Affinion breaks; CF adds step; American General, Integra talk emerges; Aveta firms spread

By Sara Rosenberg

New York, April 8 - Affinion Group Inc.'s credit facility allocated and freed up for trading during Thursday's market hours, with the term loan B quoted above its original issue discount price, and Neiman Marcus Inc.'s term loan was better with monthly revenue results.

Over in the primary market, CF Industries Holdings Inc. added a leverage-based step-down in spread to its term loan B, American General Finance Corp. came out with price talk on its already potentially upsized term loan as the deal was presented to investors, and initial pricing guidance on Integra Telecom Holdings Inc.'s proposed term loan surfaced.

In other news, Aveta Inc. set pricing on its term loan B at the wide end of initial talk, MSCI Inc. came out with timing on its credit facility, Sheridan Production Partners tweaked pricing on its term loans and Cablevision Systems Corp.'s credit facility amend and extend proposal received the necessary consents from lenders.

Affinion frees to trade

Affinion Group's credit facility hit the secondary market, with the $875 million 61/2-year term loan B quoted above the discount price at which it was sold during syndication, according to traders.

Specifically, the term loan was quoted by traders at 99½ bid, par offered on the break and then it tightened up to 99 5/8 bid, 99 7/8 offered.

Pricing on the term loan B is Libor plus 350 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, the Libor floor firmed at the low end of initial talk of 1.5% to 1.75%, and the original issue discount firmed at the tight end of the initial 98½ to 99 guidance.

Affinion has springing maturity

Affinion's $1 billion credit facility (Ba2), which also includes a $125 million five-year revolver that is priced at Libor plus 350 bps, contains a springing maturity under which the bank debt will mature 90 days prior to the company's senior subordinated notes due in 2015, if those notes are not refinanced.

That springing maturity was added during syndication and, at the same time, the refinancing accordion feature in the credit agreement was revised.

Under the modified accordion, the $455 million refinancing feature can only be used to refinance the company's senior secured notes. By comparison, originally the accordion was permitted for any refinancing.

Bank of America and Credit Suisse are the lead banks on the credit facility that will be used to refinance existing debt and for general corporate purposes, including acquisitions.

Affinion is a Norwalk, Conn.-based provider of marketing services and loyalty programs.

Neiman rises on revenues

Neiman Marcus' term loan headed higher in trading as the company released March revenue numbers that showed a year-over-year improvement, according to traders.

The term loan was quoted by one trader at 95 1/8 bid, 95 5/8 offered, up from 94¾ bid, 95¼ offered, and by a second trader at 94¾ bid, 95¾ offered, up from 94½ bid, 95¼ offered.

On Thursday, Neiman announced that total revenues for March were $341 million, up 11% from $307 million in March 2009, and comparable revenues for the month were $337 million, up 9.6% from $307 million last year.

In terms of liquidity, the company's cash balance as of April 3 was about $500 million, compared to $193 million in the prior year, and there were no borrowings outstanding under its $600 million asset-based revolver.

Neiman is a Dallas-based high-end specialty retailer.

CF term B gets step-down

Moving to the primary, CF Industries added a step-down in pricing to its oversubscribed $2 billion five-year term loan B under which the spread can drop to Libor plus 275 bps when leverage is below 2.0 times, according to a market source.

Pricing on the term loan B is initially Libor plus 350 bps with a 1.5% Libor floor. Pricing will drop to Libor plus 300 bps upon the issuance of at least $750 million of equity to repay debt. The company is expected to tap the capital markets as soon as possible, meaning probably sometime in the next couple weeks.

The company's $2.3 billion credit facility (Ba1/BBB) also includes a $300 million five-year revolver priced at Libor plus 350 bps with a 1.5% Libor floor, stepping down to Libor plus 300 bps upon the equity issuance. The revolver pricing will also be based on a leverage grid.

The term loan B is being offered at an original issue discount of 991/2, while the revolver is being offered with upfront fees.

CF lead banks

Morgan Stanley and the Bank of Tokyo-Mitsubishi UFJ are the lead banks on CF Industries' credit facility, with Morgan Stanley the administrative agent.

The company completed the first drawdown under its credit facility on Monday to finance the purchase of roughly 86% of Terra Industries Inc.'s shares that were tendered under an acquisition agreement.

A subsequent offering period for all remaining shares of Terra common stock has been started and will expire on April 9. The full merger is expected to close next week.

Following completion of the exchange offer, the company plans to do an about $1 billion common stock offering and a $1.6 billion senior notes offering, with proceeds being used to reduce borrowings under the bridge loan and the term loan B.

CF Industries is a Deerfield, Ill.-based producer and distributor of nitrogen and phosphate fertilizer products. Terra is a Sioux City, Iowa-based producer and marketer of nitrogen and methanol products.

American General sets talk

American General Finance held a bank meeting on Thursday to kick off syndication on its proposed five-year senior secured term loan (B1), and in connection with the launch, price talk was announced as well as a possible upsizing, according to a market source.

The term loan is being talked in the Libor plus 550 bps area with a 2% Libor floor and an original issue discount in the 98 to 98½ context, the source said.

In addition, the loan was presented with a size of up to $3 billion, up from the initial expectation of $2 billion.

The source explained that the size is already being talked higher than before because of early positive response from lenders.

American General refinancing debt

Proceeds from American General Finance's term loan will be used to repay existing debt and fund lending activities.

Bank of America is the lead bank on the deal.

The borrower under the facility will be a newly formed, wholly owned special purpose subsidiary of the company.

American General Finance is the Evansville, Ind.-based consumer finance unit of American International Group.

Integra floats guidance

Initial price talk on Integra Telecom's proposed $210 million term loan (B2/CCC+) surfaced as the company presented the deal to lenders through a conference call that took place very late in the day on Wednesday, according to a buyside source.

The term loan is being guided at Libor plus 725 bps to 750 bps with a 2% Libor floor and an original issue discount of around 98, the source said.

JPMorgan, Deutsche Bank, Goldman Sachs, Jefferies and Morgan Stanley are the lead banks on the $270 million senior secured credit facility, which also includes a $60 million revolver (Ba2/B+).

Proceeds from the credit facility, along with $500 million of senior secured notes, will be used to refinance existing debt and for general corporate purposes.

Integra Telecom is a Portland, Ore.-based provider of voice and internet services.

Aveta sets pricing

Aveta firmed the spread on its $300 million five-year term loan B at Libor plus 600 bps, the high end of initial talk at launch of Libor plus 575 bps to 600 bps, but in line with the price talk that was circulating prior to the bank meeting, according to a market source.

The term loan still carries a 2% Libor floor, is being offered at an original issue discount of 97, and carries call protection of 102 in year one and 101 in year two.

The $360 million credit facility also includes a $60 million five-year revolver.

Bank of America, Citigroup and Jefferies are the lead banks on the deal that will be used to refinance existing debt and to fund a dividend payment to shareholders.

Aveta is a Fort Lee, N.J.-based medical management company caring for 232,000 Medicare beneficiaries and about 300,000 commercial members in Puerto Rico, California, Arizona and Illinois.

MSCI launching Monday

MSCI has scheduled a bank meeting for Monday to launch its proposed $1.375 billion senior secured credit facility (Ba2/BB+), according to a market source.

Tranching on the deal is comprised of a $100 million five-year revolver, which is expected to be undrawn at closing, and a $1.275 billion six-year term loan B.

Both the revolver and the term loan are expected to be priced at Libor plus 350 bps with a 1.5% Libor floor, according to previous filings with the Securities and Exchange Commission, and the revolver is expected to have a 75 bps unused fee.

Morgan Stanley is the lead arranger and bookrunner on the deal. Credit Suisse is the syndication agent and Bank of America is the documentation agent.

In return for the agent roles, Credit Suisse and Bank of America have each committed to provide $127.5 million of the term loan and $10 million of the revolver.

MSCI buying RiskMetrics

Proceeds from MSCI's credit facility will be used to help finance the acquisition of RiskMetrics Group Inc., to refinance existing senior secured credit facilities at MSCI and RiskMetrics, and to fund the ongoing working capital needs of the company.

Net debt to 2009 adjusted EBITDA will be 3.6 times, and net debt to 2009 adjusted EBITDA plus run-rate synergies will be 3.1 times.

Under the agreement, MSCI is purchasing RiskMetrics in a cash and stock transaction valued at $21.75 per share based on MSCI's closing price of $29.98 per share on Feb. 26, or $1.55 billion. The offer consists of $16.35 in cash and 0.1802 shares of MSCI per RiskMetrics share.

Other funding for the acquisition will come from $642 million of existing cash.

MSCI is a New York-based provider of investment decision support tools to investment institutions. RiskMetrics is a New York-based provider of risk management and corporate governance products and services to the financial community.

Sheridan lifts pricing

Sheridan Production Partners flexed pricing higher on its $700 million in seven-year term loan debt to Libor plus 550 bps from Libor plus 450 bps, but added a step-down to Libor plus 450 bps if the company achieves public corporate ratings of B2/B or better, according to a market source.

The loans still include a 2% Libor floor and are being offered at an original issue discount of the 981/2.

UBS and JPMorgan are the lead banks on the deal that will be used to refinance an existing revolver.

Recommitments are due from lenders on Friday at 4 p.m. ET.

Sheridan is a Houston-based oil and gas production company.

Cablevision amendment okayed

Cablevision's credit facility amend and extend proposal was approved by lenders. However, it is not yet clear how much of the debt was actually extended, according to a market source.

Under the amendment proposal, the company asked to extend $1.25 billion of its term loan B-1 by three years to March 2016, and $650 million of term loan A debt and a $1 billion revolver by three years to 2015.

Pricing on the extended term loan B-1 will be Libor plus 300 bps, up from current pricing of Libor plus 175 bps, and pricing the extended term loan A and revolver will range from Libor plus 200 bps to 225 bps based on leverage, up from current pricing of Libor plus 75 bps.

Lenders were being offered a 5 bps consent fee, and there was a 50 bps extension fee on revolver commitments only.

Bank of America acted as the lead bank on the amendment for the Bethpage, N.Y.-based telecommunications, media and entertainment company.

Emergency Medical closes

Emergency Medical Services Corp. closed on its new $575 million five-year senior secured credit facility (Baa3/BB+) consisting of a 425 million term loan and a $150 million revolver, according to a news release.

Both tranches are priced at Libor plus 300 bps with no Libor floor and have a step-down to Libor plus 275 bps when leverage is below 1.2 times. The term loan was sold at an original issue discount of 991/2. The revolver has a 50 bps unused fee.

During syndication, the revolver was upsized from $125 million, the pricing step down was added and the original issue discount on the term loan was tightened from 99.

Bank of America, Barclays and JPMorgan acted as the lead banks on the deal that is being used to refinance existing bank debt and call the company's 10% senior subordinated notes.

Emergency Medical is a Greenwood Village, Colo.-based ambulance and facility-based physician services company.

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