Clarke American ups term spread, adds OID, soft call; CCC talk emerges; Capella, SS&C break

By Sara Rosenberg

New York, Nov. 28 - Clarke American Corp. increased pricing on its term loan, added an original issue discount and soft call protection to the tranche, and tweaked some other technical details in the credit agreement on Monday morning.

In other primary doings, price talk on CCC Information Services Group Inc.'s credit facility surfaced as the deal was launched with a bank meeting on Monday.

On the secondary front, Capella Healthcare Inc. allocated and freed for trading with its term loan B trading around the 101 area, and SS&C Technologies Inc. also freed for trading with its term loan quoted in the upper-par to 101 context.

Clarke American reworked its $440 million term loan B to make it a juicier investment to lenders by flexing pricing higher, adding an original issue discount and soft call protection, changing amortization requirements and tweaking a financial covenant, according to a market source.

The term loan is now priced with an interest rate of Libor plus 325 basis points, up from original price talk at launch of Libor plus 300 basis points, the source said.

In addition, the term loan paper is now being offered to investors at a discount of 991/2, as opposed to the originally planned par offer price that was announced when the deal was launched earlier this month.

Also, 101 soft call protection for 18 months has now been added to the term loan, which was originally launched with no call protection provision.

Other modifications to the term loan include increasing the amortization by $5 million per year in 2008, 2009 and 2010 and changing the interest coverage test to a fixed charge coverage test, the source added.

As for Clarke American's $40 million revolver, that was left unchanged - including the Libor plus 300 basis points pricing that has been present since launch.

Recommitments to the deal are due by 5 p.m. ET Tuesday.

Bear Stearns and JPMorgan are the lead banks on the credit facility, with Bear Stearns the left lead.

Proceeds from the $480 million credit facility (B1/B+) will be used, along with proceeds from a $175 million bond offering and cash on hand, to help fund M&F Worldwide Corp.'s acquisition of Novar USA Inc., the parent company of the businesses operated by Clarke American and related companies, from Honeywell International Inc. for $800 million in cash.

The acquisition, which is subject to certain customary conditions, is targeted to close prior to the end of the year.

Following the acquisition, Clarke will operate as a separate stand-alone business.

Clarke American is a San Antonio provider of check-related products and extensive servicing to financial institution customers.

CCC sets spread guidance

CCC Information Services launched its $300 million senior secured credit facility to investors on Monday with opening price talk of Libor plus 275 basis points on all tranches, according to a market source.

Tranching on the new deal is divided into a $250 million term loan and a $50 million revolver.

JPMorgan and Wachovia are the lead banks on the facility that will be used to back Investcorp's leveraged buyout of the company.

The company also plans on issuing $90 million in 101/2-year senior notes and $110 million in 10-year senior subordinated notes in private placement transactions. The GS purchasers - GS Mezzanine Partners II LP, GS Mezzanine Partners II Offshore LP, GS Mezzanine Partners III Onshore Fund LP and GS Mezzanine Partners III Offshore Fund LP - have agreed to purchase these notes.

In addition, there will also be a $235 million equity contribution.

Under the terms of the LBO agreement, CCC stockholders will receive $26.50 in cash for each share of CCC common stock, for a fully diluted equity value of about $495 million.

The transaction is expected to close during the fourth quarter, subject to stockholders approval and the expiration of the applicable waiting period under the Hart-Scott-Rodino Act.

CCC is a Chicago-based supplier of advanced software, communications systems, Internet and wireless-enabled technology solutions to the automotive claims and collision repair industries.

Capella wraps around 101

Capella Healthcare's credit facility freed for trading on Monday, with the $107 million first-lien term loan B (B3/B) closing the day with levels of par ¾ bid, 101 1/8 offered - about an eighth higher than the initial levels seen on the break, according to a trader.

The term loan B is priced with an interest rate of Libor plus 300 basis points. During syndication, the tranche was upsized from $97 million and reverse flexed from Libor plus 325 basis points.

Capella's $195 million credit facility also contains a $40 million revolver (B3/B) and a $48 million second-lien term loan C (Caa2/CCC+), which was downsized from $58 million when the term loan B was upsized. The second-lien term loan is priced with an interest rate of Libor plus 600 basis points.

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

Proceeds will be used to help fund the acquisition of some hospitals from HCA Inc.

Brentwood, Tenn.-based Capella was formed earlier this year by GTCR Golder Rauner LLC, Daniel Slipkovich and Thomas Anderson for the purpose of acquiring and building acute care hospitals within the U.S. Slipkovich is chief executive officer of the company and Anderson is president.

SS&C breaks

SS&C Technologies freed for trading on Monday as well, with its $275 million seven-year term loan quoted in the par ¾ bid, 101 offered context, according to traders.

The term loan is priced with an interest rate of Libor plus 250 basis points, down from the original Libor plus 275 basis points price talk that was announced when the deal launched.

SS&C's $350 million senior secured credit facility (B2/B) also contains a $75 million six-year revolver.

Proceeds were used to help fund the acquisition of the company by The Carlyle Group, which was completed last week.

JPMorgan and Wachovia acted as joint lead arrangers and joint bookrunners on the deal, with JPMorgan the left lead and administrative agent, Wachovia the syndication agent, and Bank of America the documentation agent.

SS&C is a Windsor, Conn., provider of investment and financial management software and related services.

Kodak rise continues

Eastman Kodak Co.'s term loan moved higher by about another eighth of a point during Monday's session, still on follow-through from last week's momentum that was all started by a bullish report from Barron's, according to a trader.

The term loan closed the day quoted at 99 5/8 bid, 99 7/8 offered, the trader said, adding that "it was probably the most active name that we saw today."

The company's term loan spent the majority of last week grinding higher at a slow but steady pace, creating what is now almost a full point gain from the 98 7/8 bid, 99 1/8 offered context that the paper was quoted at prior to the release of the Barron's article during the Nov. 19 weekend.

Kodak is a Rochester, N.Y.-based digital imaging products, services and solutions company.

Calpine regains some ground

Calpine Corp.'s second-lien term loan was up by about a point during Monday's session with levels closing the day at 74 bid, 76 offered, according to a trader - a nice change from the debt's recent performance.

The bank debt had spent most of last week in a downward spiral after the Delaware Court of Chancery ruled that Calpine's use of about $313 million of proceeds from the sale of domestic gas assets to buy gas storage inventory violated its second-lien notes indenture.

Calpine has been fighting the use-of-proceeds issue with The Bank of New York, collateral trustee for the company's senior secured note holders, and Wilmington Trust Co., indenture trustee for the company's first-and second-lien notes since September.

About $400 million from the sale of Calpine's domestic gas assets remains in an account at the Bank of New York.

Prior to the court ruling, the San Jose, Calif., power company's second-lien bank debt was being quoted around 77 bid, 79 offered.

Tronox closes

Tronox Inc. closed on its new $450 million senior secured credit facility (Ba2/BB-/BB) consisting of a $200 million six-year term loan at Libor plus 175 basis points and a $250 million five-year revolver at Libor plus 175 basis points.

Lehman and Credit Suisse First Boston acted as the lead banks on the deal, with Lehman the left lead.

Proceeds from the term loan were distributed to Kerr-McGee Corp.

Kerr-McGee spun off Tronox, its Oklahoma City-based chemical business, through an initial public offering of shares of class A common stock that was completed on Monday as well. Currently, Kerr-McGee continues to hold an interest through ownership of Tronox's class B common stock, with those shares expected to be distributed to stockholders through a spin off or split off during 2006.

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