Stiefel sets talk; Momentive breaks; Freescale, VNU stronger; Lear holds firm on Interior business sale

By Sara Rosenberg

New York, Dec. 1 - Stiefel Laboratories Inc. came out with price talk on its proposed credit facility as the deal was launched with a bank meeting during Friday's market hours.

In secondary happenings, Momentive Performance Materials Inc.'s credit facility freed for trading with the U.S. term loan B quoted atop par, and Freescale Semiconductor Inc. and VNU NV both saw their term loan B levels improve on market technicals.

Also in trading, Lear Corp.'s bank debt held firm on Friday after news emerged that the company will be transferring its North American Interior business and $25 million of cash to a newly formed joint venture.

Stiefel Laboratories released opening price talk on its $848 million first- and second-lien senior secured credit facility as syndication on the deal officially kicked off with a bank meeting on Friday, according to a market source.

The $75 million six-year revolver (Ba3) and the $623 million seven-year first-lien term loan B (Ba3) were both presented to lenders with talk of Libor plus 250 basis points, and the $150 million 71/2-year second-lien term loan (B3) was presented to lenders with talk of Libor plus 500 bps, the source said.

Previously, it was thought that the total deal size would be $885 million, with the difference being that the term loan B was contemplated to be slightly larger at $660 million.

Deutsche Bank is the lead bank on the deal that will be used to fund the acquisition of Connetics Corp. for $17.50 per share. The transaction is valued at about $640 million.

Stiefel is a Coral Gables, Fla., independent pharmaceutical company specializing in dermatology. Connetics is a Palo Alto, Calif., specialty pharmaceutical company focused on the development and commercialization of innovative therapeutics for the dermatology market.

Momentive breaks

On the secondary front, Momentive Performance Materials' credit facility broke for trading on Friday, with the U.S. term loan B quoted at par ¼ bid, par ½ offered, according to one trader, and at par 1/8 bid, par 3/8 offered, according to a second trader.

The seven-year term loan B is sized at $1.05 billion, with $525 million of that being dollar denominated and the remained being euro denominated. Pricing on the tranche is Libor plus 225 bps.

During syndication, the term loan B was downsized from an overall size of $1.075 billion and pricing was reverse flexed from Libor plus 250 bps.

Momentive's $1.385 billion credit facility (Ba3/B+) also includes a $300 million six-year revolver and a $35 million synthetic letter-of-credit facility.

During syndication, the revolver was upsized from $250 million and the synthetic letter-of-credit facility was added to the capital structure.

JPMorgan, General Electric Capital Corp. and UBS are the lead banks on the deal that will be used to fund Apollo Management, LP's leveraged buyout of General Electric Co.'s Advanced Materials business for $3.8 billion in cash and securities.

The company has also issued $1.925 billion equivalent in high-yield notes, downsized from $1.95 billion, for acquisition financing.

The bonds, which priced Wednesday, are comprised of a $765 million tranche of cash-pay notes priced to yield 9¾%, a $300 million tranche of senior toggle notes priced to yield 10 1/8%, a €275 million tranche priced to yield 9% and a $500 million tranche of 11½% senior subordinated notes at 98.555 to yield 11¾%. The subordinated note offering was downsized from $595 million equivalent, with a proposed euro-denominated tranche being withdrawn.

Momentive is a Wilton, Conn.-based $2.5 billion supplier of silicone-based products, silanes, sealants, urethane additives and adhesives, and high-purity fused quartz and ceramics materials.

Freescale, VNU trade up

On a day when things were rather quiet in trading and most names, if active, were moving sideways, two issuers stood out as their term loan B's headed higher on market technicals - Freescale and VNU, according to a trader.

Freescale's covenant-light term loan B closed the session quoted at par ½ bid, par ¾ offered, up from previous levels of par 3/8 bid, par 5/8 offered, the trader said.

And, VNU's term loan B closed the session quoted at par 5/8 bid, par 7/8 offered, up from previous levels of par ¼ bid, par ¾ offered, the trader added.

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

VNU is a Haarlem, Netherlands-based information and media company.

Lear steady on Interior transfer

Lear's bank debt held steady on Friday after news emerged that the company would be transferring its North American Interior business to a new joint venture called International Automotive Components Group North America, LLC, according to a trader.

The bank debt closed the session quoted at par bid, par ½ offered, unchanged from previous levels, the trader said.

Under the transfer agreement, Lear will hold a 25% equity interest in International Automotive and warrants for an additional 7% equity interest, and WL Ross & Co. LLC and Franklin Mutual Advisers, LLC will make total cash contributions of $75 million to International Automotive in exchange for the remaining equity.

WL Ross and Franklin will also provide the new joint venture with a $50 million term loan.

Lear expects to record a charge of about $675 million related to the divestiture of the Interior business in the fourth quarter and recognize its investment in International Automotive under the equity method of accounting.

The closing of the transaction is subject to various conditions, such as the receipt of required third-party consents and other closing conditions customary for transactions of this type.

"We are very pleased to have reached a definitive agreement to transfer our North American Interior business to IAC North America. This transaction combined with our recent financing initiatives have significantly strengthened the company's financial and competitive position," said Bob Rossiter, Lear's chairman and chief executive officer, in a company news release.

Lear is a Southfield, Mich.-based supplier of automotive interior systems and components.

Healthways closes

Healthways, Inc. closed on its $600 million credit facility (Ba2/BB), according to an 8-K filed with the Securities and Exchange Commission Friday.

SunTrust Bank acted as administrative agent, JPMorgan Chase Bank and Fifth Third Bank acted as co-syndication agents and U.S. Bank and Regions Bank acted as co-documentation agents.

The facility consists of a $400 million five-year amended and restated revolver with pricing that can range from Libor plus 87.5 to 175 bps based on leverage and a $200 million seven-year term loan B priced at Libor plus 175 bps.

There is a $200 million accordion feature.

Proceeds from the facility were used to refinance existing bank debt and to fund the acquisition of Axia Health Management, LLC for $450 million.

Healthways is a Nashville, Tenn.-based provider of health and care support programs and services.

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