MultiPlan, CPG, SI Organization break; Hercules up with amendment; Solutia slides on refi

By Sara Rosenberg

New York, Feb. 16 - MultiPlan Inc.'s term loan freed up for trading on Wednesday, with levels quoted above its initial par selling price, and CPG International Inc. and SI Organization hit the secondary market as well.

Also in trading, Hercules Offshore Inc.'s term loan was stronger as the company launched an amendment that would result in higher pricing, and Solutia Inc.'s term loan B weakened following the release of refinancing/repricing news.

Over in the primary market, Global Cash Access Inc. set the original issue discount on its term loan B at the low end of recent guidance while adding call protection, and BWAY Holding Co. reverse flexed pricing, added a step-down and trimmed the Libor floor on its term loan.

Additionally, Knology Inc. reduced pricing on its term loan A, lowered the Libor floor on the term loan B and is considering increasing the amount of term loan debt that it borrows through this new deal.

Furthermore, Nexeo Solutions LLC, Hertz Corp. and Ignite Restaurant Group released price talk on their credit facilities as the transactions were presented to lenders during the session.

MultiPlan starts trading

MultiPlan, a New York-based provider of health care cost management services, saw its $1.265 billion term loan make its way into the secondary market, with levels quoted at par ½ bid, 101 offered on the open and then it moved up to par ¾ bid, 101¼ offered, according to traders.

Pricing on the term loan is Libor plus 325 basis points, after firming recently at the tight end of the Libor plus 325 bps to 350 bps price talk, with a 1.5% Libor floor. As mentioned above, the paper was sold at par. There is 101 soft call protection for one year, which was added during syndication.

Barclays, Bank of America Merrill Lynch and Credit Suisse are the leads on the deal, which is being used to refinance/reprice the company's existing term loan that was obtained in August 2010 to fund its buyout by BC Partners and Silver Lake.

Pricing on the existing loan is Libor plus 475 bps with a 1.75% Libor floor, it was sold at an original issue discount of 98, and there is 101 soft call protection for one year. The initial size of the loan was $1.3 billion but some of the debt has been paid down since it closed.

CPG frees up

CPG International's credit facility also broke for trading on Wednesday, with the $285 million six-year first-lien term loan (B2/B) quoted at 101 bid, 101½ offered, according to a market source.

Pricing on the term loan is Libor plus 450 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for six months.

During syndication, the term loan was upsized from $235 million as plans for a $50 million 61/2-year second-lien term loan were eliminated, pricing was reduced from Libor plus 475 bps, the original issue discount tightened from 99 and call protection was added.

Price talk on the second-lien loan that was canceled 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.

CPG getting revolver

CPG's $350 million senior secured credit facility also 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.

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.

SI Organization breaks

SI Organization was yet another deal to make its way into the secondary market, with the $300 million term loan B quoted at par 5/8 bid, 101 1/8 offered on the open, according to traders.

Pricing on the term loan is Libor plus 325 bps, after firming at the low end of talk of Libor plus 325 bps to 350 bps, with a 1.25% Libor floor, and it was issued at par.

JPMorgan is the lead bank on the deal that is being used to reprice the existing $300 million term loan that was obtained late last year to help fund the company's buyout by Veritas Capital.

Pricing on the existing loan is Libor plus 400 bps with a 1.75% Libor floor, and there is 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.

Hercules better on amendment

Hercules Offshore's term loan headed to par bid, 101 offered from 99½ bid, par offered as the company held a lender call to launch an amendment that would provide for higher pricing and the payment of an amendment fee, according to a trader.

Specifically, the company is offering to boost pricing on its term loan to Libor plus 550 bps from Libor plus 400 bps and to pay a 25 bps amendment fee in return for covenant relief and permission to acquire 20 jackup rigs and related assets from Seahawk Drilling Inc. for 22.3 million shares of its common stock and cash consideration of $25 million.

Closing on the acquisition is expected to occur in the second quarter, subject to bankruptcy court approval, successful completion of the amendment and regulatory approvals.

Hercules refi in the future?

The trader explained that some investors may be viewing Hercules Offshore's term loan as a possible candidate for a refinancing sooner rather than later, being that the debt matures in July 2013 and carries a fairly hefty price when the 2% Libor floor and the proposed 550 bps spread are considered.

This possibility for a refinancing not too far down the line, plus the potential new pricing and amendment fee were likely the reasons that the term loan traded higher on Wednesday, the trader added.

Other terms of the amendment include permanently reducing the company's revolver to $140 million from $175 million.

UBS is leading the amendment for the Houston-based operator of rigs and marine support vessels.

Solutia softens

Solutia's existing term loan B dropped to par bid, par ½ offered from par ¾ bid, 101¼ offered after word surfaced that the debt will be refinanced/repriced, according to a trader, who said that there is no call protection on the existing loan.

The company is scheduled to hold a conference call on Thursday at 10 a.m. ET to launch a proposed $700 million term loan B due August 2017 that is being talked at Libor plus 275 bps with a 1% Libor floor and a par offer price and includes 101 soft call protection for six months.

By comparison, the company's existing B loan that is being refinanced is priced at Libor plus 325 bps with a step-down to Libor plus 300 bps at 2.5 times leverage and a 1.5% Libor floor. It was sold at an original issue discount of 99½ when it was obtained in March 2010 to refinance existing bank debt and had an original size of $850 million, but has since been partially paid down.

Deutsche Bank is leading the refinancing for the St. Louis-based performance materials and specialty chemicals company.

Dean Foods dips

Also in trading, Dean Foods Co.'s term loan due 2016 was slightly lower after the release of earnings results, with levels quoted at 99¾ bid, par ¼ offered, down from 99 7/8 bid, par 3/8 offered, according to a trader.

For the fourth quarter, the Dallas-based food and beverage company reported a net loss of $21 million, or $0.11 per diluted share, compared to net income of $50 million, or $0.27 per diluted share, in the prior year.

Net sales for the quarter were $3.153 billion, compared to $2.99 billion in the fourth quarter of 2009.

And, free cash flow provided by operations totaled $224 million for the 12 months ended Dec. 31, 2010, compared to $390 million in the previous year.

Global Cash sets OID

Moving to the primary, Global Cash Access firmed the original issue discount on its $205 million term loan B at 991/2, the low end of the most recent talk of 99 to 991/2, and tighter than the initial guidance of 99, according to a market source.

In addition, 101 soft call protection for one year was added to the loan, the source said.

Pricing on the B loan is Libor plus 550 bps with a 1.5% Libor floor, after flexing the other day from talk of Libor plus 600 bps to 625 bps with a 1.75% floor.

Commitments towards the facility are now due on Thursday at noon ET.

Deutsche Bank and Wells Fargo are the lead banks on the $235 million credit facility (B1/BB-), which also includes a $30 million revolver.

Global Cash Access, a Las Vegas-based provider of cash access services to the gaming industry, will use the new facility to refinance existing debt.

BWAY revises deal

BWAY also came out with some changes to its term loan, lowering pricing, adding a leverage-based step-down and cutting the Libor floor; however, the par offer price and 101 soft call protection for one year were left unchanged, according to a market source.

Following the revisions, pricing on the $512.5 million seven-year covenant-light term loan B (Ba3/B) is Libor plus 325 bps with a step to Libor plus 300 bps when net secured leverage is 2.75 times or less and a 1.25% Libor floor, the source said. By comparison, initial price talk had been Libor plus 350 bps with a 1.5% floor.

Commitments were due from lenders at 5 p.m. ET on Wednesday.

Deutsche Bank, Bank of America Merrill Lynch and Barclays are the lead banks on the deal.

BWAY refinancing debt

Proceeds from BWAY's new term loan will be used to refinance existing loan borrowings that carry higher pricing.

In June 2010, the company closed on a $490 million seven-year term loan for its buyout by Madison Dearborn Partners LLC that is priced at Libor plus 375 bps with a 1.75% Libor floor and was sold at an original issue discount of 991/2.

And,in December, BWAY said that it was getting a $25 million incremental term loan for general corporate purposes.

BWAY, an Atlanta-based supplier of general line rigid containers, expects to complete the refinancing this month.

Knology tweaks pricing

Knology told lenders that it reduced pricing on its term loan A due February 2016 to Libor plus 300 bps from Libor plus 325 bps, and cut the Libor floor on its term loan B due August 2017 to 1% from 1.5%, according to a market source.

All other terms were left unchanged, so the term loan A still has no Libor floor and is being offered at par, and the term loan B is still priced at Libor plus 300 bps, is offered at par and has 101 soft call protection for one year.

It is, however, possible that the tranche sizes may change. The source said that the company is mulling over increasing its term loan debt by $20 million. It has not yet been decided whether the upsizing will be done and, if it is, to which tranche. As launched, the term A is $175 million and the term B is $545 million.

Knology repricing loans

Proceeds from Knology's term loans will be used to reprice/refinance the existing $545 million term loan B and $175 million term loan A that were obtained in October 2010 to fund the acquisition of Sunflower Broadband and to refinance existing debt.

Pricing on the existing term loan B and term loan A is Libor plus 400 bps, and the B loan has a 1.5% Libor floor and was sold at an original issue discount of 99.

Any incremental proceeds raised through the potential upsizing will be used to add cash to the balance sheet.

Credit Suisse is the lead bank on the deal (B1).

Knology is a West Point, Ga.-based provider of interactive communications and entertainment services.

Nexeo talk emerges

In more primary happenings, Nexeo Solutions held a bank meeting on Wednesday to kick off syndication on its proposed $840 million credit facility, and in connection with the launch, price talk was announced, according to a market source.

The $300 million 61/2-year covenant-light term loan B (B1/B) is being talked in the Libor plus 375 bps area with a 1.5% Libor floor and an original issue discount of 991/2, and the $540 million ABL revolver is being talked at Libor plus 250 bps, the source said.

Bank of America Merrill Lynch, Citigroup and Barclays are the lead banks on the deal that will be used, along with $200 million of subordinated notes, to help fund TPG Capital's acquisition of Ashland Inc.'s chemical distribution business for $930 million. The business will be named Nexeo Solutions.

The transaction is expected to close prior to the end of the March quarter, subject to the receipt of certain regulatory approvals and other standard closing conditions.

Hertz reveals guidance

Hertz also held a bank meeting on Wednesday to launch a new deal, at which time it released price talk of Libor plus 300 bps with a 1.25% Libor floor and an original issue discount of 99½ on both its $1.35 billion seven-year covenant-light term loan B and $250 million seven-year synthetic letter-of-credit facility, according to a market source.

The term loan B includes 101 soft call protection for one year, the source said.

The company's $3.4 billion credit facility, which will be used to refinance existing debt, also includes a $1.8 billion ABL revolver.

Deutsche Bank, Wells Fargo, Barclays, Bank of America Merrill Lynch, Citigroup, Credit Agricole and JPMorgan are the lead banks on the deal and are asking for commitments by Feb. 28.

Hertz is a Park Ridge, N.J.-based auto and equipment rental company.

Ignite Restaurant pricing

Another deal to launch during the session was Ignite Restaurant Group with its $150 million senior secured credit facility talked at Libor plus 475 bps with a 1.5% Libor floor and an original issue discount of 981/2, according to a market source.

The facility, led by GE Capital and Golub Capital, consists of a $30 million revolver and a $120 million term loan.

Proceeds will be used to refinance existing debt and fund a dividend.

Ignite Restaurant Group is a Houston-based portfolio of restaurant concepts, including Joe's Crab Shack and Brick House Tavern & Tap.

Arrowhead nets interest

In other news, Arrowhead General Insurance Agency Inc.'s $172 million senior secured credit facility is "being well received" since its launch last Thursday, according to a market source, who added that details on how much of the deal is done are not yet available being that it's still early in the process.

The facility includes a $15 million five-year revolver (B3/B-) talked at Libor plus 575 bps with a 75 bps unused fee and a 1.75% Libor floor.

There is also a $115 million six-year first-lien term loan (B3/B-) talked at Libor plus 575 bps with a 1.75% Libor floor and an original issue discount of 98.

And, the last tranche in the facility is a $42 million seven-year second-lien term loan (Caa1/CCC) talked at Libor plus 950 bps with a 1.75% Libor floor and an original issue discount of 97. This debt provides for call protection of 103 in year one, 102 in year two and 101 in year three.

Arrowhead lead banks

RBC Capital Markets and Macquarie Capital are the joint lead arrangers and bookrunners on Arrowhead's credit facility.

Covenants include total leverage and interest coverage.

Proceeds 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.

Excelitas wraps repricing

Excelitas Technologies Corp. (previously known as Illumination and Detection Solutions) completed the repricing of its $200 million term loan, under which pricing dropped to Libor plus 450 bps with a 1% Libor floor from Libor plus 575 bps with a 1.5% Libor floor, according to a market source.

The repriced term loan was sold at par and has 101 soft call protection for one year that was added during syndication.

Trading levels on the repriced term loan are par ½ bid, 101½ offered, a trader remarked. It first made its way into the secondary last week, when it was known that lender approvals were obtained for the transaction.

UBS is the left lead bank on the repricing, and led the original deal that was obtained late last year to help fund the buyout of the company by Veritas Capital.

Excelitas is a provider of specialty lighting and sensor components, subsystems and integrated products to OEMs for health, environmental and security segments.

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