Vertafore, Avaya break; Tomkins dips; First Data gains with numbers; Freescale up on IPO buzz

By Sara Rosenberg

New York, Feb. 2 - Vertafore Inc.'s term loan hit the secondary market on Wednesday, with levels quoted above its par issue price, and Avaya Inc.'s extended term loan B-1 freed up, too.

Tomkins Ltd.'s term loan was softer with news of an upcoming lender call, First Data Corp.'s term loans were better after the release of positive quarterly results, and Freescale Semiconductor Inc.'s extended term loan gained ground on continued initial public offering chatter.

Switching to primary happenings, Kalispel Tribal Economic Authority and Savers Inc. released guidance as they presented their credit facilities to lenders, and Gymboree Corp. launched its covenant-light term loan at expected price talk.

Additionally, National Mentor Holdings Inc. lowered pricing on its term loan, and Axcan Holdings Inc. upsized its term loan and canceled plans for a bond deal.

Furthermore, Pinnacle Security and Datatel Inc. surfaced with new deal plans, and Intelligrated Inc. has scheduled a broad launch of its credit facility that was already shown to some lenders in an early round syndication.

Vertafore frees up

Vertafore's $550 million first-lien term loan started trading on Wednesday morning, with levels quoted at par ¾ bid, 101¼ offered on the open, according to traders.

Pricing on the term loan is Libor plus 375 basis points with a 1.5% Libor floor, and as mentioned above, it was sold to investors at par. There is 101 soft call protection for one year.

During syndication, pricing on the loan was reverse flexed from initial talk of Libor plus 400 bps.

Credit Suisse and Bank of America are the lead banks on the deal that 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.

Avaya extended breaks

Avaya's extended $1.825 billion term loan B-1 also made its way into the secondary market, with levels quoted at 99 3/8 bid, 99 7/8 offered on the open and then it moved in to 99 bid, 99 3/8 offered, according to traders.

Meanwhile, the $1.825 billion of non-extended B-1 borrowings was quoted at 99 bid, 99½ offered early in the session, but it also came under some pressure, moving down to 98 1/8 bid, 98½ offered by the afternoon, traders said.

The extended B-1 due in 2017 is priced at Libor plus 450 bps, after flexing up from Libor plus 425 bps, and includes 101 soft call protection for one year that was added during the negotiation process, while the non-extended B-1 due in 2014 is priced at Libor plus 275 bps.

Citigroup, JPMorgan and Morgan Stanley acted as the lead banks on the amend and extend, and lenders are being paid a 25 bps amendment fee, which was increased from 10 bps.

Avaya B-2 softens

Also on Wednesday, Avaya's term loan B-2 headed lower as some investors are expecting that it will be this debt that sees a paydown from the company's newly announced bond offering, traders remarked.

The B-2 was quoted at par bid, par ½ offered, down from par 1/8 bid, par 7/8 offered, traders continued.

In the morning, Avaya, a Basking Ridge, N.J., enterprise communications systems, software and services company, announced plans to sell about $1 billion of senior secured notes to repay senior secured term loan borrowings. As of Sept. 30, there was $732 million outstanding under the term loan B-2, which is priced at Libor plus 750 bps with a 3% Libor floor.

The company's recent credit facility amendment and extension proposal carved out a basket to allow for additional senior secured debt in the form of loans or bonds and gave the company the option to use that debt to repay whichever term loan tranche it wants first. People were guessing that the company would choose to repay the B-2 first since it is the most expensive term loan tranche.

Tomkins trades down

Tomkins' term loan dropped to par ¾ bid, 101 ¼ offered from 101 3/8 bid, 101 5/8 offered as guys were told that there will be a call on Thursday at 2:30 p.m. ET for existing lenders, according to a trader.

Citigroup and Bank of America are the lead banks on the deal and have not yet provided details on what the call will be regarding.

Tomkins is a Denver-based engineering and manufacturing group providing products for the industrial, automotive and building products markets.

First Data rises

First Data's term loans were stronger in trading as the company announced fourth quarter numbers that included EBITDA that beat Street estimates at $564 million, up from $530 million in the prior year, according to one trader.

Also for the quarter, net loss was $179 million, compared to a net loss of $369 million in the previous year, and revenues were $2.7 billion, up 6% from $2.6 billion in the fourth quarter of 2009.

The trader also said that the term debt had been pushed lower on Tuesday because a "large technical seller" had come to the market during the day. "With the seller taken out of the marketplace and good numbers, it moved up," the trader explained.

As a result, the company's terms loans were quoted by the trader on Wednesday at 95¼ bid, 95¾ offered, up from 94¾ bid, 95¼ offered, and by a second source at 95 bid, 95½ offered, up from 94½ bid, 94¾ offered.

First Data is a Greenwood Village, Colo., provider of electronic commerce and payment services.

Freescale strengthens

Freescale's extended term loan was better on Wednesday as talk circulated that the company has hired Deutsche Bank and Citigroup to lead its initial rumored initial public offering of common stock, according to traders.

The extended term loan was quoted at par 3/8 bid, par 7/8 offered, up half a point, the trader said. A second trader, however, only saw the paper bid higher, placing levels at par ¼ bid, par ½ offered versus par 1/8 bid, par ½ offered on Tuesday.

The trader explained that an IPO should be a positive for the bank debt as it will, among other things, likely result in reduced leverage.

Freescale is an Austin, Texas-based designer and manufacturer of embedded semiconductors for the automotive, consumer, industrial and networking markets.

Kalispel sets talk

Over in the primary, Kalispel Tribal Economic Authority held a bank meeting on Wednesday to kick off syndication on its proposed credit facility, and in connection with the event, price talk was announced, according to a market source.

The $205 million six-year term loan B is being talked at Libor plus 575 bps with a 1.75% Libor floor and an original issue discount of 98, the source said. There is call protection of 102 in year one and 101 in year two.

The authority's $210 million senior secured credit facility (B2/B+) also includes a $5 million revolver.

Bank of America is the lead bank on the deal that will be used to refinance existing debt and to fund capital spending.

Airway Heights, Wash.-based Kalispel Tribal Economic Authority is the economic development arm of the Kalispel Tribe of Indians. The authority operates the Northern Quest Resort & Casino.

Savers details emerge

Savers Inc. came out with structure and price talk on its $500 million credit facility (Ba3) as the deal also launched with a bank meeting on Wednesday, according to market sources.

The facility consists of a $40 million revolver and a $460 million six-year term loan B that is talked at Libor plus 325 bps with a 1.5% Libor floor and an original issue discount of 991/2, sources said.

JPMorgan is the lead bank on the deal that will be used to refinance existing debt and fund the acquisition of 18 stores from Apogee, a thrift store operator owned by Golden Gate Capital.

Leverage is 3.8 times all senior.

Savers is a Bellevue, Wash.-based thrift store chain.

Gymboree launches

Gymboree held a conference call at 2 p.m. ET on Wednesday to launch its $820 million covenant-light term loan B that, as was previously revealed, is being talked at Libor plus 412.5 bps with a 1.5% Libor floor, and is being offered at par.

Proceeds will be used to refinance an existing $820 million term loan B that includes maintenance covenants and is priced at Libor plus 400 bps with a 1.5% Libor floor. This debt was sold at an original issue discount of 99½ when it was obtained in November for the company's buyout by Bain Capital Partners LLC.

The existing loan has 101 soft call protection for one year, but it will not apply in this case since the company is not lowering the yield with the refinancing.

Credit Suisse is the lead bank on the deal for the San Francisco-based specialty retailer.

National Mentor flexes

In more primary news, National Mentor reduced pricing on its $530 million six-year term loan B to Libor plus 525 bps from Libor plus 550 bps, while leaving the 1.75% Libor floor and original issue discount of 98½ unchanged, according to a market source.

Recommitments are due from lenders by 5 p.m. ET on Thursday.

The company's $605 million senior secured credit facility (B1/B+) also includes a $75 million five-year revolver.

Earlier this week, the term loan had been upsized from $505 million after the company downsized its bond offering to $250 million from $275 million.

National Mentor refinancing

Proceeds from National Mentor's credit facility and bonds will be used to refinance existing senior secured credit facility borrowings and fund tender offers for $180 million of 11¼% senior subordinated notes due 2014 and about $224 million of senior floating-rate toggle notes due 2014.

The company's 12.5% notes offering priced late Friday night at 97.737 to yield 13%.

UBS, Barclays and Jefferies are the lead banks on the credit facility, with UBS the left lead.

National Mentor is a Boston-based provider of home and community-based health and human services.

Axcan tweaks size

Axcan Holdings lifted its six-year term loan to $450 million from $225 million, while leaving talk unchanged at Libor plus 475 bps with a 1.5% Libor floor and an original issue discount of 99½ and 101 soft call protection for one year, according to sources.

As a result of the term loan upsizing, the company eliminated its planned $225 million secured notes offering, sources said.

The company's now $565 million senior secured credit facility, up from $340 million, also includes a $115 million amended and restated revolver.

Based on recent filings with the Securities and Exchange Commission, initial pricing on extended revolver commitments due in 2016 is expected to be Libor plus 450 bps with a 75 bps unused fee, while pricing on the non-extended revolver due Feb. 25, 2014 will be Libor plus 350 bps with a 50 bps unused fee.

Axcan lead banks

Bank of America, RBC Capital Markets, HSBC Securities and Barclays Capital are the joint lead arrangers and bookrunners on Axcan's credit facility.

Prior to the upsizing, the credit facility was rated at B1/BB.

Proceeds from the term loan, $145 million of equity and cash on hand will be used to fund the acquisition of Eurand NV for $12 per share, or $586.5 million in total on a fully-diluted basis, to repay Eurand's debt and to repay Axcan's outstanding term loan.

The amended and restated revolver will be used to replace the company's existing revolver.

Axcan is a Mont-Saint-Hilaire, Quebec-based pharmaceutical company focused on the treatment of gastrointestinal disorders. Eurand is an Amsterdam-based specialty pharmaceutical company.

Pinnacle coming to market

Pinnacle Security has set a bank meeting for Thursday to launch a $130 million term loan, according to a market source.

Bank of America is the lead bank on the deal that will be used to refinance existing debt.

Pinnacle Security is an Orem, Utah-based provider of residential and commercial security systems.

Datatel sets call

Datatel scheduled a conference call for Thursday to launch a $430 million credit facility that consists of a $40 million five-year revolver, a $255 million six-year term loan B and a $135 million seven-year second-lien term loan, according to a market source.

Price talk on the term loan B is Libor plus 375 bps to 400 bps with a 1.5% Libor floor and an original issue discount of 99 to 991/2, and price talk on the second-lien term loan is Libor plus 750 bps to 775 bps with a 1.5% floor and a discount of 99, the source said. The second-lien includes call protection of 103 in year one, 102 in year two and 101 in year three.

Credit Suisse and BMO are the lead banks on the deal that will be used to refinance existing debt and fund a dividend.

Datatel is a Fairfax, Va.-based provider of technology solutions and professional business services to higher education institutions.

Intelligrated readies meeting

Intelligrated is set to hold a bank meeting on Thursday to launch its proposed $175 million credit facility (B2) to the broad market, after holding early round meetings in January, according to a market source.

As was already reported, the facility consists of a $30 million five-year revolver and a $145 million six-year term loan B that is talked at Libor plus 550 bps with a 1.75% Libor floor and an original issue discount of 99 and includes 101 soft call protection for one year.

Bank of America is the lead bank on the deal that will be used to refinance an existing second-lien loan and fund a $95 million dividend payment.

Leverage through the first-lien will be 3.8 times.

Intelligrated is a Cincinnati-based provider of automated material handling systems.

Spectrum wraps refi

In other news, Spectrum Brands Holdings Inc.'s closed on its $680 million term loan that is priced at Libor plus 400 bps with a 1% Libor floor, according to a news release. The paper was sold at par and includes 101 soft call protection for one year.

During syndication, pricing was flexed from Libor plus 450 bps and the floor was reduced from 1.5%.

Credit Suisse acted as the lead bank on the deal that was used, along with cash on hand, to refinance the company's existing $680 million senior secured term loan at a price of 101. This existing loan due June 2016 carries pricing of 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.

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