Clear Channel bounces around; Venoco up on paydown; Axcan, CPG, Burger King revise deals

By Sara Rosenberg

New York, Feb. 7 - Clear Channel Communications Inc.'s term loan B seesawed on Monday with earnings and amendment news, Venoco Inc.'s second-lien term loan was a little higher as the company announced plans for a repayment, and NBTY Inc.'s term loan B pretty much held steady on word of a refinancing/repricing.

Over in the primary market, Axcan Holdings Inc. lowered pricing on its recently upsized term loan, and CPG International Inc. upsized and reverse flexed its first-lien term loan and eliminated its second-lien loan.

Also, Burger King Holdings Inc. shifted some funds between its U.S. and euro term loans while reducing the spread on the U.S. piece, SI Organization released price talk on its repricing transaction, Affinion Group Inc. launched its add-on, and Arrowhead General Insurance Agency Inc. revealed plans to come to market later this week with a new deal.

Clear Channel rollercoasters

Clear Channel's term loan B saw a strong run up early on in the session but then gave up some of its gains late in the day after earnings and amendment news came out, according to a trader.

Specifically, the B loan ended the day at 92½ bid, 93¼ offered, up from Friday's levels of 92 bid, 92½ offered, but down from highs of 94 bid, 95 offered on Monday morning, the trader said.

The trader explained that the paper rallied ahead of earnings as people were positioning themselves. "People were bullish on the earnings and scrambling for paper. Post earnings it traded down," the trader remarked.

For the fourth quarter, the company reported a net loss of $63 million, compared to net income of $147 million in the prior year, revenues were $1.63 billion, up 8% from $1.5 billion in the fourth quarter of 2009, and OIBDAN was $503 million in the quarter, up 40% from $360 million in the previous year.

Clear Channel seeks amendment

In addition, on Monday, Clear Channel said that it received the required consent of a majority of its credit facility lenders for an amendment that would allow future extensions of senior secured maturities, permit new debt to pay down senior secured loans, provide more flexibility in the use of accordion provisions and give Clear Channel Outdoor Holdings Inc., and its subsidiaries, more room to get new debt.

Completion of the amendment is conditioned on the company repaying $500 million of its senior secured bank debt.

To this end, the company is proposing to do a $750 million notes offering that will be used to fund the paydown as well as to repay at maturity $250 million of its 6¼% senior notes due 2011.

Clear Channel is a San Antonio-based media and entertainment company specializing in mobile and on-demand entertainment and information services.

Venoco inches up

Venoco's second-lien term loan moved to 99 5/8 bid, par 1/8 offered, from 99½ bid, 99 7/8 offered, after the company revealed that it will be repaying the roughly $455 million tranche in full, according to a trader.

Funds for the expected par paydown will come from a $500 million senior notes offering and from the sale of 4 million shares of common stock that is anticipated to generate net proceeds of around $80 million.

Remaining proceeds from the offerings will be used to pay costs associated with settling interest rate swap contracts related to the second-lien term loan and for general corporate purposes, including the repayment of outstanding revolving credit facility borrowings.

Venoco is a Denver-based independent energy company primarily engaged in the acquisition, exploitation and development of oil and natural gas properties primarily in California.

NBTY holds firm

NBTY's term loan B was quoted by one trader at 101 1/8 bid, 101 3/8 offered and by a second trader at 101 1/8 bid, 101 5/8 offered, with both claiming that the debt was unchanged after a refinancing/repricing was announced.

The first trader explained that the debt had already moved to that level earlier as people were expecting a repricing to emerge, triggering the 101 soft call protection. "Pretty much every LBO loan is getting picked off," the trader added.

The company has set a lender call for 1:30 p.m. ET on Tuesday to launch the repricing of its originally sized $1.5 billion term B, which was obtained in October 2010 to help fund its buyout by the Carlyle Group. Pricing on the B loan is Libor plus 450 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 99. There is a step to Libor plus 425 bps based on leverage.

Barclays, Bank of America and Credit Suisse are the lead banks on the repricing deal for the Ronkonkoma, N.Y.-based manufacturer and marketer of nutritional supplements.

Axcan flexes

In more loan happenings, Axcan trimmed pricing on its $750 million term loan to Libor plus 400 bps from Libor plus 475 bps, while leaving the 1.5% Libor floor, original issue discount of 99½ and 101 soft call protection for one year intact, according to a market source.

On Friday, the term loan was upsized from $450 million and was split into a $500 million funded tranche and a $250 million delayed-draw tranche, instead of being all funded. The delayed-draw must be funded on or before March 17 but no earlier than March 11.

This was the second upsizing to the deal. Earlier it had been increased to $450 million from $225 million when plans for a $225 million secured notes offering were terminated due to strong demand for the loan.

The company's $865 million senior secured credit facility also includes a $115 million amended and restated revolver that is basically extending the revolver maturity to 2016 from Feb. 25, 2014.

Axcan lead banks

Bank of America, RBC Capital Markets, HSBC Securities and Barclays Capital are the joint lead arrangers and bookrunners on Axcan's credit facility and asked for recommitments to the term loan by noon ET on Monday.

Proceeds from the funded term loan, equity and cash on hand will be used to fund the acquisition of Eurand NV for $12.00 per share, or $586.5 million total on a fully diluted basis, to repay Eurand's debt and to repay Axcan's outstanding term loan.

And, proceeds from the delayed-draw term loan would be used to redeem or repurchase Axcan's existing 9¼% senior secured notes due March 1, 2015.

Axcan is a Mont-Saint-Hilaire, Quebec-based pharmaceutical company focused on the treatment of gastrointestinal disorders. Eurand is an Amsterdam-based specialty pharmaceutical company.

CPG reworks deal

CPG International made a round of changes to its credit facility structure, including increasing the first-lien term loan, canceling a second-lien term loan, and reducing first-lien pricing and discount, according to a market source.

The six-year first-lien term loan is now $285 million, up from $235 million, and is priced at Libor plus 450 bps with a 1.5% Libor floor and a discount of 991/2, compared to initial talk of Libor plus 475 bps with a 1.5% floor and a discount of 99, the source said. Soft call protection against repricings only of 101 for six months was added to the loan.

Meanwhile, the previously proposed $50 million 61/2-year second-lien term loan was removed from the capital structure. Price talk on this tranche had been Libor plus 850 bps with a 1.5% Libor floor and a discount of 981/2, and there was call protection of 103 in year one, 102 in year two and 101 in year three.

Prior to the changes, the first-lien loan was rated B2/B and the second-lien loan was Caa1/CCC+. Standard & Poor's affirmed the B rating on the first-lien loan following the upsizing.

CPG moves deadline

Also on Monday, lenders were told that commitments toward CPG's term loan are now due at 5 p.m. ET on Wednesday, accelerated from Friday, the source continued.

The company's $350 million senior secured credit facility still includes a $65 million five-year ABL revolver with pricing that can range from Libor plus 225 bps to 275 bps based on a grid.

Credit Suisse, UBS and Wells Fargo are the joint bookrunners on the deal that will be used to refinance all of the company's existing debt, to fund working capital requirements and for general corporate purposes.

At close, which is targeted for this quarter, leverage will be 4.3 times with average revolver draw.

CPG is a Scranton, Pa.-based manufacturer of low-maintenance building products for residential, commercial and industrial markets.

Burger King tweaks loan

Burger King lifted its U.S. term loan (Ba3) to $1.6 billion from $1.51 billion and cut pricing to Libor plus 300 bps from Libor plus 325 bps, according to a market source.

On the flip side, the company's euro term loan (Ba3) was trimmed to €200 million from €250 million, but pricing was left at Euribor plus 325 bps.

As before, both term loans include a 1.5% Libor floor and are being offered at par, but new to the table is 101 soft call protection for one year, the source said.

Proceeds will be used to reprice/refinance the existing U.S. and euro term loans that were obtained in October 2010 to help fund the buyout of the company by 3G Capital. The debt is priced at Libor plus 450 bps/Euribor plus 475 bps with a 1.75% Libor floor, was issued at a discount of 99 and has 101 soft call protection for one year.

JPMorgan and Barclays Capital are the lead banks on the deal for the Miami-based fast food hamburger chain and asked for recommitments on the U.S. piece by 5 p.m. ET on Monday.

SI Organization sets talk

SI Organization held a conference call on Monday to launch its $300 million term loan, and in connection with the event, price talk was disclosed as being Libor plus 325 bps to 350 bps with a 1.25% Libor floor and a par offer price, according to a market source.

JPMorgan is the lead bank on the deal that will be used to reprice the existing $300 million term loan that was obtained late last year to fund the company's buyout by Veritas Capital. Pricing on this loan is Libor plus 400 bps with a 1.75% Libor floor, and it has 101 soft call protection for one year.

SI Organization is a Valley Forge, Pa.-based provider of mission-critical systems engineering and integration services and modeling, simulation, analysis and risk mitigation services to the U.S. intelligence community.

Affinion launches

Also in the primary, Affinion Group held a conference call on Monday to launch its $250 million incremental term loan (Ba3), which, as expected, is being talked at Libor plus 350 bps with a 1.5% Libor floor and a par offer price, according to a market source.

The incremental talk is in line with where the company's existing term loan is priced.

Bank of America and Deutsche Bank are the lead arrangers on the deal that will be used for working capital and other corporate purposes, to fund future strategic initiatives and to pay a dividend to parent company Affinion Group Holdings Inc.

The parent company will then use the payment to fund a $134.5 million shareholders dividend, to fund the redemption of preferred equity and for general corporate purposes.

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

Arrowhead readies deal

Arrowhead General Insurance Agency has set a bank meeting for Thursday in New York to launch a $172 million senior secured credit facility, according to a market source.

The facility consists of a $15 million five-year revolver, a $115 million six-year first-lien term loan and a $42 million seven-year second-lien term loan, the source said.

RBC Capital Markets and Macquarie Capital are the joint lead arrangers and bookrunners on the deal that will be used to refinance an existing first- and second-lien credit facility.

Arrowhead is a San Diego-based national insurance program manager owned by Spectrum Equity Investors and JMI Partners.

Rovi closes

Rovi Corp. announced in a news release that it completed its $750 million of new bank debt (Ba1/BB+) comprised of a $450 million five-year term loan A priced at Libor plus 250 bps and a $300 million seven-year term loan B priced at Libor plus 300 bps with a 1% Libor floor. The term loan B was sold at an original issue discount of 993/4.

During syndication, the term loan A was upsized from $300 million. Also, regarding the B loan, pricing was reduced from talk of Libor plus 325 bps to 350 bps, the Libor floor was cut from 1.5% and the original issue discount tightened from guidance of 99 to 991/2.

Morgan Stanley, JPMorgan and Bank of America acted as the lead banks on the new deal that will be used to replenish the company's cash reserves following the pending Sonic Solutions acquisition, to repurchase stock, to repurchase convertible debt securities and for general corporate purposes.

Rovi is a Santa Clara, Calif.-based provider of next-generation guidance services, including TotalGuide, discovery, metadata, advertising and networking technologies.

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