RailAmerica, Nuveen break; Huntsman rises; TI Group, Semtech, Energy Transfer float talk

By Sara Rosenberg

New York, Feb. 23 - RailAmerica Inc. finalized pricing on its term loan at the tight end of talk on Thursday and then freed up for trading, and Nuveen Investments' second-lien term loan started trading as well.

Also on the secondary front, Huntsman International LLC's term loans were stronger after the company launched its amendment and extension offer and outlined proposed fees.

In more loan happenings, TI Group Automotive LLC and Semtech Corp. released guidance on their deals and RCN disclosed discount talk with launch, and Energy Transfer Equity LP came out with price talk on its in-market term loan B as ratings surfaced.

RailAmerica tops OID

RailAmerica's $585 million seven-year senior secured term loan (B1/BB+) hit the secondary market late in the day Thursday, with levels quoted at 99¾ bid, par ¼ offered, according to a trader.

Pricing on the loan firmed during the session at Libor plus 300 basis points with a 1% Libor floor and an original issue discount of 991/2, a source said. There is 101 soft call protection for one year.

The loan, which was met with strong demand came at the low end of initial talk of Libor plus 300 bps to 325 bps talk with a 1% floor and a discount of 99 to 991/2.

Morgan Stanley & Co. LLC is the lead arranger on the deal and a joint bookrunner with Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and BMO Capital Markets Corp.

RailAmerica buying notes

Proceeds from RailAmerica's term loan will be used to help fund a tender offer for up to $444 million of the company's 9¼% senior secured notes.

Early tenders for about $513 million of the $518 million notes outstanding have already been received and the company will accept the tendered notes on a pro rata basis.

The bond tender offer is scheduled to expire on Feb. 29 and is subject to completion of the credit facility.

RailAmerica is a Jacksonville, Fla.-based owner and operator of short-line and regional freight railroads.

Nuveen frees up

Another deal to break was Nuveen Investments' $500 million seven-year second-lien term loan (Caa1/CCC), with levels seen at par bid, 101 offered on the open and then it tightened to par ¼ bid, 101 offered, according to a market source.

Pricing on the loan is Libor plus 700 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is call protection of 103 in year one, 102 in year two and 101 in year three.

On Wednesday, the coupon firmed at the low end of the Libor plus 700 bps to 725 bps talk and the discount was revised from 98.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Bank of America Merrill Lynch are leading the deal that will refinance an existing $500 million second-lien loan priced at 12.5%.

Nuveen is a Chicago-based provider of investment services to institutions as well as individual investors.

Huntsman trades up

Meanwhile, Huntsman's term loans headed higher in trading on Thursday after the company held its amendment and extension call, disclosing that a 20 bps extension fee and 5 bps amendment fee are being offered on the transaction, according to a trader.

The existing extended term loan B was quoted at 97½ bid, 98¼ offered, up from 97 bid, 98 offered, the term loan C was quoted at 97¾ bid, 98½ offered, up from 97 bid, 98 offered, and the non-extended term loan B was quoted at 99½ bid, par offered, up from 99 bid, 99¾ offered, the trader said.

Under the proposal, the Salt Lake City, Utah-based differentiated chemicals company is looking to extend its $300 million revolver due 2014 to 2017 and its $652 million term loan B due 2014 to 2017. Price talk on the extended term B is Libor plus 300 bps, compared to non-extended pricing of Libor plus 150 bps.

Commitments/consents are due on March 1.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Bank of America Merrill Lynch are the lead banks on the deal.

TI reveals guidance

Over in the primary, TI Group Automotive held a bank meeting on Thursday to kick off syndication on its proposed $550 million six-year term loan B, and in connection with the event, price talk was announced, according to a market source.

The B loan is being shopped at Libor plus 550 bps with a 1.25% Libor floor and an original issue discount of 97, and includes 101 soft call protection for one year, the source said.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to refinance an existing senior secured term loan due in 2016 and fund a special one-time dividend.

Commitments are due on March 7.

TI Group is an Auburn Hills, Mich.-based automotive supplier with a focus on fluid storage, transfer and delivery technology.

Semtech pricing

Also launching and releasing price talk was Semtech, and the company set a March 8commitment deadline on its $350 million in new five-year term loans, according to a market source.

The $100 million amortizing term loan A is talked at Libor plus 300 bps with a step-down to Libor plus 275 bps at 1.5 times gross leverage, no Libor floor and an original issue discount of 991/2, and the $250 million term loan B is talked at Libor plus 325 bps to 350 bps with a 1.25% Libor floor and a discount of 99, the source remarked.

Jefferies & Co. is the lead bank on the deal that will be used with cash on hand to fund the acquisition of Gennum Corp. for C$13.55 in cash per share, or about C$500 million.

Closing is subject to the receipt of Gennum shareholder and Ontario Superior Court approvals.

Semtech is a Camarillo, Calif.-based supplier of analog and mixed-signal semiconductors. Gennum is a Burlington, Ont.-based supplier of high-speed analog and mixed-signal semiconductors for the optical communications and video broadcast markets.

RCN discount

RCN held a bank meeting too, and with the launch, the company disclosed that its $125 million add-on term loan B due August 2016 is talked with an original issue discount of 99, according to a market source.

As was already reported, pricing on the add-on is Libor plus 450 bps with a 2% Libor floor - the same as existing term loan B pricing.

SunTrust Robinson Humphrey Inc., GE Capital Markets and TD Securities (USA) LLC are the lead banks on the deal that will be used to fund a dividend.

Total and senior leverage will be 4.2 times, versus current leverage of 3.4 times.

RCN is a Herndon, Va.-based broadband services provider.

Energy Transfer talk

Energy Transfer Equity set price talk on its up to $2.25 billion five-year senior secured term loan B at Libor plus 350 bps with a 1% Libor floor and an original issue discount of 98½ as ratings on the debt emerged at Ba2/BB-, according to a market source. The loan has 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, BNP Paribas Securities Corp., RBS Securities Inc. and SunTrust Robinson Humphrey Inc. are the lead banks on the deal.

The loan launched with a bank meeting on Wednesday, but at that time, investors were told that price talk was still to be determined.

Commitments are due the week of March 5 and closing is expected the week of March 19.

Total debt to 2011 adjusted EBITDA and 2011 EBITDA to interest expense is 3.9 times.

Energy Transfer acquisition

Proceeds from Energy Transfer's term loan B will be used to help fund the purchase of Southern Union Co. for $44.25 in cash or one common unit per Southern Union share, repay revolver borrowings and for general partnership purposes.

The final amount of the term loan B will be determined by how many Southern Union shareholders elect to receive cash in exchange for their shares, but it is expected that the B loan size will range from $1.67 billion to $2.25 billion, the company said in a recent 8-K filing. Up to 60% of the $5.7 billion total consideration will be paid in cash.

Other funds for the transaction will come from a portion of the proceeds from Southern Union's contribution of its 50% interest in Citrus Corp. to Energy Transfer Partners LP in exchange for $2 billion.

Energy Transfer Equity is a Dallas-based provider of energy-related services. Southern Union is a Houston-based transporter, gatherer, processor and distributor of natural gas.

WCA launches

WCA Waste Corp. launched its $375 million credit facility on Thursday as planned with price talk of Libor plus 500 bps with a 1.25% Libor floor and an original issue discount of 981/2, according to sources.

The facility consists of a $100 million five-year revolver and a $275 million six-year term loan, with the term loan having 101 soft call protection for one year.

Initially, based on filings with the SEC, it was thought that the revolver would be sized at $50 million, but upon announcing the bank meeting date earlier this week, the larger revolver size emerged.

Credit Suisse Securities (USA) LLC and Macquarie Capital are leading the deal for the Houston-based non-hazardous solid-waste services company.

WCA being acquired

Proceeds from WCA's credit facility, along with shareholder capital, will be used to fund the buyout of the company by Macquarie Infrastructure Partners II for $6.50 per share in cash, or about $526 million, provide liquidity going forward, refinance existing bank debt and redeem 7½% senior notes due 2019. The term loan amount will be reduced to the extent that any notes remain in place.

Total leverage is 4.25 times, and there is 50% plus of equity.

Closing is expected this quarter, subject to stockholder approval and regulatory approvals, which have already been obtained.

Commitments for the credit facility are due on March 8, which is also the date that the tender offer expires and the special meeting of shareholders will take place.

One source added that there has been a bunch of reverse inquiry for the transaction ahead of the bank meeting since investors have been expecting it to come to market for a while now, especially after the launch of the bond tender offer.

Centaur sets deadline

Centaur LLC also launched its $240 million credit facility (B+) during the session and is asking lenders to get their commitments in by March 8, a market source told Prospect News.

As was previously reported, the facility consists of a $15 million revolver and a $225 million six-year first-lien term loan, both talked at Libor plus 575 bps. The term loan has a 1.25% Libor floor, an original issue discount of 98 and 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC and Macquarie Capital are leading the deal that will be used to refinance existing debt.

Centaur, an Indianapolis-based casino operator, emerged from bankruptcy in October 2011 with about one-third of the debt it had when it filed for protection.

Tropicana fills out

In other news, Tropicana Entertainment Inc.'s $175 million six-year first-lien term loan B (B2/BB+) was fully subscribed by Wednesday's commitment deadline, and is expected to close at initial terms, according to a market source.

Pricing on the loan is Libor plus 600 bps with a 1.5% Libor floor and an original issue discount of 98, and it includes 101 soft call protection for one year.

UBS Securities LLC is the lead bank on the deal that will be used to refinance an existing $105 million term loan and add cash to the balance sheet.

Total leverage is around 2.2 times.

In a lender presentation filed with the Securities and Exchange Commission, the company had said that allocations are targeted for the week of Feb. 27 and closing is expected in mid-March.

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

Rockwood closes

Rockwood Specialties Group Inc. completed its $350 million five-year term loan A (Ba1/BBB-) priced at Libor plus 225 bps with no Libor floor, according to a 10-K filed with the Securities and Exchange Commission on Thursday.

Credit Suisse Securities (USA) LLC and KKR Capital Markets led the deal that will be used with cash on hand to fund the redemption of senior subordinated notes, consisting of €250.1 million of 7.625% euro-denominated notes and $200 million of 7.5% dollar-denominated notes. The notes are due on Nov. 15, 2014.

Rockwood is a Princeton, N.J.-based inorganic specialty chemicals and advanced materials company.

ILFC wraps loan

International Lease Finance Corp. (ILFC) closed on its $900 million senior secured term loan (Ba3/BBB-) that is priced at Libor plus 400 bps with a 1% Libor floor and was sold at an original issue discount of 99, according to a news release. There is 101 soft call protection for one year.

During syndication, the spread on the loan was flexed up from talk of Libor plus 350 bps to 375 bps and the discount increased from 991/2.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., UBS Securities LLC and RBC Capital Markets LLC led the deal that was to repay some outstanding debt, including revolver borrowings, and for general corporate purposes.

International Lease is a Los Angeles-based independent aircraft lessor.

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