Eldorado breaks; Swift Energy pulls loan; Hostess, Alion, Consolidated Aerospace set talk

By Sara Rosenberg

New York, July 16 – Eldorado Resorts Inc. trimmed pricing on its term loan, and then the debt surfaced in the secondary market on Thursday afternoon with levels quoted above its original issue discount.

In more happenings, Swift Energy Co. pulled its term loan from market, Hostess Brands LLC, Alion Science and Technology Corp. and Consolidated Aerospace Manufacturing LLC disclosed price talk with launch, V. Group came out with original issue discount guidance, and Avago Technologies Ltd. joined next week’s new issue calendar.

Eldorado cuts spread, trades

Eldorado Resorts lowered pricing on its $425 million term loan to Libor plus 325 basis points from talk of Libor plus 375 bps to 400 bps, while keeping the 1% Libor floor, original issue discount of 99.5 and 101 soft call protection for one year intact, according to a market source.

The company’s $575 million credit facility (Ba3/BB-) also includes a $150 million revolver.

With final terms in place, the debt freed up for trading on Thursday, and the term loan was seen quoted at 100¼ bid, 100¾ offered, a trader remarked.

J.P. Morgan Securities LLC and Macquarie Capital (USA) Inc. are leading the deal.

In addition to the credit facility, the company plans to get $375 million of senior notes due 2023 and issue roughly $60 million in stock.

Eldorado funding acquisition

Proceeds from Eldorado Resorts’ new debt, stock and cash on hand will be used to fund the purchase of MGM Resorts International’s 50% interest in the Silver Legacy Resort Casino Reno (Eldorado already owns the other 50%) and the assets of Circus Circus Reno for total consideration of $72.5 million cash, and repay amounts outstanding under the Silver Legacy credit facility, which totaled about $60 million at March 31.

Furthermore, proceeds from the financings will be used to redeem 8 5/8% senior secured notes due 2019 issued by Eldorado and 11½% senior secured second-lien notes due 2019 issued by MTR Gaming Group Inc.

Closing on the acquisitions is expected by year-end, subject to regulatory approvals and other customary conditions.

Eldorado Resorts is a Reno, Nev.-based casino entertainment company.

Swift Energy shelved

In other news, Swift Energy withdrew its $640 million five-year first-lien term loan (B+) from market due to unfavorable conditions, according to sources.

The loan was talked in the 10.5% fixed-rate area.

J.P. Morgan Securities LLC was leading the deal that was going to be used to repay all outstanding borrowings under the company’s existing revolver, which was $263 million at May 31, and for general corporate purposes, including capital expenditures.

Swift Energy is a Houston-based developer, explorer, acquirer and operator of oil and gas properties.

Hostess talk surfaces

Hostess held its bank meeting at 2 p.m. ET on Thursday, and a few hours before the event kicked off, price talk on its first-and second-lien term loan was announced, according to a market source.

The $825 million seven-year first-lien covenant-light term loan (B+) is talked at Libor plus 350 bps to 375 bps with a 1% Libor floor and an original issue discount of 99.5, and the $400 million eight-year second-lien covenant-light term loan (CCC+) is talked at Libor plus 750 bps to 775 bps with a 1% Libor floor and a discount of 99, the source said.

As previously reported, the first-lien term loan has 101 soft call protection for six months, and the second-lien term loan has call protection of 102 in year one and 101 in year two.

The company’s $1,325,000,000 credit facility also includes a $100 million revolver (B+).

Commitments are due at 5 p.m. ET on July 30.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., UBS AG, Morgan Stanley Senior Funding Inc., RBC Capital Markets and Nomura are leading the deal that will be used by the Kansas City, Mo.-based sweet baked goods company to refinance existing debt and fund a shareholder dividend.

Alion reveals guidance

Alion Science and Technology released price talk on its first-and second-lien term loan with its morning bank meeting, a source remarked.

The $280 million first-lien term loan is talked at Libor plus 500 bps to 550 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, and the $120 million second-lien term loan is talked at Libor plus 900 bps to 950 bps with a 1% Libor floor, a discount of 99 and call protection of 102 in year one and 101 in year two, the source continued.

Jefferies Finance LLC, Credit Suisse Securities (USA) LLC and UBS AG are leading the $400 million in term loans that will be used to refinance existing debt.

Commitments are due concurrent with pricing of the company’s planned public offering, which is expected on July 28 to 29, the source added. The loans are conditioned on the IPO.

Alion is a McLean, Va.-based research and development, IT and operational services company.

Consolidated Aerospace terms

Consolidated Aerospace Manufacturing came out with talk of Libor plus 350 bps to 375 bps with a 1% Libor floor and an original issue discount of 99.5 on its $240 million seven-year covenant-light term loan that launched with a bank meeting during the session, according to a market source.

The term loan has 101 soft call protection for six months.

The company’s $265 million credit facility (B2/BB-) also includes a $25 million five-year revolver.

Commitments are due on July 30, the source said.

Citizens Bank is leading the deal that will be used to refinance existing debt.

Consolidated Aerospace is a Fullerton, Calif.-based manufacturer of components principally for the aerospace industry.

V. Group OID emerges

V. Group launched with a call its fungible $90 million add-on first-lien term loan with original issue discount talk of 99 to 99.5, a market source remarked.

The add-on term loan is priced at Libor plus 400 bps with a 1% Libor floor, which matches existing first-lien term loan pricing.

Commitments are due on July 22.

Goldman Sachs Bank USA is leading the deal that will be used to help repay the company’s second-lien term loan.

V. Group is a supplier of a broad range of specialist outsourcing services to asset owners and operators in the shipping, offshore, leisure and defense sectors.

Vistage launches

Vistage launched its $165 million credit facility (B2/B) with a morning meeting, and asked lenders to get their commitments in by July 30, a source said.

The facility consists of a $15 million revolver and a $150 million term loan B.

As reported previously, the term loan B is talked at Libor plus 475 bps to 500 bps with a 1% Libor floor and an original issue discount of 99, and includes 101 soft call protection for six months and a net leverage covenant.

SunTrust Robinson Humphrey Inc. and Credit Suisse Securities (USA) LLC are leading the deal that will be used to refinance existing debt and fund a dividend.

Vistage is a San Diego, Calif.-based for-profit membership organization of CEOs.

Avago on deck

Also in the primary market, Avago set a bank meeting for 9:30 a.m. ET in New York on Wednesday to launch a $3.75 billion five-year credit facility, according to a market source.

The facility consists of a $500 million revolver, and a $3.25 billion term loan A priced at Libor plus 150 bps to 200 bps, subject to a ratings-based grid, the source said.

Commitments are due at 5 p.m. ET on Aug. 5.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Barclays, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are leading the deal.

Avago buying Broadcom

Proceeds from Avago’s credit facility will be used to refinance existing debt and help fund the acquisition of Broadcom Corp. for $17 billion in cash consideration and the economic equivalent of about 140 million Avago ordinary shares, valued at $20 billion as of May 27. Broadcom shareholders will own around 32% of the combined company.

Closing is expected in the first quarter of 2016, subject to regulatory approvals in various jurisdictions, and the approval of Avago’s and Broadcom’s shareholders.

Avago is a designer, developer and supplier of analog semiconductor devices with headquarters in Singapore and San Jose, Calif. Broadcom is an Irvine, Calif.-based provider of semiconductor solutions for wired and wireless communications.

The combined company will adopt the name Broadcom Ltd.

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