Warner Chilcott breaks above OID; Conseco rises on paydown; Lear tweaks deal; GenTek sets talk

By Sara Rosenberg

New York, Oct. 13 - Warner Chilcott plc's credit facility allocated and free up for trading during Wednesday's market hours, with the debt trading above the discount at which it was sold during syndication, and Conseco Inc.'s term loan was stronger on news of a repayment.

Over in the primary market, Lear Corp. made a round of changes to its first-lien term loan, including reducing the spread and tightening the original issue discount as a result of strong investor demand.

In other news, GenTek Inc. released official price talk on its credit facility now that ratings have come out, spread guidance on USI Holdings Corp.'s and Sinclair Television Group Inc.'s recently launched term loans surfaced, and Language Line Holdings Inc. added two more banks to lead its upcoming credit facility.

Warner Chilcott frees to trade

Warner Chilcott's credit facility hit the secondary during the session and levels on the actively traded loan were stronger than the discount price at which it was issued, according to traders.

The strip of term loan A, term loan B and delayed-draw term loan debt was quoted by one trader at par ¾ bid, 101 offered, after moving up from a breaking price of par 1/8 bid, par 3/8 offered.

Meanwhile, a second trader had the strip quoted at par 7/8 bid, 101¼ offered.

The term loan B by itself was quoted by the first trader at 101 bid, 101¼ offered, up from a breaking price of par 3/8 bid, par 5/8 offered.

The second trader had the term loan B quoted at par 7/8 bid, 101¼ offered.

Warner Chilcott pricing

Pricing on Warner Chilcott's $1 billion five-year term loan A is Libor plus 325 basis points, and pricing on the $1.6 billion 51/2-year term loan B and the $350 million delayed-draw term loan B is Libor plus 350 bps. All tranches have a 2.25% Libor floor and the original issue discount was 99. The delayed-draw commitment fee is 175 bps.

During syndication, the term loan B was upsized to $1.95 billion, including the delayed draw, from $1.5 billion, pricing on the term loan A was reduced from initial talk of Libor plus 350 bps, pricing on the term loan B was reduced from initial talk of Libor plus 375 bps, the Libor floor was cut from 2.5% and the discount was set at the tight end of the 98 to 99 talk.

Also, the delayed-draw term loan was able to come from either the term loan A or the term loan B, but it was decided during syndication that it would come entirely from the B loan.

All orders from lenders had to be pro rata towards the term loan A and term loan B, inclusive of the delayed-draw term loan.

The company's credit facility also includes a $250 million five-year revolver that has a 2.25% Libor floor.

Warner Chilcott lead banks

Bank of America and Credit Suisse are the co-lead arrangers on Warner Chilcott's $3.2 billion senior secured credit facility (B1/BB+). Bookrunners are Bank of America, Credit Suisse, Barclays, Citigroup, JPMorgan and Morgan Stanley. Credit Suisse is the administrative agent.

Proceeds from the deal will be used to fund the acquisition of Procter & Gamble Co.'s pharmaceuticals business.

Closing on the facility and the acquisition is expected to take place at the end of this month, subject to regulatory approvals, the receipt of proceeds of the financing, the delivery of audited financial statements for the pharmaceuticals business and other customary conditions.

Originally, the company was planning on selling $1.4 billion of senior unsecured notes to help fund the acquisition.

The offering was then reduced to $450 million as a result of Warner Chilcott's sale of exclusive product licensing rights in the United States to its topical psoriasis treatments Taclonex, Taclonex Scalp, Dovonex to LEO Pharma for $1 billion.

Then, with the upsizing to the term loan B, the company eliminated all plans for a notes offering.

Warner Chilcott is a Rockaway, N.J.-based specialty pharmaceutical company.

Conseco moves higher

Conseco's term loan gained some ground on Wednesday on the back of the company's announcement that it plans to repay some bank debt, according to traders.

The term loan was quoted by one trader at 90½ bid, 91½ offered, up from 83 bid, 85 offered, and by a second trader at 89½ bid, 90 offered.

Late Tuesday, Conseco revealed that it will be doing a common stock offering that is expected to generate at least $200 million in proceeds.

Half of the proceeds from the offering will be used to repay loan borrowings, as required by the credit agreement.

Remaining net proceeds will be used for general corporate purposes.

Conseco is a Carmel, Ind.-based insurance company.

Allen Systems starts trading

Allen Systems Group Inc.'s credit facility freed up for trading on Tuesday night, with the term loan B quoted at 99 bid, par offered, according to a trader.

The $250 million four-year term loan B (B1/BB-) is priced at Libor plus 550 bps with a 3% Libor floor.

The company's $355 million credit facility also includes a $10 million three-year revolver (B1/BB-) and a $95 million 41/2-year second-lien term loan (Caa1/B+) that is priced at Libor plus 800 bps plus 200 bps PIK with a 3% Libor floor.

During syndication, the term loan B was upsized from $235 million, the revolver was downsized from $20 million and the second-lien term loan was downsized from $100 million.

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

Allen Systems is a Naples, Fla.-based enterprise software provider.

Lear revises pricing

Switching to new deal happenings, Lear lowered pricing on its first-lien term loan and reduced the original issue discount because interest in the transaction was strong, according to a market source.

The $400 million five-year first-lien term loan (Ba2) is now priced at Libor plus 550 bps, down from initial talk of Libor plus 575 bps, and there is now a step down to Libor plus 525 bps based on leverage, the source said.

In addition, the original issue discount is now set at 99, down from initial talk of 981/2, the source continued.

The loan has a 2% Libor floor and 101 soft call protection for one year.

Up to $200 million of the first-lien term loan will be delayed draw for 35 days after the closing date.

The first-lien term loan has a $200 million accordion feature, subject to the pro forma consolidated leverage ratio being less than 2.5 times and most-favored-nation pricing protection will apply.

JPMorgan is the lead bank on the deal that will be used to refinance the company's existing $500 million DIP/exit facility that is priced at Libor plus 1,000 basis points with a 3.5% Libor floor.

Lear is a Southfield, Mich.-based automotive parts supplier.

GenTek reveals talk

GenTek announced official guidance on its term loan on Wednesday now that ratings from both Standard & Poor's and Moody's Investors Service have been determined, according to a market source.

The $300 million five-year term loan B is talked at Libor plus 475 bps with a 2.5% Libor floor, as was expected based on the company's commitment letter, the source said.

And, the original issue discount on the term loan is being talked at 97 to 98, the source added. Previously, there was indication on the discount.

The company's $330 million senior secured credit facility also includes a $30 million four-year revolver.

According to the credit facility commitment letter, pricing on the revolver is expected to be Libor plus 450 bps with a 75 bps undrawn fee and a 2.5% Libor floor.

The company's corporate rating is B1/B+ and the credit facility rating is Ba3/BB-.

GenTek led by Goldman

Goldman Sachs is the lead arranger and bookrunner on the GenTek deal, KeyBank is the syndication agent and GE Capital is the administrative agent.

Proceeds from the credit facility will be used to help fund American Securities LLC's acquisition of the company for $38 per share.

Financial covenants under the facility include a minimum interest coverage and a maximum total leverage ratio.

GenTek is a Parsippany, N.J.-based provider of specialty inorganic chemical products and valve actuation systems and components for automotive and heavy duty/commercial engines.

USI guidance

USI Holdings is talking its $100 million incremental senior secured term loan (B-) at Libor plus 500 bps with an original issue discount in the mid-90s context, according to a market source.

Goldman Sachs is the lead arranger on the deal that will be used for general corporate purposes.

In June, the company had approached the market with a $117 million incremental senior secured term loan (B-) due in May 2014 that was going to fund a tender offer for up to $100 million of its outstanding senior floating-rate notes due 2014 and 9.75% senior subordinated notes due 2015.

However, the loan was pulled because the tender offer was terminated as a result of minimal participation in the tender.

The pulled loan was being talked at Libor plus 575 bps with an original issue discount of 90.

An informed source previously told Prospect News that the company is doing this loan now because the markets have improved - as illustrated by the difference in price talk between the two deals.

USI is a Briarcliff Manor, N.Y.-based distributor of property and casualty insurance and employee benefits products.

Sinclair price talk

Sinclair Television is talking its $400 million six-year term loan B (Ba3) at Libor plus 400 bps to 450 bps, according to a market source.

As was previously reported, the loan has a 2% Libor floor and is being offered at an original issue discount of 98.

JPMorgan is the lead bank on the deal that was launched with a conference call late Tuesday afternoon.

Proceeds from the term loan B would be used to repay the existing $78.8 million tranche A term loan due in December 2011, the $216.6 million tranche A-1 term loan due in December 2012, and some or all revolver borrowings.

Sinclair extending revolver

In addition to the term loan B transaction, Sinclair is trying to extend its revolving credit facility.

Under the extension, the revolver maturity would be pushed out to 2013 from June 30, 2011.

The company said in an 8-K filed with the Securities and Exchange Commission that it expects the amended revolver size to be somewhere between $125 million and $175 million and, under the proposed terms, lenders with at least $75 million in commitments are expected to extend their revolver commitments.

Proceeds from the revolver will be used to repay some existing revolver debt and for general corporate purposes.

Sinclair amending facility

Alongside the new B loan and the revolver extension, Sinclair is looking to amend its credit facility to allow for the issuance of senior secured second-lien notes and permit one or more incremental term loans.

Sinclair plans on selling $430 million of notes to fund cash tenders for its 3% senior convertible notes due 2027 and 4.875% senior convertible notes due 2018.

Other funds for the tenders will come from cash on hand and/or revolver borrowings.

The amendment would also provide for revised financial covenants, including an interest coverage ratio, a first-lien secured debt ratio and a total debt ratio.

Sinclair Television is a wholly owned subsidiary of Sinclair Broadcast Group Inc., a Hunt Valley, Md.-based television broadcasting company.

Language Line adds banks

Language Line has added Credit Suisse and Morgan Stanley to join left lead Bank of America to arrange its proposed $575 million credit facility (Ba3/B+), according to a market source.

A bank meeting to launch the deal is scheduled to take place on Thursday.

The facility consists of a $50 million five-year revolver and a $525 million six-year term loan, with both tranches talked in the Libor plus 350 basis points context with a 2% Libor floor.

The original issue discount on the term loan is still to be determined.

Proceeds will be used to refinance existing debt.

Language Line is a Monterey, Calif.-based provider of language-based services.

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