Primedia, inVentiv, Ashland break; Reynolds, Dynegy, Stackpole, U.S. Security talk emerges

By Sara Rosenberg

New York, July 12 - Primedia Inc. came out with an upsizing to its term loan B to help fund its original issue discount and then the deal allocated and freed up for trading pretty much in line with that discount price.

Also, inVentiv Health finalized pricing on its incremental term loan at the high end of talk and afterwards hit the secondary market as well, and Ashland Inc.'s credit facility broke for trading, too.

In more loan happenings, Reynolds Group and Dynegy Inc. revealed price talk on their term loans as ratings were announced, and Stackpole International and U.S. Security Associates Inc. set guidance on their deals with launch.

Additionally, YRC Worldwide Inc. released the original issue discount talk on its second-out loan as it held a lender meeting in the afternoon, Henniges Automotive began circulating guidance on its upcoming transaction, and Royalty Pharma and Insight Global Inc. emerged with new deal plans.

Primedia ups B loan, trades

Primedia increased its 61/2-year term loan B to $280 million from $275 million and proceeded to made its way into the secondary market, with levels quoted at 96 bid, 97 offered, according to a trader.

Pricing on the term loan B is Libor plus 600 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 96. There is soft call protection of 102 in year one and 101 in year two.

During syndication, pricing was lifted from Libor plus 500 bps, the discount widened from talk of 98½ to 99, call protection was added and the maturity was shortened from seven years.

The newly announced term B upsizing is being done to help fund the wider-than-expected original issue discount price, a market source added.

Primedia getting revolver

Primedia's now $325 million credit facility (B), up from $315 million, also provides for a $40 million five-year revolver that will be undrawn at close and is priced at Libor plus 600 bps with no floor and an undrawn fee of 62.5 bps.

Pricing on the revolver was increased from Libor plus 500 bps during syndication.

Another credit agreement change that was made at the time of the pricing flex included setting the excess cash flow sweep at 75% with step-downs to 50%, 25% and 0% versus an original sweep of 50% with step-downs to 25% and 0%.

Also, the facility includes a $60 million accordion feature plus an unlimited amount, subject to net senior secured leverage of 3.25 times, which was revised from 3.5 times. There is 25 bps most favored nation language with no sunsetting provision, changed from 50 bps with a two-year sunsetting provision.

Primedia lead banks

Bank of America Merrill Lynch, Barclays Capital Inc., UBS Securities LLC and RBC Capital Markets LLC are the lead banks on Primedia's credit facility.

Proceeds will be used to help fund the acquisition of the company by TPG Capital for $7.10 per share in cash. The transaction enterprise value is about $525 million.

Other funds for the transaction, which is targeted to close on Wednesday, will come from equity.

Primedia is a Norcross, Ga.-based provider of internet, mobile and print guides to help people find apartments, houses for rent or new homes for sale.

inVentiv sets spread, breaks

inVentiv Health firmed pricing on its $245 million seven-year incremental term loan (B1/BB-) at Libor plus 525 bps and then began trading, with levels quoted at 98 3/8 bid, 98 7/8 offered, according to a trader.

Most recently, price talk on the loan had been Libor plus 500 bps to 525 bps and, initially, it was Libor plus 425 bps to 450 bps.

The term loan has a 1.5% Libor floor and was sold at an original issue discount of 99. There is 101 soft call protection for one year.

Citigroup Global Markets Inc., Bank of America Merrill Lynch and Jefferies & Co. Inc. are the lead banks on the deal.

inVentiv buying PharmaNet

Proceeds from inVentiv's credit facility will be used to help fund the acquisition of PharmaNet Development Group from JLL Partners Inc.

In addition to the credit facility, the company will use proceeds from a $390 million 10% senior notes offering that priced at 95 to yield 11.031% and $50 million of cash on hand for the acquisition.

Net senior secured leverage is 3.28 times and total net debt is 5.81 times.

inVentiv is a Somerset, N.J.-based provider of clinical, consulting and commercial services to the health care industry. PharmaNet is a Princeton, N.J.-based provider of drug development services.

Ashland frees up

Ashland was another deal to emerge in the secondary market, with the $1.4 billion seven-year term loan B quoted at par 1/8 bid, par 3/8 offered on the open and then it moved up to par ¼ bid, par ½ offered, according to traders.

Pricing on the B loan is Libor plus 275 bps with a 1% Libor floor and it was sold at an original issue discount of 993/4. There is 101 soft call protection for one year.

During syndication, the term loan B was downsized from $1.7 billion, pricing was reduced from Libor plus 300 bps, a 25 bps step-down based on leverage was eliminated, the original issue discount tightened from 99½ and call protection was added.

Citigroup Global Markets Inc., Scotia Capital (USA) Inc., Bank of America Merrill Lynch and U.S. Bank are the joint lead arrangers and bookrunners on the deal for the Covington, Ky.-based provider of specialty chemical products and services.

Ashland pro rata details

Ashland's $3.9 billion credit facility (BB) also includes a $1 billion five-year revolver and a $1.5 billion five-year term loan A, with both of these tranches priced in line with talk at Libor plus 225 bps.

At the time of the B loan downsizing, the revolver was upsized from $750 million and the A loan was upsized from $1.2 billion.

Proceeds, along with cash on hand, will be used to fund the acquisition of International Specialty Products Inc., a Wayne, N.J.-based specialty chemical manufacturer of functional ingredients and technologies, for $3.2 billion in cash.

Pro forma for the transaction, secured debt to adjusted EBITDA is 3.2 times and total debt to adjusted EBITDA is 3.5 times.

Closing is expected prior to the end of the September quarter, subject to satisfaction of customary conditions and receipt of U.S. and European Union regulatory approvals.

Reynolds sets talk

Back over in the primary, Reynolds Group disclosed price talk on its $2 billion senior secured term loan due August 2018 now that ratings surfaced at Ba3/BB-, according to a market source. The loan launched with a bank meeting on Monday afternoon, but investors were told that pricing was waiting for ratings.

The new loan is being talked at Libor plus 525 bps with a 1.25% Libor floor and an original issue discount of 99, the source said.

Also with the new deal, the company is repricing its existing loan due February 2018 at Libor plus 525 bps with a 1.25% Libor floor from Libor plus 325 bps with a 1% floor currently. There is no discount price being offered on the existing deal because it is not new money.

Commitments are due from investors on July 25.

Reynolds acquiring Graham

Proceeds from Reynolds' credit facility, $1.5 billion of senior secured debt, $500 million of senior unsecured debt and cash on hand will be used to fund the purchase of Graham Packaging Co. Inc. for $25.50 per share, or a total of about $4.5 billion, including assumed debt.

Pro forma for the transaction, net senior secured leverage is 3.5 times and net total leverage is 6.0 times.

Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. are leading the deal.

Closing is expected in the second half of this year, subject to customary regulatory approvals and closing conditions, including the approval of Graham's stockholders.

Reynolds Group is an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products. Graham is a York, Pa.-based supplier of plastic containers.

Dynegy pricing comes out

Dynegy released price talk on its $1.7 billion of new senior secured term loans with some clarity on ratings as well, after declining to give out guidance at the deal's Monday bank meeting, according to a market source.

The $1.3 billion six-year term loan (B2) at GasCo is being talked at Libor plus 650 bps with a 1.5% Libor floor, an original issue discount of 99 and call protection of 103 in year one, 102 in year two and 101 in year three, the source said.

And, the unrated $400 million six-year term loan at CoalCo is being talked at Libor plus 775 bps with a 1.5% Libor floor and an original issue discount of 98, and is non-callable for two years, then at 102 in year three and 101 in year four, the source continued.

Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. are the joint lead arrangers on the deal and are asking for commitments by July 22.

Dynegy refinancing debt

Proceeds from the GasCo loan will be used to repay Dynegy Holdings Inc.'s existing senior secured credit facility, repay existing debt relating to Sithe Energies Inc., make a $400 million restricted payment to a parent holding company of GasCo, and fund cash collateralized letters of credit and cash collateral for existing collateral requirements.

The CoalCo loan will be used to fund cash collateralized letters of credit and cash collateral for existing collateral requirements, and for general working capital and general corporate purposes.

GasCo and CoalCo are being created through a reorganization. GasCo will be a subsidiary that owns eight primarily natural gas-fired intermediate and peaking power generation facilities, and CoalCo will be a subsidiary that owns six primarily coal-fired baseload power generation facilities.

Dynegy, a Houston-based producer and seller of electric energy, capacity and ancillary services, expects to close on the term loans at the end of July.

Stackpole guidance emerges

Continuing on the topic of price talk, Stackpole announced that its $165 million credit facility is being guided at Libor plus 475 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 99 as the deal launched with a bank meeting on Tuesday morning, according to a market source.

The facility consists of a $140 million six-year term loan and a $25 million five-year revolver.

RBC Capital Markets LLC, BNP Paribas Securities Corp. and UBS Securities LLC are the joint bookrunners on the deal that will be used, along with a $45 million seven-year subordinated mezzanine facility, to fund the buyout of the company by the Sterling Group.

Expected corporate ratings are B2/B+, and expected facility ratings are B1/BB-.

Pro forma for the transaction senior leverage will be 2.8 times and total leverage will be 3.7 times.

Stackpole is a supplier of highly engineered engine and transmission oil pumps and powdered metal components to automotive and original equipment manufacturers.

U.S. Security term loan talk

U.S. Security Associates Inc. also held a bank meeting during the session, at which time talk on its $360 million of six-year term loan debt was outlined as Libor plus 500 bps to 525 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

The term loan debt, comprised of a $75 million delayed-draw tranche and a $285 million funded loan, has 101 soft call protection for one year, and there is a 150 bps ticking fee on the delayed-draw loan.

The company's $435 million facility (Ba3/B) includes a $75 million five-year revolver as well.

Goldman Sachs & Co., KeyBanc Capital Markets LLC and Wells Fargo Securities LLC are the lead banks on the deal that will be used to help fund the buyout of the company by Goldman Sachs Private Equity.

U.S. Security Associates is a Roswell, Ga.-based security firm.

YRC discloses OID

YRC launched its $225 million second-out term loan due Sept. 30, 2014 on Tuesday with an original issue discount of 981/2, according to a market source. Price talk on the loan had come out prior to the lender meeting at Libor plus 975 bps with a 1.5% Libor floor.

By comparison, the commitment letter filed with the Securities and Exchange Commission had the second-out loan expected at Libor plus 850 bps with a 1.5% floor and an original issue discount of 981/2.

J.P. Morgan Securities LLC is the lead bank on the deal.

Proceeds will be used to repay outstanding debt under an existing asset-backed securitization facility and for general corporate purposes.

YRC first-out loan

Also as part of the refinancing, YRC plans on getting a $175 million senior secured first-out term facility that, according to the commitment letter, is priced at Libor plus 700 bps with a 1.5% Libor floor and a 700 bps unused fee.

The first-out loan, due Sept. 30, 2014, can only have $30 million drawn at closing and is non-callable for one year, then at 101 in year two.

Commitments for the first-out deal have come from J.P. Morgan Securities LLC, the Catalyst Capital Group Inc., Cyrus Capital Partners LP and Owl Creek Investments I LLC.

YRC is an Overland Park, Kan.-based transportation service provider.

Henniges floats guidance

Henniges Automotive began talking its $155 million credit facility at Libor plus 600 bps with a 1.5% Libor floor and an original issue discount of 99 ahead of its Thursday bank meeting , according to a market source.

The facility consists of a $20 million revolver and a $130 million term loan.

The term loan includes 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC, Macquarie Capital and PNC Capital Markets LLC are the lead banks on the deal that will be used to refinance existing debt and fund a dividend.

Henniges Automotive is a Farmington Hills, Mich.-based provider of sealing system solutions to the automotive market.

Royalty Pharma plans loans

In other news, Royalty Pharma will be holding a bank meeting on Thursday to launch a $3.6 billion credit facility that will be used to refinance existing debt, fund a distribution and put cash on the balance sheet, according to a market source.

The facility consists of an $850 million five-year term loan at RPI Select Finance Trust, and $2.75 billion in 51/4-year and 61/4-year term loans at RPI Finance Trust, with the breakdown still to be determined, the source said. The borrowers are newly formed entities for this transaction.

The RPI Finance Trust loans have 101 soft call protection for one year, the source remarked.

Bank of America Merrill Lynch, Goldman Sachs & Co. and Citigroup Global Markets Inc. are the lead banks on the deal for the New York-based acquirer of royalty interests in marketed and late stage biopharmaceutical products.

Insight Global readies deal

Insight Global has set a bank meeting for Monday to launch a proposed $177 million credit facility that is being led by BNP Paribas Securities Corp., according to a market source.

The facility consists of a $20 million revolver and a $157 million term loan B, the source said, adding that price talk is not yet available.

Proceeds will be used to refinance existing senior and mezzanine debt, and pro forma leverage is 2.95 times.

Insight Global is an Atlanta-based Information Technology employment firm.

Kansas City Southern closes

Kansas City Southern completed its $500 million credit facility (Baa3/BBB-), consisting of a $200 million five-year revolver and a $300 million 51/2-year term loan A, according to a news release.

The tranches were talked at Libor plus 175 bps.

Bank of America Merrill Lynch and Scotia Capital (USA) Inc. acted as the lead banks on the deal that was used to refinance existing debt.

Kansas City Southern is a Kansas City, Mo.-based transportation holding company that has railroad investments in the U.S., Mexico and Panama.

INC wraps acquisition

INC Research LLC, a Raleigh, N.C.-based therapeutically focused contract research organization, closed on its purchase of Kendle International Inc., a Cincinnati-based clinical research organization, for $15.25 per share in cash, according to an 8-K filed with the SEC on Tuesday.

To help fund the transaction, INC Research got a new $375 million credit facility (Ba3/B+) consisting of a $75 million revolver and a $300 million term loan B priced at Libor plus 575 bps with a 1.25% Libor floor and sold at a discount of 97. The B loan has 101 soft call protection for one year.

During syndication, the term B was downsized from $350 million as a bond offering was upsized, pricing firmed at the wide end of revised talk of Libor plus 550 bps to 575 bps and was flexed up from initial talk of Libor plus 475 bps to 500 bps, the discount widened from revised talk of 98 and from initial talk of 99, and call protection was added.

Morgan Stanley & Co. Inc., ING Financial Markets LLC and RBC Capital Markets LLC led the deal.

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