Engility hits secondary; SuperValu guidance surfaces; Corporate Executive reveals timing

By Sara Rosenberg

New York, July 13 - Engility Corp.'s credit facility freed up for trading on Friday, with the term loan seen above its original issue discount price, and Tribune Co.'s debt was relatively flat after spending the last few days running up.

Switching to the primary, SuperValu Inc. released priced talk on its covenant-light term loan in connection with its morning bank meeting and the Corporate Executive Board Co. came out with timing on the launch of its credit facility.

In addition, Kenan Advantage Group's credit facility has received strong demand, resulting in oversubscription by its recent commitment deadline.

Engility starts trading

Engility's credit facility emerged in the secondary market on Friday, with the $335 million term loan quoted at 99¼ bid, par offered, according to a trader.

Pricing on the term loan is Libor plus 450 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 99.

During syndication, the spread firmed at the tight end of the Libor plus 450 bps to 500 bps talk and the loan was upsized from $200 million as the company withdrew plans for a $250 million senior notes offering.

Engility lead banks

Bank of America Merrill Lynch and Barclays Capital Inc. are leading Engility's company's $400 million senior secured credit facility (Ba1/BB+), which also includes a $65 million revolver that is priced at Libor plus 450 bps with no Libor floor.

The revolver was increased from a revised size of $50 million recently, but is down from the original amount of $100 million that was announced at launch.

Proceeds will be used to pay a dividend to L-3 Communications Holdings Inc., from which Engility is being spun off.

Engility is a Billerica, Mass.-based provider of systems engineering and technical assistance, explosive ordnance disposal/counter-IED technical support, acquisition support and NextGen services.

Tribune holds steady

Tribune's loans saw an end to their recent rally, with levels pretty much unchanged from the prior session, according to a trader. The loans had spent the previous few days rising since the judge on the company's bankruptcy case was expected to have a final opinion on its reorganization plan on Friday.

The Chicago-based media company's term loan B was quoted at 68¾ bid, 69¾ offered, versus 68¾ bid, 69½ offered on Thursday, the incremental loan and term loan X were quoted at 67¾ bid, 68¾ offered, flat on the day, and the revolver was quoted at 73 bid, 75 offered, also unchanged, the trader said.

Under the reorganization plan, the company would transfer its broadcast licenses to a new ownership group that includes senior creditors Oaktree Capital Management, Angelo, Gordon & Co. and JPMorgan Chase.

Tribune believes that it will be able to emerge from Chapter 11 by the end of the year.

SuperValu talk emerges

SuperValu held a bank meeting on Friday morning to launch its credit facility, and with the event, price talk on the $850 million seven-year covenant-light term loan was disclosed, according to a market source.

The Eden Prairie, Minn.-based supermarket operator's term loan is being talked at Libor plus 625 bps with a 1.25% Libor floor and an original issue discount of 98, the source said. As was previously reported, the loan includes 101 soft call protection for one year.

Security is a first-lien in real estate with an appraised value of at least 1.5 times the amount of the loan, and there is a springing maturity to 90 days prior to the maturity of the 7½% senior notes due 2014 and 8% senior notes due 2016 if more than $200 million of either is outstanding at that time.

Joint bookrunners, Credit Suisse Securities (USA) LLC and Barclays Capital Inc., are seeking commitment by July 27, the source remarked.

SuperValu getting revolver

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

Proceeds will be used to refinance existing debt.

Recently, Standard & Poor's placed Supervalu's ratings, including the B+ corporate credit rating, on CreditWatch with negative implications on news that management is reviewing strategic alternatives to enhance value for its shareholders, and the release of lower-than-expected first-quarter results.

Also, Fitch Ratings downgraded the issuer default rating on Supervalue to CCC from B, citing the earnings and review of strategic alternatives as the reasons for the move.

For the first quarter of fiscal 2013, the company reported net sales of $10.6 billion, versus $11.1 billion in the prior year, and net earnings of $41 million, or $0.19 per diluted share, compared to net earnings of $74 million, or $0.35 per diluted share, in the fiscal 2012 first quarter.

Corporate Executive launch

Corporate Executive Board has set a bank meeting for Tuesday morning to launch its previously announced $625 million senior secured credit facility, according to a market source.

The facility consists of a $50 million five-year revolver, a $200 million five-year term loan A and a $375 million seven-year term loan B that has 101 soft call protection for one year, the source remarked.

Based on filings with the Securities and Exchange Commission, revolver and term loan A pricing is expected at Libor plus 300 bps, and term loan B pricing is expected at Libor plus 350 bps with a 1.25% Libor floor.

Bank of America Merrill Lynch and Barclays Capital Inc. are leading the deal that will help fund the acquisition of SHL from HgCapital and Veronis Suhler Stevenson for $660 million in cash.

Corporate Executive Board is an Arlington, Va.-based member-based advisory company. SHL is a U.K.-based provider of cloud-based talent measurement and management services.

Kenan well met

In other news, Kenan Advantage Group's $700 million credit facility (Ba3/BB-) is "considerably oversubscribed" at initial terms, a market source told Prospect News on Friday.

The facility consists of a $100 million revolver, a $450 million term loan B and $150 million delayed-draw term loan. Pricing on the term loan B and delayed-draw term loan is Libor plus 325 bps with a 1.25% Libor floor, in line with existing term loan pricing, and the debt was offered with an original issue discount of 99.

KeyBanc Capital Markets is leading the deal that is essentially an upsizing of the existing facility that consists of a $100 million revolver, a $370 million term B and a $125 million delayed-draw term loan.

With this new deal, the term loan will retain its existing tenor and the delayed-draw term loan will be renewed for an 18-month duration and retain its use or lose provision.

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

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