SMG breaks; HD Supply trades up with earnings; Ferrara Candy, Zuffa, Kronos revise deals

By Sara Rosenberg

New York, June 7 - SMG (Stadium Management Group) saw its credit facility make its way into the secondary market on Thursday, with the first-lien loan bid above its original issue discount and the second-lien debt bid at its discount price.

Also in trading, HD Supply Inc.'s term loan was stronger as the market in general was better and the company released favorable fiscal first quarter numbers that showed a year-over-year improvement in sales and adjusted EBITDA.

Over in the primary market, Ferrara Candy Co. Inc. revised its term loan B, increasing the spread, widening original issue discount talk and updating tenor and call protection, and Zuffa LLC upsized its add-on term loan.

Furthermore, Kronos Worldwide Inc. reduced the size of its term loan B, lifted pricing for a second time, sweetened the original issue discount and shortened the maturity.

In addition, Smart Balance Inc. nailed down timing on its bank meeting, and eResearchTechnology Inc. launched its credit facility at previously outlined terms and gave lenders two weeks to place their orders.

SMG hits secondary

SMG's credit facility freed up for trading on Thursday, with the $255 million six-year first-lien term loan (Ba3/B+) quoted at 99½ bid, and the $105 million 61/2-year second-lien term loan (Caa1/CCC+) quoted at 98 bid, 99 offered, according to a trader.

Pricing on the first-lien term loan is Libor plus 425 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is 101 repricing protection for one year.

Meanwhile, the second-lien loan is priced at Libor plus 950 bps with a 1.25% Libor floor and was sold at a discount of 98. This debt includes call protection of 103 in year one, 102 in year two and 101 in year three.

The $385 million credit facility also includes a $25 million revolver (Ba3/B+).

SMG lead banks

Credit Suisse Securities (USA) LLC and GE Capital Markets were the lead banks on SMG's credit facility that was slated to close on Thursday as well.

The deal had gone through some changes during its syndication process, including upsizing the first-lien loan from $240 million, downsizing the second-lien term loan from $125 million and lifting pricing on the second-lien debt from Libor plus 900 bps.

Once the revisions were made, the facility was oversubscribed.

Proceeds are being used by the West Conshohocken, Pa.-based venue management company to refinance existing debt.

HD Supply rises

In more trading news, HD Supply's term loan moved up to 99 7/8 bid, par 3/8 offered from 99 bid, 99¾ offered with the overall stronger market tone and the company's fiscal 2012 first quarter results announcement, according to a trader.

For the quarter, the company reported net sales of $1.8 billion, a 14.2% increase from $1.6 billion in the fiscal 2011 first quarter.

Net loss for the quarter was $360 million, versus a $164 million loss in the prior year. The results, however, included a $220 million loss on extinguishment of debt.

And, adjusted EBITDA for the first quarter was $133 million, up 38.5% from $96 million in the previous year.

HD Supply is an Atlanta-based wholesale distributor for the infrastructure & energy, maintenance, repair & improvement and specialty construction sectors.

Ferrara reworks B loan

Switching to the primary, Ferrara Candy revised pricing on its $425 million term loan B (B2/B) to Libor plus 625 bps with a 1.25% Libor floor and an original issue discount of 96 to 97, from talk of Libor plus 525 bps to 550 bps with a 1.25% floor and a discount of 98 to 99, according to a market source.

Furthermore, the general line candy manufacturer's term loan now matures in six years and includes soft call protection of 102 in year one and 101 in year two, the source remarked.

Lead banks, Morgan Stanley Senior Funding Inc. and Goldman Sachs & Co., are still seeking commitments by Friday morning.

The company's $550 million credit facility also includes a $125 million asset-based revolver.

Proceeds will be used to fund the creation of the company through the merger of Round Lake, Minn.-based Farley's & Sathers Candy Co. Inc. and Forest Park, Ill.-based Ferrara Pan Candy Co. Inc.

Closing is subject to applicable regulatory approval and satisfaction of other customary conditions.

Zuffa ups loan

Zuffa lifted its add-on term loan to $60 million from $50 million, while leaving pricing at Libor plus 550 bps with a 2% Libor floor and a par offer price, according to a market source.

The spread and floor match that of the existing term loan that was done in 2009.

Goldman Sachs & Co. and Deutsche Bank Securities Inc. are the lead banks on the deal that will be used to repay revolving credit facility borrowings.

Zuffa is the Las Vegas-based company that owns the Ultimate Fighting Championship brand.

Kronos revised again

Kronos reduced its senior secured term loan B to $400 million from $600 million, flexed to Libor plus 475 bps from revised talk of Libor plus 425 bps and initial talk of Libor plus 375 bps, moved the original issue discount to 98½ from 99 and shortened the tenor to six years from seven years, a market source said.

As before, the loan has a 1% Libor floor and 101 soft call protection for one year.

The company's $725 million credit facility also includes a $125 million ABL revolver that is not being syndicated.

Wells Fargo Securities LLC is leading the deal that will be used to refinance existing debt, including the company's 6½% senior secured notes due April 2013. Plans for a possible special dividend of up to $1 per share were eliminated as a result of the loan size reduction.

Kronos is a Dallas-based producer of titanium dioxide products.

Smart Balance timing

Also in the primary, Smart Balance came out with a bank meeting date for its previously announced $280 million senior secured credit facility, scheduling the launch for this Monday, according to a market source.

The facility consists of a $40 million five-year revolver and a $240 million six-year term loan B.

BMO Capital Markets and Citigroup Global Markets Inc. are leading the deal that will be used to fund the purchase of Udi's Healthy Foods LLC for $125 million and to refinance existing outstanding debt.

Closing on the acquisition is expected to take place in July and pro forma adjusted leverage is 4.4 times.

Smart Balance is a Paramus, N.J.-based distributor of health foods. Udi's Healthy is a Denver-based maker of gluten-free foods.

eResearch launches

eResearchTechnology held a bank meeting on Thursday morning to launch its $270 million credit facility, and lenders were given a commitment deadline of June 21, with closing targeted for the week of June 25, according to a market source.

As was previously reported, the facility consists of a $50 million five-year revolver and a $220 million six-year first-lien term loan, both talked at Libor plus 600 bps with a 1.5% Libor floor. The revolver is being offered at an original issue discount of 98, while the term loan is being offered at 97 and includes 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC and Jefferies Finance LLC are leading the deal that will be used to help fund the buyout of the company by Genstar Capital LLC for $8 per share in cash.

Closing is subject to stockholder approval, which will be sought at a special meeting on June 22.

eResearchTechnology is a Philadelphia-based technology-driven provider of health outcomes research services and customizable medical devices.

Polypore comes to market

Another deal to launch was Polypore International Inc.'s $450 million five-year senior secured credit facility (Ba2/BB) that consists of a $150 million revolver and a $300 million term loan, according to a market source.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance an existing $90 million revolver as well as around $344.9 million of term loan debt, and for working capital and general corporate purposes.

Polypore is a Charlotte, N.C.-based high technology filtration company specializing in microporous membranes.

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