Cinemark, Open Text, Sedgwick CMS, Lord & Taylor set talk; Sonic frees to trade

By Sara Rosenberg

New York, Sept. 6 - Spread guidance on Cinemark USA Inc., Open Text Corp. and Sedgwick CMS Holdings Inc. surfaced on Wednesday as all three deals were launched during the session. In addition, price talk on Lord & Taylor emerged as the deal is getting ready for its Thursday bank meeting.

In secondary happenings, Sonic Corp.'s credit facility broke for trading, with the term loan B quoted atop par.

Cinemark released price talk on its $1.27 billion senior credit facility (Ba2) Wednesday as a bank meeting was held at 9:30 a.m. ET to officially kick off syndication on the transaction, according to a market source.

Both the $1.12 billion term loan and the $150 million revolver were launched to lenders with opening talk of Libor plus 225 basis points, the source said.

Lehman Brothers and Morgan Stanley are the lead banks on the credit facility.

Proceeds from the term loan will be used to fund the acquisition of Century Theatres, Inc. and to refinance existing credit facility debt. The equity purchase price for Century is about $681 million. The bank debt to be refinanced includes Cinemark's current senior facility of $254 million and Century's senior facility of $360 million.

The transaction will not constitute a change of control for purposes of Cinemark's 9¾% senior discount notes or its 9% senior subordinated notes.

Completion of the acquisition is subject to the satisfaction of customary closing conditions, including antitrust approval and completion of financing.

The revolver is expected to be undrawn at closing.

Cinemark is a Plano, Texas, motion picture exhibitor. Century is a San Rafael, Calif., motion picture exhibitor.

Open Text price talk

Open Text came out with price talk in the Libor plus 225 basis points area on both its $75 million revolver and $415 million term loan B as this deal was also launched with a bank meeting Wednesday, according to market source.

RBC Capital Markets is the lead bank on the $490 million credit facility that will be used to fund the acquisition of Hummingbird Ltd. for $27.85 per share, or about $489 million.

The transaction is to be carried out by way of a statutory plan of arrangement and will be voted on by Hummingbird's shareholders at a meeting of shareholders, currently expected to be held in mid-September.

Closing is expected in early October, subject to court approval as well as certain other customary conditions, including the receipt of regulatory approvals.

Open Text is a Waterloo, Ont., provider of enterprise content management software solutions. Hummingbird is a Toronto, Ont., provider of enterprise software solutions.

Sedgwick spread guidance

Sedgwick CMS' $150 million term loan B add-on (B1) was presented to lenders on Wednesday with price talk of Libor plus 225 basis points, according to a market source.

In addition, the company is proposing to raise pricing on its $300 million of existing term loan B debt to Libor plus 225 basis points from current pricing of Libor plus 200 basis points in connection with the incremental loan, the source said.

Bank of America and Wachovia are the lead banks on the deal.

Proceeds from the add-on will be used to fund the acquisition of Security Capital Corp., parent company of CompManagement, Inc., for $191.5 million.

Closing on the acquisition is subject to regulatory approvals and other customary conditions and is expected to occur late in the third quarter or early in the fourth quarter.

Sedgwick is a Memphis-based provider of outsourced insurance claims management services to large corporate and public sector entities. Security Capital is a Greenwich, Conn., provider of claims management and cost control services to businesses.

Lord & Taylor floats talk

Continuing on the price talk front, Lord & Taylor revealed guidance on its proposed $350 million ABL revolving credit facility ahead of its Thursday bank meeting that is set to start at 2 p.m. ET, according to a market source.

Of the total revolver amount, $325 million is being talked at Libor plus 175 basis points with a 25 basis point undrawn fee and $25 million, which is in the form of a first-in, last-out tranche, is being talked at Libor plus 375 basis points with a 25 basis point undrawn fee, the source said.

Bear Stearns and CIT are the joint lead arrangers and joint bookrunners on the fashion retailer's deal, which is expected to close around the end of September.

Proceeds from the revolver will be used for general corporate purposes as well as to help fund the buyout of Lord & Taylor by NRDC Equity Partners from Federated Department Stores for $1.2 billion in cash.

Other buyout financing will come from a CMBS transaction.

Sonic breaks

Switching to the secondary, Sonic's credit facility freed for trading, with the $675 million seven-year term loan B quoted at par 3/8 bid, par 5/8 offered, according to a trader.

The term loan B is priced with an interest rate of Libor plus 200 basis points with a step down to Libor plus 175 basis points if ratings are upgraded to Ba2/BB. During syndication, pricing on the tranche firmed up at the low end of guidance of Libor plus 200 to 225 basis points due to oversubscription, with the addition of the step.

Sonic's $775 million senior secured credit facility (Ba3/BB-) also contains a $100 million five-year revolver with an interest rate of Libor plus 175 basis points.

Bank of America and Lehman Brothers are the joint lead arrangers on the deal, with Lehman also acting as syndication agent.

Proceeds will be used to fund a modified Dutch auction tender offer to purchase up to $560 million of its common stock and refinance certain existing debt.

The tender offer, which is subject to successful completion of the credit facility, was commenced on Aug. 15 and expires on Sept. 22.

After completion of the tender offer, subject to market conditions, the company may pursue a refinancing of its new senior secured credit facility with a securitized transaction and has engaged Lehman Brothers as its structuring adviser to evaluate the securitized transaction.

Sonic is an Oklahoma City-based chain of drive-in restaurants.

Clearwire closes

Clearwire Corp. closed on its new $125 million credit facility, according to a company news release. Morgan Stanley, Merrill Lynch and JPMorgan acted as the lead banks on the deal, with Morgan Stanley the left lead.

Proceeds from the credit facility are being used for general corporate purposes.

Clearwire is a Kirkland, Wash., provider of wireless high-speed internet and internet phone service.

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