LodgeNet, Realogy, Celanese, Synagro and Graham Packaging tweak deals

By Sara Rosenberg

New York, March 26 - LodgeNet Entertainment Corp. revised its credit facility on Monday, increasing the size of the overall term loan B tranche while lowering pricing on the paper and Realogy Corp. modified tranching on its deal to compensate for a smaller-than-expected bond offering and increased price talk once again.

Also in the primary, Celanese Corp. upsized its revolver and added a pricing step down to its institutional tranches, Synagro Technologies Inc. cut spreads on its deal and Graham Packaging Holdings Co. increased the spread on its term loan while adding a pricing grid.

LodgeNet made some changes to its credit facility structure, including upsizing its term loan B to fund a newly announced notes repurchase, revising how much of the debt will be funded and how much will be delayed-draw, and reverse flexing pricing, according to a market source.

The total seven-year term loan B size is now set at $625 million, up from $400 million, and pricing is now set at Libor plus 175 basis points, down from original talk at launch of Libor plus 225 bps, the source said.

Of the total term loan B amount, $400 million will be funded and $225 million will be delayed-draw with funding expected on or before April 27.

Under the original structure, $75 million of the term loan B was going to be funded and $325 million was going to be delayed-draw.

The change in the amount of the funded versus delayed-draw came about for the following reason: the original $400 million of term loan B debt is going to be used to help fund the acquisition of Ascent Entertainment Group, Inc., the owner of On Command Corp., from Liberty Media Corp. 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 piece for the financing, the source explained.

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, which began on Monday and will expire on April 23.

LodgeNet's now $675 million (up from $450 million) senior secured credit facility (Ba3/B+) also includes a $50 million six-year revolver that is priced at Libor plus 225 bps. No changes have been made to the revolver throughout the syndication process.

Bear Stearns and Credit Suisse are 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 hotel rooms.

Realogy restructures

Realogy also came out with a bunch of changes to its credit facility, including revising the sizes of, and price talk on, its funded term loan and synthetic letter-of-credit facility tranches, according to a market source.

The funded term loan due 2014 was upsized to $1.95 billion from $1.45 billion and the 61/2-year synthetic letter-of-credit facility was downsized to $600 million from $850 million, the source said.

In addition, price talk on the funded term loan and synthetic letter-of-credit facility was increased to Libor plus 275 bps to 300 bps from most recent talk of Libor plus 250 bps to 275 bps; original talk at launch of that was in the Libor plus 225 bps area, the source continued.

The upsizing to the funded term loan resulted from the company's decision to sell $3.15 billion of high-yield bonds, as opposed to $3.65 billion of bonds. The offering will consist of seven-year senior notes, senior floating-rate notes and senior PIK toggle notes and eight-year senior subordinated notes.

The synthetic letter-of-credit facility size has been somewhat fluid from the start as it will be used to secure obligations in respect of Cendant Corp.'s contingent and other liabilities that were assumed with a merger and separation agreement, a second source explained. Up to $100 million of the synthetic letter-of-credit facility will be available for general corporate purposes.

Sizes on Realogy's revolver due 2013 and delayed-draw term loan due 2014 were left unchanged at $750 million and $1.22 billion, respectively.

However, the syndicate has decided to no longer sell the funded and delayed-draw term loan as a strip, which will make it easier for some investors to participate in the funded term loan, the market source added. Now, 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 now $4.52 billion (up from $4.27 billion) senior secured credit facility (Ba3/BB), 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.

The principal amount of the delayed-draw tranche will be determined at closing to reflect the remaining total principal amount of the existing senior notes after any tender offer, redemption or discharge that may be done prior to closing.

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

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

Celanese upsizes, adds grid

Celanese increased the size of its revolving credit facility to gain some extra liquidity and added pricing step downs to its U.S. and euro term loans and credit-linked revolving letter-of-credit facility, according to a market source.

The revolver due 2013 is now sized at $650 million, up from $600 million, with pricing unchanged at Libor plus 150 bps, the source said.

Meanwhile, the €400 million term loan B due 2014, the $2.28 billion term loan B due 2014 and the $228 million credit-linked revolving letter-of-credit facility due 2014 retained their initial pricing of Euribor/Libor plus 175 bps, but now have the ability to step down to Euribor/Libor plus 150 bps when total net debt to adjusted EBITDA is less than or equal to 2.25 times, the source added.

Merrill Lynch and Deutsche Bank are the joint bookrunners and joint lead arrangers on the now approximately $3.678 billion (up from $3.628 billion) credit facility (Ba3/BB-).

Proceeds will be used to refinance the company's existing facility, which consists of a $1.622 billion term loan B due 2011, a $600 million revolver due 2009 and a $228 million credit-linked revolver facility due 2009, and to tender for all of its $796 million 9 5/8% senior subordinated notes, €130 million 10 3/8% senior subordinated notes and $430 million of 10% and 10½% senior discount notes.

Upon completion, the proposed refinancing plan will reduce the company's debt, lower net interest expense, extend debt maturities, improve flexibility and modify and simplify its global corporate and capital structure.

Celanese is a Dallas-based hybrid chemical company.

Synagro flexes

Another deal to announce modifications on Monday was Synagro, with pricing reduced on its first-and second-lien term loans due to strong oversubscription, according to a market source.

The company's $290 million first-lien term loan (Ba3/B+) is now priced at Libor plus 200 bps , down from original talk of Libor plus 225 bps to 250 bps, and the $150 million second-lien term loan (Caa1/CCC+) is now priced at Libor plus 475 bps, down from original talk of Libor plus 550 bps, the source said.

Synagro's $540 million senior secured credit facility also includes a $100 million revolver (Ba3/B+).

Bank of America, Citigroup and Lehman are joint bookrunners on the deal, with Bank of America and Citigroup the joint lead arrangers.

Proceeds will be used to fund the Carlyle Group's buyout of the company in a transaction valued at $772 million, including the assumption of $310 million in debt. Synagro shareholders will get $5.76 per share in cash.

Synagro is a Houston-based recycler of biosolids and other organic residuals.

Graham Packaging ups pricing

Graham Packaging flexed pricing higher on its $1.875 billion term loan B (B1) to Libor plus 225 bps from original talk of Libor plus 200 bps, according to a market source.

Furthermore, a pricing grid was added to the deal under which pricing can increase to Libor plus 250 bps or decrease to Libor plus 200 bps depending on ratings and leverage, the source said.

The term loan B carries 101 soft call protection for one year.

Proceeds will be used to repay the company's second-lien term loan and refinance the existing first-lien term loan B.

The existing first-lien term loan B debt is currently priced at Libor plus 225 bps. With the original price talk, this debt was essentially going to be repriced, but now, the only real change will be the stripping of covenants.

Deutsche Bank and Citigroup are the lead banks on the deal.

Graham Packaging is a York, Pa.-based producer of custom high-value-added blow-molded plastic containers.

Dean Foods cuts B loan pricing

Also on the flex front, Dean Foods Co. lowered pricing on its $1.8 billion seven-year term loan B to Libor plus 150 bps from original talk at launch of Libor plus 175 bps, according to a market source.

Pricing on the company's $1.5 billion five-year revolver and $1.5 billion five-year term loan A was left unchanged at Libor plus 150 bps, the source added.

JPMorgan, Bank of America and Wachovia are the lead banks on the $4.8 billion senior secured credit facility (Ba3/BB).

Proceeds will be used for a recapitalization that will include an approximately $2 billion one-time special cash dividend to shareholders that is payable on April 2 and the refinancing of existing senior secured bank debt.

The company will also be replacing its existing receivables facility with a new secured $500 million three-year facility.

Dean Foods is a Dallas-based food and beverage company.

US Airways closes

US Airways Group, Inc. closed on its new $1.6 billion seven-year term loan (B2/B/BB-) that is priced at Libor plus 250 bps, according to a company news release.

Pricing on the loan can reduce as paydowns are made or if credit ratings improve. The low end of the pricing grid is Libor plus 200 bps and that occurs if the term loan balance is under $600 million or the facility credit rating improves to Ba3/BB-.

During syndication, pricing on the term loan was flexed up twice - first to Libor plus 225 bps from Libor plus 200 bps as a result of weaker-than-anticipated ratings, and then to Libor plus 250 bps from Libor plus 225 bps.

The loan requires the company to maintain a minimum level of unrestricted cash and a minimum collateral coverage ratio.

Proceeds were used to refinance a $1.25 billion senior secured credit facility, refinance a $325 million unsecured debt facility and raise incremental liquidity.

The new loan will reduce the blended interest margin by over 100 bps.

Citigroup and Morgan Stanley acted as the joint lead arrangers on the Tempe, Ariz., airline company's deal.

Hawker Beechcraft closes

Onex Corp. and GS Capital Partners completed their acquisition of Hawker Beechcraft Corp., the aviation division of Raytheon Co., according to a news release.

To help fund the transaction, Hawker Beechcraft got a new $1.81 billion credit facility (Ba3/BB-) consisting of a $400 million six-year revolver at Libor plus 200 bps with a 50 bps commitment fee, a $1.3 billion covenant-light seven-year term loan at Libor plus 200 bps with a step down to Libor plus 175 bps at corporate ratings of B1/B+ and a $110 million covenant-light seven-year pre-funded synthetic letter-of-credit facility at Libor plus 200 bps with a step down to Libor plus 175 bps at corporate ratings of B1/B+.

The term loan and the synthetic letter-of-credit facility were originally launched with price talk of Libor plus 225 bps to 250 bps before flexing down to Libor plus 200 bps with the step to Libor plus 175 bps. At one point during syndication, pricing of Libor plus 175 bps was attempted on the two tranches, but investors dropped out of the book, making the syndicate move pricing back to the initial flex levels.

In addition, during syndication, the term loan was upsized from $1.2 billion after the company downsized its high-yield bond offering by $100 million, and the synthetic letter-of-credit facility was downsized from $250 million.

Credit Suisse, Goldman Sachs and Lehman acted as the lead banks on the deal, with Credit Suisse the left lead.

Hawker Beechcraft is a Wichita, Kan., manufacturer of business jet, turboprop, piston-driven and military training aircraft.

© 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.