps.

Before launching, the facility structure had been described as a $900 million asset-based facility and about $1.3 billion of first- and second-lien term loans, with specific tranche sizes unavailable.

And prior to that, the company had said in filings with the SEC that it would be getting a $900 million ABL facility, a $1.25 billion first-lien term loan and a $425 million second-lien term loan.

However, shortly before the bank meeting, the decision was made to reduce the amount of term loan borrowings as a result of sale and leaseback proceeds that are expected to come at closing.

BJ's funding buyout

Proceeds from BJ's credit facility, along with a little over $600 million of equity, will be used to fund the acquisition of the company by Leonard Green & Partners LP and CVC Capital Partners for $51.25 per share in cash. The all-cash transaction is valued at $2.8 billion.

Closing is expected on or about Sept. 30, subject to approval of BJ's shareholders, which was already obtained, customary conditions and regulatory approvals.

Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Barclays Capital Inc., Jefferies & Co., GE Capital Markets and Wells Fargo Securities LLC are the lead banks on the credit facility.

Commitments were due at 3 p.m. ET on Friday.

BJ's is a Westborough, Mass.-based operator of warehouse clubs.

DigitalGlobe guidance emerges

In more primary happenings, DigitalGlobe held a bank meeting on Friday to launch its proposed senior secured credit facility, and in connection with the event, price talk on the $500 million term loan B was announced, according to a market source.

The B loan is being talked at Libor plus 425 bps to 450 bps with a 1.25% Libor floor and an original issue discount of 97½ to 98, and includes 101 soft call protection for one year, the source said.

Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are the leading the $600 million deal (Ba3), which also provides for a $100 million revolver, and are seeking commitments by Oct. 6.

Proceeds will be used to fund a tender offer that expires on Oct. 19 for the company's $355 million 10½% senior secured notes due 2014 and for general corporate purposes, including stock repurchases and acquisitions.

DigitalGlobe is a Longmont, Colo.-based content provider of high-resolution earth imagery products and services.

Valeant reveals talk

Continuing on the topic of price talk, it was disclosed on Friday morning that Valeant Pharmaceuticals' $1.7 billion 41/2-year senior secured credit facility is being talked at Libor plus 250 bps if leverage is 3.25 times or less, Libor plus 275 bps if leverage is more than 3.25 times but less than or equal to 4.0 times, and Libor plus 300 bps if leverage is greater than 4.0 times, according to a market source.

The facility consists of a $200 million revolver, a $1 billion term loan A and a $500 million delayed-draw term loan A that has a 50 bps unused fee. All tranches are being sold as a strip.

Goldman Sachs & Co. and J.P. Morgan Securities LLC are the lead banks on the deal that launched with a bank meeting on Thursday afternoon.

Proceeds will be used to refinance existing senior secured credit facility debt, and closing is expected in October, subject to market and other customary conditions.

Valeant Pharmaceuticals is a Mississauga, Ont.-based specialty pharmaceutical company that primarily focuses on the areas of neurology, dermatology and branded generics.

Open Text readies launch

Also on the new deal front, Open Text, a Waterloo, Ont.-based enterprise software company, has set a bank meeting for Oct. 5 to launch a proposed senior secured credit facility that is coming with a completely different structure than was originally contemplated, according to a market sources.

The $700 million deal is comprised of a $100 million revolver and a $600 million term loan A, sources said. Price talk is not yet available.

Previously, it was thought that the facility would consist of a $100 million revolver, a $200 million delayed-draw term loan A and a $600 million term loan B. However, the company opted to go with an all pro rata structure given recent market conditions, sources explained.

Barclays Capital Inc. and RBC Capital Markets LLC are the joint lead arrangers and joint bookrunners on the deal that will be used to add cash to the balance sheet, refinance existing bank debt, including the revolver borrowings that were used to fund the acquisition of Global 360 Holding Corp., and for working capital purposes.

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