iStar, Tube City, United Surgical break; Covanta, Sonneborn revise deals; SeaWorld ups fee

By Sara Rosenberg

New York, March 19 - iStar Financial Inc. and Tube City IMS Corp.'s term loans freed up for trading on Monday, and United Surgical Partners International Inc. finalized pricing on its upsized incremental loan and then it too began trading.

Also in trading, Dollar General Corp.'s term loan was a little higher as the company launched an amendment and extension transaction that would push out the maturity on a portion of the debt.

Moving to the primary, Covanta Energy Corp. firmed the original issue discount on its term loan B at the low end of guidance and added a pricing step-down that is based on leverage, and Sonneborn LLC reduced its term loan B coupon and eliminated the call protection.

Additionally, SeaWorld Parks & Entertainment Inc. lifted the consent fee being offered with its amendment, and Community Health Systems Inc. pulled its term loan extension proposal from market.

Furthermore, Mercury Payment Systems LLC released price talk on its term loan repricing, and Pinnacle Foods Finance LLC came out with guidance on its new credit facility and amend and extend offer as the transactions launched to lenders. Sprouts Farmers Market emerged with add-on loan plans.

iStar starts trading

iStar Financial's $880 million of new senior secured term loans emerged in the secondary market on Monday, with the $410 million first-out four-year term loan A-1 (B1/BB) quoted at 98 bid, 98½ offered on the open and then it widened to 98 bid, 99 offered, according to a trader.

And, the $470 million five-year term loan A-2 (B2/BB-) was quoted at 99½ bid on the break and then it moved up to 99 ¾ bid, par ½ offered, the trader said.

Pricing on the term loan A-1 is Libor plus 400 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 98. It is non-callable for one year, then at 102 in year two.

Meanwhile, the term loan A-2 is priced at Libor plus 575 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 981/2. The tranche is non-callable for three years, then at 104 in year four.

iStar lead banks

Barclays Capital Inc. and Bank of America Merrill Lynch were the joint lead arrangers on iStar's new term loans and bookrunners with J.P. Morgan Securities LLC.

During syndication, the term loan A-1 was downsized from $500 million, the discount widened from talk of 98½ to 99, and call protection was sweetened from 101 in year one and par ½ in year two.

Also, the term loan A-2 was upsized from $400 million and the discount firmed at the wide end of the 98½ to 99 talk.

Proceeds from the loans, which closed on Monday, are being used for general corporate purposes, including the refinancing of 2012 unsecured debt maturities.

iStar Financial is a New York-based finance and investment company focused on the commercial real estate industry.

Tube City frees up

Another deal to break was Tube City, with its $300 million seven-year senior secured term loan B (B1/B+) quoted at par bid, par ½ offered, according to a trader.

Pricing on the loan is Libor plus 450 bps with a 1.25% Libor floor. The debt was sold at an original issue discount of 99 and includes 101 soft call protection for one year.

On Friday, pricing on the loan was reduced from talk of Libor plus 475 bps to 500 bps and the discount tightened from 981/2.

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch and Wells Fargo Securities LLC are the lead banks on the deal that will be used to refinance an existing term loan B due Jan. 25, 2014 and 9¾% senior subordinated notes due Feb. 1, 2015.

Tube City is a Glassport, Pa.-based provider of outsourced industrial services to steel mills.

United Surgical tops OID

United Surgical Partners' $365 million incremental first-lien term loan B due 2019 also freed up, with levels quoted at 98¾ bid, 99¼ offered, according to a trader.

Pricing on the incremental loan is Libor plus 475 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 981/2. There is 101 soft call protection for one year.

During syndication, the term loan was upsized from $330 million and the coupon firmed at the high side of the Libor plus 450 bps to 475 bps talk.

The company's $490 million credit facility (B1/B) also includes a $125 million five-year revolver.

J.P. Morgan Securities LLC and Barclays Capital Inc. are the lead banks on the deal for the Dallas-based owner and operator of ambulatory surgery centers and surgical hospitals.

United Surgical amend, extend

With the incremental term loan, United Surgical is amending and extending its existing credit facility to push out the maturity on a portion of its $503 million first-lien term loan B to 2017 from 2014.

Lenders were offered a 40 bps extension fee, which had been increased from 15 bps last week, and a 10 bps consent fee.

The company had been trying to extend $375 million of the first-lien term loan B, a source said, adding that he did not know the final amount of the extension.

However, it is known that the incremental term loan was upsized to take out some non-extended term loan borrowings since the company did not extend as much of the debt as it would have liked, the source remarked.

Additionally, proceeds from the new credit facility, $440 million of senior notes and cash on hand will be used to repay $437.5 million of senior subordinated notes and to fund a $270 million special dividend to equity holders.

Dollar General inches up

Dollar General's term loan moved to 99 7/8 bid, par 3/8 offered from 99¾ bid, par ¼ offered with the launch of an amend and extend deal, a trader told Prospect News.

Under the proposal, the Goodlettsville, Tenn.-based discount retailer is asking to extend at least $500 million of its roughly $1.95 billion term loan by three years to July 2017 at pricing of Libor plus 275 bps, unchanged from current pricing.

Lenders are being offered a 25 bps extension fee and 5 bps consent fee, and responses are due on March 28.

The amendment is needed to allow for the extension, a source remarked.

Citigroup Global Markets Inc., Goldman Sachs & Co. and KKR Capital Markets are leading the transaction.

Covanta sets discount

Switching to the primary, Covanta nailed down the original issue discount price on its $300 million seven-year term loan B, finalizing it at 991/2, the tight end of the 99 to 99½ talk, according to a market source.

In addition, while pricing on the B loan was left at Libor plus 300 bps with a 1% Libor floor, a step-down was added to Libor plus 275 bps when leverage is 1.5 times or less at the borrower level, the source remarked.

The company's $1.2 billion credit facility (Ba1/BB+/BB+) also provides for a $900 million five-year revolver priced at Libor plus 225 bps with a 50 bps unused fee. The coupon can range from Libor plus 200 bps to 275 bps based on leverage.

Allocations on the deal are expected to go out later this week, the source continued.

Covanta replacing debt

Proceeds from Covanta's credit facility will be used to refinance an existing credit facility. To this end, the company is also getting $400 million of senior notes that priced on March 8 at par to yield 6 3/8%.

Specifically, the notes are being used to repay some existing term loan borrowings.

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC, Barclays Capital Inc., Credit Agricole Securities (USA) Inc. and J.P. Morgan Securities LLC are the lead banks on the new credit facility.

Covanta is a Morristown, N.J.-based owner and operator of energy-from-waste and power generation projects.

Sonneborn flexes lower

Sonneborn cut pricing on its $240 million six-year term loan B to Libor plus 500 bps from the Libor plus 550 bps context and eliminated the 101 soft call protection for one year as the tranche is well oversubscribed, according to a market source.

The loan continues to have a 1.5% Libor floor and be offered at an original issue discount of 98.

The $270 million senior secured facility (B1/B) also includes a $30 million five-year revolver.

Recommitments are due on Wednesday and allocations are expected on Thursday.

Macquarie Capital and BMO Capital Markets Corp. are leading the deal that will fund the company's buyout by One Equity Partners from Sun Capital Partners Inc. Closing is targeted for March 30.

Sonneborn, a Parsippany, N.J.-based manufacturer and supplier of high-purity specialty hydrocarbons, will have total and senior leverage of 3.8 times.

SeaWorld revises fee

SeaWorld Parks & Entertainment increased the consent fee to 25 bps from 15 bps on its amendment proposal that would allow for the entrance into a new $500 million add-on term loan (Ba3/BB-), according to a market source.

The in-market add-on loan is priced at Libor plus 300 bps with a 1% Libor floor, in line with existing term loan pricing, and is being offered at an original issue discount of 98¾ to 99.

Bank of America Merrill Lynch, Barclays Capital Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and Macquarie Capital are leading the add-on that will be used to fund a distribution to shareholders.

SeaWorld is an Orlando, Fla.-based theme park operator.

Community Health shelved

Community Health Systems removed its extension request from markets, in which it was looking to extend at least $750 million of its roughly $2.2 billion term loan to January 2018 from July 2014 at pricing of Libor plus 375 bps, according to a market source. Current pricing is Libor plus 225 bps.

The extended loan included 101 soft call protection for one year and lenders were being offered a 50 bps extension fee.

Credit Suisse Securities (USA) LLC was the lead bank on the deal.

Community Health is a Nashville, Tenn.-based operator of hospitals.

Mercury talk emerges

In more loan happenings, Mercury Payment Systems held a conference call on Monday to launch a repricing of its $199 million term debt, at which time price talk of Libor plus 425 bps with a 1.25% Libor floor and a par offer price was announced, according to a market source.

The term loan being repriced was obtained in 2011 with a coupon of Libor plus 500 bps and a 1.5% Libor floor. It had been sold at an original issue discount of 99.

With the repricing, the 101 soft call protection on the term loan is being reset for one year, the source added.

Lead banks, Deutsche Bank Securities Inc., Barclays Capital Inc. and Credit Suisse Securities (USA) LLC, are seeking commitments by March 26.

Mercury Payment Systems is a Durango, Colo.-based payment processing company that partners with point-of-sale developers and resellers.

Pinnacle reveals guidance

Pinnacle Foods Finance also released talk as it launched a new $550 million credit facility and an amendment and extension proposal, according to a market source.

The new $150 million five-year revolver is talked at Libor plus 350 bps, the new $400 million 61/2-year term loan E is talked at Libor plus 375 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, and the proposed extended term loan B is talked at Libor plus 350 bps versus non-extended pricing of Libor plus 250 bps, the source said.

The company is asking to extend at least 55% of its roughly $1.2 billion term loan B by 2½ years to October 2016. The base extension amount presented to lenders was 65%, the source remarked.

With the credit facility amendment, the company will gain permission to obtain the new term loan E and extend the term loan B.

Pinnacle Foods fees

Pinnacle Foods is offering a 15 bps fee for the extension of term loan B commitments, and all lenders will get a 10 bps fee to approve the amendment, the source continued.

Barclays Capital Inc, Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Macquarie Capital are the lead banks on the deal.

Proceeds from the term loan E will be used to repay a roughly $313 million term loan D that was obtained in 2010 at pricing of Libor plus 425 bps with a 1.75% Libor floor and to redeem all $199 million of its 10 5/8% notes.

Commitments/consents are due on March 26.

Pinnacle Foods is a Mountain Lakes, N.J.-based manufacturer and distributor of branded packaged foods.

Sprouts readies loan

Sprouts Farmers Market joined this week's calendar, setting a conference call for Wednesday to launch a $100 million add-on term loan that is talked at Libor plus 475 bps with 1.25% Libor floor, in line with existing term loan pricing, according to a market source.

Original issue discount on the add-on is still to be determined, the source said. When done in 2011, the existing term loan was sold at an original issue discount of 98.

Jefferies & Co. and Apollo Global Securities are leading the deal that will be used to help fund the purchase of Sunflower Farmers Market, a chain of full-service grocery stores.

Closing is expected in mid-Spring, subject to regulatory approval.

Sprouts Farmers Market is a Phoenix-based grocer that operates in the farmers' market specialty segment of the retail food industry.

Avis closes

In other news, Avis Budget Car Rental LLC completed its $500 million seven-year term loan B that is priced at Libor plus 325 bps with a 1% Libor floor, according to a news release. The loan, upsized from $375 million, was sold at an original issue discount of 99 and has 101 soft call protection for one year.

Proceeds are being used by the company to repay about $420 million of term loan borrowings due in 2014 and 2018 and $75 million of senior notes due in 2014. The upsizing to the new deal allowed for more term loan debt to be taken out.

JPMorgan, Bank of America Merrill Lynch, Barclays Capital Inc. and Deutsche Bank Securities Inc. led the deal for the Parsippany, N.J.-based vehicle rental operator.

Tropicana completes loan

Tropicana Entertainment Inc. closed on its $175 million six-year first-lien term loan B (B2/BB+) that is priced at Libor plus 600 bps with a 1.5% Libor floor, according to an 8-K filed with the Securities and Exchange Commission on Monday. The tranche was sold at an original issue discount of 98 and includes 101 soft call protection for one year.

UBS Securities LLC led the deal that was used to refinance an existing $105 million term loan and add cash to the balance sheet.

Total leverage is around 2.2 times.

Tropicana Entertainment is a Las Vegas-based owner and operator of casino gaming properties.

Pinnacle Entertainment wraps

Pinnacle Entertainment Inc. closed on its $325 million seven-year term loan B (Ba1/BB+/BB), according to an 8-K filed with the SEC on Monday.

The loan is priced at Libor plus 300 bps with a 1% Libor floor, and was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, the term loan was upsized from $250 million, pricing was reduced from talk of Libor plus 325 bps to 350 bps and the Libor floor was revised from 1.25%.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Barclays Capital Inc., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., UBS Investment Bank, Capital One and Wells Fargo Securities LLC led the deal for the Las Vegas-based owner and operator of casinos.

Proceeds, along with $325 million of senior subordinated notes, were used to redeem $385 million of 7½% senior subordinated notes due 2015, repay all revolver borrowings and for general corporate purposes.

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