CTI breaks; Auction.com, Iron Data, Grede talk emerges; Reynolds postpones B loan launch

By Sara Rosenberg

New York, March 21 - CTI Foods' new term loan B started trading on Monday in what was described as an overall firmer, although quiet, secondary market, and levels on the company's debt were quoted in the par context.

Over in the primary market, Auction.com and Iron Data LLC began circulating price talk on their upcoming credit facilities, and Grede Holdings LLC released original issue discount guidance on its term loan B while narrowing price talk.

Also, Reynolds and Reynolds Co. delayed the launch of its term loan B, but the deal is still expected as this month's business, especially since the already in-market term loan A has gone well, and Sidera Networks Inc.'s term loan is oversubscribed now that pricing has widened out.

Additionally, Pacific Architects and Engineers surfaced with plans to bring a new deal to market, and Engineering Solutions & Products Inc. nailed down timing on the launch of its credit facility.

CTI Foods frees up

CTI Foods' $180 million term loan B (B2) broke for trading on Monday, with the debt seen at par bid, par ½ offered, according to a trader.

Pricing on the B loan firmed in line with initial talk at Libor plus 350 basis points with a 1.5% Libor floor, and it was sold at par. There is 101 soft call protection for one year.

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

CTI Foods is a supplier of processed food to quick-service and casual dining restaurants.

Auction.com floats talk

Switching to the primary, Auction.com started going out with price talk on its proposed $120 million five-year credit facility as the deal is getting ready to launch with a bank meeting on Wednesday, according to a market source.

Both the $10 million revolver and the $110 million term loan are being talked at Libor plus 450 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 99 to 991/2, the source said.

SunTrust is the lead bank on the deal that will be used to refinance existing debt and fund a dividend payment.

Leverage will be about 2.0 times.

Auction.com is an Irvine, Calif.-based real estate auction firm.

Iron Data reveals guidance

Iron Data also released price talk on its upcoming deal, telling lenders that the $95 million six-year term loan is being talked at Libor plus 500 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

The $110 million credit facility, which also includes a $15 million five-year revolver, is set to launch with a bank meeting on Tuesday.

SunTrust is leading the deal that will be used to help fund the acquisition of the company by Arlington Capital Partners.

Following completion of the transaction, leverage through the credit facility will be around 3.1 times and total leverage will be just shy of 4.3 times.

Iron Data is an Atlanta-based provider of software that assesses, manages and monitors challenging operational process issues for clients in the public sector and transportation/logistics.

Grede OID surfaces

Grede Holdings revealed that its $175 million six-year term loan B (B1/B+) is being guided at an original issue discount of 99, and price talk is now Libor plus 550 bps, as opposed to in the Libor plus 550 bps to 575 bps area, according to a market source. As before, there is a 1.5% Libor floor. The loan includes 101 soft call protection for one year.

The company's $265 million senior secured credit facility, which launched with a bank meeting last Wednesday, also provides for a $90 million ABL revolver.

Bank of America Merrill Lynch and GE Capital Markets are the lead banks on the deal that will be used to fund the acquisition of two foundries in Mexico from Grupo Proeza, which is expected to close by the end of the first quarter pending Mexican regulatory approval, and to pay a shareholder distribution.

Grede is a Southfield, Mich.-based designer, developer and manufacturer of cast, machined and assembled components for the transportation and industrial markets.

Reynolds B loan delayed

Reynolds and Reynolds did not launch its proposed $950 million term loan B on Monday, as was previously planned, due to market conditions, but according to a source, the deal is still expected to get done, with the bank meeting possibly even taking place next week.

Meanwhile, the company's $600 million term loan A, which launched to lenders with a bank meeting on March 3, is heard to be pretty much fully subscribed at this time.

"I think that the deal will actually go pretty well. Repeat issuer. Term loan launched to banks going well. Feels like they'll flex [the B loan] to market. And, the market seems to be stabilizing," the source remarked.

Price talk on the term loan A is Libor plus 250 bps with no Libor floor, while price talk on the term loan B has not yet been announced.

Reynolds refinancing debt

Proceeds from Reynolds and Reynolds $1.55 billion of new term loan borrowings (Ba2/BB+) will be used to refinance existing debt.

In 2010, the company got a $1.82 billion seven-year term loan as part of a refinancing transaction that is priced at Libor plus 350 bps with a step-down to Libor plus 325 bps at 3.0 times net total leverage and a 1.75% Libor floor. The loan was sold at an original issue discount of 99¼ and includes 101 soft call protection for one year.

Deutsche Bank Securities Inc. is the lead bank on the new deal.

Reynolds and Reynolds is a Dayton, Ohio-based dealer services company.

Sidera flexes higher

In more primary happenings, Sidera Networks raised pricing on its $310 million term loan to Libor plus 400 bps from Libor plus 375 bps, while leaving the 1.5% Libor floor, par offer price and 101 soft call protection for one year unchanged, according to a market source.

Allocations on the SunTrust led deal are expected to go out on Tuesday, the source said.

Proceeds will be used to reprice existing term loan borrowings that currently carry an interest rate of Libor plus 450 bps with a 2% Libor floor.

The term loan debt is comprised of a $240 million term loan obtained in August 2010 to help fund the company's buyout by ABRY Partners, $45 million term loan add-on obtained in November 2010 for acquisition financing and a $25 million term loan add-on obtained in December 2010 for the purchase of Long Island Fiber Exchange Inc.

Sidera is a New York-based provider of fiber optic-based network services.

Pacific Architects readies

Pacific Architects and Engineers disclosed that it will be holding a bank meeting on Wednesday to launch a proposed $155 million credit facility that is being led by RBC, according to a market source.

The facility consists of a $50 million five-year revolver and a $105 million six-year term loan B, the source said, adding that price talk is not yet available.

Proceeds will be used to help fund the acquisition of the company by Lindsay Goldberg LLC from Lockheed Martin Corp., which is expected to be completed in the second quarter, subject to customary conditions.

Leverage will be less than 3.0 times.

Pacific Architects and Engineers is an Arlington, Va.-based provider of contract support services to U.S. government agencies, international organizations and foreign governments.

Engineering firms launch

Engineering Solutions & Products zeroed in on timing for its proposed $140 million credit facility with the scheduling of a bank meeting for Wednesday, according to a market source. Previously, it was known that the deal was expected this month, and likely this week, but a specific date had been unavailable.

As was already reported, the facility consists of a $20 million revolver and a $120 million term loan, with official price talk not yet announced.

However, when word of the deal first hit the market last week, rumor was that the revolver may come in the Libor plus 450 bps area and the term loan may come in the Libor plus 500 area.

Bank of America Merrill Lynch is the lead bank on the facility that will be used to help fund the buyout of the company by Berkshire Partners.

Engineering Solutions & Products is an Eatontown, N.J.-based provider of engineering, technical and consulting services in response to Department of Defense requirements.

AVG Technologies closes

In other news, AVG Technologies announced in a news release on Monday that it completed its $235 million five-year term loan B (B1/B+).

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

During syndication, pricing was flexed up from talk of Libor plus 475 bps to 500 bps and the discount widened from 99.

Other changes made to the deal included reducing the restricted payment availability and moving the opening leverage to 3.0 times from 3.5 times. Also, amortization was set at 10% per annum.

J.P. Morgan and Morgan Stanley acted as the lead banks on the deal that was used by the Chelmsford, Mass.-based security software maker to fund a dividend payment.

HHI wraps recap

HHI Group Holdings LLC closed on its $425 million credit facility that was used to refinance existing debt, to fund a $100 million dividend and to finance continued growth, according to a news release.

The facility consists of a $100 million asset-based revolver and a $325 million term loan B (B2/B+).

Pricing on the B loan is Libor plus 550 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 991/4, after widening out from initial talk of 991/2. There is 101 soft call protection for one year.

HHI lead banks

Bank of America Merrill Lynch, Goldman Sachs and Credit Suisse were the joint lead arrangers on HHI's term loan B, and Bank of America was sold lead on the revolver.

On March 31, 2010, as part of a dividend recapitalization, the company got a $200 million term B priced at Libor plus 750 bps with a 3% Libor floor that was sold at a discount of 97, and then on Oct. 31, the company did a $30 million term loan add-on that was also used for a dividend.

The combined proceeds of all three recapitalizations, as well as the company's cash flow, resulted in more than $300 million of cash distributions to stockholders.

HHI is a Royal Oak, Mich.-based manufacturer of forged parts and wheel bearings and a supplier of powdered metal engine and transmission components.

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