Spectrum, Styron, TowerCo, Houghton break; Rovi, Booz, Weather, CPI, Vertafore tweak deals

By Sara Rosenberg

New York, Jan. 28 - Spectrum Brands Holdings Inc.'s credit facility freed for trading on Friday, with the term loan quoted above its par sale price, and Styron LLC, TowerCo and Houghton International Inc. made their way into the secondary as well.

Also, Ford Motor Co.'s term loans were unchanged to a little bit weaker as the company announced fourth-quarter results that showed a year-over-year decrease in earnings and revenues and fell short of analysts' estimates.

Over in the primary market, Rovi Corp. came out with some changes to its bank deal, including lifting the size of the term loan A tranche, reducing the spread and Libor floor on the term loan B, and firming the original issue discount on the B loan at the tight end of talk.

Additionally, Booz Allen Hamilton Holding Corp. revised tranche sizes and set term loan B pricing at the low end of talk while removing the original issue discount, Weather Channel and CPI International Inc. cut the pricing, Libor floor and original issue discount on their term loans, and Vertafore Inc. trimmed the spread on its deal.

Furthermore, CPG International Inc. launched its credit facility in the morning in line with previous price talk, and Reynolds Group Holdings Ltd. announced plans to bring a refinancing deal to market.

Spectrum starts trading

Spectrum Brands' $680 million term loan hit the secondary market on Friday, with levels quoted at par ½ bid to open and then it moved up to 101 bid, 101½ offered, according to a trader.

Pricing on the term loan is Libor plus 400 basis points with a 1% Libor floor, after flexing from Libor plus 450 bps with a 1.5% floor, and it was sold at par. There is 101 soft call protection for one year.

Credit Suisse is the lead bank on the deal that will be used, along with cash on hand, to refinance the company's existing $680 million senior secured term loan at a price of 101 due to call protection. This existing loan due June 2016 is priced at Libor plus 650 bps with a 1.5% Libor floor and was sold at an original issue discount of 98 when it was obtained in the summer of 2010.

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

Styron trades atop 101

Styron's $1.4 billion 61/2-year term loan (B1/B+) freed up too, with levels quoted at 101 bid, 101½ offered on the break, and then it moved up to 101 5/8 bid, 102 1/8 offered, according to a trader.

Pricing on the loan is Libor plus 450 bps with a 1.5% Libor floor, and it was issued at par. There is 101 soft call protection for one year.

During syndication, the loan was upsized from $1.3 billion, pricing was reduced from Libor plus 500 bps, and the discount tightened from most recent talk of 99¾ to par and initial talk of 99.

Deutsche Bank, HSBC, Barclays and BMO are the lead banks on the deal that will be used to refinance an existing term loan, to repay revolver borrowings, to take out seller notes and to fund a dividend.

Styron is a diversified chemical manufacturer of emulsion polymers and plastics based in Midland, Mich.

TowerCo breaks

Another deal to start trading was TowerCo, with its $400 million six-year term loan quoted at 101 bid, 101½ offered, according to a trader.

Pricing on the loan is Libor plus 375 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 991/2.

During syndication, the term loan was upsized from $350 million and pricing firmed at the tight end of the Libor plus 375 bps to 400 bps with a discount of 99 to 99½ guidance.

The company's $440 million credit facility (Ba3/BB-) also includes a $40 million four-year revolver.

Morgan Stanley, TD Securities and Fifth Third Bank are the lead banks on the deal that will be used to refinance existing debt and fund a dividend.

TowerCo is a Cary, N.C.-based owner and leaser of communication towers.

Houghton frees to trade

Also breaking for trading was Houghton International, with the $450 million term loan B quoted at par ½ bid, 101½ offered on the open and then it moved up to 101¾ bid, 102½ offered, according to traders.

Pricing on the B loan is Libor plus 500 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

During syndication, the term loan B was upsized from $315 million as mezzanine debt was eliminated from the capital structure, and the original issue discount was tightened from 981/2.

The company's $500 million senior secured credit facility, which allocated late Thursday night, also includes a $50 million revolver priced at Libor plus 500 bps with a 1.75% Libor floor.

After the term loan B upsizing was announced, Standard & Poor's lowered the rating on the facility to B from B+. Moody's Investors Service left its B1 loan rating unchanged.

Houghton taps lead banks

Deutsche Bank, Bank of Ireland and GE Capital are the joint lead arrangers on Houghton's credit facility, with Deutsche the left lead.

Proceeds 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.

Leverage at close will be 4.3 times all senior. Before the changes to the capital structure, leverage was 3.1 times senior and 4.3 times total.

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

Ford steady to softer

Ford's term loans were flat to slightly lower on Friday after the company released quarterly numbers that came in below expectations, according to traders.

The term loan B-1 was quoted by one trader at par 1/8 bid, par 3/8 offered, unchanged on the day, and by a second trader at par 1/8 bid, par ½ offered, versus par ¼ bid, par ½ offered previously.

And, the term loan B-2 was quoted by the first trader at 99 7/8 bid, par 3/8 offered, unchanged from Thursday, and by the second trader at par 1/8 bid, par ½ offered, down from par ¼ bid, par 5/8 offered.

Ford sees less profit

For the fourth quarter, Ford reported net income of $190 million, or $0.05 per share, compared to net income of $886 million, or $0.25 per share, in the prior year.

The company said that its net income results include the negative impact of special items of $1 billion, primarily associated with a previously disclosed $960 million charge related to the completion of debt conversion offers that reduced outstanding Automotive debt by more than $1.9 billion.

Revenues for the quarter were $32.5 billion, down from $34.8 billion in the fourth quarter of 2009.

Ford is a Dearborn, Mich.-based automotive company.

Rovi reworks deal

Moving to the primary, Rovi went out with some revisions to its deal on Friday morning, including upsizing its five-year term loan A to $450 million from $300 million, according to a market source. Pricing on this tranche is set at Libor plus 250 bps with no Libor floor.

In addition, the $300 million seven-year term loan B was left unchanged in terms of size, but the spread was reduced to Libor plus 300 bps from talk of Libor plus 325 bps to 350 bps, the Libor floor was cut to 1% from 1.5%, and the original issue discount was set at 991/2, the low end of the 99 to 99½ guidance.

Commitments are due from lenders early in the Jan. 31 week.

Morgan Stanley, JPMorgan and Bank of America are the lead banks on the now $750 million deal (Ba1/BB+), up from $600 million, with Morgan Stanley the left lead.

Rovi funding repurchases

Proceeds from Rovi's oversubscribed credit facility will be used for general corporate purposes, including the repurchase of common stock and outstanding convertible notes.

As of late last year, the company's board had already authorized up to $400 million of stock purchases and up to $200 million of purchases of the outstanding convertible notes.

When the plan for the repurchases was first announced in December, the company had said that it was expecting to get a $500 million term loan for the transaction.

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

Booz makes changes

Also coming out with structural and pricing updates was Booz Allen, as it revised tranche sizes and finalized pricing on its term loan B at issuer-friendly levels, according to a market source.

Under the new structure, the term loan B is sized at $500 million, down from $700 million, the term loan A is sized at $500 million, up from $350 million, and the amended revolver is sized at $275 million, up from $250 million, the source said.

The shift to more term loan A and less term loan B debt was not much of surprise, since investors have been hearing from the start that if demand allowed for it, the move would be made being that the A loan is cheaper than the B loan. In fact, there had already been a shift, as prior to the deal's launch, it was thought that the A loan would be sized at $300 million and the B loan would be sized at $750 million.

To compensate for the reduction in funded term loan debt to $1 billion from $1.05 billion, the company will use more of its cash on hand for the refinancing of its $1.021 billion of bank debt and $222 million of mezzanine debt, the source continued.

Booz firms B pricing

Along with the revisions to tranche sizes, pricing on Booz Allen's term loan B was set at Libor plus 300 bps, the low end of the Libor plus 300 bps to 325 bps talk, a step down to Libor plus 275 bps when total net leverage is 1.75 times or less was added, and the debt is now being sold at par, as opposed to at 991/2. The 1% Libor floor and 101 soft call protection for one year were left intact.

As before, pricing on the term loan A and the revolver is Libor plus 250 bps with no Libor floor.

Allocations on the credit facility (Ba2/BBB-) are expected to go out sometime on Monday, the source added.

Bank of America, Credit Suisse, Barclays, Morgan Stanley, Goldman Sachs and Sumitomo are the lead banks on the deal.

Booz Allen Hamilton is a McLean, Va.-based provider of management and technology consulting services to the U.S. government in the defense, intelligence and civil markets.

Weather Channel tweaks loan

Weather Channel reduced pricing on its $1.625 billion six-year term loan B (Ba3) to Libor plus 325 bps with a 1% Libor floor and an offer price of par, compared to initial talk of Libor plus 400 bps with a 1.5% floor and a discount of 991/2, according to a market source. The 101 soft call protection for one year was left unchanged.

Deutsche Bank is the lead arranger on the deal and is a joint bookrunner with Credit Suisse, Goldman Sachs and JPMorgan.

Proceeds will be used to replace the company's existing $1.3 billion term loan B that is priced at Libor plus 350 bps with a 1.5% Libor floor, to refinance some junior debt and for general corporate purposes.

Weather Channel is an Atlanta-based media company devoted to bringing weather news via television, internet and mobile devices.

CPI cuts pricing

CPI International also modified pricing on its term loan due to strong demand, and asked that lenders recommit to the deal by 5 p.m. ET on Monday, according to a market source.

Pricing on the $150 million six-year term loan is now Libor plus 400 bps with a 1% Libor floor and an original issue discount of 991/2, compared to initial talk at launch of Libor plus 450 bps with a 1.75% floor and a discount of 99, the source said.

UBS Investment Bank is the lead bank on the $180 million senior secured credit facility (B+) that also includes a $30 million five-year revolver, and KKR Capital Markets LLC has signed on as syndication agent.

Proceeds will be used to help fund the acquisition of the company by Veritas Capital for $19.50 per share in cash and refinance existing debt. The transaction is valued at roughly $525 million.

CPI selling notes

Other funds for CPI's buyout 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.

A roadshow for the notes is set to kick off on Monday.

Closing is subject to stockholder approval and a number of customary regulatory and other conditions. The transaction is not subject to any financing conditions.

A stockholder meeting to vote on the transaction has been set for Feb. 10 and closing is targeted for Feb. 11.

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.

Vertafore flexes

Vertafore reduced pricing on its $550 million first-lien term loan to Libor plus 375 bps from Libor plus 400 bps, while leaving the 1.5% Libor floor, par issue price and 101 soft call protection for one year unchanged, according to a market source.

Credit Suisse and Bank of America are the lead banks on the deal, and asked for recommitments by 5 p.m. ET on Friday.

Proceeds will be used to refinance/reprice an existing $550 million first-lien term loan that is priced at Libor plus 500 bps with a 1.75% Libor floor.

The maturity on the new term loan is July 2016, the same as the existing loan's maturity.

Vertafore is a Bothell, Wash.-based provider of software and information to the insurance distribution channel.

CPG launches

In other news, CPG International held a bank meeting at 10 a.m. ET on Friday at the Parker Meridien to launch its proposed $350 million senior secured credit facility that is being led by Credit Suisse, UBS and Wells Fargo.

The facility consists of a $65 million five-year ABL revolver, a $235 million six-year first-lien term loan and a $50 million 61/2-year second-lien term loan.

The deal was launched in line with previous expectations, with the revolver talked at Libor plus 225 bps to 275 bps based on a grid, the first-lien term loan (B2/B) talked at Libor plus 475 bps with a 1.5% Libor floor and an original issue discount of 99, and the second-lien loan (Caa1/CCC+) talked at Libor plus 850 bps with a 1.5% Libor floor and a discount of 981/2, a market source said.

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

CPG refinancing debt

Proceeds from CPG International's credit facility will be used to refinance all of its existing debt, to fund working capital and for general corporate purposes.

At close, which is targeted for the first quarter, about $40 million is expected to be drawn under the revolver.

Leverage will be 3.7 times through the first-lien and 4.4 times total.

CPG is a Scranton, Pa.-based manufacturer of low-maintenance building products for residential, commercial and industrial markets.

Reynolds readies deal

Reynolds Group has scheduled a call for Monday to launch a $2.325 billion seven-year term loan E that is being talked at Libor plus 350 bps with a 1.5% Libor floor and a €250 million seven-year term loan B that is talked at Euribor plus 375 bps with a 1.5% floor, according to a market source.

Commitments are due on Feb. 4.

Credit Suisse is the left lead bank on the deal that will be used to refinance the company's existing senior secured credit facility.

Following the news, the company's existing term loan B was quoted in the secondary at par bid, par ¾ offered, down from 101 3/8 bid, 101¾ offered, a trader remarked.

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

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