Performance Food, Warner Music, CompuCom, Key Safety break; deal updates abound in primary

By Sara Rosenberg

New York, May 7 - Performance Food Group Inc.'s term loan hit the secondary market on Tuesday, with levels quoted above its original issue discount price, and Warner Music Group Corp., CompuCom Systems Inc. and Key Safety Systems Inc. began trading as well.

Over in the primary, WCA Waste Corp. lowered the coupon on its term loan, Seminole Hard Rock Entertainment Inc. upsized its loan, while trimming the spread and the Libor floor, and Coinmach Corp. upsized its term loan B, cut pricing and set the discount at the tight side of talk.

Also, On Assignment Inc. flexed pricing on its B loan lower and tightened the offer price, Press Ganey Associates Inc. (PGA Holdings Inc.) lifted the size of its first-lien term loan, and Grocery Outlet Inc. upsized its add-on loan while firming pricing at the low end of guidance.

In addition, US Airways Group Inc., Pacific Drilling SA and Brickman Group Holdings Inc. details surfaced as the deals were presented to investors during the session.

Furthermore, Hoyts and Burlington Coat Factory Warehouse Corp. released talk ahead of their launches, and Murray Energy Corp. and Ozburn-Hessey Holding Co. LLC joined the forward calendar.

Performance Food frees up

Performance Food Group's $750 million 61/2-year covenant-light second-lien term loan (B3/CCC+) broke for trading on Tuesday, with levels quoted at par bid, par ½ offered, according to a market source.

Pricing on the term loan is Libor plus 525 basis points with a step-down to Libor plus 500 bps if net leverage is less than 4.25 times. There is a 1% Libor floor and call protection of 102 in year one and 101 in year two on all voluntary prepayments, and the debt was sold at an original issue discount of 991/2.

Last week, the term loan was upsized from $530 million, pricing was reduced from talk of Libor plus 550 bps to 575 bps, the step-down was added and the discount was tightened from 99.

Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, BMO Capital Markets, J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Barclays and Blackstone Capital Markets are leading the deal.

Proceeds will be used by the Richmond, Va.-based foodservice distributor to refinance existing mezzanine notes, and the funds raised through the upsizing will be used to fund a dividend.

Warner Music trading

Warner Music Group's loan emerged in the secondary market too, with the $820 million first-lien delayed-draw covenant-light term loan (Ba3/BB-) due July 2020 quoted at par bid, par ½ offered, and the $490 million covenant-light repricing term loan due July 2020 quoted at par ¾ bid, 101½ offered, according to a market source.

Pricing on the term loans is Libor plus 275 bps with a 1% Libor floor. The delayed-draw loan was sold at an original issue discount of 993/4, while the repricing loan was issued at par. All of the debt has 101 soft call protection through Dec. 31, 2013.

Included in the delayed-draw loan is a ticking fee of a third of the spread from days 31 to 60, two thirds of the spread from days 61 to 90 and the full spread thereafter.

The delayed-draw loan is split between a $710 million tranche and a $110 million tranche as they are expected to fund at different times due to timing of regulatory approvals.

Once all of the term loans are fully funded, they are expected to trade as a single tranche.

Warner Music lead banks

Credit Suisse Securities (USA) LLC, Barclays, UBS Investment Bank, Macquarie and Nomura are the lead banks on Warner Music's $1.31 billion deal.

Proceeds from the delayed-draw loan will be used to fund the acquisition of Parlophone Label Group from Universal Music Group for £487 million (around $765 million) and for general corporate purposes, and the repricing loan is taking existing term loan pricing down from Libor plus 400 bps with a 1.25% Libor floor.

The $490 million size on the repricing loan includes a planned $100 million prepayment.

During syndication, pricing on the delayed-draw loan was lowered from Libor plus 325 bps and the original issue discount was revised from 991/2, and the repricing loan was added to the transaction.

Existing lenders are being paid out at 101 for the repriced term loan amounts.

Closing on the acquisition is expected to occur mid-year, subject to regulatory approvals and a consultation procedure with employee representatives.

Warner Music is a New York-based music content company.

CompuCom tops OID

CompuCom Systems' $605 million seven-year senior secured term loan B (B1/B) also began trading, with levels quoted by one source at par 5/8 bid, 101 5/8 offered and by a second source at par ¾ bid, 101½ offered.

Pricing on the loan is Libor plus 325 bps with a 1% Libor floor, and it was sold at a discount of 991/2. There is 101 soft call protection for six months.

During syndication, the loan was upsized from $580 million as the company's bond deal was downsized to $225 million from $250 million, pricing was trimmed from Libor plus 350 bps, the floor was revised from 1.25% and the discount was tightened from 99.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, BMO Capital Markets, Jefferies Finance LLC and Sumitomo Mitsui Banking Corp. are leading the deal that will be used with the bonds to help fund the buyout of the company by Thomas H. Lee Partners LP from Court Square Capital Partners.

CompuCom is a Dallas-based IT services specialist.

Key Safety breaks

Key Safety Systems' credit facility was another deal to free up, with the $400 million five-year first-lien term loan B quoted at 101 bid, 101½ offered, a trader remarked.

Pricing on the term loan is Libor plus 375 bps with a 1% Libor floor, and it was sold at a discount of 991/2. There is 101 soft call protection for one year.

Last week, the term loan was upsized from $395 million, pricing was reduced from Libor plus 400 bps and the floor was cut from 1.25%.

The company's $470 million credit facility (B1/B+) also includes a $70 million 41/2-year revolver that was downsized from $75 million when the term loan was upsized.

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

Key Safety Systems is a Sterling Heights, Mich.-based supplier of automotive safety components and systems.

WCA flexes lower

Moving to the primary, WCA Waste trimmed pricing on its $272,250,000 first-lien term loan due March 2018 to Libor plus 300 bps from Libor plus 325 bps, while keeping the 1% Libor floor, par offer price and 101 repricing protection for one year intact, ccording to a market source.

The company's $372,250,000 credit facility (B1) also provides for a $100 million revolver due March 2017 priced at Libor plus 400 bps with no Libor floor and a par offer price.

Recommitments were due at 5 p.m. ET on Tuesday, the source said.

Credit Suisse Securities (USA) LLC and Macquarie Capital are leading the deal that will be used to reprice both the existing term loan and the existing revolver from Libor plus 425 bps with a 1.25% Libor floor.

In connection with the repricing, the Houston-based non-hazardous solid-waste services company is revising covenants to flat line them at the current levels and the incremental loan provision is being revised to an unlimited amount subject to a 4.75 times leverage ratio.

Seminole reworks deal

Seminole Hard Rock upsized its seven-year covenant-light term loan B (Ba1/BB+) to $290 million from $240 million, cut pricing to Libor plus 275 bps from Libor plus 300 bps and reduced the Libor floor to 0.75% from 1%, according to a market source.

As before, the loan has an original issue discount of 99½ and 101 soft call protection for six months.

Bank of America Merrill Lynch and Credit Suisse Securities (USA) LLC are leading the deal that will be used to refinance existing debt and for general corporate purposes.

Seminole Hard Rock is an owner, operator and franchisor of Hard Rock cafes, casinos and hotels.

Coinmach updates terms

Coinmach increased its 61/2-year covenant-light first-lien term loan (B2/B+) to $795 million from $770 million, cut the spread to Libor plus 325 bps from talk of Libor plus 350 bps to 375 bps and finalized the discount at 991/2, the tight end of the 99 to 99½ talk, according to a market source.

As before, the loan has a 1% Libor floor and 101 soft call protection for six months.

The company's now $1,195,000,000 credit facility also includes a $75 million five-year revolver (B2/B+), and a $325 million seven-year covenant-light second-lien term loan that has already been placed with the sponsor and friends and family of the sponsor.

Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., KeyBanc Capital Markets LLC, Credit Suisse Securities (USA) LLC and UBS Investment Bank are leading the first-lien debt, and Deutsche Bank is the lead on the second-lien debt.

Proceeds will be used by the laundry equipment service provider to help fund the buyout of the company by Pamplona Capital Management and the funds raised through the term loan upsizing will be used to add cash to the balance sheet, the source added.

On Assignment tweaked

On Assignment reduced pricing on its $275 million seven-year term loan B to Libor plus 250 bps from Libor plus 275 bps and modified the offer price to par from 991/2, according to a market source.

The 1% Libor floor and 101 soft call protection for six months on the B tranche were left unchanged.

The company's $500 million senior secured credit facility (Ba2/BB-) also includes a $125 million five-year revolver and a $100 million five-year term loan A, both priced at Libor plus 200 bps.

Recommitments were due on Tuesday, the source remarked.

Wells Fargo Securities LLC and Bank of America Merrill Lynch are leading the transaction that will be used to refinance existing debt.

On Assignment is a Calabasas, Calif.-based provider of professionals in the technology, health care and life sciences sectors.

Press Ganey ups loan

Press Ganey Associates raised its first-lien senior secured term loan due April 20, 2018 to $391.55 million from $371.55 million, while keeping pricing at Libor plus 325 bps with a 1% Libor floor and a par offer price, according to a market source.

Also, the loan still has 101 soft call protection for six months.

Barclays is the leading the deal that will be used to reprice an existing $341.55 million first-lien term loan from Libor plus 400 bps with a 1.25% Libor floor, and pay down second-lien term loan borrowings.

Press Ganey is a South Bend, Ind.-based provider of health care performance improvement services.

Grocery Outlet revised

Grocery Outlet lifted its add-on term loan by $20 million to roughly $25.8 million and set pricing on the debt, as well as on the existing roughly $314.2 million first-lien term loan due Dec. 17, 2018, at Libor plus 425 bps, the tight end of the Libor plus 425 bps to 450 bps talk, according to a market source.

The first-lien debt still has a 1.25% Libor floor, a par offer price and 101 soft call protection for six months.

Recommitments are due at 5 p.m. ET on Wednesday, the source added.

Barclays is the leading the deal that will be used to reprice an existing first-lien term loan from Libor plus 575 bps with a 1.25% Libor floor, and pay down $20 million of second-lien term loan debt.

First-lien leverage is 4 times, versus 3.7 times previously. Total leverage is 5.1 times and rent adjusted leverage is 6.1 times.

Grocery Outlet is a Berkeley, Calif.-based extreme-value grocery retailer.

US Airways reveals terms

US Airways came out with structure and price talk on its $1.6 billion of senior secured term loan B debt (B2/B+/BB+) as the company held its previously announced Tuesday morning bank meeting, according to a market source.

The debt includes a $1 billion six-year term loan B-1 talked at Libor plus 350 bps to 375 bps with a 1% Libor floor, a discount of 99 and 101 soft call protection for six months, the source said.

In addition, there is a $600 million 31/2-year term loan B-2 talked at Libor plus 275 bps to 300 bps with a 1% Libor floor, a discount of 99½ and 101 soft call protection for six months, the source continued.

US Airways, a Tempe, Ariz.-based airline company, is asking for loan commitments by May 16.

Citigroup Global Markets Inc., Barclays, Morgan Stanley Senior Funding Inc. and Goldman Sachs & Co. are leading the deal that will be used to refinance the company's existing term loan due in 2014, refinance the GECAS spare parts and spare engines loans due 2014, refinance the DCA slot loan due 2014, and contribute $248 million of cash to the balance sheet for general corporate purposes.

Pacific Drilling launches

Pacific Drilling launched with an afternoon bank meeting a $750 million five-year covenant-light senior secured term loan B that is talked at Libor plus 400 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to market sources.

Citigroup Global Markets Inc., Goldman Sachs & Co., Deutsche Bank Securities Inc. and Barclays are leading the deal that will be used to refinance existing commercial bank debt.

Other funds for the transaction will come from high-yield bonds. The total amount of loan and bond debt being raised is $1.5 billion, so the bonds are expected to be sized at $750 million, sources added.

Pacific Drilling is a Luxembourg-based ultra-deepwater drilling contractor.

Brickman holds call

Brickman hosted a lender call at 11 a.m. ET to launch a repricing of its roughly $537.9 million term loan B due Oct. 14, 2016 with talk in the Libor plus 325 bps to 350 bps area with a 1% Libor floor, a par offer price and 101 soft call protection for six months, according to a market source.

Through this transaction, the term loan pricing is being taken down from Libor plus 425 bps with a 1.25% Libor floor.

Barclays is the lead bank on the deal, for which commitments are due on May 14, the source remarked.

Senior secured leverage is 3.4 times and total leverage is 5.7 times.

Brickman is a Gaithersburg, Md.-based commercial landscaping company.

Hoyts floats talk

Hoyts set a bank meeting for 10 a.m. ET in New York on Wednesday to launch $410 million in new term loans, and pricing guidance on the debt began making its way around the market, according a market source.

The $310 million seven-year covenant-light first-lien term loan is talked at Libor plus 350 bps to 375 bps with a 1% Libor floor, an original issue discount of 99½ and 101 repricing protection for six months, the source said.

And, the $100 million 71/2-year covenant-light second-lien term loan is talked at Libor plus 750 bps to 775 bps with a 1% Libor floor, a discount of 99 and call protection of 103 in year one, 102 in year two and 101 in year three.

Proceeds from term loans, along with a new A$40 million five-year revolver, will be used by the Australian cinema exhibitor to refinance existing debt and fund a dividend.

Lead banks, Credit Suisse Securities (USA) LLC and UBS Investment Bank, are asking for commitments by May 22, the source added.

Burlington refinancing

Burlington Coat Factory scheduled a call for 2 p.m. ET on Wednesday to launch an $871 million term loan B-2 due February 2017 that will be used to refinance an existing $871 million term loan B-1 due February 2017, according to a market source.

Talk on the term B-2 is Libor plus 325 bps with a 1% Libor floor, a par offer price and 101 soft call protection for six months, the source said.

By comparison, the existing term loan B-1 is priced at Libor plus 425 bps with a 1.25% Libor floor.

The company attempted this refinancing/repricing earlier this year with talk of Libor plus 325 bps to 350 bps with a 1% Libor floor, a par offer price and 101 soft call protection for six months, but it was then pulled in February.

J.P. Morgan Securities LLC is leading the deal for the Burlington, N.J.-based discount retailer.

Murray readies deal

Murray Energy Corp. emerged with plans to hold a bank meeting at 11 a.m. ET on Thursday to launch a $350 million credit facility that is being led by Goldman Sachs & Co., according to a market source.

The facility consists of a $50 million ABL revolver (on receivables only) and a $300 million term loan B, the source said.

Proceeds from the credit facility, along with $400 million of bonds, will be used to refinance existing debt.

Murray Energy is a St. Clairsville, Ohio-based coal company.

Ozburn coming soon

Ozburn-Hessey scheduled a call for Wednesday to launch a $270 million six-year term loan, according to a market source.

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc. and GE Capital Markets are leading the transaction that will be used to refinance existing term loans.

Ozburn-Hessey is a Brentwood, Tenn.-based third-party logistics provider.

Sprint well met

In other news, Sprint Industrial Holdings LLC's $232.5 million credit facility was oversubscribed ahead of Tuesday's commitment deadline and allocations are expected to go out later this week, according to a market source.

The deal includes a $12.5 million five-year revolver (B2/B+), a $150 million six-year first-lien term loan (B2/B+) and a $70 million 61/2-year second-lien term loan (Caa2/CCC+).

The first-lien term loan is talked at Libor plus 575 bps to 600 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, and the second-lien term loan is talked at Libor plus 1,025 bps to 1,050 bps with a 1.25% Libor floor, a discount of 98 and call protection of 103 in year one, 102 in year two and 101 in year three.

Goldman Sachs & Co. is leading the deal that will be used to refinance existing debt.

Sprint Industrial is a Houston-based specialized industrial maintenance service provider offering both storage and safety equipment for rental.

PowerTeam closes

The buyout of PowerTeam Services (Power Buyer LLC) by Kelso & Co. from CIVC Partners and True North Equity LLC has been completed, according to a news release.

For the transaction, the company got a $680 million credit facility, which includes a $60 million revolver (B2/B), a $400 million seven-year covenant-light first-lien term loan (B2/B), a $50 million covenant-light first-lien delayed-draw term loan (B2/B) that is available for one year, and a $170 million 71/2-year covenant-light second-lien term loan (Caa2/CCC+).

Pricing on the first-lien term loans is Libor plus 325 bps with a 1% Libor floor, and the debt was sold at a discount of 991/2. There is 101 repricing protection for six months. The delayed-draw loan has a ticking fee of half the spread from days 31 to 90 and the full spread starting on day 91.

During syndication, the first-lien term loan was upsized from $385 million, pricing on the tranche and the delayed-draw loan was lowered from Libor plus 350 bps, the floor was reduced from 1.25%, the original issue discount was revised from 99 and call protection was shortened from one year.

PowerTeam second-lien

PowerTeam's second-lien loan is priced at Libor plus 725 bps with a 1% Libor floor, and was sold at a discount of 99. This tranche has call protection of 102 in year one and 101 in year two.

The second-lien term loan was upsized from $140 million during the syndication process, pricing was cut from Libor plus 750 bps, the floor was trimmed from 1.25%, the discount was tightened from 98½ and the call protection was changed from 103 in year one, 102 in year two and 101 in year three.

Credit Suisse Securities (USA) LLC, RBC Capital Markets and GE Capital led the first- and second-lien deal.

PowerTeam is a Plymouth, Mich.-based provider of services to electric and gas utilities.

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