SuperMedia dips with downgrade; Darling, CCC, AMC revise pricing; Southern Pacific sets talk

By Sara Rosenberg

New York, Dec. 10 - SuperMedia Inc.'s term loan headed lower in Friday's quiet trading session on the back of a downgrade by Standard & Poor's that stemmed from the company's offer to repurchase its debt below par.

Over in the primary market, Darling International Inc. made some changes to its term loan B, including reducing pricing and tightening the original issue discount, and CCC Information Services Inc. cuts the spread on its B loan as well.

Also, AMC Entertainment Inc. increased pricing on its proposed extended bank debt, and Southern Pacific Resource Corp. released guidance on its second-lien term loan as the deal was presented to lenders in the morning.

In more loan happenings, Advantage Sales & Marketing LLC, as expected, accelerated the commitment deadline on its well received credit facility, while on the flip side, Lineage Power removed its term loan from market due to a lack of demand.

SuperMedia slides

SuperMedia's term loan dropped in trading to 67¾ bid, 68¾ offered from 68 bid, 69 offered following a downgrade by S&P of the company's corporate and senior secured credit facility ratings to CC from B-, according to a trader.

"The downgrade reflects our view that the company's discussion about a proposed amendment, which would allow for subpar repurchases of its term debt of up to $185 million for 90 days from the effective date of the amendment, suggests a high probability of a subpar buyback," said S&P credit analyst Andy Liu in the rating release.

Liu added that under S&P's criteria, the subpar buybacks by the Dallas-based directory publisher would be viewed as tantamount to a default.

"I don't really agree with the logic of the analyst," the trader told Prospect News. "It's opportunistic and a lit bit of desperation, but I don't think it's the same as a default."

Darling trims spread, OID

Moving to the primary, Darling International reverse flexed pricing on its $300 million six-year term loan B (Ba2/BB+), while reducing the original issue discount, and is asking for recommitments by Monday, according to a market source.

Pricing on the B loan is now set at Libor plus 350 bps, down from Libor plus 400 bps, and the original issue discount was moved to 99½ from 99, the source said. The 1.5% Libor floor was left intact.

The company's $625 million senior secured credit facility also includes a $325 million five-year revolver (Ba2) that is expected to be priced at Libor plus 325 bps with a 50 bps commitment fee.

JPMorgan, BMO Capital, Goldman Sachs and PNC Bank are the lead banks on the deal that is expected to allocate and close during the week of Dec. 13.

Darling buying Griffin

Proceeds from the term loan and $175 million of revolver borrowings will be used to help fund the acquisition of Griffin Industries Inc. for $740 million in cash and about $100 million of common stock.

Other funds for the transaction will come from $250 million of eight-year senior unsecured notes that already priced at par to yield 8½% and cash on hand.

Total funded debt to EBITDA will exceed 3.0 times after completion of the transaction.

Darling is an Irving, Texas-based provider of rendering, recycling and recovery services to the food industry. Griffin is Cold Spring, Ky.-based provider of rendering, bakery feed and cooking oil recycling services.

CCC Information flexes

Accounts were expecting a reduction in spread on CCC Information Services' $350 million five-year term loan B, and they got it, as word came out Friday that pricing was cut to Libor plus 400 bps from Libor plus 450 bps, according to a market source.

The 1.5% Libor floor and original issue discount of 99 were left unchanged, the source said.

Recommitments were due on Friday, and allocations are expected to go out during the week of Dec. 13.

The company's $400 million credit facility (B1/B+) also includes a $50 million 41/2-year revolver.

JPMorgan and Barclays are the lead banks on the deal that will be used to refinance existing debt.

CCC is a Chicago-based provider of advanced software, workflow tools and enabling technologies to the automotive claims and collision repair industries.

AMC lifts pricing

AMC Entertainment raised pricing on its proposed extended senior secured term loan to Libor plus 325 bps from Libor plus 300 bps while adding 101 soft call protection for one year, according to a market source.

The company is looking to extend the term loan debt to December 2016 from January 2013. Pricing on the non-extended debt is Libor plus 150 bps.

As a result of the changes, lead banks Citigroup and Barclays are now giving lenders until Monday to provide their responses. The original deadline had been Friday.

Lenders are still being offered a 10 bps consent fee.

AMC Entertainment is a Kansas City, Mo.-based theatrical exhibition and entertainment company.

Southern Pacific talk emerges

Southern Pacific Resource held a conference call on Friday morning to launch a proposed $275 million second-lien term loan, and in connection with the event, price talk was announced, according to a market source.

The loan is talked at Libor plus 925 bps with a 2% Libor floor and an original issue discount of 97 and is non-callable for one year, then at 102 in year two and 101 in year three, the source said.

Credit Suisse and RBC Capital Markets are the joint lead arrangers and joint bookrunners on the deal, with BMO Capital Markets and TD Securities bookrunners as well.

Commitments are due from lenders on Dec. 17.

Southern Pacific funding project

Proceeds from Southern Pacific's second-lien loan, C$125 million of 6% convertible unsecured subordinated debentures and cash on hand will be used to fund the development of the company's McKay phase 1 project.

The company expects that the McKay project will cost $408 million. Through Sept. 30, roughly $9 million has been spent on construction of the project, leaving remaining costs of about $399 million.

Additionally the company plans to enter into a separate first-lien secured revolving credit facility that will be used to replace its current credit facility.

Southern Pacific is a Calgary, Alberta-based explorer, developer and producer of in-situ thermal heavy oil and bitumen production in the Athabasca oil sands of Alberta and in Senlac, Saskatchewan.

Advantage Sales moves deadline

Advantage Sales & Marketing revised the commitment deadline on its $1.325 billion credit facility to Monday from Wednesday, according to a market source. There has been talk that this move would be coming being that the transaction is heavily oversubscribed.

The facility consists of a $100 million revolver (B+), an $800 million first-lien term loan (B+) and a $425 million second-lien term loan (B-).

Price talk on the first-lien term loan is Libor plus 400 bps to 425 bps with a 1.5% Libor floor and an original issue discount of 99, while talk on the second-lien loan is Libor plus 800 bps with a 1.5% Libor floor and a discount of 981/2.

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

Advantage Sales may flex

Based on the amount of demand for Advantage Sale's credit facility, it is thought that pricing may come tighter than talk, with the expectation being that an update will emerge next week, the source said.

Credit Suisse, JPMorgan and UBS are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds from the facility will be used to help fund the acquisition of the company by Apax Partners from J.W. Childs Associates LP and BAML Capital Partners.

The transaction, which is subject to customary approvals, is expected to close prior to the end of the year.

Senior leverage is about 4.0 times, and total leverage is around 6.5 times.

Advantage Sales is an Irvine, Calif.-based sales and marketing agency.

Lineage pulls deal

Lineage Power removed its $135 million term loan from market as the deal was struggling to get done, according to a market source.

Talk was in the 10% all-in range, including the spread, Libor floor and original issue discount.

Wells Fargo was the lead bank on the deal that was going to be used to refinance existing debt.

Lineage is a Plano, Texas-based producer of hardware and software for power conversion.

Kenan nets interest

In other news, Kenan Advantage Group's $600 million credit facility (BB-) was oversubscribed by the time books were closed on Thursday, and the plan is for allocations to go out during the week of Dec. 13, according to a market source.

Through this new deal, led by KeyBanc Capital Markets, the company is basically amending and restating its existing credit facility to get more term loan B debt, reset the delayed-draw term loan and increase the revolver. Maturities are being left unchanged.

As a result, existing lenders are being given the option to rollover and even upsize their current commitments, and new lenders are being offered the chance to participate as well.

The proposed facility consists of a $100 million revolver, a $375 million term loan B and a $125 million delayed-draw term loan. Price talk on the term loan debt is Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 99 for new money.

Kenan existing loan details

Kenan's current $450 million credit facility was obtained this past summer and is comprised of a $250 million term loan B and a $125 million delayed-draw term loan, both priced at Libor plus 450 bps with a 1.75% Libor floor and sold at a discount of 98, and a $75 million revolver priced at Libor plus 400 bps with a 1.75% Libor floor.

During syndication, pricing on the term loans had been increased from initial talk of Libor plus 400 bps and the discount on the B loan widened from 99.

Since closing on the original facility, some of the delayed-draw term loan has been drawn, although the exact amount is not being disclosed. The delayed-draw loan may only be used for acquisition financing.

Kenan Advantage is a North Canton, Ohio-based logistics and liquid bulk transportation services provider to the fuels, chemical and food end-markets.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.