Weight Watchers, Rexnord, Avis, Tropicana, RCN break; Yankee Candle, DJO tweak deals

By Sara Rosenberg

New York, March 13 - A number of deals freed up for trading during Tuesday's market hours, including Weight Watchers International Inc., Rexnord LLC, Avis Budget Car Rental LLC, Tropicana Entertainment Inc. and RCN.

Meanwhile, over in the primary, Yankee Candle Co. Inc. increased its term loan B and finalized pricing at the tight end of talk, and DJO Finance LLC upsized its incremental loan and disclosed that not only has its concurrent amendment passed, but a large portion of existing term loan lenders have agreed to extend their maturities.

Also, Expert Global Solutions Inc., PetroLogistics, Education Management Corp. and TowerCo Finance LLC released price talk, and SeaWorld Parks & Entertainment Inc. and Armstrong World Industries Inc. came out with original issue discount guidance as all of these deals were launched during the session.

Furthermore, AMN Healthcare Services Inc. began floating some early talk on its term loan B in preparation for its upcoming meeting, Container Store Inc., NPC International Inc. and Alere Inc. joined this week's calendar, and Catalina Marketing Corp. is getting ready to bring an amendment and extension transaction to market.

Weight Watchers tops OID

Weight Watchers' new debt began trading on Tuesday, with the seven-year term loan F quoted at 99 5/8 bid, par 1/8 offered on the break and then it moved up to 99 7/8 bid, par 3/8 offered, according to a trader.

The incremental term loan F will be sized at $600 million to $630 million, with final sizing to be determined at close, a source said.

Pricing on the term loan F is Libor plus 300 basis points with a step down to Libor plus 275 bps at 3.75 times total net leverage. There is a 1% Libor floor and 101 soft call protection for one year, and it was sold at an original issue discount of 99.

During syndication, the spread firmed at the high side of the Libor plus 275 bps to 300 bps guidance, and the step down and call protection were added.

Weight Watchers term E

In addition to the term loan F, Weight Watchers is getting an $850 million incremental five-year term loan E that is priced at Libor plus 225 bps. The size of this tranche came slightly below original expectations of $900 million to $1 billion.

With the up to $1.48 billion of incremental loans (Ba1/BB+), the company is amending and extending its existing revolver, term loan A-1 due January 2013, term loan B due January 2014, term loan C due June 2015 and term loan D due June 2016.

The extended term loan B and term loan D loans will be combined into the new term loan F, and that extended term loan A-1 and term loan C loans will have terms matching those of the new term loan E.

Term loan A-1 and term loan B lenders were offered a 20 bps extension fee, term loan C and term loan D lenders were offered a 7.5 bps extension fee, and all lenders were offered a 5 bps amendment fee.

The various term loans were priced at different rates, ranging from Libor plus 87.5 bps to 225 bps, and the revolver was priced at Libor plus 225 bps at Dec. 31.

Weight Watchers lead banks

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch and Scotia Capital (USA) Inc. are the lead banks on Weight Watchers' deal.

Proceeds from new term loans will be used to fund the repurchase of common stock through a modified Dutch auction tender offer, for which a credit facility amendment is needed in order to complete.

The company is tendering for up to $720 million of its common stock at a price of $72 to $83 per share and will purchase shares from Artal, which owns about 52% of the company's outstanding shares, at the same price as the one determined in the tender offer.

The tender expires on March 22, and if it is fully subscribed, the company will repurchase a total of about $1.5 billion of its common stock through the offer and the Artal purchase agreement.

Weight Watchers is a New York-based provider of weight management services.

Rexnord starts trading

Another deal to break was Rexnord's $950 million six-year covenant-light first-lien term loan, with levels quoted at 99¾ bid, par ¼ offered, according to a market source.

Pricing on the term loan is Libor plus 400 bps with a 1% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for six months.

Coupon on the loan was flexed down from Libor plus 425 bps, the discount tightened from 99 and the call protection was shortened from one year during the syndication process.

Also, at one point a $100 million euro equivalent tranche was carved out of the term loan at talk of Euribor plus 425 bps with a 1% floor and an original issue discount of 99, but this euro piece was then dropped.

Rexnord getting revolver

Rexnord's $1.13 billion credit facility (Ba3/BB-), which will be used to refinance existing term loan and revolver borrowings, also includes a $180 million five-year revolver.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Barclays Capital Inc., Goldman Sachs & Co., BMO Capital Markets Corp. and Sumitomo Mitsui Banking Corp. are the lead banks on the deal.

Rexnord is a Milwaukee-based industrial company comprised of two strategic platforms: process & motion control and water management.

Avis emerges in secondary

Avis' new $500 million seven-year term loan B was free to trade as well, with levels seen at 99¼ bid, 99¾ offered on the break and then it moved up to 99 5/8 bid, par 1/8 offered, according to a trader.

Pricing on the loan, which was upsized recently from $375 million, is Libor plus 325 bps with a 1% Libor floor. It was sold at an original issue discount of 99 and has 101 soft call protection for one year.

Proceeds will be used by the Parsippany, N.J.-based vehicle rental operator to refinance existing debt. As a result of the upsizing, the company will repay about $150 million of existing term loans due 2018 at the 101 call protection, and the expected amount of unsecured corporate debt to be paid down was revised to $75 million from $100 million.

JPMorgan, Bank of America Merrill Lynch, Barclays Capital Inc. and Deutsche Bank Securities Inc. are the lead banks on the loan.

Tropicana frees up

Also hitting the secondary market was Tropicana Entertainment's $175 million six-year first-lien term loan B (B2/BB+), with levels quoted at 98½ bid, 99½ offered, according to a trader.

Pricing on the loan firmed in line with initial talk at Libor plus 600 basis points with a 1.5% Libor floor. The tranche was sold at an original issue discount of 98 and includes 101 soft call protection for one year.

UBS Securities LLC is the lead bank on the deal that will be used to refinance an existing $105 million term loan and add cash to the balance sheet.

Total leverage is around 2.2 times.

Tropicana Entertainment is a Las Vegas-based owner and operator of casino gaming properties.

RCN allocates add-on

RCN's $75 million add-on term loan B due August 2016 allocated on Tuesday morning, and the debt is trading along with the existing $533 million of term loan B debt at 99¼ bid, 99¾ offered, according to a trader. On Monday, the existing term loan B was quoted at 99¼ bid, 99¾ offered, he added.

Pricing on the add-on matches existing B loan pricing at Libor plus 450 bps with a 2% Libor floor. The add-on was sold at an original issue discount of 99.

Initially, the Herndon, Va.-based broadband services provider was planning a $125 million term loan B add-on, but the tranche was downsized as a $50 million term loan A was added at pricing of Libor plus 400 bps with no Libor floor, a source remarked.

SunTrust Robinson Humphrey Inc., GE Capital Markets and TD Securities (USA) LLC are the lead banks on incremental debt that will be used to fund a dividend.

With this deal, RCN will have total and senior leverage of 4.2 times, up from 3.4 times currently.

Yankee Candle revises loan

Moving to the primary, Yankee Candle lifted its seven-year term loan B size to $725 million from $580 million and set pricing at Libor plus 400 bps, the low end of the Libor plus 400 bps to 425 bps talk, according to a market source.

As before, the loan has a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

Allocations on the company's now $900 million senior secured credit facility, which also includes a $175 million five-year asset-based revolver, are expected to go out on Wednesday.

Bank of America Merrill Lynch and Barclays Capital Inc. are the lead banks on the deal that will be used to refinance existing bank debt and redeem 8½% senior notes due 2015. The amount of the bond repurchase has been increased because of the term loan upsizing, the source remarked.

Yankee Candle is a South Deerfield, Mass.-based scented candles company.

DJO ups size

DJO Finance raised its incremental term loan (Ba2/BB-) due September 2017 to $350 million from $300 million, while leaving pricing at Libor plus 500 bps with a 1.25% Libor floor and an original issue discount of 981/2, according to a market source.

In connection with the new loan, the company sought an amendment to allow for the financing, which was approved, and is looking to extend some of its existing $843 million term loan to November 2016 from May 2014 at pricing of Libor plus 500 bps, versus non-extended pricing of Libor plus 300 bps.

Early results show that a little more than 65% of the term loan has been extended, the source said.

On top of the incremental loan and amend and extend, the company is also seeking a new $100 million five-year revolver (Ba2/BB-) to replace its existing revolver.

DJO repaying debt

Proceeds from DJO's incremental loan will be used to refinance some outstanding term loan borrowings. Funds from the upsizing will result in a $25 million paydown to the extended tranche and a $25 million paydown to the non-extended tranche, the source continued.

Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Macquarie Capital, RBC Capital Markets LLC, UBS Securities LLC and Wells Fargo Securities LLC are the lead banks on the deal.

DJO Finance is a Vista, Calif.-based developer, manufacturer and distributor of medical devices for musculoskeletal health, vascular health and pain management.

Expert Global sets talk

Also on the new issue front, Expert Global Solutions held a conference call on Tuesday to launch its credit facility, at which time talk of Libor plus 675 bps with a 1.25% Libor floor, an original issue discount of 98 and 101 soft call protection for one year surfaced on its $675 million first-lien term loan B, according to a market source.

The $795 million credit facility (B) also includes a $120 million revolver.

Lead banks Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and RBS Securities Inc. are seeking commitments by 5 p.m. ET on March 23.

Proceeds will be used to help fund the merger of APAC Customer Services Inc. with NCO Group to create Expert Global Solutions and to refinance existing debt, including NCO's floating rate senior notes due 2013 and 11 7/8% senior subordinated notes due 2014. Both APAC and NCO are already owned by One Equity Partners.

Expert Global second-lien

In addition to the first-lien bank debt, Expert Global will be getting a $200 million second-lien term loan that has already been sold. Also, One Equity will be providing the company with a $159 million PIK loan and $300 million of equity.

The company had tried last year to get a new $870 million credit facility and $300 million of bonds for this proposed merger, but the financing was pulled due to unattractive rates available, so the merger was not completed.

The credit facility that was tabled in December 2011 consisted of a $120 million revolver and a $750 million term loan, both talked at Libor plus 625 bps. The term loan had a 1.25% Libor floor, an original issue discount of 96 to 97 and 101 soft call protection for one year.

Expert Global Solutions is a provider of business process outsourcing and customer care services.

PetroLogistics guidance

PetroLogistics revealed price talk with its launch as well, with its $350 million five-year term loan B being shopped at Libor plus 575 bps with a 1.25% Libor floor and an original issue discount of 98, according to a market source. The debt is non-callable for one year, then at 102 in year two and 101 in year three.

The company's $470 million senior secured credit facility (B1/B) also includes a $120 million 41/2-year revolver.

Commitments are due at 5 p.m. ET on March 23.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to refinance project debt and fund a payment to investors to return construction capital.

PetroLogistics is a Houston-based producer of propylene.

Education Management launch

Education Management held a call in the afternoon and set talk on its $350 million term loan B due 2018 at Libor plus 525 bps with a 1.25% Libor floor, an original issue discount of 98½ and 101 soft call protection for one year, according to a market source.

By comparison, before the launch took place, early talk on the B loan was rumored to be Libor plus 525 bps to 550 bps.

Commitments are due on March 22.

Bank of America Merrill Lynch, Barclays Capital Inc. and Goldman Sachs & Co. are the lead banks on the deal that will be used to refinance existing term loan debt.

Education Management is a Pittsburgh-based provider of private post-secondary education.

TowerCo repricing details

TowerCo Finance launched the repricing of its $397 million term loan B at Libor plus 350 bps with a 1% Libor floor, versus current pricing of Libor plus 375 bps with a 1.5% Libor floor, according to a market source.

As part of the repricing, the 101 soft call protection will be extended for one year, the source said.

Commitments are due on March 20.

Morgan Stanley Senior Funding, Inc. is the lead arranger and a joint bookrunner with TD Securities (USA) LLC and Fifth Third Securities Inc.

TowerCo is a Cary, N.C.-based owner and leaser of communication towers.

SeaWorld releases OID

SeaWorld Parks & Entertainment told investors that its $500 million add-on term loan (Ba3/BB-) is being talked with an original issue discount of 98¾ to 99 as the deal launched with a call in the afternoon, according to a market source.

As was previously reported, pricing on the add-on matches existing term loan pricing at Libor plus 300 bps with a 1% Libor floor.

Bank of America Merrill Lynch, Barclays Capital Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and Macquarie Capital are leading the deal that will be used to fund a distribution to shareholders.

SeaWorld is an Orlando, Fla.-based theme park operator.

Armstrong discloses discount

Armstrong World Industries brought its $250 million add-on term loan B (BB-) to market as well, with the debt offered at an original issue discount of 981/2, according to a market source.

Pricing on the loan is Libor plus 300 bps with a 1% Libor floor, in line with existing term loan pricing.

Bank of America Merrill Lynch, J.P. Morgan Securities Inc. and Barclays Capital Inc. are the lead banks on the deal that will be used to help fund a special cash dividend of about $500 million, or about $8.55 per share.

Armstrong is a Lancaster, Pa.-based designer and manufacturer of floors, ceilings and cabinets.

Grede comes to market

Grede Holdings LLC launched its $250 million term loan B on Tuesday as expected at Libor plus 500 bps to 550 bps with a 1.5% Libor floor and an original issue discount of 98 to 981/2, a market source said. There is 101 soft call protection for one year.

Commitments are due on March 26.

GE Capital Markets and Jefferies & Co. are leading the deal that will be used to refinance existing debt and fund a $216 million dividend.

Expected ratings are B1 from Moody's Investors Service and B+ from Standard & Poor's.

Grede is a Southfield, Mich.-based iron casting supplier.

AMN talk circulates

AMN Healthcare released price talk in the Libor plus 500 bps area with a 1.25% to 1.5% Libor floor on its $200 million six-year term loan B as the debt is getting ready to launch with a bank meeting on Thursday, according to a market source.

The term loan B will have an original issue discount that is still to be determined, the source said.

In addition to the term loan B, the company will be getting a $50 million five-year revolver.

SunTrust Robinson Humphrey Inc. and GE Capital Markets are the lead banks on the $250 million deal that will be used to refinance existing debt.

AMN is a San Diego-based health-care staffing and workforce services company.

Container Store readies deal

In more primary happenings, Container Store emerged with new deal plans, setting a bank meeting for 10 a.m. ET on Thursday to launch a $350 million credit facility, according to market sources.

The facility consists of a $75 million asset-based revolver and a $275 million term loan B, sources said.

J.P. Morgan Securities LLC, Barclays Capital Inc., Morgan Stanley Senior Funding Inc. and Wells Fargo Securities LLC are leading the deal that will be used to replace an existing $75 million ABL revolver, a $116 million term loan B and $166 million of mezzanine notes.

With the refinancing news, the company's term loan was quoted at 98 bid, par offered in the secondary market, versus most recently seen levels of 97½ bid, 99½ offered on March 7, a trader added.

Container Store is Coppell, Texas-based retailer of organization and storage products.

NPC plans term loan

NPC International also announced a refinancing, which will be launched with a conference call at noon ET on Wednesday, according to a market source.

The company will be getting a new term loan to replace its $375 million term loan that was done late last year at pricing of Libor plus 525 bps with a 1.5% Libor floor and was sold at an original issue discount of 98.

Barclays Capital Inc. and Goldman Sachs & Co. are leading the deal for the Overland Park, Kan.-based Pizza Hut franchisee.

Existing lenders will be paid down at 101 since the existing loan includes soft call protection, the source added.

Alere coming soon

Alere scheduled a conference call for Thursday to launch a $200 million term loan B-2 that is being led by Jefferies & Co., GE Capital Markets and Credit Suisse Securities (USA) LLC, according to a market source.

Proceeds will be used to help fund the acquisition of eScreen Inc. for $270 million in cash. The price is subject to a customary working capital adjustment and follow-on contingent consideration of up to an additional $70 million.

Alere is a Waltham, Mass.-based provider of near-patient diagnosis, monitoring and health management. eScreen is an Overland Park, Kan.-based technology firm that specializes in toxicology screening and employee health products and services.

Catalina amend, extend

And, another company to join the forward calendar was Catalina Marketing, as it will be holding a call on Thursday for existing lenders to present an amendment and extension proposal, according to a market source.

The company is looking to amend and extend $100 million revolver due 2013 and $597 million term loan B (Ba2) due 2014, the source said.

J.P. Morgan Securities LLC is the lead bank on the deal.

Catalina Marketing is a St. Petersburg, Fla.-based provider of precision marketing services.

Sleepy's wraps syndication

In other news, Sleepy's Intermediate LLC's $170 million seven-year first-lien term loan (B2/B-) was oversubscribed by Tuesday's commitment deadline, and terms are expected to be remain in line with initial talk, according to a market source.

Pricing on the loan is Libor plus 600 bps with a 1.25% Libor floor and an original issue discount of 98, and there is 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to refinance existing debt and pay a distribution to shareholders.

Sleepy's is a specialty mattress retailer owned by the Acker family, and with this transaction, Calera Capital is making a significant minority equity investment in the company.

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