Flexera breaks; Houghton may flex; CPI well-met; Paxton pulls loan; NexTag reworks loan

By Sara Rosenberg

New York, Jan. 19 - Flexera Software Inc.'s credit facility freed up for trading on Wednesday, with the term loan quoted well above its original issue discount price, and Charter Communications Inc.'s term loans were mostly steady following paydown news.

Over in the primary market, Houghton International Inc. is expected to come out with some issuer-friendly changes on its credit facility as the deal is already heavily oversubscribed after only being in market for about a week.

Also seeing a lot of interest from lenders is CPI International Inc.'s credit facility, as it too has filled out in just a few days of syndication, while on the flip side, Paxton Media Group LLC opted to pull its struggling credit facility from market and will be approaching guys with an amendment instead.

Another deal that had been fighting to get done is NexTag Inc., and in order to push things over the edge, the company, in a second round of changes, downsized its term loan B and widened the original issue discount.

In other primary happenings, Rovi Corp. and GEO Group released price talk as their new deals were presented to lenders during market hours, and Attachmate Corp. and Spectrum Brands Holdings Inc. launched on Wednesday as well.

Flexera starts trading

Flexera Software's credit facility hit the secondary market on Wednesday, with the $200 million term loan B quoted at 99 bid, par ½ offered on the open and then it moved up to par bid, 101 offered, according to traders.

Pricing on the term loan B is Libor plus 575 basis points with a 1.75% Libor floor, and it was sold at an original issue discount of 98. There is soft call protection of 102 in year one and 101 in year two.

During syndication, pricing on the B loan, as well as on a $15 million revolver, was increased from Libor plus 525 bps, and call protection was added to the term loan B.

Barclays Capital and RBC Capital are the lead banks on the $215 million credit facility (B2/BB-) that will be used to refinance existing debt and fund a dividend payment.

Flexera is a Schaumburg, Ill.-based provider of software to help simplify the business relationship between software producers and enterprises.

Charter fairly steady

Charter Communications' term loans were relatively flat following the company's announcement that it will repay some outstanding term loan debt using proceeds from a 7% senior unsecured notes offering that was upsized to $300 million from $250 million, according to traders.

The term loan B-1 was quoted by traders at par 1/8 bid, par 3/8 offered, with one trader placing the paper down from par ¼ bid, par 5/8 offered and another calling it unchanged on the day, the term loan B-2 was quoted by at 102 bid, 102½ offered, in line with previous levels, the term loan C was quoted at par ½ bid, par ¾ offered, up an eighth of a point, and the third-lien term loan was quoted at 98¾ bid, 99¼ offered, unchanged on the day.

One trader remarked that it's the B-1 and B-2 that are getting paid down and that will be done at par. He explained that the B-2 is still trading in the 102s since it's only a partial repayment and the coupon on the paper is pretty steep.

Charter is a St. Louis-based broadband communications company.

Houghton revisions expected

Houghton International's $315 million term loan B is more than three times oversubscribed since launching on Jan. 11, and as a result of the strong demand, some sources are anticipating that pricing will tighten.

Currently, the term loan B is being talked at Libor plus 500 bps with a 1.75% Libor floor and an original issue discount of 981/2. There is 101 soft call protection for one year.

The company's $365 million senior secured credit facility (B1/B+) also includes a $50 million revolver talked at Libor plus 500 bps with a 1.75% Libor floor and a discount of 98½ as well.

Deutsche Bank, Bank of Ireland and GE Capital are the joint lead arrangers on the deal, with Deutsche the left lead.

Houghton funding acquisition

Proceeds from Houghton's credit facility will be used to fund the acquisition of Royal Dutch Shell plc's Metalworking and Metal Rolling Oils business, a specialty fluid manufacturer in the metal working and metal rolling fluids marketplace, and to refinance existing senior secured debt.

The transaction is anticipated to close early this year, subject to regulatory approval.

Without synergy adjustments, senior leverage will be around the mid-2 times and total leverage will be in the high-3 times.

Houghton is a Valley Forge, Pa.-based developer and producer of specialty chemicals, oils and lubricants for the metalworking, automotive, steel and aluminum industries.

CPI nets interest

Houghton isn't the only name to catch attention. CPI International's $180 million senior secured credit facility, which just launched with a bank meeting on Jan. 13, is fully subscribed and "has been for a bit now," a market source told Prospect News.

The facility consists of a $150 million six-year term loan and a $30 million five-year revolver, with both tranches talked at Libor plus 450 bps with a 1.75% Libor floor and an original issue discount of 99.

Commitments are due on Jan. 27 and closing is targeted for Feb. 11.

UBS Investment Bank is the lead bank on the deal, and KKR Capital Markets LLC signed on as syndication agent.

CPI being acquired

Proceeds from CPI's credit facility will be used to help fund the acquisition of the company by Veritas Capital for $19.50 per share in cash. The transaction is valued at roughly $525 million.

Other funds for the acquisition will come from $215 million of senior notes that are backed by a commitment for a $215 million senior unsecured bridge loan and from $220 million of equity.

Closing is subject to stockholder approval, which will be sought at a stockholder meeting on Feb. 10, and a number of customary regulatory and other conditions. The transaction is not subject to any financing conditions.

CPI is a Palo Alto, Calif.-based provider of microwave, radio frequency, power and control services for critical defense, communications, medical, scientific and other applications.

Paxton cancels new deal

Meanwhile, Paxton Media Group has officially pulled its proposed $240 million credit facility (B2/B+) from market after trying since November to fill the transaction out. It is planning instead to launch an amendment to its existing bank group, according to a market source.

The refinancing credit facility that was being led by Wells Fargo and U.S. Bank consisted of a $10 million five-year revolver and a $20 million three-year term loan A, both talked at Libor plus 450 bps with no Libor floor, and a $210 million six-year term loan B talked at Libor plus 550 bps with a 1.75% Libor floor and an original issue discount of 98.

Details on the amendment that the company will now be doing are not expected to come out until a lender call is held at 2 p.m. ET on Thursday, the source said.

Wells Fargo is lead on the Paducah, Ky.-based newspaper and television company's amendment.

NexTag tweaks deal

NexTag came out with more revisions to its credit facility, this time downsizing the five-year term loan B to $150 million from $200 million and widening the original issue discount to 93½ from most recent talk of 97½ and initial talk at launch of 99, according to a market source.

Pricing on the loan was left at Libor plus 550 bps, where it was moved earlier this month from talk of Libor plus 475 bps to 500 bps, and the 1.5% Libor floor was left intact.

Additionally, the term loan B still includes the 101 soft call protection for one year that had been added during syndication.

As part of the earlier changes, the maturity on the B loan had been shortened from seven years, amortization was increased to 5% in years one and two, 10% in year three, 15% in year four and 65% in year five, and the credit agreement provided that no further dividends were to be allowed.

NexTag getting revolver

NexTag's now $200 million, down from $250 million, credit facility (B1/BB-) also provides for a $50 million revolver.

Deutsche Bank, JPMorgan and Morgan Stanley are the lead arrangers on the deal, with Deutsche the left lead.

Proceeds will be used to fund a distribution to shareholders and for general corporate purposes.

Syndication of the credit facility was expected to wrap on Wednesday and allocations are targeted to go out later this week.

NexTag is a San Mateo, Calif.-based comparison shopping website for products and services.

CRC lifts spread

CRC Health Corp. flexed pricing on its extended term loan to Libor plus 450 bps from initial talk of Libor plus 375 bps and added 101 soft call protection for one year, according to a market source.

The extended term loan will mature in November 2015.

Any non-extended term loan debt, which matures in February 2013, will continue to be priced at Libor plus 225 bps.

The company is also planning on extending its revolver to August 2015 from February 2012.

Citigroup is the lead bank on the amend and extend for the Cupertino, Calif.-based provider of substance abuse treatment and adolescent youth services.

Rovi guidance emerges

Switching to deals just hitting the market, Rovi held a bank meeting on Wednesday morning to kick off syndication on its proposed bank debt, and in connection with the launch, talk on the term loan B was announced, according to a market source.

The $300 million seven-year B loan is being guided at Libor plus 325 bps to 350 bps with a 1.5% Libor floor and an original issue discount of 99 to 991/2, the source said.

In addition to the term loan B, the company is getting a $300 million term loan A.

The company announced plans to come to market with a new term loan back in December, but at that time, it was said that the deal would be sized at $500 million.

Rovi lead banks

Morgan Stanley, JPMorgan and Bank of America are the lead banks on Rovi's new term loans, with Morgan Stanley the left lead.

Proceeds will be used for general corporate purposes, including the repurchase of common stock and outstanding convertible notes.

The company's board has already authorized up to $400 million of stock purchases and up to $200 million of purchases of the outstanding convertible notes.

Rovi is a Santa Clara, Calif.-based provider of next-generation guidance services, including TotalGuide, discovery, metadata, advertising and networking technologies.

GEO sets talk

Continuing on the price talk front, GEO Group launched its $250 million credit facility at Libor plus 275 basis points to 300 bps with no Libor floor, according to a market source, who said that the deal is targeted towards banks, not institutions.

The facility consists of a $100 million revolver and a $150 million term loan A-2. The tranches are being sold as a strip, the source added.

BNP Paribas is the lead bank on the deal that will be used to help fund the acquisition of Behavioral Interventions Inc., a Boulder, Colo.-based provider of electronic monitoring services, for $415 million in an all-cash transaction, excluding transaction-related expenses.

Closing is anticipated in the first quarter, subject to regulatory approval and customary conditions.

GEO is a Boca Raton, Fla.-based provider of correctional, detention and residential treatment services to government agencies.

Attachmate launches

Also launching with a bank meeting on Wednesday was Attachmate's $1.09 billion senior secured credit facility that is being led by Credit Suisse, RBC, Goldman Sachs and Citadel, with Credit Suisse the left lead.

As was already reported, the facility consists of $40 million five-year revolver and an $825 million six-year first-lien term loan, with both of these tranches talked at Libor plus 575 bps, and a $225 million 61/2-year second-lien term loan talked at Libor plus 950 bps. All tranches have a 1.75% Libor floor.

The first-lien term loan is being offered at 981/2, while the second-lien loan is being offered at 98.

And. the second lien is non-callable in the first year, then at 103 in year two, 102 in year three and 101 in year four.

Commitments are due on Feb. 4.

Attachmate buying Novell

Proceeds from Attachmate's credit facility, along with $425 million of equity, will be used to fund the acquisition of Novell Inc. for $6.10 per share in cash in a transaction valued at $2.2 billion.

Novell has also entered into a definitive agreement for the concurrent sale of certain intellectual property assets to CPTN Holdings LLC, a consortium of technology companies organized by Microsoft Corp., for $450 million in cash. The cash payment is reflected in the price to be paid by Attachmate.

Closing on the acquisition is expected to occur in the first quarter, subject to regulatory approvals and clearance under the Hart-Scott-Rodino Act, the completion of the sale of assets to CPTN Holdings and approval by Novell's stockholders.

Attachmate is a Seattle-based provider of access and integration software for legacy systems. Novell is a Waltham, Mass.-based developer, seller and installer of enterprise software.

Spectrum holds call

Yet another deal to launch during the session was Spectrum Brands' $680 million term loan that is talked at Libor plus 450 bps with a 1.5% Libor floor and is being offered at par. There is 101 soft call protection for one year.

Credit Suisse is the lead bank on the deal that was presented to lenders through a conference call at noon ET.

Proceeds, along with cash on hand, will be used to refinance the company's existing $680 million senior secured term loan at a price of 101. The existing loan is set to mature in June 2016 and is priced at Libor plus 650 bps with a 1.5% Libor floor and had been issued at a discount of 98.

Spectrum Brands, a Madison, Wis.-based consumer products company, expects to close on the transaction sometime this month.

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