Integra Telecom breaks; Mirant up on merger; MSCI sets talk; Prime Healthcare tweaks deal

By Sara Rosenberg

New York, April 12 - Integra Telecom Holdings Inc.'s credit facility allocated and freed up for trading on Monday, with the term loan quoted above par, and Mirant Corp.'s bank debt was stronger after the company announced plans to merge with RRI Energy Inc.

Over in the primary market, MSCI Inc. released price talk on its acquisition financing credit facility as the deal was presented to lenders during the session, and Prime Healthcare Services Inc. came out with more changes to its credit facility, revising tranching once again.

Also, Christie/AIX Inc.'s term loan is now anticipated to get a better rating than was originally expected, and DS Waters of America Inc. is preparing to launch a new deal this week.

Integra Telecom frees up

Integra Telecom's credit facility hit the secondary market, with the $210 million term loan (B2/CCC+) quoted at par bid on the open and then moving up to par ½ bid, 101¼ offered, according to traders.

Pricing on the term loan is Libor plus 725 basis points with a 2% Libor floor, and it was sold at an original issue discount of 98.

During syndication, the spread on the term loan firmed at the tight end of the initial Libor plus 725 bps to 750 bps talk.

Integra Telecom lead banks

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

Proceeds from the credit facility will be used to refinance existing debt and for general corporate purposes.

Other funds for the refinancing are coming from $475 million of senior secured notes that priced on Friday at par to yield 10¾%. The notes offering was downsized from $500 million,

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

Mirant rises

Mirant's bank debt headed higher on Monday on the back of news that the company is merging with RRI Energy and, with the merger, existing debt will be refinanced, according to traders.

Mirant's term loan was quoted by one trader at 98½ bid, par offered, up from 98 bid, 98¾ offered, and by a second trader wrapped around par.

And, the company's revolver was quoted by the first trader at 95 bid, 96 offered, up from 93½ bid, 95½ offered.

Under the merger agreement, Mirant stockholders will receive a fixed ratio of 2.835 shares of RRI Energy common stock for each share of Mirant common stock they own. Mirant stockholders will own about 54% of the equity of the combined company and RRI Energy stockholders will own approximately 46%.

The combined power producing company will be named GenOn Energy, and it will be based in Houston.

GenOn plans new debt

To help refinance Mirant's and RRI Energy's existing debt, GenOn Energy expects to get a new revolver and a new term loan and will issue new senior notes, company officials said in a conference call on Monday.

About $1.8 billion of existing debt will be addressed, including the $307 million term loan due 2013 at Mirant North America, the $850 million of 7.375% notes due 2013 at Mirant North America, the $279 million of secured notes due 2014 at RRI, the $371 million of secured notes due 2036 at PEDFA, and revolvers at Mirant and RRI.

Closing is expected before the end of 2010, subject to stockholder approval, U.S. antitrust approval and approval by the Federal Energy Regulatory Commission. The closing is also subject to the refinancing of a portion of each company's existing debt.

MSCI talk emerges

MSCI held a bank meeting on Monday to officially kick off syndication on its proposed $1.375 billion senior secured credit facility (Ba2/BB+), and in connection with the launch, price talk was announced, according to a market source.

Both the $100 million five-year revolver, which is expected to be undrawn at closing, and the $1.275 billion six-year term loan B are being talked at Libor plus 350 bps with a 1.5% Libor floor - in line with where the commitment letter had said.

The term loan B is being offered at an original issue discount of 99, the source remarked.

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 both companies and to fund ongoing working capital needs.

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.

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

Closing is expected to occur in mid-to-late June, subject to approval of RiskMetrics shareholders, antitrust clearance and receipt of financing.

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.

Prime Healthcare reworks structure

Prime Healthcare made another round of revisions to the tranching of its credit facility (B1), and as a result of the changes, the size of the transaction was lowered to up to $232 million from $290 million, according to a market source.

Following the changes, the facility consists of a $72 million term loan A and a $155 million to $160 million term loan B, and there is no longer a revolver, the source said.

By comparison, most recently the facility was structured as a $40 million four-year revolver, a $50 million four-year term loan A and a $200 million five-year term loan B.

And, before that, the credit facility consisted of a $40 million five-year revolver and a $250 million six-year term loan.

Prime Healthcare price talk

Price talk on Prime Healthcare's term loan A remained at Libor plus 425 bps with a 2% Libor floor and an original issue discount of 981/2, and price talk on the term loan B is still Libor plus 525 bps with a 2% Libor floor and an original issue discount of 971/2.

When the deal was structured with a single term loan tranche it was being talked at Libor plus 400 bps with a 2% Libor floor and a discount that was still to be determined, and the eliminated revolver was being talked at Libor plus 400 bps with a 2% Libor floor as well.

RBC is the lead bank on the deal that will be used to refinance existing debt, make certain investments and for general corporate purposes.

Prime Healthcare is an Ontario, Calif.-based owner and operator of acute care hospitals.

Christie/AIX expecting better rating

Christie/AIX is anticipating a Ba1 rating from Moody's Investors Service on its $172.5 million six-year senior secured term loan, as opposed to the Ba2 rating that was initially expected, according to a market source.

However, even with the change in the expected rating, price talk on the term loan was left at Libor plus 350 bps with a 1.75% Libor floor and an original issue discount of 99, the source said.

The deal is heard to be coming along very well with some commitments already in ahead of Friday's deadline, the source added.

SG and GE Capital are the joint lead arrangers and bookrunners on the deal that will be used to refinance existing debt.

Christie/AIX is a wholly owned subsidiary of Cinedigm Digital Cinema Corp., a Morristown, N.J.-based provider of digital cinema platforms.

DS Waters readies launch

DS Waters of America is scheduled to hold a bank meeting on Wednesday to launch a proposed $375 million credit facility that will be used to refinance existing debt, according to sources.

Tranching on the deal is comprised of a $100 million revolver and a $275 million term loan, sources said.

JPMorgan is the lead bank on the facility.

DS Waters is an Atlanta-based home and office water delivery company.

Skilled Healthcare closes

In other news, Skilled Healthcare Group Inc. closed on its new $460 million credit facility (Ba3/BB-), consisting of a $360 million six-year term loan and a $100 million undrawn five-year revolver, according to a news release.

Pricing on the two tranches is Libor plus 375 bps with a 1.5% Libor floor. The term loan includes a step down to Libor plus 350 bps when leverage coverage decreases to 3.25 times and was sold at an original issue discount of 991/2. The revolver has a 50 bps unused fee.

During syndication, the term loan was upsized from $330 million, pricing firmed at the high end of initial talk of Libor plus 350 bps to 375 bps with the addition of the step, the Libor floor was decreased from 1.75%, and the original issue discount tightened from 99.

Credit Suisse, Bank of America, Barclays Capital and JPMorgan acted as the joint lead arrangers on the deal that was used to refinance an existing credit facility.

Skilled Healthcare is a Foothill Ranch, Calif.-based health care services company.

Affinion closes

Affinion Group Inc. closed on its $1 billion credit facility (Ba2), consisting of a $125 million five-year revolver and an $875 million 61/2-year term loan B, with both tranches priced at Libor plus 350 bps, according to an 8-K filed with the Securities and Exchange Commission on Monday.

The term loan B has 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.

Bank of America and Credit Suisse acted as the lead banks on the credit facility that was completed on Friday.

Proceeds are being used by the Norwalk, Conn.-based provider of marketing services and loyalty programs to refinance existing debt and for general corporate purposes, including acquisitions.

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