MedAssets breaks; Bucyrus dips on acquisition; Sabre rises; Petco, Endo, Royall tweak deals

By Sara Rosenberg

New York, Nov. 15 - MedAssets Inc.'s credit facility allocated and freed up for trading during Monday's market hours, with the term loan quoted well above par, Bucyrus International Inc.'s term loan softened on acquisition news, and Sabre Holdings' term loan headed higher as the company is seeking to amend and extend the debt.

Over in the primary market, Petco Animal Supplies Inc. and Endo Pharmaceuticals Holdings Inc. both announced increases to the size of their term loans due to strong demand, and Royall & Co. firmed pricing at the low end of talk and reduced the Libor floor on its facility.

Also, Amscan Holdings Inc. released price talk on its term loan as the deal was presented to lenders, GT Solar International Inc. and HealthCare Partners Medical Group launched their facilities, and Smile Brands Group Inc. and Amneal Pharmaceuticals LLC joined the forward calendar.

In more loan happenings, Neiman Marcus Inc. made changes to the pricing of its proposed extended term loan in order to entice lenders into the deal, and Education Management Corp. released price talk on its extended debt.

MedAssets starts trading

MedAssets' credit facility hit the secondary market on Monday with the $635 million six-year term loan B quoted at par bid, 101 offered and then it moved up to par ¾ bid, 101½ offered, according to traders.

Pricing on the term loan B and on a $150 million five-year revolver is Libor plus 375 basis points with a step-down to Libor plus 350 bps when total leverage is less than 4.5 times. There is a 1.5% Libor floor. Also, the term loan B has 101 soft call protection for one year and was sold at an original issue discount of 99.

During syndication, the term loan B was upsized from $600 million when the company's bond offering was downsized to $325 million from $360 million, pricing on the term loan B and the revolver was reduced from talk of Libor plus 400 bps to 425 bps and the step-down was added to the B loan.

MedAssets buying Broadlane

Proceeds from MedAssets' credit facility and notes will be used to fund the acquisition of the Broadlane Group, which is expected to be completed this week, and to refinance existing bank debt.

Under the acquisition agreement, MedAssets is buying Broadlane, a Dallas-based end-to-end cost-management partner for health care providers, for roughly $850 million in cash, with $725 million to be paid at closing and $125 million to be paid in January 2012.

As a result of the credit facility upsizing and the bond downsizing, senior leverage is 3.3 times, up from 3.2 times under the original structure, and total leverage remains at 5.1 times.

Barclays and JPMorgan are the joint lead arrangers on the $785 million credit facility (Ba3/BB-).

MedAssets is an Alpharetta, Ga.-based provider of technology-enabled products and services for hospitals, health systems and ancillary health care providers.

Bucyrus retreats

Bucyrus' term loan moved down to par bid, par ½ offered after the company announced that it is being bought by Caterpillar Inc., according to a traders. Previously, one trader was quoting the loan at par 5/8 bid, 101 3/8 offered, and a second trader was quoting it at 101½ bid, 102 offered.

Under the agreement, Bucyrus shareholders will receive $92 per share, or $7.6 billion in aggregate consisting of all cash. The transaction is valued at $8.6 billion, including net debt.

Caterpillar, an investment-grade company, will fund the acquisition through a combination of cash from the balance sheet, debt and up to $2 billion in equity.

The transaction is expected to close in mid-2011, subject to regulatory approvals, customary conditions and approval by Bucyrus stockholders.

Bucyrus is a South Milwaukee, Wis.-based designer and manufacturer of mining equipment. Caterpillar is a Peoria, Ill.-based manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.

Sabre up on amend/extend

Sabre Holding's term loan gained some ground in trading as investors were told about an amendment and extension proposal, according to traders.

The term loan was quoted by one trader at 95¼ bid, 96 offered, up from 94 bid, 94¾ offered, and by a second trader at 95 ½ bid, 96 offered, up 1¼ points on the day.

Under the amendment, the company is looking to extend $1 billion of its term loan to 2017 from September 2014 and its revolver to 2016 from March 2013, with pricing on the extended debt being Libor plus 325 bps, up from current pricing of Libor plus 225 bps.

Lenders are being offered a 10 bps amendment fee.

Deutsche Bank is leading the transaction that was launched with a conference call on Monday.

Sabre is a Southlake, Texas-based online travel company.

Petco revises size

Moving to the primary, Petco upsized its term loan (B1/B) to $1.225 billion from $1.1 billion, while leaving talk at Libor plus 475 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 981/2, and the 101 soft call protection for one year in place, according to a market source.

As a result of the increase to the term loan size, the company's bonds were reduced to $500 million from $625 million, the source said.

Credit Suisse, JPMorgan, Bank of America, Wells Fargo, Morgan Stanley and Goldman Sachs are the lead banks on the deal.

Proceeds from the term loan, which just launched on Nov. 9, and the notes will be used to refinance existing debt and to fund a dividend.

Petco seeks revolver

As part of its dividend recapitalization, Petco is also getting a $250 million ABL revolver that was launched to investors on Nov. 3.

Pricing on the revolver can range from Libor plus 225 bps to 275 bps and the unused fee can range from 37.5 bps to 62.5 bps, based on availability.

Lenders are being offered 50 bps upfront for commitments of $35 million or more toward the revolver, and 37.5 bps upfront for commitments of less than $35 million.

Petco is a San Diego-based specialty retailer of pet food, supplies and services.

Endo upsizes loan

Endo Pharmaceuticals moved its term loan size to $400 million from $200 million, while leaving pricing unchanged at Libor plus 250 bps with no Libor floor, according to a market source.

The company's now $900 million, up from $700 million, five-year credit facility also includes a $500 million revolver priced at Libor plus 250 bps with no floor as well.

Both tranches are only being marketed to banks and are being offered with upfront fees based on commitment size.

JPMorgan and RBC are the lead banks on the deal that will be used to help fund the acquisition of Qualitest Pharmaceuticals, a Huntsville, Ala.-based generics company, from Apax Partners for $1.2 billion in cash.

Endo selling notes

In addition to the credit facility, Endo plans on selling $400 million of senior unsecured notes to help fund the acquisition.

Closing on the transaction is expected late in the fourth quarter of 2010 or early in the first quarter of 2011, subject to regulatory approval.

On a pro forma basis for fiscal 2010, the combined company would have had revenues of about $2 billion.

Endo is a Chadds Ford, Pa.-based specialty health care services company focused on high-value branded products and specialty generics.

Royall sets pricing

Royall firmed pricing on its $103.25 million five-year senior secured credit facility at Libor plus 500 bps, the tight end of the initial Libor plus 500 bps to 550 bps talk, and lowered the Libor floor to 1.5% from 1.75%, according to a market source.

As before, the deal is being sold at an original issue discount of 98.

GE Capital is the lead arranger on the facility that consists of a $10 million revolver and a $93.25 million term loan.

Proceeds will be used for a dividend recapitalization.

Royall is a Richmond, Va.-based direct marketing company focused on working with colleges and universities to achieve their enrollment and financial goals.

Amscan guidance disclosed

Amscan held a bank meeting on Monday to kick off syndication on its proposed $675 million seven-year senior secured covenant-light term loan, and in preparation for the event, price talk was released early in the morning, according to a market source.

The term loan is being talked at Libor plus 450 basis points to 475 bps with a 1.5% Libor floor and an original issue discount of 99, the source said. There is no call protection on the loan.

Credit Suisse and Goldman Sachs are the joint lead arrangers on the deal, with Credit Suisse the left lead.

In addition, the lead arrangers are bookrunners as well with Wells Fargo, Deutsche Bank and Barclays.

Amscan amending revolver

In connection with the new term loan, Amscan plans on amending its existing senior secured revolving credit facility to allow for the new debt.

Proceeds from the term loan will be used to refinance an existing senior secured term loan due in 2013 and to fund a cash dividend of about $310 million.

Amscan is an Elmsford, N.Y.-based designer, manufacturer and distributor of decorated party goods and party accessories.

GT Solar comes to market

Also holding a bank meeting during the session was GT Solar, which came to market with a $200 million pro rata senior secured credit facility, according to a market source.

As was previously reported, the facility is being talked at Libor plus 425 bps with no Libor floor and an original issue discount of 98.

The facility, which is being led by Credit Suisse, consists of a $75 million revolver and a $125 million term loan.

Proceeds will be used to purchase 26.5 million shares of the company's common stock from private equity investors at a price of $7.66 per share, for a total purchase price of about $203 million.

GT Solar using cash first

Since GT Solar's share repurchase was expected to close on Friday, the company planned to initially fund the transaction with cash on hand. There is $317 million of unrestricted cash on the balance sheet.

However, to retain investment flexibility, the company is getting the credit facility for the long-term funding of the stock buyback.

Closing on the credit facility is expected before the end of the quarter.

GT Solar is a Merrimack, N.H.-based provider of polysilicon production technology and sapphire and silicon crystalline growth systems and materials for the solar, LED and other specialty markets.

Healthcare Partners launches

HealthCare Partners Medical Group was another company to hold a bank meeting on Monday, as it launched a $585 million five-year term loan A that is being talked at Libor plus 200 bps, according to a market source.

Bank of America, JPMorgan and SunTrust are the lead banks on the deal that will be used to refinance existing debt.

HealthCare Partners is a Torrance, Calif.-based medical group.

Smile Brands readies deal

Smile Brands has set a bank meeting for Tuesday to launch a proposed $275 million senior secured credit facility that's comprised of a $35 million revolver and a $240 million term loan, according to a market source.

Price talk on both tranches is Libor plus 500 bps with a 1.75% Libor floor and an original issue discount of 981/2, the source said.

Credit Suisse is the lead bank on the deal that will be used to help fund Welsh, Carson, Anderson & Stowe's purchase of a majority interest in the company from Freeman Spogli & Co., who will remain as a minority investor.

Smile Brands, an Irvine, Calif.-based dental support services organization, expects to close on the transaction in December.

Amneal sets launch

Amneal Pharmaceuticals has scheduled a bank meeting for Wednesday to launch a proposed $205 million five-year credit facility comprised of a $50 million revolver and a $155 million term loan, according to a market source.

Price talk on the two tranches is Libor plus 450 bps to 475 bps with a 1.75% Libor floor and fees of 1.5%, the source said.

GE Capital is the lead arranger on the deal that will be used for a refinancing/recapitalization.

Amneal Pharmaceuticals is a Hauppauge, N.Y.-based generic pharmaceuticals company.

Nieman ups spread

Neiman Marcus increased pricing on its proposed extended term loan to Libor plus 400 bps from Libor plus 325 bps, according to a market source.

In addition, the company added to the extended debt a step-down to Libor plus 375 bps when total leverage is at or below 5.0 times and 101 soft call protection against repricings for one year, the source said.

The 10 bps amendment fee was left unchanged, and lenders are now being given until 2 p.m. ET on Tuesday to provide signatures.

The original consent deadline was this past Friday.

Neiman bid rises

Following the changes to the amendment, Neiman Marcus' existing term loan was quoted by at 98 5/8 bid, 98 7/8 offered versus 98¼ bid, 99 offered on Friday, according to a trader.

As before, under the amendment and extension, the company is looking to push out the maturity on some or all of its term loan by three years from April 6, 2013.

At July 31, there was roughly $1.5 billion of the term loan outstanding and pricing was Libor plus 200 bps.

In addition, the amendment would allow for the incurrence of additional debt to refinance the non-extended term loan.

Credit Suisse and JPMorgan are the lead banks on the deal for the Dallas-based high-end specialty retailer.

Education extended pricing

Education Management launched its amendment and extension proposal on Monday, at which time lenders were told that both the extended revolver and the extended term loan would be priced at Libor plus 350 bps, according to a market source.

By comparison, the revolver is currently priced at Libor plus 150 bps and the term loan C is currently priced at Libor plus 175 bps.

Under the proposal, the company is looking to extend its entire revolver by three years to June 2015 and its entire term loan by three years to June 2016, and is offering lenders a 10 bps amendment fee in addition to the increased pricing.

Barclays, Bank of America, Goldman Sachs and BNP Paribas are leading the deal and are looking for commitments/consents by Dec. 1.

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

Universal Health closes

In other news, Universal Health Services Inc. completed its acquisition of Psychiatric Solutions Inc., according to a news release.

To help fund the transaction, Universal Health got a new $3.45 billion senior secured credit facility (Ba2/BB+), consisting of an $800 million revolver priced at Libor plus 325 bps, a $1.05 billion term loan A priced at Libor plus 325 bps, and a $1.6 billion term loan B priced at Libor plus 400 bps with a 1.5% Libor floor that was sold at an original issue discount of 98½ and has 101 soft call protection for one year,

During syndication, the term loan A was upsized from $1 billion and the term loan B was upsized from $1.55 billion after the company's senior unsecured notes were downsized to $250 million from $400 million.

JPMorgan and Deutsche Bank acted as the joint lead arrangers and bookrunners on the deal for the King of Prussia, Pa.-based owner and operator of acute care hospitals and behavioral health care facilities and schools.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.