Neiman, Progressive, Paradigm, Systems Maintenance, Navios, Focus Brands break; NRG softens

By Sara Rosenberg

New York, Oct. 18 - Neiman Marcus Group Ltd. Inc.'s credit facility made its way into the secondary market on Friday with its term loan seen trading above its original issue discount price, and Progressive Solutions (P2 Lower Acquisition LLC), Paradigm Precision Group, Systems Maintenance Services, Navios Maritime Partners LP and Focus Brands Inc. freed up as well.

Also in trading, NRG Energy Inc.'s term loan was a little softer following the company's announcement that it will be acquiring Edison Mission Energy and will use new corporate debt for the transaction.

Moving to the primary, Calpine Corp. tightened the original issue discount on its term loan, Dole Food Co. Inc. lifted the size of its term loan while shortening the tenor, and Penn National Gaming Inc. reduced pricing and Libor floor on its B loan.

Furthermore, Garda World Security Corp. and Genesys Telecommunications Laboratories Inc. surfaced with new deal plans.

Neiman frees up

Neiman Marcus' credit facility broke for trading on Friday, with the $2.95 billion seven-year first-lien covenant-light senior secured term loan (B2/B) quoted at par bid, par ½ offered, according to a market source.

Pricing on the term loan is Libor plus 400 basis points with a step-down to Libor plus 375 bps when net first-lien leverage is below 4 times. There is a 1% Libor floor and 101 soft call protection for one year, and the debt was sold at an original issue discount of 991/2.

During syndication, the spread on the term loan was increased from talk of Libor plus 350 bps to 375 bps, the step-down was added, the discount was tightened from 99, the call protection was extended from six months and the MFN protection was set for the life of the loan instead of having an 18-month sunset.

The company's $3.75 billion credit facility also provides for an $800 million five-year ABL revolver with pricing ranging from Libor plus 125 bps to 175 bps based on utilization.

Neiman being acquired

Proceeds from Neiman's credit facility, $1.56 billion of senior notes, about $1.6 billion of equity and $62 million in cash on hand will finance its $6 billion purchase by Ares Management LLC and Canada Pension Plan Investment Board from TPG and Warburg Pincus.

Credit Suisse Securities (USA) LLC, RBC Capital Markets LLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA and Morgan Stanley Senior Funding Inc. are the bookrunners on the term loan, and Deutsche Bank, Credit Suisse, RBC, Bank of America Merrill Lynch, GE Capital Markets, J.P. Morgan Securities LLC, Wells Fargo Securities LLC, BMO Capital Markets Corp., SunTrust Robinson Humphrey Inc. and UBS Securities LLC are the bookrunners on the revolver.

Closing is expected in the fourth quarter, subject to regulatory approvals and other customary conditions.

Neiman Marcus is a Dallas-based luxury retailer.

Progressive starts trading

Progressive Solutions' credit facility also hit the secondary market, with both the $490 million seven-year first-lien covenant-light term loan (B1/B) and the $160 million eight-year covenant-light second-lien term loan (Caa1/CCC+) quoted at 99½ bid, par bid, a trader remarked.

Pricing on the first-lien term loan is Libor plus 450 bps with a 1% Libor floor and it was sold at a discount of 99. There is 101 soft call protection for one year.

The second-lien term loan is priced at Libor plus 850 bps with a 1% Libor floor and was also sold at 99. This tranche has call protection of 103 in year one, 102 in year two and 101 in year three.

Recently, the first-lien loan spread was lifted from talk of Libor plus 375 bps to 400 bps and the call protection was extended from six months, and the second-lien loan was flexed from talk of Libor plus 775 bps to 800 bps while its call protection was revised from 102 in year one and 101 in year two.

Other changes made included reducing the incurrence test for restricted payments for dividends or distributions to 3.0 times first-lien net leverage from 3.25 times, trimming the incremental amount not subject to a leverage test to $100 million from $125 million, removing the MFN sunset provision and adding an aggregate cap on cost savings and synergies in the definition of consolidated EBITDA after year one of 20% of consolidated EBITDA.

Progressive lead banks

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and MCS Capital Markets are leading Progressive Solutions' $700 million credit facility, which also provides for a $50 million five-year revolver (B1/B).

Proceeds will be used to help fund the merger of Progressive Solutions and PMSI Holdings Corp.

Progressive Solutions is a pharmacy benefit manager for workers compensation.

Paradigm levels emerge

Paradigm Precision's credit facility freed to trade in the afternoon, with the $260 million seven-year covenant-light term loan B quoted at 99¼ bid, par ¼ offered, according to a trader.

Pricing on the B loan is Libor plus 450 bps 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.

During syndication, the spread on the term B firmed at the wide end of revised talk of Libor plus 425 bps to 450 bps, and up from initial talk in the Libor plus 400 bps area, the call protection was extended from six months, the 18 month MFN sunset provision was removed and the incremental allowance was changed to $60 million from $100 million with there still being an option for additional amounts up to 4.75 times net first-lien leverage.

The company's $330 million credit facility (B2/B) also includes a $70 million revolver.

Paradigm funding acquisition

Proceeds from Paradigm Precision's credit facility will be used to help fund the acquisition of eight aerospace component fabrication and machining facilities from Unison Engine Components, a subsidiary of GE Aviation.

Closing is expected by the end of the year.

RBC Capital Markets LLC, Deutsche Bank Securities Inc., SMBC and SunTrust Robinson Humphrey Inc. are the bookrunners on the deal.

Paradigm Precision is a Stuart, Fla.-based manufacturer of complex components. It specializes in the combustion section of turbine engines used in commercial and military aviation as well as industrial gas turbine applications.

Systems Maintenance breaks

Another deal to begin trading was Systems Maintenance Services, with its $160 million first-lien term loan B seen at 99¾ bid, par ¼ offered, according to a trader.

Pricing on the first-lien B loan is Libor plus 425 bps with a 1% Libor floor and it was sold at an original issue discount of 991/2, after tightening the other day from 99. The debt includes a step-down to Libor plus 400 bps based on leverage, which was added during syndication.

The company's $240 million credit facility also includes a $20 million revolver and a $60 million second-lien term loan.

The second-lien term loan is priced at Libor plus 825 bps with a 1% Libor floor and was sold at a discount of 99, after being revised recently from 981/2. There is call protection of 103 in year one, 102 in year two and 101 in year three.

GE Capital Markets and BMO Capital Markets are leading the deal that will be used to refinance existing debt and fund a dividend.

Systems Maintenance Services is a Charlotte, N.C.-based provider of managed IT asset lifecycle support services.

Navios tops issue price

Navios' $189.5 million fungible add-on term loan B due June 27, 2018 broke too, with levels quoted at 101 bid, 102 offered, a source remarked.

Pricing on the add-on loan is Libor plus 425 bps with a 1% Libor floor, in line with existing term loan B pricing, and it was issued at par. There is hard call protection of 102 through June 2014 and 101 for one year thereafter.

Prior to allocating, the add-on term loan was upsized from $182.5 million and the offer price was set at the tight end of the 99 to par talk, another source added.

Morgan Stanley Senior Funding Inc., J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are leading the deal that will be used to fund the acquisition of five container vessels.

Closing is expected to occur on Nov. 1.

Navios is a Piraeus, Greece-based owner and operator of tanker vessels.

Focus hits secondary

Focus Brands' $201 million fungible add-on first-lien term loan due February 2018 freed up as well, with levels quoted at 99½ bid, par offered, according to a market source.

The add-on loan is priced at Libor plus 325 bps with a 1% Libor floor and was sold at an original issue discount of 991/2. There is 101 soft call protection for one year, revised during syndication from 101 soft call protection through April 2014, the source said.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to fund the acquisition of McAlister's Deli.

Focus Brands is an Atlanta-based franchisor and operator of ice cream stores, bakeries, restaurants and cafes.

NRG heads lower

Also in the secondary market, NRG Energy's term loan fell to 99¼ bid, 99¾ offered from 99 3/8 bid, 99 7/8 offered after news surfaced that the company will purchase Edison Mission Energy for an aggregate price of $2,635,000,000, according to a trader.

Funds for the transaction will come from new corporate debt, cash on hand and the issuance of about 12.7 million shares of common stock for $350 million.

"Up in the air as to which market they're going to tap for the debt," the trader said, explaining that if they get more bank debt it would make sense for the existing term loan to come under some pressure in trading.

The acquisition will be completed as part of an Edison Mission's Chapter 11 plan of reorganization and closing is expected in the first quarter of 2014, subject to, among other things, bankruptcy court approval, the effectiveness of the registration statement and approval for the listing of the NRG common stock on the NYSE, and receipt of regulatory approval.

NRG is a wholesale power generation company with headquarters in Princeton, N.J., and Houston. Edison Mission is a Santa Ana, Calif.-based owner, operator and leaser of a portfolio of electric generating facilities.

Calpine tweaks OID

Over in the primary, Calpine changed the original issue discount on its $390 million seven-year senior secured covenant-light term loan (B1) to 99 7/8 from 99, while keeping pricing at Libor plus 300 bps with a 1% Libor floor and the 101 soft call protection for six months intact, according to a market source.

Commitments were due at 5 p.m. ET on Friday, moved up from the original deadline of 5 p.m. ET on Tuesday, the source said, adding that allocations are expected to go out on Monday.

On Thursday, the deal launched with a size of $570 million, but shortly thereafter was trimmed to $390 million when the company's bond offering was upsized to $750 million from $570 million.

Citigroup Global Markets Inc., Barclays, Morgan Stanley Senior Funding Inc., RBC Capital Markets, UBS Securities LLC, Mitsubishi and RBS Securities Inc. are leading the deal that is expected to close on Oct. 31.

Proceeds from the loan and notes will be used to redeem 7¼% senior secured notes due 2017.

Calpine is a Houston-based power producer.

Dole upsizes

Dole Food increased its covenant-light term loan B (B2/B-) to $725 million from $675 million and revised the tenor to five years from seven years, according to market sources.

As before, the loan is talked at Libor plus 375 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

Allocations are expected to go out during the week of Oct. 21, sources remarked.

The company's now $875 million senior secured credit facility also includes a $150 million five-year ABL revolver that is talked at Libor plus 175 bps.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch and Scotia Capital are the leading the deal that will be used with $275 million of senior notes and $200 million of equity to fund the buyout of the Westlake Village, Calif.-based fruit and vegetable company by chairman and chief executive officer David H. Murdock for $13.50 in cash per share, or about $1.6 billion.

The notes offering was reduced from $325 million with the term loan upsizing.

Closing is expected to take place during the fourth quarter.

Penn National flexes

Penn National Gaming cut pricing on its $250 million seven-year term loan B to Libor plus 250 bps from talk of Libor plus 275 bps to 300 bps and trimmed the Libor floor to 0.75% from 1%, according to a market source.

The term B still has an original issue discount of 99½ and 101 soft call protection for six months.

Recommitments are due at noon ET on Monday, the source said.

The company's $1.25 billion senior secured credit facility (Ba1/BB+) also includes a $500 million five-year revolver and a $500 million five-year term loan A.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Wells Fargo Securities LLC are leading the deal that will be used with $300 million in notes to fund future expansion, development and renovation projects and acquisitions.

Penn National is a Wyomissing, Pa.-based owner and operator of gaming and racing facilities.

Garda readies deal

Also on the primary front, Garda World Security set a bank meeting for 10 a.m. ET on Tuesday to launch a roughly $825 million senior secured credit facility, according to a market source.

The facility consists of a $150 million five-year revolver, a $525 million seven-year term loan B and a C$150 million seven-year term loan B, the source said.

RBC Capital Markets, Bank of America Merrill Lynch, TD Securities (USA) LLC and Mizuho Securities USA Inc. are leading the deal that will be used to refinance existing credit facility debt and senior unsecured notes due 2017, and fund the C$110 million acquisition of G4S Cash Solutions, a provider of risk management and secure transit of valuables.

Closing on the acquisition is expected before the end of this year, subject to customary conditions including regulatory approvals.

Garda is a Montreal, Canada-based provider of business and security services.

Genesys on deck

Genesys scheduled a call for 11 a.m. ET on Tuesday to launch a $300 million term loan of which $100 million will be funded and $200 million will be delayed-draw, according to a market source.

J.P. Morgan Securities LLC and Goldman Sachs Bank USA are leading the deal.

Proceeds will be used to refinance existing debt and fund the acquisition of Echopass Corp., which is expected to close in the fourth quarter.

Genesys is a Daly City, Calif.-based provider of customer engagement and contact center solutions. Echopass is a Pleasanton, Calif.-based application service provider offering web-based telephone and internet customer support services.

Scientific Games closes

In other news, Scientific Games Corp. completed its $2.6 billion senior secured credit facility (Ba2/BB-) that consists of a $300 million five-year revolver priced at Libor plus 300 bps and a $2.3 billion seven-year covenant-light term loan B, according to an 8-K filed with the Securities and Exchange Commission.

Pricing on the B loan is Libor plus 325 bps, after flexing during syndication from talk of Libor plus 275 bps to 300 bps. There is a 1% Libor floor and 101 soft call protection for six months, and the debt was sold at an original issue discount of 991/2.

Proceeds were used to help fund the purchase of WMS Industries Inc. for $26.00 in cash per common share, or about $1.5 billion total, and to refinance credit facilities at both companies.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and UBS Securities LLC were the joint lead arrangers on the deal and bookrunners with J.P. Morgan Securities LLC, RBS Securities Inc., Deutsche Bank Securities Inc., Goldman Sachs Bank USA and HSBC Securities (USA) Inc.

Scientific Games is a New York-based provider of customized, end-to-end gaming services to lottery and gaming organizations. WMS is a Waukegan, Ill.-based designer, manufacturer and marketer of video and mechanical reel-spinning gaming machines, video lottery terminals and in gaming operations.

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