Michael Foods, Kalispel break; Vantage, Affordable, Serena, Carestream, Cedar tweak deals

By Sara Rosenberg

New York, Feb. 22 - Michael Foods Inc. and Kalispel Tribal Economic Authority both saw their credit facilities free for trading on Tuesday, and Dynegy Inc.'s strip of institutional bank debt was lower as its proposed buyout was terminated and management changes were announced.

Over in the primary, Vantage Oncology Inc. reworked its credit facility, lowering size, pricing, Libor floor and original issue discount on the term loan B and adding a delayed-draw term loan to the capital structure.

Also, Affordable Care Inc. added a pricing grid to its term loan, Serena Software Inc. lifted pricing on its proposed extended term loan and revolver, Carestream Health Inc. added soft call protection, and Cedar Fair LP firmed pricing at the low end of talk while cutting the Libor floor.

Furthermore, MidContinent Communications and the Sheridan Group Inc. began circulating price talk on their upcoming refinancing deals, and JohnsonDiversey Inc., Delta Air Lines Inc., Gentiva Health Services Inc., Sinclair Television Group Inc. and Universal Health Services Inc. released guidance as their transactions were launched to investors.

Michael Foods starts trading

Michael Foods' $840 million term loan (B1) broke for trading, with levels quoted at par ½ bid, par 7/8 offered on the open and then it moved to par 5/8 bid, 101 offered, according to a trader.

Pricing on the loan is Libor plus 300 basis points - after flexing down from Libor plus 325 bps during syndication - with a 1.25% Libor floor, and it was sold at par. There is 101 soft call protection for six months.

Bank of America Merrill Lynch, Goldman Sachs and Barclays are the lead banks on the deal that will be used to refinance existing debt and fund a dividend payment.

Last summer, the company got a $790 million term loan priced at Libor plus 450 bps with a 1.75% Libor floor that was sold at an original issue discount of 98. The loan includes 101 soft call protection for one year and was used to help fund the company's buyout by GS Capital Partners.

Michael Foods is a Minnetonka, Minn.-based producer and distributor of food products.

Kalispel frees up

Kalispel Tribal Economic Authority's credit facility also hit the secondary market on Tuesday, with the $205 million six-year term loan B quoted at 98¼ bid, 99¼ offered, according to a trader.

Pricing on the term loan B is Libor plus 575 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 98. There is call protection of 102 in year one and 101 in year two.

The company's $210 million senior secured credit facility (B2/B+) also includes a $5 million revolver.

Bank of America Merrill Lynch is the lead bank on the deal that is being used to refinance existing debt and to fund capital spending.

Airway Heights, Wash.-based Kalispel Tribal Economic Authority was created in 2007 and is the economic development arm of the Kalispel Tribe of Indians. The authority operates the Northern Quest Resort & Casino.

Dynegy retreats

Dynegy's strip of institutional bank debt was weaker after it was disclosed that the proposed acquisition by Icahn Enterprises LP failed and several members of management are leaving the company, according to traders.

The strip of debt was quoted by one trader at 99 bid, par offered, down from 99 7/8 bid, par 1/8 offered, and by a second trader at 99 1/8 bid, 99 7/8 offered, down from par bid, par ¼ offered.

On Monday evening, Dynegy revealed that an insufficient number of shares were tendered in Icahn's tender offer, and as a result, the merger agreement was terminated.

Icahn was offering to buy the Houston-based producer and seller of electric energy, capacity and ancillary services for $5.50 per share in cash, or about $665 million.

Dynegy shakes up management

Dynegy also revealed that it is reworking its management structure, which includes the resignation of Bruce A. Williamson from the president and chief executive role, effective March 11, and from director and chairman of the board, effective immediately.

David Biegler, currently an independent Dynegy director, has been appointed interim president and chief executive officer, and Patricia A. Hammick, previously lead director of Dynegy, now serves as chairman of the board.

Additionally, Holli Nichols is resigning as executive vice president and chief financial officer, effective March 11, and Charles C. Cook, the current executive vice president, commercial operations and market analytics, will serve as interim chief financial officer.

Furthermore, the company's five remaining directors do not intend to stand for reelection at the annual meeting that is anticipated to be held in June.

Vantage revises deal

Switching to the primary, Vantage Oncology came out with a number of updates to its credit facility, including revising size and pricing on its term loan B and adding a new delayed-draw term loan tranche, according to a market source.

The term loan B is now sized at $220 million, down from $221 million, and pricing is Libor plus 475 bps with a 1.5% Libor floor and an original issue discount of 99, versus initial talk of Libor plus 525 bps with a 1.75% floor and a discount of 981/2, the source said. Soft call protection of 101 for one year was added to the loan.

Also, the credit facility now provides for a $25 million delayed-draw term loan that is available for six months for acquisition financing. Pricing is Libor plus 475 bps with a 1.5% Libor floor and an original issue discount of 99, and there is a 75 bps ticking fee. This tranche also includes 101 soft call protection.

Vantage getting revolver

Vantage Oncology's now $270 million senior secured credit facility (B2/B), up from $246 million, still includes a $25 million five-year revolver.

Jefferies and SunTrust are the lead banks on the deal and they asked for recommitments from lenders by 5 p.m. ET on Tuesday.

Proceeds will be used to help fund the buyout of the company by Oak Hill Capital Partners and its portfolio company Physicians Oncology Services LP, an Atlanta-based operator of outpatient radiation oncology centers.

Vantage Oncology is a Manhattan Beach, Calif.-based owner and operator of radiation oncology centers.

Affordable Care adds grid

Affordable Care added a pricing grid to its $145 million term loan so that the spread can now step down to Libor plus 475 bps based on the company meeting a leverage test, according to a market source.

Initial pricing on the term loan, as well as on a $10 million revolver, was left unchanged at Libor plus 500 bps with a 1.5% Libor floor and an original issue discount of 981/2.

Recommitments are due from lenders at 5 p.m. ET on Wednesday.

GE Capital, NXT Capital and Golub Capital are leading the $155 million senior credit facility that will be used to refinance existing debt and pay a roughly $83 million dividend to sponsor American Capital. The dividend was upsized from an initially proposed amount of $80 million.

Affordable Care is Kinston, N.C.-based provider of practice management services and on-site denture laboratories focused exclusively on dentures.

Serena flexes

Serena Software raised pricing on its proposed extended term loan and revolver to Libor plus 400 bps from initial talk of Libor plus 325 bps as the entire pricing grid was raised by 75 bps. With this change, the term loan will now include a step up to Libor plus 425 bps based on leverage, and the revolver grid will now range from Libor plus 375 bps to 450 bps, according to a market source.

Pricing on the non-extended term loan is Libor plus 200 bps and the pricing grid on the non-extended revolver ranges from Libor plus 175 bps to 225 bps.

Also, the extended term loan saw the addition of soft call protection of 102 in year one and 101 in year two, and revolver lenders are now being offered 50 bps upfront, up from 25 bps previously, the source said.

Serena resets deadline

Following the revisions, Serena Software asked that lenders get their responses in by 5 p.m. ET on Thursday. The initial deadline had been Tuesday.

Barclays is the lead bank on the deal amendment and extension, under which the company is trying to push out that maturity on its term loan to March 2016 from March 2013 and the maturity on its revolver to March 2015 from March 2012.

As before, investors are being offered a 10 bps amendment fee.

Serena is a Redwood City, Calif.-based provider of Application Lifecycle Management and Process Management services.

Carestream adds call

Carestream Health's $1.85 billion six-year term loan B now includes 101 soft call protection for one year, as opposed to having no call protection, according to a market source.

Pricing on the B loan, as well as a $150 million five-year revolver, was left unchanged at Libor plus 350 bps with a 1.5% Libor floor and an original issue discount of 991/2.

Since there were no changes to pricing or structure, there was no recommitment deadline required, the source said, adding that allocations are expected to go out on Wednesday or Thursday.

Credit Suisse, Goldman Sachs and Bank of America Merrill Lynch are the lead banks on the $2 billion credit facility (B1/BB-) that will be used to refinance existing first- and second-lien term loans and to pay a dividend.

First-lien and total leverage will be 3.9 times.

Carestream is a Rochester, N.Y.-based provider of medical and dental imaging products and services.

Cedar Fair sets terms

Cedar Fair finalized pricing on its $1.175 billion term loan (Ba2/BB-) at Libor plus 300 bps, the tight end of the Libor plus 300 bps to 325 bps guidance, and cut the Libor floor to 1% from 1.25%, while leaving the par offer price unchanged, according to a market source. The loan includes 101 soft call protection for six months.

JPMorgan is the lead bank on the deal that will be used to reprice/refinance an existing term loan that is priced at Libor plus 400 bps with a 1.5% Libor floor. When the loan was obtained in the summer of 2010 to refinance existing debt, it was sold at an original issue discount of 99.

Cedar Fair is a Sandusky, Ohio-based regional amusement-resort operator.

MidContinent floats guidance

MidContinent Communications started telling lenders price talk on its $675 million credit facility as the deal is set to launch with a conference call at 10:30 a.m. ET on Wednesday, according to a market source.

The $125 million revolver and $200 million term loan A are both being talked at Libor plus 275 bps, the source said.

And, the $350 million term loan B is being talked at Libor plus 325 bps with a 1.25% Libor floor and a par issue price, and includes 101 soft call protection for one year, the source continued.

SunTrust, Wells Fargo, RBC and U.S. Bank are the joint bookrunners on the deal.

Corporate and loan ratings are B1/B+.

MidContinent refinancing debt

Proceeds from MidContinent Communications' bank deal will be used to refinance an existing credit facility that was obtained in August 2010 to fund a distribution, refinance debt and for general corporate purposes, and has the same structure but higher pricing than the new facility.

Through the refinancing, pricing on the pro rata debt will drop by about 100 bps.

Pricing on the B loan will be reduced as well. At close in August 2010 the tranche was priced at Libor plus 450 bps with a step-down to Libor plus 425 bps at less than 3.5 times leverage. The tranche has a 1.75% Libor floor and 101 soft call protection for one year, and was sold at a discount of 981/2.

"Performance has been strong since the August close with leverage dropping almost a half turn to [around] 4.3 times," the source added.

MidContinent Communications is a Minneapolis-based provider of cable television, local and long-distance digital telephone service and high-speed internet access.

Sheridan readies launch

Sheridan Group has set a conference call for Wednesday to launch a $160 million credit facility, and began distributing some price talk on the $140 million term loan that is included in the deal, according to a market source.

The term loan is being guided at Libor plus 525 bps with a 1.75% Libor floor, the source said, adding that the offer price will likely emerge on the call.

Bank of America Merrill Lynch is the lead bank on the deal that will be used to refinance existing notes and bank debt.

Sheridan Group is a Hunt Valley, Md.-based print and publishing company.

JohnsonDiversey sets talk

JohnsonDiversey held its lender call on Tuesday morning, as expected, and in connection with the event, price talk on the repricing amendment was announced, according to a market source.

The $386 million term loan B is being talked at Libor plus 300 bps with a 1% Libor floor and a pr offer price, compared to current pricing of Libor plus 325 bps with a 2% Libor floor, the source said. When the term loan B was obtained in 2009 to fund a recapitalization, it was sold at an original issue discount of 99.

In addition, the amendment will change the total net leverage ratio to 4.75 times and the interest coverage ratio to 2.75 times, the source continued.

Citigroup is the left lead bank on the deal and is seeking consents by March 1.

JohnsonDiversey is a Sturtevant, Wis.-based provider of commercial cleaning, sanitation and hygiene products.

Delta pricing

Also launching during the session was Delta Air Lines' new $250 million term loan (Ba2), and it is being talked at Libor plus 325 bps with a 1.25% Libor floor and an original issue discount of 991/2, according to a market source.

Proceeds will be used to refinance/reprice an existing $246.8 million term loan that is priced at Libor plus 675 bps with a 2% Libor floor and was sold at an original issue discount of 98 when it was obtained in 2009 to repay bank debt.

Citigroup and Deutsche Bank are the lead banks on the deal and are seeking lender commitments by March 2.

Delta is an Atlanta-based airline company.

Gentiva guidance emerges

Gentiva Health Services was another company to hold a call on Tuesday, launching a roughly $852 million credit facility that will be used refinance an existing bank deal obtained in August 2010 for the acquisition of Odyssey HealthCare Inc. , according to a market source.

The facility consists of a $125 million revolver due Aug. 17, 2015 talked at Libor plus 500 bps, a $180 million term loan A due Aug. 17, 2015 talked at Libor plus 325 bps with a 1.25% Libor floor and a par offer price, and a $547 million term loan B due Aug. 17, 2016 talked at Libor plus 350 bps with a 1.25% Libor floor and a par offer price, the source said. The term loan B has 101 soft call protection for six months.

By comparison, at close in 2010, the company's existing revolver, term loan A and term loan B were priced at Libor plus 500 bps, with the term loan A having a 1.5% floor and the B loan having a 1.75% floor. The A loan was issued at an original issue discount of 98 and the term loan B was sold at 96. Pricing on revolver and A loan can vary from Libor plus 400 bps to 500 bps based on leverage.

Gentiva being repaid at 102

Gentiva's existing term loan B includes soft call protection of 102 in year one and 101 in year two, and, as a result, existing lenders are getting paid down at 102 in connection with this refinancing transaction.

Prior to the refinancing news, the term loan B was being quoted at 101¾ bid, 102¼ offered in the secondary market and it is expected to stay in roughly that same context because of the paydown price, a trader remarked.

Bank of America Merrill Lynch, GE Capital, Barclays and SunTrust are the lead banks on the refinancing deal.

Gentiva is an Atlanta-based home health care provider.

Sinclair reveals talk

Sinclair Television released price talk of Libor plus 325 bps with a 1% Libor floor and a par offer price on its $240 million 51/2-year term loan B, and Libor plus 225 bps on its $100 million five-year term loan A as this deal was also launched with a call Tuesday, according to a market source.

JPMorgan is the lead bank on the $340 million facility (Baa3/BB+) that will be used, along with cash and/or revolver borrowings, to repay an existing $270 million term loan B that matures in October 2015 and to redeem $70 million of 6% convertible debentures due 2012.

The existing B loan was obtained in August 2010, at pricing of Libor plus 400 bps with a 1.5% Libor floor. The loan was sold at an original issue discount of 99½ and includes 101 soft call protection for one year. It was used to repay an existing B loan. As of Sept. 30, there was about $264 million outstanding under the tranche.

Sinclair is a Hunt Valley, Md.-based television broadcasting company.

Universal Health guidance

Furthermore, on the price talk front, Universal Health Services is guiding its $1.6 billion term loan B due Nov. 15, 2016 at Libor plus 300 bps with a 1% Libor floor and a par offer price, according to a market source.

The company's $3.45 billion credit facility, which launched with a call on Tuesday, also includes an $800 million revolver due Nov. 15, 2015 and a $1.05 billion term loan A due Nov. 15, 2015.

JPMorgan and Deutsche Bank are the lead banks on the deal that will be used to refinance existing debt.

Universal Health is a King of Prussia, Pa.-based health care management company.

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