Booz Allen breaks; SuperMedia rises; SuperValu flex expected; Drew, Corporate tweak deals

By Sara Rosenberg

New York, July 27 - Booz Allen Hamilton Inc.'s credit facility made its way into the secondary market on Friday afternoon, with the senior secured term loan B seen trading above its original issue discount price.

Also in trading, SuperMedia Inc.'s term loan headed higher as the company released second-quarter results that showed a year-over-year improvement in net income.

Moving to the primary, SuperValu Inc.'s term loan is seeing a lot of interest wide of talk, creating the expectation that a flex up in pricing will be announced in the next few days, while Drew Marine's term loan has been very well met by investors, and as a result, the company went out with a reduction in pricing and Libor floor.

Another company to make changes was Corporate Executive Board Co., as it downsized its term loan B while firming pricing at the wide end of guidance and increased sizes on its revolver and term loan A.

Booz Allen tops OID

Booz Allen Hamilton's credit facility freed up for trading on Friday, with the $1.025 billion term loan B quoted at 99¾ bid, par ¼ offered, according to a trader.

Pricing on the B loan is Libor plus 350 basis points with a 1% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

The company's $2.25 billion senior secured credit facility (Ba3/BB) also includes a $725 million term loan A and a $500 million revolver, both priced at Libor plus 275 bps.

During syndication, the term loan A was upsized from $500 million as the term loan B was downsized from $1.25 billion, and pricing on the B tranche was reduced from talk of Libor plus 375 bps to 400 bps.

Booz Allen lead banks

Bank of America Merrill Lynch and Credit Suisse Securities (USA) LLC are the joint lead arrangers on Booz Allen's credit facility. Those two banks are also bookrunners with Credit Suisse Securities (USA) LLC, Barclays Capital Inc., Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc. and SMBC.

Proceeds will be used to help refinance about $959 million of senior secured credit facility debt and fund a special dividend to stockholders of up to $1 billion.

Other funds for the transaction will come from around $260 million of cash on hand.

Booz Allen Hamilton is a McLean, Va.-based provider of management and technology consulting services to the U.S. government in the defense, intelligence and civil markets.

SuperMedia strengthens

In more trading news, SuperMedia's term loan was better as the company announced second quarter results, according to a trader.

The term loan was quoted at 58½ bid, 59½ offered, up from 57½ bid, 58½ offered, the trader said.

For the quarter, the company reported net income of $64 million, or $4.11 per share, compared to net income of $29 million, or $1.89 per share, in the previous year.

Operating revenue was $349 million, a decline of 17.1% from $421 million in the second quarter of 2011.

And, adjusted EBITDA for the quarter was $144 million, versus $152 million in the prior year.

In addition, the Dallas-based directory publisher said that it reduced total debt by $170 million during the second quarter, bringing total debt reduction for the first half of 2012 to $234 million.

SuperValu changes likely

Switching to the primary, SuperValu's $850 million seven-year covenant-light term loan (B1/BB-) is oversubscribed, but a number of orders are wide of talk, leaving investors with the expectation for an increase in pricing, according to a market source, who said the flex will probably come out in the week of July 30.

Current price talk on the term loan is Libor plus 625 bps with a 1.25% Libor floor and an original issue discount of 98, and there is 101 soft call protection for one year.

Security for the term loan is a first-lien in real estate with an appraised value of at least 1.5 times the amount of the loan.

Commitments were due on Friday.

SuperValu getting revolver

SuperValu's $2.5 billion credit facility also provides for a $1.65 billion five-year ABL revolver., for which Wells Fargo Securities LLC, U.S. Bancorp Investments Inc., Barclays and Credit Suisse are the bookrunners.

The joint bookrunners on the term loan are Credit Suisse Securities (USA) LLC and Barclays Capital Inc.

Proceeds from the credit facility will be used to refinance existing debt.

SuperValu is an Eden Prairie, Minn.-based supermarket operator.

Drew Marine cuts pricing

Drew Marine made some changes to its $115 million six-year term loan due to oversubscription, including trimming the coupon to Libor plus 500 bps from Libor plus 525 bps and tightening the Libor floor to 1.25% from 1.5%, according to a market source.

The company is still offering an original issue discount of 99 on new money and 99½ on old money. The amount of new money in the transaction will depend on how much rollover is obtained from existing lenders.

BNP Paribas Securities Corp. is the leading the $135 million credit facility that also provides for a $20 million five-year revolver.

Drew buying maritime business

Proceeds from Drew Marine's credit facility will be used to fund the purchase of Chemring Group plc's maritime interests for £32 million, subject to standard closing adjustments. The business, which is a Hampshire, U.K.-based supplier of marine distress signals, will be renamed Drew Marine Signal and Safety.

In addition, the credit facility will be used to refinance existing debt.

Completion of the transaction is expected by the end of this month, subject to regulatory approvals.

Drew Marine is a Whippany, N.J.-based provider of technical services to the marine industry specializing in water treatment, fire, safety & rescue, cleaning & coatings, fuel management, welding & refrigeration and sealing products.

Corporate restructures

Corporate Executive Board reworked its facility as well, increasing its seven-year term loan B to $250 million from $375 million and setting pricing at Libor plus 375 bps, the high end of the Libor plus 350 bps to 375 bps talk, sources said.

The term loan B still has a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

Furthermore, the company lifted its term loan A to $275 million from $200 million and its five-year revolver to $100 million from $50 million, while leaving pricing at Libor plus 300 bps.

Commitments were due at 2 p.m. ET on Friday, sources remarked.

Corporate acquisition

Proceeds from Corporate Executive's $625 million senior secured credit facility (Ba3/BB-) will be used to help fund the purchase of SHL, a U.K.-based provider of cloud-based talent measurement and management services.

SHL is being bought from funds managed by HgCapital and Veronis Suhler Stevenson for $660 million in cash, subject to customary pre- and post-closing adjustments.

Bank of America Merrill Lynch and Barclays Capital Inc. are the joint lead arrangers and bookrunners on the credit facility.

Corporate Executive Board is an Arlington, Va.-based member-based advisory company. SHL is a

Party City closes

In other news, the buyout of Party City Holdings Inc. by Thomas H. Lee Partners LP from Advent International Corp., Berkshire Partners LLC and Weston Presidio in a deal valued at $2.69 billion has been completed, according to an 8-K filed with the Securities and Exchange Commission on Friday.

For the transaction, Party City, a Rockaway, N.J.-based party goods company, got a new $1.525 billion credit facility comprised of a $1.125 billion term loan (B1/B) and a $400 million ABL revolver.

Pricing on the term loan is Libor plus 450 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, the term loan was upsized from $1.05 billion as the equity for the deal was reduced and pricing was reverse flexed from talk of Libor plus 500 bps to 525 bps.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Goldman Sachs & Co., Morgan Stanley Senior Funding Inc. and Barclays Capital Inc. led the deal.

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