AutoTrader, Endo, U.S. Renal Care, Legendary Pictures break; Avaya rises on IPO chatter

By Sara Rosenberg

New York, June 7 - AutoTrader.com, Endo Pharmaceuticals, U.S. Renal Care Inc. and Legendary Pictures all freed up for trading on Tuesday, Avaya Inc.'s term loans were stronger on rumors of an initial public offering, and Team Health Holdings Inc.'s term loan was better with news of a refinancing.

Over in the primary market, Walter Investment Management Corp. made some investor-friendly changes to its credit facility, including raising pricing on its first- and second-lien tranches, widening the original issue discounts and sweetening call premiums.

Additionally, Bass Pro Shops lowered its term B size, while increasing pricing and the original issue discount, and Pre-Paid Legal Services Inc. divided its term loan into two tranches and modified pricing.

Also, Mobilitie Investments II LLC set the spread on its B loan at the wide end of guidance, while raising pricing on its revolver and delayed-draw tranches, and FTD finalized the spread on its term loan at the high end of talk.

Furthermore, Calpine Corp. and Revlon Consumer Products Corp. announced and launched new deals during the session, INC Research LLC delayed the launch of its credit facility by about a week as a result of scheduling conflicts, and AMC Entertainment Holdings Inc. firmed timing on its deal.

AutoTrader sees par bid

AutoTrader.com's $400 million term loan B emerged in the secondary market on Tuesday, with levels quoted at par bid, par ½ offered, according to a trader.

Pricing on the term loan B is Libor plus 300 basis points with a 1% Libor floor, and the tranche includes 101 soft call protection for one year.

During syndication, the B loan was downsized from $500 million, the call protection was extended form six months and plans to go covenant-light were eliminated.

Essentially, this term loan B was used to reprice the company's existing $500 million B loan that was obtained in December at pricing of Libor plus 325 bps with a 1.5% floor and contained no call protection.

AutoTrader upsizes A loan

As a result of the term loan B downsizing, AutoTrader.com increased its term loan A to $450 million from $350 million, meaning that the loan now includes $200 million of add-on debt as opposed to $100 million, the source remarked.

Pricing on the well met term loan A, as well as on a $200 million revolver, is Libor plus 225 bps.

In addition to paying down B loan borrowings, the incremental term loan A debt is being used to help fund the acquisition of VinSolutions, an Overland Park, Kan.-based dealer software company. Also, the upsized A loan and the revolver are essentially repricing existing term loan A and revolver debt that was obtained in December at pricing of Libor plus 300 bps.

Wells Fargo Securities LLC is the lead bank on the deal $1.05 billion credit facility (Ba3).

AutoTrader.com is an Atlanta-based automotive marketplace and consumer information website.

Endo frees up

Endo Pharmaceuticals' $700 million seven-year term loan B broke late in the day, with levels quoted at par ¼ bid, par ¾ offered, according to a trader.

Shortly before entering the secondary market, the term loan B was downsized from $900 million, and pricing was reduced to Libor plus 300 bps from Libor plus 325 bps, while the 1% Libor floor, par offer price and 101 soft call protection for six months were left unchanged, according to a market source.

Also, the B loan now has no step downs. Previously, there was a step-down to Libor plus 300 bps at 3.0 times net leverage.

The company's now $2.7 billion senior secured credit facility (Ba1/BBB-), down from $2.9 billion, still includes a $500 million five-year revolver and a $1.5 billion five-year term loan A that are priced at Libor plus 250 bps, with the revolver having a 50 bps unused fee. Pricing can range from Libor plus 175 bps to 250 bps based on leverage.

Endo funding acquisition

Proceeds from Endo's credit facility, which is led by Morgan Stanley & Co. Inc. and Bank of America Merrill Lynch, will be used to help fund the acquisition of American Medical Systems for $30 per share, or $2.9 billion in cash, including the assumption and repayment of $312 million of debt.

Other funds for the transaction will come from $900 million of senior notes. The bond offering was upsized from $700 million last week, resulting in the newly announced term loan B downsizing.

Closing is expected late in the third quarter, subject to customary conditions, regulatory approval and American Medical stockholder approval.

Endo is a Chadds Ford, Pa.-based specialty health care company focused on branded products and specialty generics. American Medical is a Minnetonka, Minn.-based provider of devices and therapies for male and female pelvic health.

U.S. Renal starts trading

Also hitting the secondary market was U.S. Renal Care's credit facility, with the $215 million 51/2-year term loan B quoted at 99½ bid, par offered, according to a trader.

Pricing on the B loan, as well as on a $40 million five-year revolver, is Libor plus 400 bps with a 1.5% Libor floor, and the tranches were sold at an original issue discount of 991/2. The term B has 101 soft call protection for one year.

The deal had been launched to existing lenders in an early syndication round, and as a result of oversubscription, there was no need for a general syndication launch.

RBC Capital Markets LLC is the lead arranger on the $255 million credit facility (B1/B+) that will be used, along with $100 million of six-year amended and upsized mezzanine borrowings, to refinance existing debt and pay a $137.5 million dividend.

U.S. Renal is a Plano, Texas-based provider of outpatient dialysis services.

Legendary Pictures breaks

Legendary Pictures' $200 million six-year term loan B freed up for trading as well, with levels quoted at 99 bid, 99½ offered, according to a trader.

Pricing on the B loan is Libor plus 450 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for two years.

The company's $700 million credit facility also includes a $500 million revolver.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to refinance existing debt.

Legendary Pictures is a Burbank, Calif.-based film production company.

Avaya trades higher

Avaya's term loans gained some ground in trading on Tuesday as rumors were circulating that the company may file for an initial public offering, according to a trader.

The extended term loan was quoted at 97 1/8 bid, 97 5/8 offered, up from 96 5/8 bid, 97 1/8 offered, the trader said.

And, the non-extended term loan was quoted at 96 3/8 bid, 96 7/8 offered, up from 95 ¾ bid, 96 ¼ offered, the trader added.

Avaya is a Basking Ridge, N.J., enterprise communications systems, software and services company.

Team Health inches up

Team Health's term loan moved to 99 15/16 bid, par 1/16 offered from 99½ bid, par offered first thing in the morning and 99 3/8 bid, 99 7/8 offered on Monday, after word surfaced that the company will be launching a refinancing deal with a lender call on Thursday at 11 a.m. ET, according to a trader.

The proposed $575 million credit facility consists of a $165 million five-year revolver, a $110 million five-year term loan A and a $300 million seven-year term loan B, with price talk not yet available.

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

Team Health is a Knoxville, Tenn.-based provider of hospital-based clinical outsourcing.

Walter revises deal

In more loan happenings, Walter Investment came out with a slew of changes to its credit facility that resulted in juicier pricing, discounts and call protection on both the first- and second-lien debt, according to a market source.

Under the revisions, the $500 million five-year first-lien term loan (B1/B+) is priced at Libor plus 625 bps with a 1.5% Libor floor and an original issue discount of 98 and includes call protection of 102 in year one and 101 in year two, the source said. By comparison, initial talk had been Libor plus 525 bps with a 1.5% floor, a discount of 99 and 101 soft call protection for one year.

Also, amortization on the first-lien term loan was increased to 12.5% per annum from 10%, and there is a 75% excess cash flow sweep.

And, pricing on the company's $45 million five-year revolver was moved to Libor plus 625 bps from Libor plus 525 bps as well, with the 1.5% floor staying intact.

Walter second-lien changes

Meanwhile, Walter Investment's $265 million 51/2-year second-lien term loan (B3/B) is now priced at Libor plus 1,100 bps with a 1.5% floor and a discount of 98, the source continued versus prior talk of Libor plus 900 bps with a 1.5% floor and a discount of 99.

Furthermore, call protection on the second-lien loan was changed to non-callable for two years, then at 103 in year three and 101 in year four, from 103 in year one, 102 in year two and 101 in year three.

Credit Suisse Securities (USA) LLC and RBS Securities Inc. are the joint bookrunners and lead arrangers on the $810 million senior secured deal. Bank of America Merrill Lynch is a bookrunner and a co-documentation agent, and Morgan Stanley Senior Funding Inc. is as a co-documentation agent.

Commitments towards the modified credit facility are due on Monday, the source added.

Leverage through the first-lien is 2.22 times and through the second-lien is 3.36 times.

Walter buying Green Tree

Proceeds from Walter Investment's credit facility, along with cash on hand and the issuance of 1.8 million shares of common stock to the seller, will be used to fund the acquisition of GTCS Holdings LLC (Green Tree) in a transaction valued at $1.065 billion.

Closing on the transaction is expected in the third quarter, subject to customary conditions, including receipt of governmental approvals and third-party consents.

Walter Investment is a Tampa, Fla.-based asset manager, mortgage servicer and mortgage portfolio owner specializing in less-than-prime, non-conforming and other credit-challenged mortgage assets. Green Tree is a St. Paul, Minn.-based fee-based business services company, which provides high-touch, third-party servicing of credit-sensitive consumer loans/

Bass Pro tweaks loan

Bass Pro Shops reduced its term loan B (B1/BB-) to $750 million from $825 million, increased pricing to Libor plus 400 bps from talk of Libor plus 325 bps to 350 bps, set the Libor floor at 1.25%, the high end of the 1% to 1.25% talk and moved the original issue discount to 99 from 991/2, according to a market source.

The Springfield, Mo.-based outdoor retailer's B loan includes 101 soft call protection for one year.

Recommitments were due on Tuesday and allocations are expected to go out on Wednesday.

Bank of America Merrill Lynch and J.P. Morgan Securities LLC are leading the deal that will be used to refinance an existing term loan, redeem preferred stock and common units and fund a dividend.

The existing term loan was obtained early last year at pricing of Libor plus 350 bps with a 1.5% Libor floor and was sold at an original issue discount of 99.

Pre-Paid Legal retranches

Pre-Paid Legal Services modified its credit facility so that there is now a $300 million 51/2-year first-out term loan and a $100 million six-year last-out term loan, instead of just a $400 million six-year term loan B, according to a market source.

Price talk on the first-out term loan is Libor plus 550 bps to 600 bps with a 1.5% Libor floor and an original issue discount of 981/2, while talk on the last-out tranche is not available as the debt was pre-placed, the source said.

Under the original structure, the term loan B was talked at Libor plus 450 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 981/2.

The company's $430 million senior secured credit facility still includes a $30 million five-year revolver.

Pre-Paid lead banks

Macquarie Capital, RBC Capital Markets LLC, KeyBanc Capital Markets LLC and Bank of Ireland are the lead banks on Pre-Paid Legal's credit facility.

Proceeds, along with equity, will be used to fund the buyout of the company by MidOcean Partners for $66.50 per share, or about $650 million.

Closing is targeted for June 30, subject to stockholder and regulatory approvals.

Pre-Paid Legal is an Ada, Okla.-based provider of legal service benefits through a network of independent law firms.

Mobilitie reworks pricing

Mobilitie finalized pricing on its $240 million six-year term loan B at Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 991/2, compared to initial talk of Libor plus 375 bps to 400 bps with a 1.25% to 1.5% and a discount of 991/2, according to a market source.

Also, pricing on the $25 million five-year revolver and $150 million five-year 24-month-delayed-draw term loan was increased to Libor plus 375 bps from Libor plus 350 bps, the source remarked. As before, these tranches, which are being sold as a strip to banks, have no Libor floor. The ticking fee on the delayed-draw term loan was left unchanged at 125 bps, moving to 75 bps once usage is over 50%.

Allocations are expected early next week since there are still a few banks working.

TD Securities (USA) LLC and GE Capital Markets are leading the $415 million credit facility (B2/BB-) that will be used by the Newport Beach, Calif.-based owner and constructor of communication towers to refinance existing debt. The delayed-draw loan is for capital expenditures.

FTD sets spread

FTD firmed pricing on its $265 million term loan at Libor plus 350 bps, the wide end of the Libor plus 325 bps to 350 bps talk, while leaving the 1.25% Libor floor and original issue discount of 99½ unchanged, according to a market source.

The company's $315 million credit facility also includes a $50 million revolver.

Last week, it was known that the transaction was oversubscribed within the guidance, but final pricing was waiting on the receipt of a private rating from Moody's Investors Service, which has now been obtained. A private rating from Standard & Poor's was already received earlier.

Wells Fargo Securities LLC is the lead bank on the deal that will be used by the Downers Grove, Ill.-based floral company to refinance existing debt.

Calpine shops B-2 loan

Calpine revealed early in the morning that it would be holding a lender call at 11 a.m. ET to launch a $360 million first-lien senior secured term loan B-2 (NA/NA/BB), according to market sources.

Price talk on the term loan B-2 is Libor plus 325 bps with a 1.25% Libor floor, so that it mirrors terms on the Houston-based power company's existing $1.3 billion covenant-light term loan B-1 that was obtained in March. The new deal will have the same 101 soft call protection as the existing tranche.

The original issue discount on the term loan B-2 is still to be determined, with the expectation that guidance will be announced in the next day or two, sources added.

Morgan Stanley & Co. Inc. is the lead bank on the refinancing deal and is asking for commitments by 5 p.m. ET on Thursday.

Following the news, the company's existing term loan B-1 was relatively flat in trading at 99 7/8 bid, par 1/8 offered, compared to 99 7/8 bid, par 3/8 offered on Monday, a trader added.

Revlon launches revolver

Revlon Consumer Products held a conference call on Tuesday to launch a $140 million five-year asset-based revolving credit facility that is being talked at Libor plus 200 bps to 250 bps, subject to a grid based on excess availability, according to an 8-K filed with the Securities and Exchange Commission.

The revolver has a 37.5 bps unused fee, no Libor floor and is being offered with a 25 bps upfront fee.

Citigroup Global Markets Inc. is the administrative agent on the deal that will be used to refinance an existing $140 million asset-based revolver, resulting in lower pricing and a longer maturity.

Revlon, a New York-based cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirant/deodorant and beauty care products company, expects to close on the refinancing in mid-to late-June.

NANA holds off on talk

As planned, NANA Development Corp. held a bank meeting on Tuesday to launch its proposed $435 million six-year term loan B (B+). Price talk, however, was not released as the company is waiting on a rating from Moody's Investors Service, according to a market source.

Goldman Sachs & Co. is the lead bank on the deal that will be used to refinance the company's existing credit facility and to fund the acquisition of Grand Isle Shipyard Inc., a Galliano, La.-based service provider for the oil and gas industry, in a transaction that is expected to close by the end of this month.

In addition to the term loan B, the company is getting an $85 million five-year ABL revolver that is being held by Bank of America Merrill Lynch.

NANA Development is an Anchorage, Alaska-based provider of engineering and construction, resource development, facilities management and logistics, real estate and hotel development, and information technology and telecommunications services.

Penn National guidance TBD

Penn National Gaming Inc. also declined to go out with official price talk on its $750 million seven-year term loan B with the deal's Tuesday launch, with one source saying that the company is still reviewing its options.

Another source remarked that he heard a rumor that talk may come out in the Libor plus 275 bps area.

Bank of America Merrill Lynch, Wells Fargo Securities LLC, Commerz Markets LLC, RBS Securities Inc. and UBS Securities LLC are the lead banks on the deal (BBB-), with Bank of America the left lead on the B loan and Wells Fargo the left lead on the pro rata.

The $1.4 billion of pro rata bank debt, comprised of a $700 million five-year revolver and a $700 million five-year term loan A, was already launched on May 25 and is being talked at Libor plus 175 bps.

Proceeds will be used by the Wyomissing, Pa.-based gaming company to refinance existing debt.

INC Research moves meeting

INC Research delayed the bank meeting for its proposed $425 million credit facility to June 15 at 9:30 a.m. ET from June 7 because of scheduling issues, according to a market source.

The facility consists of a $75 million revolver and a $350 million term loan B. Price talk is not yet available.

Morgan Stanley & Co. Inc., ING Financial Markets LLC and RBC Capital Markets LLC are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of Kendle International Inc. for $15.25 per share in cash. The total equity value is roughly $232 million.

INC Research plans notes

In addition to the credit facility, INC Research expects to issue $250 million of high-yield bonds and use equity for the Kendle purchase.

Backing the bonds is a commitment for a $250 million senior unsecured bridge loan that was launched into syndication around mid-May and is priced at Libor plus 750 bps with a 1.25% Libor floor. The spread will step up by 50 bps every four months until it hits an 11.5% cap.

Closing is expected in the third quarter, subject to approval by Kendle's shareholders as well as satisfaction of customary conditions and regulatory approvals.

INC Research is a Raleigh, N.C.-based therapeutically focused contract research organization privately held by Avista Capital Partners and Ontario Teachers' Pension Plan. Kendle is a Cincinnati-based clinical research organization.

AMC sets launch

AMC Entertainment Holdings (Rainbow Media Holdings LLC) scheduled a bank meeting for Thursday at 1 p.m. ET at the W Hotel in New York to launch its proposed $2.225 billion senior secured credit facility, according to a market source.

The facility consists of a $500 million five-year revolver, a $1.16 billion six-year term loan A and a $565 million seven-year term loan B, the source said.

Initially it was thought that the deal would be comprised of a $500 million revolver, a $1 billion term loan A and a $675 million term loan B, but later the company revealed that it was planning $1.725 billion of term loans instead of $1.675 billion of term loans. The revised breakdown of the term loan A and term loan B tranches was unavailable until now.

J.P. Morgan Securities LLC and Bank of America Merrill Lynch are the lead banks on the deal.

AMC funding spin-off

Proceeds from AMC Entertainment's credit facility will be used to refinance all existing debt at Rainbow Media as well as to repay $1.25 billion of Cablevision Systems Corp. and/or CSC Holdings LLC debt, in connection with Rainbow's spinoff from Cablevision.

Other funds for the spin-off will come from a $700 million senior notes offering. The notes were originally expected at $750 million, but $50 million was shifted into the term loans.

The spinoff will be structured as a tax-free pro rata distribution to stockholders and is expected to be completed by the end of this month.

Following the spinoff, AMC's assets would include programming networks AMC, WE tv, IFC, Sundance Channel and Wedding Central, IFC Entertainment, an independent film business, and Rainbow Network Communications, a network programming origination and distribution company.

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