Penn National, Rural/Metro break; Pre-Paid Legal restructures; Alkermes sets ticking fee

By Sara Rosenberg

New York, June 21 - Penn National Gaming Inc.'s credit facility made its way into the secondary market on Tuesday, with the term loan B quoted above its original issue discount price, and Rural/Metro Corp. started trading as well.

Also, Emmis Communications Corp.'s term loan was better as a newly announced asset sale is expected to result in a pay down, and Nuance Communications Inc.'s term loan was bid higher with amend and extend news.

Over in the primary market, Pre-Paid Legal Services Inc. came out with a number of updates to its senior secured credit facility, including moving funds between its first-out and last-out term loans and firming pricing.

Additionally, Alkermes Inc. outlined the ticking fee on its term loans, and Lawson Software Inc. raised the spread and widened the original issue discount on its term loan.

Furthermore, inVentiv Health released details on size and price talk on its incremental term loan as the deal was presented to lenders during the session, and Smart Modular Technologies Inc. and Nobel Learning Communities Inc. nailed down timing on the launch of their credit facilities.

Penn National tops par

Penn National Gaming's credit facility broke for trading on Tuesday, with the $750 million seven-year term loan B quoted at 99 7/8 bid, par 1/8 offered on the open and then it moved up to par 1/8 bid, par 3/8 offered, according to traders.

Pricing on the term loan B firmed in line with talk at Libor plus 275 basis points with a 1% Libor floor, and it was sold at an original issue discount of 993/4. There is 101 soft call protection for six months.

The Wyomissing, Pa.-based gaming company's $2.15 billion credit facility (Ba1/BBB-) also includes a $700 million five-year revolver and a $700 million five-year term loan A, both priced at Libor plus 175 bps.

Bank of America Merrill Lynch, Wells Fargo Securities LLC, Commerz Markets LLC, RBS Securities Inc. and UBS Securities LLC are the lead banks on the refinancing deal, with Bank of America the left lead on the B loan and Wells Fargo the left lead on the pro rata.

Rural/Metro frees up

Another deal to hit the secondary market was Rural/Metro, with its $325 million seven-year term loan quoted at 99 5/8 bid, par 1/8 offered on the open and then it moved to 99¾ bid, par ¼ offered, according to a trader.

Pricing on the term loan, as well as on a $100 million five-year revolver, is Libor plus 425 bps, after flexing up recently from Libor plus 400 bps. There is a 1.5% Libor floor, and the debt was sold at an original issue discount of 99.

Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and Jefferies & Co. are leading the $425 million senior secured credit facility (B) that will be used, along with $200 million of senior notes and $213 million of equity, to fund the buyout of the company by Warburg Pincus for $17.25 per share in cash and to refinance existing debt. The revolver will be used for general corporate purposes.

Rural/Metro, a Scottsdale, Ariz.-based provider of emergency and non-emergency ambulance services and private fire protection services, expects its buyout to close by the end of June.

Emmis gains ground

Emmis Communications' term loan was stronger after the company revealed that it plans to repay some of the debt with proceeds from the sale of a controlling interest in Merlin Media LLC, an owner and operator of media assets, to GTCR LLC and Benjamin L. Homel, according to traders.

The term loan was quoted by one trader at 91½ bid, 92½ offered, up from 91 bid, 92 offered, and by a second trader at 92 bid, 95 offered, up from 89 bid, 90 offered.

Under the agreement, Emmis, an Indianapolis-based diversified media company, may elect to receive aggregate cash proceeds in the transaction of between $110 million and $130 million and will retain equity interests in Merlin Media, the level of which will depend on the amount of cash proceeds it elects to receive.

Closing is expected in the second half of this year, subject to approval by the Federal Communications Commission and other customary conditions.

Nuance bid rises

Nuance Communications' term loan was quoted at 99½ bid, par offered versus 99¼ bid, par offered on Monday, as the company launched an amendment and extension proposal on Tuesday, according to a trader.

Under the amend and extend, the company is looking to push out the maturity on its term loan debt by three years to 2016 at pricing of Libor plus 300 bps, compared to non-extended pricing of Libor plus 175 bps, and its revolver by three years to 2015.

Lenders are being offered a 10 bps amendment fee.

As of March 31, the Burlington, Mass-based provider of voice and language services had $640.2 million in term loans and its $75 million revolver was undrawn, other than $21.3 million in letters of credit.

Citigroup Global Markets Inc. is the lead bank on the deal and is seeking consents next week, with closing targeted for July.

Pre-Paid reworks deal

Moving to the primary, Pre-Paid Legal Services revised its credit facility structure again, and with the new terms, the deal is fully subscribed and on track to close and fund on June 30, according to a source.

Under the latest changes, the first-out term loan B was downsized to $250 million from $300 million, and pricing firmed at Libor plus 600 bps, the wide end of the Libor plus 550 bps to 600 bps talk. There is still a 1.5% Libor floor and an original issue discount of 981/2.

Meanwhile, the last-out term loan B was upsized to $150 million from $100 million, the maturity was shortened to 5½ years from six years, and pricing firmed at Libor plus 950 bps with a 1.5% floor and a discount of 97, the source said. There is call protection of 102 in year one and 101 in year two.

When the deal was first launched back in May, there was just a single $400 million six-year term loan piece that was talked at Libor plus 450 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 981/2. The decision to create first-out and last-out tranches was made earlier this month.

Pre-Paid getting revolver

Pre-Paid Legal Services' $430 million senior secured credit facility also includes a $30 million five-year revolver.

Pricing on the revolver firmed at Libor plus 550 bps with a 1.5% Libor floor and an original issue discount of 981/2, the source added.

Macquarie Capital, RBC Capital Markets LLC, KeyBanc Capital Markets LLC and Bank of Ireland are the lead banks on the deal that will be used, along with equity, to fund the buyout of the company by MidOcean Partners for $66.50 per share, or about $650 million.

Pre-Paid Legal is an Ada, Okla.-based provider of legal service benefits through a network of independent law firms.

Alkermes ticking fee surfaces

Alkermes revealed the ticking fee on its $450 million of covenant-light term loans, according to a market source, who said the fee will be 75 bps from allocation through July 31, then half the funded spread from Aug.1 through Sept. 30 and the full spread thereafter.

However, closing on the deal is expected to occur in September, the source said.

The debt is comprised of a $310 million six-year first-lien term loan B (BB) talked at Libor plus 425 bps to 450 bps with a 1.5% Libor floor and an original issue discount of 99, and a $140 million seven-year second-lien term loan C (B) talked at Libor plus 725 bps to 750 bps with a 1.5% Libor floor and a discount of 98.

The first-lien term loan has 101 soft call protection for one year, and the second-lien term loan has call protection of 103 in year one, 102 in year two and 101 in year three.

Alkermes merging with Elan

Proceeds from Alkermes' term loans, which are being led by Morgan Stanley & Co. Inc. and HSBC Securities (USA) Inc., will be used to help fund the company's merger with Elan Drug Technologies to create Alkermes plc.

Under the agreement, Elan Corp. plc will receive $500 million in cash and 31.9 million ordinary shares of Alkermes plc common stock. Also, existing shareholders of Alkermes Inc. will receive one ordinary share of Alkermes plc in exchange for each share of Alkermes Inc. they own at the time of the merger. The cash and stock transaction is valued at about $960 million.

Pro forma debt to EBITDA will be 4.6 times and net debt to adjusted EBITDA will be 2.5 times.

The transaction is subject to approval by Alkermes' stockholders and the satisfaction of customary conditions and regulatory approvals, including antitrust approvals in the United States.

Alkermes plc will have headquarters in Dublin, Ireland. Alkermes Inc. is a Waltham, Mass.-based biotechnology company. Elan Drug Technologies is an Ireland-based drug delivery business.

Lawson flexes up

Lawson Software lifted the spread on its $1.04 billion seven-year term loan (Ba3/B+) to Libor plus 500 bps from Libor plus 450 bps and moved the original issue discount to 98 from talk of 98½ to 99, while leaving the 1.5% Libor floor intact, according to a market source.

Also, with the changes, the commitment deadline was extended to Monday from this Wednesday, the source said.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Morgan Stanley & Co. Inc., RBC Capital Markets LLC and Deutsche Bank Securities Inc. are the lead banks on the deal.

The $1.115 billion senior secured credit facility also includes a $75 million five-year revolver (Ba3).

Lawson being acquired

Proceeds from Lawson's credit facility will be used to help fund its purchase by GGC Software Holdings Inc., an affiliate of Golden Gate Capital and Infor Global Solutions, for $11.25 per share in cash. The acquisition is valued at about $2 billion.

Other funds for the transaction will come from $560 million of senior unsecured notes, which are backed by a commitment for a $560 million senior bridge loan, and up to $618 million of equity.

The acquisition is expected to close in the third quarter, subject to approval of Lawson's stockholders and regulatory approvals.

Lawson Software is a St. Paul, Minn.-based enterprise software developer. Infor is an Alpharetta, Ga.-based provider of business software and services.

inVentiv reveals talk

inVentiv held a bank meeting on Tuesday morning to launch its incremental term loan (B1), at which time lenders were told that the seven-year deal is sized at $245 million and talked at Libor plus 425 bps to 450 bps with a 1.5% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

The launch for the loan was announced last week, but details on size and pricing were not available until the meeting took place.

Citigroup Global Markets Inc., Bank of America Merrill Lynch and Jefferies & Co. Inc. are the lead banks on the deal and are asking for commitments by next week.

Proceeds will be used to help fund the acquisition of PharmaNet Development Group from JLL Partners Inc.

inVentiv plans notes

In addition to the credit facility, inVentiv expects to issue $390 million of notes and use $50 million in cash on hand for acquisition financing.

As part of the purchase, PharmaNet is tendering for its 10 7/8% senior secured notes due 2017 in an offer that expires on June 28.

The transaction is expected to close on June 30, subject to customary conditions.

Net senior secured leverage is 3.28 times and total net debt is 5.81 times.

inVentiv is a Somerset, N.J.-based provider of clinical, consulting and commercial services to the health care industry. PharmaNet is a Princeton, N.J.-based provider of drug development services.

Primedia launches

Also holding a bank meeting on Tuesday morning was Primedia Inc. Price talk on the company's $315 million credit facility (B), however, was left as to be determined, with the expectation being that it will emerge within the next few days, according to market sources.

One source guessed that the leads are first trying to figure out where investors are interested in the deal before going out with guidance.

The facility consists of a $40 million five-year revolver that will be undrawn at close and a $275 million seven-year term loan B.

Bank of America Merrill Lynch, Barclays Capital Inc., UBS Securities LLC and RBC Capital Markets LLC are the lead banks on the deal.

Primedia funding buyout

Proceeds from Primedia's credit facility, along with equity, will be used to fund the acquisition of the company by TPG Capital for $7.10 per share in cash, representing a transaction enterprise value of about $525 million.

The transaction is expected to close in the third quarter, subject to customary closing conditions, including expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. There is no financing contingency.

Stockholders with roughly 58% of Primedia's common stock have executed a written consent approving the deal. Therefore, no additional stockholder action is required.

Primedia is a Norcross, Ga.-based provider of internet, mobile and print guides to help people find apartments, houses for rent or new homes for sale.

Smart Modular sets launch

Smart Modular Technologies firmed up timing on its proposed $350 million senior secured credit facility, with the scheduling of a bank meeting for 9:30 a.m. ET at the W Hotel in New York on Thursday, according to a market source.

The facility consists of a $300 million seven-year covenant-light first-lien term loan (B2/B+) and a $50 million five-year first-lien first-out revolver (B1), with official price talk not yet available.

Previously, the company had said in filings with the Securities and Exchange Commission that the facility is expected to be priced at Libor plus 450 bps with a 1.25% Libor floor, and that the term loan is anticipated to be offered at an original issue discount of 991/2, while the revolver is expected to have a 50 bps unused fee and be offered with a 100 bps upfront fee.

Smart Modular lead banks

J.P. Morgan Securities LLC and UBS Securities LLC are the lead arrangers and bookrunners on Smart Modular Technologies' credit facility.

Proceeds will be used to help fund the acquisition of the company by Silver Lake Partners and Silver Lake Sumeru for $9.25 per share in cash, in a transaction valued at approximately $645 million.

Other funds for the acquisition will come from up to $381 million of equity.

Closing on the transaction is expected in the third quarter, subject to receipt of shareholder and regulatory approval.

Smart Modular is a Newark, Calif.-based manufacturer of memory modules and solid state storage products.

Nobel discloses timing

Nobel Learning Communities also nailed down timing on its $91 million senior secured credit facility, as it too scheduled a bank meeting for Thursday, according to a market source.

The facility consists of a $71 million term loan and a $20 million revolver.

Bank of Montreal and Citizens Bank of Pennsylvania are leading the deal that will be used, along with roughly $78.5 million of equity, to fund the buyout of the company by Leeds Equity Partners for $11.75 per share in cash, or about $149 million, including consideration paid to holders of outstanding options and warrants.

Closing is expected within the next few months, subject to regulatory approval, licensing approval from certain governmental agencies and stockholder approval.

Nobel Learning is a West Chester, Pa.-based operator of private preschools, elementary schools, middle schools and K-12 online distance learning.

SemGroup closes

SemGroup Corp. completed its $600 million credit facility (B1) consisting of a $325 million five-year revolver, a $75 million five-year term loan A and a $200 million seven-year term loan B, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

Pricing on the revolver and term loan A is Libor plus 350 bps, and pricing on the B loan is Libor plus 450 bps with a 1.25% Libor floor and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year on the B loan.

During syndication, the spread on the term loan B was increased from talk of Libor plus 375 bps to 400 bps, pricing on the revolver and term loan A was raised from Libor plus 325 bps, the revolver was downsized from $350 million and the term loan A was downsized from $100 million.

RBS Securities Inc., Barclays Capital Inc., BNP Paribas Securities Corp. and Citigroup Global Markets Inc. led the deal for the Tulsa, Okla.-based midstream service company that was used to refinance existing debt.

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