PVH, Reynolds break; Sorenson up; Aurora, SkillSoft set talk; U.S. Silica, Aspect tweak deals

By Sara Rosenberg

New York, May 4 - Phillips-Van Heusen Corp. and Reynolds Group Holdings Ltd. freed up for trading during Tuesday's market hours, with levels on the companies' term loans quoted above their original issue discount prices.

Also in trading, Sorenson Communications Inc.'s first-lien term loan regained some of the ground that it lost during the previous session when investors first got word of potential rate cuts by the Federal Communications Commission.

Over in the primary market, Aurora Diagnostics Inc. and SkillSoft plc came out with price talk on their credit facilities as the deals were presented to lenders during the session.

Additionally, U.S. Silica Co. made a number of changes to its in-market term loan, increasing the size, reverse flexing pricing and lowering the original issue discount, and Aspect Software Inc. reduced the original issue discount on its term loan B while adding a leverage-based pricing step down.

Phillips-Van Heusen frees up

Phillips-Van Heusen's credit facility hit the secondary market, with the U.S. term loan B quoted at par bid, par ¾ offered on the open and then one trader saw it move up to par ¾ bid, 101 1/8 offered, and a second trader saw it move to par ¾ bid, 101 offered.

The roughly $1.4 billion six-year term loan B is priced at Libor plus 300 basis points on the $1 billion U.S. piece and Euribor plus 325 bps on the €300 million piece. The tranche has a 1.75% Libor floor and was sold at an original issue discount of 991/2.

During syndication, the term loan B was downsized from $1.5 billion because the company's bond and equity offerings were upsized, pricing on the U.S. piece was lowered from initial talk of Libor plus 325 bps to 350 bps, pricing on the euro piece was cut from talk of Euribor plus 350 bps to 375 bps, and the original issue discount was tightened from 99.

Phillips-Van Heusen pro rata details

Phillips-Van Heusen's $2.35 billion senior secured credit facility (Ba2/BBB) also includes a $450 million five-year revolver and $500 million five-year term loan A.

Pricing on the revolver and the term loan A is Libor plus 300 bps on the U.S. pieces and Euribor plus 325 bps on the foreign pieces. The term loan A has a 1.75% Libor floor.

Upfront fees on the revolver and the term loan A were 100 bps on allocation for a $40 million commitment and 50 bps on allocation for a $20 million commitment.

Barclays Capital and Deutsche Bank are the global debt coordinators and bookrunners on the credit facility, with Barclays the left lead. Other bookrunners include Bank of America, Credit Suisse and RBC Capital Markets.

Phillips-Van Heusen buying Hilfiger

Proceeds from the credit facility will be used to help fund the acquisition of Tommy Hilfiger BV from Apax Partners LP for €2.2 billion, plus the assumption of €100 million in liabilities, and to refinance Phillips-Van Heusen's $300 million of existing senior unsecured notes due in 2011 and 2013.

The consideration to be paid to Apax includes €1.924 billion in cash and €276 million in Phillips-Van Heusen common stock.

Other financing is coming from $600 million of 7 3/8% senior notes due 2020, which was upsized from $525 million, and $382.4 million of common equity, which was upsized from$275 million, comprised of almost 5.8 million shares at a price of $66.50 per share.

Closing on the acquisition is expected to occur during the company's fiscal 2010 second quarter.

New York-based Phillips-Van Heusen and Tommy Hilfiger are apparel companies.

Reynolds Group breaks

Another deal to start trading on Tuesday was Reynolds Group's $800 million term loan (B1), with levels quoted at par bid, par 3/8 offered on the open and then moving up to par 1/8 bid, par ½ offered, according to traders.

Pricing on the term loan is Libor plus 425 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 993/4.

During syndication, the term loan was upsized from $750 million and the discount was tightened from 991/2.

Credit Suisse is the lead bank on the deal.

Reynolds funding acquisition

Proceeds from Reynolds Group's term loan, along with $1 billion of 8½% senior notes, will be used to fund the acquisitions of the Evergreen Packaging group of companies and the Whakatane Mill from Carter Holt Harvey Ltd.

The Evergreen Packaging group of companies manufacture fresh carton packaging systems for beverage products, primarily for the juice and milk end markets, and the Whakatane Mill is a paper mill located in New Zealand.

Closing on the acquisitions is expected to take place this month.

Reynolds Group is an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products.

Sorenson recoups some losses

Sorenson Communications' first-lien term loan moved higher in trading, getting back a portion of its losses from the previous day's activity, according to a trader.

The term loan was quoted at 89 bid, 91 offered, up from 86 bid at the close on Monday, the trader said. During the day on Monday, the debt had at one point dropped to the low-80s. On Friday, the loan was quoted at 98½ bid, 99½ offered.

Monday's massive fall was attributed to a document posted by the FCC that had investors concerned over potential rate cuts that could amount to up to 40% for video relay services reimbursement, which would affect Sorenson.

Sorenson is a Salt Lake City-based provider of industry-leading communications services and products.

Mylan bid up with paydown

In more trading happenings, Mylan Inc.'s term loan bid was better after the company announced plans for a prepayment, according to a trader.

The term loan was quoted at 99 7/8 bid, par 1/8 offered, versus 99 5/8 bid, par 1/8 offered during the previous session, the trader said.

Funds for the term loan paydown will come from the sale of $1 billion of senior notes.

Mylan is a Canonsburg, Pa.-based generic and specialty pharmaceutical company.

Aurora Diagnostics talk emerges

Moving to the primary, Aurora Diagnostics held a bank meeting on Tuesday to kick off syndication on its proposed $340 million credit facility (B1/B), and in connection with the launch, official price talk was announced, according to a market source.

Both the $110 million four-year revolver and the $230 million six-year term loan B were launched with talk of Libor plus 425 bps with a 2% Libor floor, the source said. This talk is in line with what the company had used for a model in its recent S-1 filing with the Securities and Exchange Commission.

In addition, the term loan B is being offered to lenders at an original issue discount of 981/2, the source continued.

Barclays, Morgan Stanley and UBS are the lead banks on the deal and are asking for commitments by May 18.

Aurora Diagnostics refinancing debt

Proceeds from Aurora Diagnostics' credit facility will be used to refinance existing bank debt, to redeem Aurora Holdings' class Z capital and for acquisitions, working capital and general corporate purposes.

Secured leverage is 3.5 times and total leverage is 4.4 times, the source added.

Closing on the credit facility is expected to occur before the company completes its proposed initial public offering of class A common stock - the net proceeds of which will be used to acquire Aurora Holdings' units and to increase the company's capitalization and financial flexibility, fund its growth, and for working capital and general corporate purposes.

Of the total revolver amount, $50 million will be available at the close of the facility and $60 million will be available upon completion of the IPO.

Aurora Diagnostics is a Palm Beach Gardens, Fla.-based diagnostics company.

SkillSoft releases guidance

SkillSoft also held a bank meeting on Tuesday to launch its new deal, at which time price talk on the term loan was announced, according to a market source.

The $325 million six-year term loan is being talked at Libor plus 475 bps with a 1.75% Libor floor and an original issue discount of 981/2, the source said.

The company's $365 million senior secured credit facility (Ba3) also includes a $40 million five-year revolver that is talked at Libor plus 450 bps.

Morgan Stanley and Barclays are the lead banks on the deal.

SkillSoft being acquired

Proceeds from SkillSoft's credit facility will be used to help fund the buyout of the company by an investor group, which is comprised of Berkshire Partners LLC, Advent International Corp. and Bain Capital Partners LLC.

The investor group is purchasing the company for $11.25 in cash per share. The fully diluted equity value of the transaction is $1.2 billion.

Other financing will come from equity. Also, the company has received a commitment for a $240 million senior unsecured bridge loan.

The buyout will be effected by means of a scheme of arrangement under Irish law.

SkillSoft is a Dublin, Ireland-based provider of on-demand e-learning and performance support services for global enterprises, government, education and small- to medium-sized businesses.

U.S. Silica modifies loan

U.S. Silica came out with a round of changes to size and pricing on its term loan (B1/BB-), which was strongly oversubscribed by last Fridays' original commitment deadline, according to a market source.

Under the revisions, the term loan is now sized at $165 million, up from $160 million, pricing is now Libor plus 400 bps, down from Libor plus 450 bps, and the original issue discount is now 991/2, down from 99, the source said.

As before, the loan includes a 1.75% Libor floor.

BNP Paribas is the lead bank on the deal that will be used to refinance existing debt and fund a dividend.

U.S. Silica is a Berkeley Springs, W.Va.-based producer of ground and unground silica sand, kaolin clay, aplite and related industrial minerals.

Aspect Software trims OID

Aspect Software reduced the original issue discount on its $500 million six-year term loan B to 99 from 981/2, and while pricing remained at Libor plus 450 bps, a step-down to Libor plus 425 bps was added when leverage is less than 3.5 times, according to a market source.

As before, the term loan carries a 1.75% Libor floor.

JPMorgan is the lead bank on the $530 million credit facility (Ba3/B+), which also includes a $30 million four-year revolver.

Proceeds will be used to refinance existing debt.

Aspect Software is a Chelmsford, Mass.-based software and IT services firm.

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