Vonage prices, breaks; Applied Systems frees up; AutoTrader, Novelis, HDT, MGM tweak deals

By Sara Rosenberg

New York, Dec. 9 - Vonage Holdings Corp. flexed pricing higher on its term loan and finalized the original issue discount at the high end of guidance, and with those details taken care of, the deal was then able to free up for trading.

Also hitting the secondary market on Thursday was Applied Systems Inc., with its first- and second-lien term loans quoted above their original issue discount prices.

In more loan happenings, AutoTrader.com announced a number of changes to its credit facility, including moving some funds from its term loan B into its revolver and term loan A and lowering pricing on everything.

Furthermore, Novelis Inc. reduced the spread and set the discount on its term loan B, HDT Global revised the size of its term loan B, and Metro-Goldwyn-Mayer Inc. increased pricing and firmed the discount on its term loan.

Additionally, CCC Information Services Inc. is anticipated to come out with a reverse flex shortly being that its loan is well oversubscribed, and Allied Specialty Vehicles Inc. is looking at reworking pricing and the discount and sweetening other terms as well in order to get its deal done.

Vonage revises spread

Vonage raised pricing on its $200 million senior secured term loan (B2/BB) to Libor plus 800 basis points from Libor plus 750 bps, while leaving the 1.75% Libor floor intact, according to a market source.

Also, the original issue discount firmed up at 97, the wide end of the initial 97 to 98 talk, the source said.

The 101 soft call protection for one year under the term loan, as well as the amortization of 10% per year, was left unchanged.

Bank of America, Deutsche Bank and Citigroup are the lead banks on the deal, with Bank of America the left lead.

Vonage starts trading

After pricing was finalized, Vonage's term loan made its way into the secondary market, with levels quoted at 98 bid, 98½ offered, according to a trader.

Proceeds from the new debt, along with cash on hand, will be used to refinance existing term loans totaling $194 million.

Following completion of the refinancing, the company expects total leverage at or below 1.5 times debt to EBITDA, net debt at around 1.1 times and liquidity of $55 million in cash.

Closing on the new term loan is expected to occur prior to Dec. 31.

Vonage refi details

To complete the refinancing, Vonage will exercise its right to retire its existing first-lien debt under the make-whole provisions of the credit agreement and retire its second-lien debt at a discount of more than 25% to the contractual make-whole amount.

As of Oct. 31, the principal amount of the first-lien loans was $99.5 million, accrued but unpaid interest was $3.9 million, and the required make-whole payment was $20.6 million. The principal amount of the second-lien loans was $89.7 million as of Aug. 30, plus a payment of $72.8 million.

Meanwhile, the company's third-lien notes will be converted into 8.3 million shares of its common stock. In addition, the third-lien noteholders will receive a cash payment of $2.2 million plus accrued interest of $1.1 million.

Vonage is a Holmdel, N.J.-based provider of communications services connecting individuals and social networks through broadband devices.

Applied Systems breaks

Applied Systems' credit facility also freed up for trading on Thursday, with the $300 million first-lien term loan quoted at par bid, par ½ offered, and the $175 million second-lien term loan quoted at par bid with no offers, according to a trader.

Pricing on the first-lien term loan is Libor plus 400 bps, pricing on the second-lien term loan is Libor plus 775 bps, and both tranches have a 1.5% Libor floor and were sold at an original issue discount of 99.

Call protection on the second-lien loan is 103 in year one, 102 in year two and 101 in year three.

During syndication, the first-lien term loan was upsized from $280 million and pricing was cut from talk of Libor plus 450 bps to 475 bps. Also, pricing on the second-lien loan was lowered from Libor plus 825 bps and the discount tightened from 981/2.

Applied Systems lead banks

Credit Suisse and JPMorgan are the lead banks on Applied Systems' credit facility, with Credit Suisse the left lead.

The $505 million deal also includes a $30 million revolver.

Proceeds will be used to refinance existing debt and fund a dividend payment.

Applied Systems is a University Park, Ill.-based provider of insurance agency management systems.

AutoTrader reworks facility

Back over in the primary, AutoTrader.com made revisions to tranche sizes and pricing on its $950 million credit facility (Ba3/BB+) and is asking for recommitments by 10 a.m. ET on Friday, with plans to allocate no later than Monday, according to a market source.

Under the new structure, the five-year revolver is sized at $200 million, up from $150 million, and the five-year term loan A is sized at $250 million, up from $200 million, and pricing on both of these tranches was trimmed to Libor plus 300 bps from Libor plus 350 bps.

As for the six-year term loan B, that is sized at $500 million, down from $600 million, pricing was reduced to Libor plus 325 bps from talk of Libor plus 375 bps to 400 bps and the original issue discount was tightened to 99½ from 99. The 1.5% Libor floor was left unchanged.

There has been talk since last week that the credit facility would undergo some issuer-friendly changes being the deal was well oversubscribed by the time books closed on Friday.

AutoTrader buying Kelley

Proceeds from AutoTrader.com's credit facility will be used to fund the acquisition of Irvine, Calif.-based Kelley Blue Book, a provider of new and used vehicle pricing information, and its sister companies, CDMdata and CDM Dealer Services.

Closing on the transaction is expected by the end of the year.

Wells Fargo, JPMorgan, Goldman Sachs, SunTrust, Fifth Third Bank and UBS are the lead banks on the credit facility, with Wells Fargo the left lead.

AutoTrader.com is an Atlanta-based automotive marketplace and consumer information website.

Novelis slashes pricing

Novelis lowered pricing on its $1.5 billion senior secured six-year term loan B (Ba2/BB-) to Libor plus 375 bps from talk of Libor plus 400 bps to 425 bps and firmed the original issue discount at 99, the low end of the 98½ to 99 talk, according to a market source.

Also, the company added a step-down to the B loan to Libor plus 350 bps at less than 3.5 times leverage, the source said.

Left unchanged were the loan's 1.5% Libor floor and 101 soft call protection for one year.

Bank of America, Citigroup, JPMorgan, RBS and UBS are the lead banks on the deal.

The company's $2.3 billion credit facility also includes an $800 million asset-based loan.

Novelis funding recap

Proceeds from Novelis' credit facility, along with $2.5 billion of senior notes, will be used to refinance a $1.125 billion term loan and an $800 million asset-based loan, to fund a tender offer for $1.124 billion of 7¼% senior notes and $185 million of 11½% senior notes, and to fund a $1.7 billion distribution to Novelis' parent company.

The tender offer expires on Dec. 28.

Completion of the recapitalization is conditioned on the company raising at least $4 billion from one or more offerings of senior notes and the entry into the new credit facility.

Novelis is an Atlanta-based aluminum-rolled products and beverage can recycling company.

HDT cuts size

HDT Global downsized its six-year term loan B to $275 million from $300 million and left price talk at Libor plus 475 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

JPMorgan and Bank of America are the lead banks on the now $325 million credit facility (B+), down from $350 million, which also includes a $50 million revolver.

Proceeds will be used to refinance existing debt and to fund a dividend payment. The dividend was reduced with the change in the B loan size.

HDT Global is a Solon, Ohio-based manufacturer of deployable, expeditionary systems and high-performance aerial delivery systems for the U.S. Military, Allied Forces, Homeland Security and Emergency Management agencies.

MGM revises pricing

Metro-Goldwyn-Mayer lifted pricing on its $250 million six-year term loan to Libor plus 500 bps from Libor plus 400 bps and set the original issue discount at 981/2, the wide end of the 98½ to 99 talk, according to a market source, who said that the 1.5% Libor floor was left intact.

JPMorgan is the lead bank on the $500 million exit financing deal (B1/B+) that also includes a $250 million five-year revolver.

Recommitments were due on Thursday and allocations are expected to go out mid-next week.

Metro-Goldwyn-Mayer is a Los Angeles-based motion picture, television, home video and theatrical production and distribution company.

CCC flex expected

Accounts are anticipating that CCC Information Services will reduce pricing on its $350 million five-year term loan B as the tranche was well-oversubscribed by Thursday's commitment deadline, according to a market source.

Price talk at launch on the B loan was Libor plus 450 bps with a 1.5% Libor floor and an original issue discount of 99.

The company's $400 million credit facility (B1/B+) also includes a $50 million 41/2-year revolver that is talked at Libor plus 450 bps with a 1.5% Libor floor as well.

JPMorgan and Barclays are the lead banks on the deal that will be used to refinance existing debt.

CCC is a Chicago-based provider of advanced software, workflow tools and enabling technologies to the automotive claims and collision repair industries.

Allied mulls changes

Allied Specialty Vehicles is talking its $165 million six-year term loan B to some investors at Libor plus 700 bps to 800 bps, up from the original Libor plus 525 bps to 550 bps guidance, although no official flex has been made, according to a market source.

Additionally, the original issue discount on the deal is being discussed in the 97 to 98 area, as opposed to just at 98, while the 1.75% Libor floor is expected to be unchanged, the source said.

Furthermore, there's talk of adding call protection and increasing amortization, the source added.

JPMorgan is the left lead bank on the $265 million recapitalization deal, which also provides for a $100 million five-year asset-based revolver.

Allied Specialty is a manufacturer of specialty vehicles in the recreational vehicle, fire, ambulance, bus, terminal truck and industrial sweeper markets.

AbitibiBowater exits

In other news, AbitibiBowater Inc. announced that it emerged from bankruptcy protection, and as part of the exit, the company got a $600 million four-year asset-based revolver priced at Libor plus 300 bps with a 75 bps unused fee.

Citigroup, Barclays and JPMorgan acted as the lead banks on the deal.

Proceeds will be to fund working capital and general corporate purposes.

AbitibiBowater is a Montreal-based producer of newsprint, commercial printing papers, market pulp and wood products.

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