SuperMedia dips as tender deadline hits; 99 Cents tweaks deal; SunCoke sets discount price

By Sara Rosenberg

New York, Dec. 13 - SuperMedia Inc.'s term loan seesawed on Tuesday, moving up in the morning, but then ending the session at a loss as the company's sub-par buyback offer expired, and Hawker Beechcraft Acquisition Co. LLC's strip of bank debt saw some movement as well.

Over in the primary, 99 Cents Only Stores reworked its credit facility, eliminating financial covenants from its term loan and sweetening call premiums, and SunCoke Energy Inc. set the original issue discount on its incremental term loan B at the tight end of guidance.

Also, Milk Specialties Global reduced the size of its first-lien term loan while increasing pricing on the tranche as well as on a second-lien loan. The company set original issue discounts on the term loans at the wide end of guidance.

Furthermore, Lightower Fiber Networks' incremental term loan A was well met by investors, resulting in oversubscription of the deal ahead of its commitment deadline.

SuperMedia bounces around

SuperMedia's term loan started Thursday stronger in the secondary market but ended weaker following the 3 p.m. ET deadline for responses to its tender offer, according to a trader.

Specifically, the loan was quoted at 47 bid, 49 offered in the morning but at 46 bid, 48 offered by late day, the trader said. On Monday, the debt was seen at 46½ bid, 48½ offered.

As was previously reported, the company approached lenders with a $117 million cash-offer buyback for its term loan debt in a price range of 43 to 50.

This was the company's second attempt at a repurchase. In November, SuperMedia had launched a tender with the same cash offer size but a price range of 43 to 46. This offer was then pulled because of insufficient interest.

SuperMedia, a Dallas-based directory publisher, has the ability to buy back the term loan borrowings at a price below par using up to $122.5 million of cash until Jan. 1, 2014 as a result of a recently completed amendment to its credit facility.

Hawker seen in mid-70s

Hawker Beechcraft, a Wichita, Kan.-based manufacturer of business, special-mission and trainer aircraft, saw its strip of bank debt quoted around the mid-70s context, with some viewing it as up on the day and others claiming it was down, according to traders.

One trader was quoting the strip of debt at 74½ bid, 75½ offered, up on the bid side from 73½ bid, 75½ offered, while a second trader was also seeing it at 74½ bid, 75½ offered but said the paper was down from Monday's closing levels of 75¼ bid, 76¼ offered.

"Most headlines have been more positive recently. Seems like a restructuring is not as imminent [as people thought]. Also, market felt better today," the first trader said in explanation of why he was seeing the debt bid higher.

A company spokesperson told Prospect News that the company "will likely need to address [its] revolving credit agreement, which was last amended more than two years ago." In order to do this in a timely fashion, Perella Weinberg Partners, a consulting and financial services firm, has been retained.

99 Cents cuts covenants

Switching to the primary, 99 Cents Only Stores opted to take out the financial covenants from its $525 million seven-year term loan (B2/B) as a result of strong demand and, in return, bump up soft call protection to 102 in year one and 101 in year two from just 101 in year one, according to a market source.

Pricing on the loan was left unchanged at Libor plus 550 bps with a 1.5% Libor floor and an original issue discount of 98.

Recommitments were due at 5 p.m. ET on Tuesday.

The $675 million facility also includes a $150 million five-year ABL revolver.

Prior to launch, the company has said in regulatory filings that term loan pricing would be Libor plus 600 bps with a 1.5% Libor floor and revolver pricing was outlined at Libor plus 200 bps with a 37.5 bps unused fee.

99 Cents lead banks

RBC Capital Markets, BMO Capital Markets and Deutsche Bank Securities Inc. are leading 99 Cents' credit facility that will be used to help fund its buyout by Ares Management LLC and Canada Pension Plan Investment Board for $22.00 per share in cash in a transaction with a total equity value of about $1.6 billion.

Other funds for the purchase will come from $635.9 million of equity and a $250 million of senior notes backed by a $250 million bridge loan commitment priced initially at Libor plus 950 bps with a 1.5% Libor floor.

Closing is anticipated in the first quarter of 2012, subject to shareholder approval. Regulatory approvals have already been obtained.

99 Cents is a City of Commerce, Calif.-based operator of extreme value retail stores.

SunCoke firms OID

SunCoke Energy firmed the original issue discount on its $30 million incremental term loan B due July 2018 at 98, the low end of talk of 97½ to 98, and moved up the commitment deadline to 1 p.m. ET from 3 p.m. ET on Tuesday, according to a market source.

Pricing on the loan matches existing term loan pricing at Libor plus 300 bps with a 1% Libor floor, however, the existing loan was sold at a discount of 99½ when done in July.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used for general corporate purposes.

SunCoke is a Lisle, Ill.-based producer of metallurgical coke.

Milk revises deal

Milk Specialties made a number of changes to its credit facility, including lowering the size and lifting pricing, and is expecting to allocate the transaction sometime next week, a market source told Prospect News.

Under the revisions, the company's first-lien term loan (B2/B+) is now sized at $125 million, down from $145 million, and pricing is Libor plus 700 bps with a 1.5% Libor floor and an original issue discount of 97, versus initial talk of Libor plus 650 bps with a 1.5% floor and a discount of 97 to 98, the source said.

Also, the $60 million second-lien term loan (CCC+) is now priced at Libor plus 1,300 bps with a 1.5% floor and a discount of 96, compared to earlier talk of Libor plus 1,050 bps with a 1.5% floor and a discount of 96 to 97, the source remarked. The tranche is still non-callable for one year, then at 102 in year two and 101 in year three.

Milk getting revolver

Milk Specialties' $220 million credit facility, down from $240 million, continues to provide for a $35 million revolver (B2/B+)

RBC Capital Markets LLC is the lead bank on the deal that will be used to help fund the acquisition of the company by HM Capital from Stonehenge Partners Inc.

As a result of the downsizing to the first-lien term loan, $20 million of additional equity will be used for the buyout.

Milk Specialties is a Carpentersville, Ill.-based manufacturer of nutrition products.

Lightower nets interest

Lightower Fiber Networks' $150 million incremental term loan A was oversubscribed at talk of Libor plus 450 bps with no Libor floor before Wednesday's official commitment deadline hit, according to sources.

"Good mix of banks, finance companies in deal. Still have guys coming in and may extend deadline for those few who needed it," one source added.

GE Capital Markets and SunTrust Robinson Humphrey Inc. are the lead banks on the loan that will be used to fund a dividend payment.

With this new deal, pricing on the company's existing revolver and term loan A is being increased to Libor plus 450 bps from Libor plus 300 bps, to match that of the incremental debt.

Lightower Fiber Networks, a Boxborough, Mass.-based metro fiber network and bandwidth service provider, hopes to close on the new loan by year-end.

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