Securus, Helm break; ISP rises with acquisition; SRAM reworks deal; Rural/Metro sets talk

By Sara Rosenberg

New York, May 31 - Securus Technologies' credit facility made its way into the secondary market on Tuesday, with the first- and second-lien term loans quoted above their original issue discount prices, and Helm Financial Corp. began trading as well.

Also in trading, International Specialty Products Inc.'s (ISP) term loan headed higher following news that the company is being acquired by Ashland Inc. - but Ashland's term loan was unchanged on the day.

Over in the primary market, SRAM International Corp. made some changes to its credit facility, including shifting some funds between the first- and second-lien term loans and reverse flexing pricing on the tranches.

In addition, Rural/Metro Corp. began circulating price talk on its credit facility ahead of its bank meeting, Totes-Isotoner Corp. and TriMas Corp. surfaced with plans to bring new deals to market, and INC Research LLC firmed up timing on the launch of its facility.

Securus frees up

Securus Technologies' credit facility started trading on Tuesday, with the $233 million first-lien term loan B (B1/B+) quoted at 99 5/8 bid, par 1/8 offered on the open and then it moved up to 99 7/8 bid, par ¼ offered, according to a trader.

Meanwhile, the company's $97 million second-lien term loan (Caa1/CCC+) was quoted at 99 bid, par offered on the break, but no levels were really seen afterwards, the trader remarked.

Pricing on the first-lien term loan is Libor plus 400 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for six months.

And, the second-lien term loan is priced at Libor plus 825 bps with a 1.75% Libor floor, and it was sold at a discount of 98. There is call protection of 103 in year one, 102 in year two and 101 in year three.

Securus getting revolver

Securus Technologies' $365 million credit facility, which is being led by BNP Paribas Securities Corp. and GE Capital Markets, also provides for a $35 million revolver (B1/B+).

The deal was well received during the syndication process, so much so that pricing on the first-lien term loan B was reduced from Libor plus 425 bps and the Libor floor was cut from 1.5%. With the tighter pricing, soft call protection was added to the tranche.

Proceeds from the credit facility will be used to help fund Castle Harlan's buyout of the company from H.I.G. Capital.

Securus Technologies is a Dallas-based provider of telecommunications products and services for the corrections marketplace.

Helm bid atop OID

Helm Financial saw its credit facility break too, with its $120 million six-year term loan quoted at par bid, no offers, according to a market source.

Pricing on the term loan, as well as on a $50 million five-year revolver, is Libor plus 500 bps with a 1.25% Libor floor, and the tranches were sold at an original issue discount of 99.

During syndication, pricing on the $170 million facility was reverse flexed from Libor plus 550 bps.

Credit Suisse Securities (USA) LLC and Guggenheim are the lead banks on the deal that will be used by the San Francisco-based rail equipment lessor to refinance existing debt

ISP trades up

International Specialty Products' term loan strengthened to 99¼ bid, 99¾ offered from 98 3/8 bid, 98 7/8 offered as the company announced that it is being bought by Ashland for $3.2 billion in cash, according to a trader.

Ashland's term loan, however, was flat on the news at par bid, par ½ offered, the trader said.

To help fund the transaction, Ashland has received a commitment for a new $3.65 billion credit facility that is comprised of a $750 million revolver that will be undrawn at close, a roughly $1.2 billion term loan A and a roughly $1.7 billion term loan B.

The average cost of the new debt anticipated to be 3.8%, company officials said in a conference call on Tuesday.

Ashland lead banks

Citigroup Global Markets Inc., Scotia Capital (USA) Inc., Bank of America Merrill Lynch and U.S. Bank are the lead banks on Ashland's proposed credit facility.

Following completion of the acquisition, the company's estimated gross debt to EBITDA ratio will be around 3.5 times.

Closing is expected prior to the end of the September quarter, subject to satisfaction of customary conditions and receipt of U.S. and European Union regulatory approvals.

Ashland is a Covington, Ky.-based provider of specialty chemical products and services. International Specialty is a Wayne, N.J.-based specialty chemical manufacturer of functional ingredients and technologies.

SRAM revises facility

In more loan happenings, SRAM modified its credit facility, upsizing its first-lien term loan, downsizing its second-lien term loan and reducing pricing on both, according to a market source.

The seven-year first-lien term loan (Ba2/B+) is now sized at $605 million, up from $575 million, and priced at Libor plus 350 bps, down from Libor plus 400 bps, the source said. As before, the tranche has a 1.25% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year.

Meanwhile, the 71/2-year second-lien term loan (B3/B-) is sized at $185 million, down from $215 million, pricing was flexed to Libor plus 700 bps from Libor plus 750 bps, and the original issue discount tightened to 99 from 98, the source continued. The 1.5% floor and call protection of 103 for 18 months, with an equity carve-out, then 102, 101 were left intact.

J.P. Morgan Securities LLC is the leading the deal and is asking for recommitments by 5 p.m. ET on Wednesday.

SRAM repaying debt, units

Proceeds from SRAM's $840 million credit facility, which also includes a $50 million five-year revolver (Ba2/B+), will be used to repay all of the company's existing bank debt and to acquire all of the 3.64 million class A units of SRAM Holdings LLC held by Trilantic and its co-investors.

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

The existing credit facility due in 2015 was obtained as a $25 million revolver and a $290 million term loan in April 2010 via lead bank GE Capital Markets. As of Dec. 31, there was $235 million of outstanding borrowings left under the term loan.

Pricing on the existing term loan is Libor plus 350 bps with a step-down to Libor plus 325 bps when corporate ratings are B1/B+. There is a 1.5% Libor floor, and it was sold at s discount of 99 3/8. The revolver pricing, at close, was Libor plus 350 bps with a 1.5% Libor floor and a 50 bps unused fee.

Rural/Metro floats talk

Rural/Metro started distributing price talk on its proposed $425 million senior secured credit facility (B) as the deal is getting ready to launch with a bank meeting on Wednesday morning, according to a market source.

The facility, comprised of a $100 million five-year revolver and a $325 million seven-year term loan, is being talked at Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 99. the source said.

Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and Jefferies & Co. are the lead banks on the deal.

Proceeds will be used to fund the acquisition of the company by Warburg Pincus for $17.25 per share in cash and to refinance existing debt. The revolver will be used for general corporate purposes.

Rural/Metro plans notes

Other funds for the buyout of Rural/Metro will come from $200 million of senior unsecured notes and $213 million of equity.

Based on filings with the Securities and Exchange Commission, it was thought that the term loan would be sized at $315 million, but the decision was made to increase it by $10 million and reduce the equity component, which was previously outlined at about $218 million.

Closing on the transaction is expected to take place by the end of June, subject to customary conditions and regulatory approvals.

Rural/Metro is a Scottsdale, Ariz.-based provider of emergency and non-emergency ambulance services and private fire protection services.

Totes-Isotoner readies deal

Totes-Isotoner emerged with new deal plans, scheduling a bank meeting for 10 a.m. ET on Thursday to launch a proposed $325 million credit facility, according to a market source.

The facility consists of an $85 million five-year ABL revolver, a $145 million six-year first-lien term loan, a $15 million six-year final maturity delayed-draw first-lien term loan and an $80 million 61/2-year second-lien term loan, the source said.

Price talk is still to be determined, the source added.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to refinance existing debt and pay a dividend to shareholders.

Totes-Isotoner is a Cincinnati-based marketer of umbrellas, gloves, rainwear, rubber overshoes and other weather-related accessories.

TriMas launching soon

TriMas has set a conference call for Wednesday to launch a proposed $300 million credit facility that consists of a $75 million five-year revolver and a $225 million six-year term loan B, according to a market source.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to refinance existing debt.

As of Dec. 31, the company had a $223.4 million extended term loan priced at Libor plus 400 basis points with a 2% Libor floor and a $25.6 million non-extended term loan priced at Libor plus 225 bps.

The company was considering coming to market in March with a $225 million term loan for the same purposes but it was postponed due to market conditions.

TriMas is a Bloomfield Hills, Mich.-based provider of engineered and applied products.

INC Research reveals timing

INC Research nailed down timing on the launch of its proposed $425 million credit facility, with the scheduling of a bank meeting for June 7, according to a market source.

The facility consists of a $75 million revolver and a $350 million term loan B, with price talk still to be determined.

Morgan Stanley & Co. Inc. is the lead bank on the deal that will be used to help fund the acquisition of Kendle International Inc. for $15.25 per share in cash. The total equity value is roughly $232 million.

Other funds for the transaction will come from equity and $250 million of high-yield notes.

INC Research bridge loan

To back up its bond plans, INC Research has received a commitment for a $250 million senior unsecured bridge loan that was launched into syndication around mid-May.

At launch, price talk on the bridge loan was Libor plus 750 bps with a 1.25% Libor floor. The spread will step up by 50 bps every four months until it hits an 11.5% cap.

Closing on the acquisition is expected in the third quarter, subject to approval by Kendle's shareholders as well as satisfaction of customary conditions and regulatory approvals.

INC Research is a Raleigh, N.C.-based therapeutically focused contract research organization privately held by Avista Capital Partners and Ontario Teachers' Pension Plan. Kendle is a Cincinnati-based clinical research organization.

Paetec closes

In other news, Paetec Holding Corp. closed on its $225 million credit facility (Ba3/B), consisting of a $125 million revolver and a $100 million term loan B, according to an 8-K filed with the SEC.

Pricing on the term loan B is Libor plus 350 bps with a 1.5% Libor floor, and it was sold at a discount of 993/4, after tightening from 991/2. There is 101 soft call protection for one year.

Bank of America Merrill Lynch acted as the lead bank on the deal that was used for the acquisition of XETA Technologies Inc. and to pay down revolver borrowings.

Paetec is a Fairport, N.Y., provider of business communications.

Exopack wraps deal

Exopack Holdings Corp. completed its $425 million credit facility, comprised of a $75 million five-year ABL revolver and a $350 million six-year covenant-light term loan, according to a news release.

Pricing on the term loan, which was reduced from $400 million, is Libor plus 500 bps, after being increased from Libor plus 450 bps during syndication. There is a 1.5% Libor floor and 101 soft call protection for one year, and the debt was sold at an original issue discount of 991/2.

Bank of America Merrill Lynch and Goldman Sachs & Co. led the deal that was used to repay all outstanding borrowings under the company's existing revolver, purchase any and all of its outstanding 11¼% senior notes due 2014 and pay a dividend to stockholders.

Exopack is a Spartanburg, S.C.-based full-service paper and plastic flexible packaging products manufacturer.

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