Pharmaceuticals Technologies, Realogy, LodgeNet break; Sleep Innovations revises tranche sizes

By Sara Rosenberg

New York, April 5 - Pharmaceutical Technologies and Services Inc., Realogy Corp. and LodgeNet Entertainment Corp. all freed up for trading on Thursday, with Pharmaceuticals Technologies' term loan quoted in the low par's, Realogy's strip of institutional bank debt quoted in the low par's and LodgeNet's strip of institutional bank debt ending the day in the upper par's.

Meanwhile, in primary happenings, Sleep Innovations made some modifications to the tranche sizes under its credit facility that resulted in an overall $5 million reduction in the total facility size.

Pharmaceutical Technologies and Services' credit facility allocated and freed up for trading on Thursday afternoon, with the $1.41 billion term loan quoted at par 1/16 bid, par 3/8 offered, according to a trader.

The term loan is priced at Libor plus 225 basis points.

The company's $1.76 billion credit facility (Ba3/B+) also includes a $350 million revolver that is priced at Libor plus 225 bps as well.

During syndication, pricing on both the term loan and the revolver firmed up at the tight end of original guidance of Libor plus 225 bps to 250 bps.

Morgan Stanley, Goldman Sachs, Bank of America and Bear Stearns are the lead banks on the facility, with Morgan Stanley the left lead.

Proceeds will be used to help fund the Blackstone Group's acquisition of Pharmaceutical Technologies and Services, which is a segment of Cardinal Health Inc., for about $3.3 billion in cash.

The segment develops, manufactures and packages medication and other products for pharmaceutical and biotech firms.

Realogy trades atop par

Realogy's facility also hit the secondary on Thursday, with the strip of funded term loan and synthetic letter-of-credit facility debt quoted at par bid, par ¼ offered, according to a trader.

Both the $1.95 billion funded term loan due 2014 and the $525 million 61/2-year synthetic letter-of-credit facility are priced at Libor plus 300 bps.

During syndication, the funded term loan was upsized from $1.45 billion after the company downsized its bond offering by $500 million, the synthetic letter-of-credit facility was downsized from $850 million and price talk on the two tranches was increased a number of times - first going to Libor plus 250 bps to 275 bps from the Libor plus 225 bps area and then to Libor plus 275 bps to 300 bps, before ending up at the high end of the revised guidance.

Realogy's $4.445 billion senior secured credit facility (Ba3/BB) also includes a $750 million revolver due 2013 and a $1.22 billion delayed-draw term loan due 2014 that would be available to fund purchases of the company's notes if necessary.

During syndication, it was decided by the syndicate to not sell the funded and delayed-draw term loan as a strip to make it easier for some investors to participate in the funded term loan. The delayed-draw term loan will only be syndicated if it is funded.

JPMorgan, Credit Suisse, Bear Stearns and Citigroup are the bookrunners on the deal, with JPMorgan and Credit Suisse the joint lead arrangers.

Proceeds from the credit facility will be used to help fund the leveraged buyout of the company by Apollo Management, LP in a transaction valued at about $9 billion, including the assumption or repayment of net debt and legacy contingent and other liabilities. The buyout is expected to be completed on or about April 10.

The delayed-draw tranche will be available to fund purchases of the company's 6.15% senior notes due 2011, 6½% senior notes due 2016 and floating-rate senior notes due 2009, which may be put upon a change of control and a ratings downgrade to non-investment grade.

Other leveraged buyout financing will come from an approximately $1.99 billion equity commitment.

Realogy is a Parsippany, N.J., real estate franchisor.

LodgeNet breaks

Another deal to free up for trading on Thursday was LodgeNet Entertainment, with its strip of funded and delayed-draw term loan B debt quoted at par 3/8 bid, par 5/8 offered on the open and then moving up to par ½ bid, par ¾ offered, where it closed out the session, according to a trader.

The $400 million seven-year funded term loan B and the $225 million seven-year final maturity delayed-draw term loan B are priced at Libor plus 200 bps with a step down to Libor plus 175 bps at 3.25 times total leverage.

During syndication, pricing was reverse flexed from original talk at launch of Libor plus 225 bps to Libor plus 175 bps, but after some investor pushback the spread was flexed up to Libor plus 200 bps with the step down to Libor plus 175 bps.

There were also changes to the term loan B size during the syndication process. Originally, the term loan B totaled $400 million, of which $75 million was to be funded and $325 million was to be delayed-draw. However, the company decided to fund the full $400 million at close and add the new $225 million delayed-draw tranche to fund a note redemption that was announced after the launch of the facility.

The original $400 million of term loan B debt was used to help fund the recently completed acquisition of Ascent Entertainment Group, Inc., the owner of On Command Corp., from Liberty Media Corp. The decision to fund the full amount instead of having a delayed-draw piece came about because this acquisition received early termination of Hart-Scott-Rodino, so the company was able to accelerate timing on the transaction making it unnecessary to have a delayed-draw loan.

The $225 million of delayed-draw term loan B debt that was added to the capital structure will be used to fund an offer to purchase all of the company's outstanding $200 million 9½% senior subordinated notes due 2013 that mature on April 23.

The delayed-draw term loan B is expected to fund on or before April 27.

LodgeNet's $675 million senior secured credit facility (Ba3/B+) also includes a $50 million six-year revolver that is priced at Libor plus 225 bps.

Bear Stearns and Credit Suisse acted as the lead banks on the deal.

LodgeNet is a Sioux Falls, S.D.-based provider of interactive TV and broadband products to hotels. On Command is a Denver-based provider of interactive media services to hotels rooms.

Sleep Innovations tweaks tranching

Sleep Innovations revised the tranching under its credit facility, including upsizing its first-lien term loan by $15 million and downsizing its second-lien term loan by $20 million, according to a fund manager.

With the modifications, the first-lien term loan is now sized at $240 million, up from $225 million, and the second-lien term loan is now sized at $50 million, down from $70 million.

Pricing on the first-lien term loan is set at Libor plus 275 bps after flexing up the other day from original guidance of Libor plus 225 bps to 250 bps, and pricing on the second-lien term loan is set at Libor plus 650 bps after flexing up from original guidance of Libor plus 550 bps to 575 bps.

When the flex was announced, it was rumored that a shift in funds was being contemplated, with the speculation being that something like $5 million to $10 million would be moved out of the second-lien and into the first-lien term loan.

Sleep Innovations' now $320 million (down from $325 million) credit facility also includes a $30 million revolver.

Proceeds will be used to fund an acquisition and to refinance existing debt.

The $5 million downsizing to the deal will result in a reduction to the amount of proceeds going toward working capital, the fund manager explained.

JPMorgan is the lead bank on the facility.

Sleep Innovations is a West Long Branch, N.J., fabricator and marketer of foam bedding, sleep products and accessories.

Maguire downsizes

Maguire Properties Inc. reduced the size of its credit facility to $530 million (Ba3/BB-) from $825 million after the successful refinancing of its Wells Fargo Tower property, according to a syndicate document.

The five-year term loan B is now sized at $400 million, down from $625 million, and the four-year revolver is now sized at $130 million, down from $200 million, the document said.

Both tranches are still being talked at Libor plus 200 bps. The revolver carries a 50 bps commitment fee.

Credit Suisse, Lehman Brothers and Merrill Lynch are joint bookrunners on the deal, with Credit Suisse acting as lead arranger.

Proceeds from the facility, along with a $2.5 billion CMBS bridge facility, will be used to fund the acquisition from the Blackstone Group of all the properties in Orange County and downtown Los Angeles that were part of the former Equity Office Properties portfolio.

The company recently completed a new $550 million 10-year fixed-rate, interest-only financing at a rate of 5.68% on its Wells Fargo Tower property, resulting in about $290 million of net proceeds to Maguire.

Upon completion, Maguire revealed that $225 million of the net proceeds will be used to fund a portion of the purchase price of the former Equity Office Properties portfolio - which accounts for the $225 million downsizing to the term loan B.

Maguire is a Los Angeles-based real estate investment trust.

AM General holdco loan flexes

AM General LLC flexed pricing higher on its $200 million five-year holdco term loan that is being obtained by MacAndrews AMG Holdings, according to a market source.

The holdco term loan is now priced at Libor plus 575 bps cash pay, up from original talk at launch of Libor plus 500 bps cash pay, the source said.

Call protection on the loan is 103 in year one, 102 in year two and 101 in year three.

Citigroup and Bear Stearns are the lead banks on the deal, which will be used to pay a dividend and refinance some debt at MacAndrews AMG.

AM General is a South Bend, Ind., military and special-purpose vehicles company.

Attachmate ups pricing

Attachmate Corp. increased pricing on all tranches under its credit facility by 50 bps, according to a syndicate document.

With the changes, the $20 million revolver (B1/B) and $430 million six-year first-lien term loan B (B1/B) are now priced at Libor plus 325 bps, up from original talk of Libor plus 275 bps, and the $255 million 61/2-year second-lien term loan (Caa2/CCC+) is now priced at Libor plus 675 bps, up from original talk of Libor plus 625 bps, the document said.

Earlier on in syndication, the company downsized its first-lien term loan B from $480 million and its second-lien term loan from $275 million as the decision was made to decrease the amount of the dividend payment that is being made with some of the loan proceeds by $70 million.

In addition to funding a dividend, proceeds will be used to refinance existing debt.

Credit Suisse and UBS are the lead banks on the $705 million deal, with Credit Suisse the left lead.

Attachmate is a Seattle-based provider of access and integration software for legacy systems.

Sun Healthcare upsizes

Sun Healthcare Group Inc. upsized its senior secured credit facility (Ba2/B) by $50 million to $485 million, according to a syndicate document.

The tranches that were revised included the seven-year synthetic letter-of-credit facility, which is now $70 million as opposed to $40 million, and the seven-year term loan B, which is now $310 million as opposed to $290 million, the document said.

Pricing on these tranches is set at Libor plus 200 bps. During syndication, the pricing had been reverse flexed from original talk at launch of Libor plus 225 bps.

Sun Healthcare's facility also includes a $50 million six-year revolver priced at Libor plus 200 bps and a $55 million delayed-draw seven-year term loan priced at Libor plus 200 bps. The spread on these tranches was also reverse flexed from original talk at launch of Libor plus 225 bps during syndication.

The revolver carries a 50 bps commitment fee.

Credit Suisse, CIBC and UBS are the lead banks on the deal that will be used to help fund the acquisition of Harborside Healthcare Corp., a nursing and long-term care company, from Investcorp for about $350 million in cash plus the refinancing or assumption of about $275 million in debt.

Sun Healthcare is an Irvine, Calif., operator of long-term and post-acute care facilities and a provider of therapy, medical staffing, home care and hospice services.

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