Realogy breaks; Phillips-Van Heusen dips with refi; Freescale up with IPO buzz, earnings

By Sara Rosenberg

New York, Jan. 27 - Realogy Corp.'s extended bank debt began being quoted in the secondary market on Thursday, with levels seen in the upper 90s context, and Phillips-Van Heusen Corp.'s term loan B headed lower after word of a refinancing plan hit the market.

Additionally, Freescale Semiconductor Inc.'s term loan was stronger after reports surfaced claiming that the company is preparing to do an initial public offering of common stock and quarterly numbers were positive.

Over in the primary market, Acosta Sales & Marketing, Axcan Holdings Inc. and Intelligrated Inc. came out with price talk on their credit facilities as all three transactions were officially launched to investors during the session.

Also, MotorCity Casino Hotel started circulating some price talk on its upcoming credit facility, Electrical Components International reworked tranching and firmed pricing at the wide end of talk on its loan, and Allied Security Holdings LLC (AlliedBarton) shifted funds between its term loans and reduced pricing.

Realogy frees up

Realogy's extended bank debt hit the secondary market on Thursday, with the strip of extended term loan and synthetic letter-of-credit facility quoted at 96¾ bid, 97¼ offered on the open and then moving up to 97 bid, 97½ offered, according to a trader.

The company extended about $2.421 billion of its term loan B and about $173 million of its synthetic letter-of-credit facility by three years to Oct. 10, 2016 with pricing of Libor plus 425 basis points.

There is roughly $638 million of non-extended first-lien term loans that are priced at Libor plus 300 bps.

In addition to the institutional debt, the company extended about $461 million of its revolver by three years to April 10, 2016 at pricing of Libor plus 325 bps, up from Libor plus 225 bps on the roughly $191 million non-extended revolver.

Realogy plans paydown

In order for Realogy's amendment and extension to take effect, the company must complete its $700 million secured bond offering and use the funds to repay extended term loan B borrowings.

Lenders holding about $103 million of the extended term loan B elected not to receive a portion of the prepayment. Lenders holding the remaining $2.318 billion of the extended B loan will receive the prepayment on a pro rata basis.

Other terms of the amendment include allowing future issuances of additional senior secured or unsecured notes or loans to prepay first-lien term loans and/or second-lien loans, and the incurrence of $350 million of incremental term loans that are secured on a junior basis to the second-lien loans.

JPMorgan is the administrative agent on the deal.

Investors were offered a 10 bps amendment fee by the Parsippany, N.J.-based provider of real estate and relocation services.

Phillips-Van Heusen slides

Phillips-Van Heusen's term loan B softened in trading after news surfaced that a refinancing of the debt will be launched on Monday via lead banks Barclays, Deutsche Bank, Bank of America, Credit Suisse and RBC, according to traders.

The New York-based apparel company's term loan B was quoted by one trader at par 1/8 bid, par 5/8 offered, down from 101¼ bid, 101¾ offered, and by a second trader at par 1/8 bid, par ¾ offered, down from 101 3/8 bid, 102 offered.

Under the credit facility refinancing, the company plans on getting more term loan A and less term loan B debt, and lowering pricing, sources told Prospect News. Additional details on the refinancing deal are expected to emerge with launch.

In May 2010, the company completed a $2.35 billion senior secured credit facility (Ba2/BBB) for its acquisition of Tommy Hilfiger BV, consisting of a $450 million five-year revolver, a $500 million five-year term loan A and a $1.4 billion six-year term loan B.

Phillips deleveraging

As of Oct. 31, Phillips-Van Heusen had about $480 million outstanding under its term loan A and about $1.34 billion outstanding under its term loan B. The company said in a news release on Thursday that the refinancing will reflect a deleveraging, including a voluntary prepayment of $150 million of principal in February that was previously anticipated to be made by Jan. 30. In addition, a voluntary repayment of about $150 million of principal was made in December.

Pricing on the existing revolver, term loan A and term loan B is Libor plus 300 bps on the U.S. pieces and Euribor plus 325 bps on the foreign pieces. The term loan A and the term loan B have a 1.75% Libor floor. The original issue discount on the term loan B was 991/2.

During syndication, the B loan had been reduced from $1.5 billion because bond and equity offerings were upsized, the spread on the U.S. piece was cut from talk of Libor plus 325 bps to 350 bps, the spread on the euro piece was cut from talk of Euribor plus 350 bps to 375 bps, and the discount tightened from 99.

Phillips affirms guidance

In connection with the discussions regarding the credit facility refinancing, Phillips-Van Heusen reaffirmed its previous guidance estimates for revenue and earnings per share for the fiscal quarter and year ending Jan. 30, and it provided guidance for its 2010 pro forma revenue and EBITDA, adjusted as if the Tommy Hilfiger acquisition occurred as of the first day of the fiscal year.

For the fourth quarter, the Company continues to expect earnings per share to be $0.69, compared to $0.51 in the prior year's fourth quarter, and total revenue for the fourth quarter continues to be estimated at $1.37 billion.

For the year, earnings per share is estimated to be $0.70, compared to $3.08 in the prior year, and total revenue continues to be estimated at $4.61 billion, compared to revenue of $2.4 billion previously.

And, total revenue and EBITDA for 2010, adjusted to reflect the Tommy Hilfiger transaction, are projected to be $5.24 billion and $773.6 million, respectively.

Freescale gains ground

Freescale's term loan moved up as news outlets reported that the company is getting ready to hire banks to underwrite an initial public offering of stock and fourth-quarter numbers exceeded expectations, according to traders.

The term loan was quoted by one trader at par 3/8 bid, par ¾ offered, up from 99 3/8 bid, 99 7/8 offered, and by a second trader at par 1/8 bid, par 5/8 offered, up from 99¾ bid, par ¼ offered.

For the quarter, Freescale reported net sales of $1.18 billion, compared to $951 million in the previous year's fourth quarter, income from operations of $17 million, compared to last year's loss of $261 million, and EBITDA of $280 million versus $168 million in the fourth quarter of 2009.

Freescale is an Austin, Texas-based designer and manufacturer of embedded semiconductors for the automotive, consumer, industrial and networking markets.

Acosta discloses talk

Switching to the primary, Acosta Sales & Marketing held a bank meeting on Thursday morning to kick off syndication on its proposed credit facility, at which time price talk on the $900 million term loan was revealed, according to sources.

The term loan was launched at Libor plus 350 bps to 375 bps with a 1.5% Libor floor and an original issue discount of 99 to 991/2, sources said.

Goldman Sachs and Barclays are the lead banks on the $990 million deal, which also includes a $90 million revolver.

Proceeds from the credit facility, along with $610 million of unsecured debt that is not being marketed, will be used to help fund the buyout of the company by Thomas H. Lee Partners from AEA Investors.

Acosta is a Jacksonville, Fla.-based sales and marketing agency in the consumer packaged goods industry.

Axcan guidance announced

Axcan Holdings told lenders on Thursday morning that its $225 million six-year term loan is being talked at Libor plus 475 bps with a 1.5% Libor floor and an original issue discount of 99½ and provides for 101 soft call protection for one year, according to a market source.

The company's $340 million senior secured credit facility (B1/BB) also includes a $115 million amended and restated revolver that is expected to be undrawn at close other than for amounts required to finance any original issue discounts and fees and expenses.

Based on filings with the Securities and Exchange Commission, initial pricing on extended revolver commitments due in 2016 is expected at Libor plus 450 bps with a 75 bps unused fee, while pricing on the non-extended revolver due Feb. 25, 2014 is Libor plus 350 bps with a 50 bps unused fee.

Bank of America, RBC Capital Markets, HSBC Securities and Barclays Capital are the joint lead arrangers and bookrunners on the deal that was launched with a conference call instead of a bank meeting as a result of the snowstorm that hit New York.

Axcan buying Eurand

Proceeds from Axcan's term loan, $225 million of secured notes, $145 million of equity and cash on hand will be used to fund the acquisition of Eurand NV for $12 per share, or $586.5 million in total on a fully diluted basis, to repay Eurand's debt and to repay Axcan's outstanding term loan.

Initially, the company had said that it received a commitment for a $445 million bridge loan for the acquisition and was planning to use $160 million of equity.

Axcan is tendering for Eurand's shares in an offer will expire on Feb. 3. The acquisition is subject to a minimum tender of 80% of Eurand shares and receipt of antitrust approval, which has already been received.

The amended and restated revolver will be used to replace an existing revolver.

Axcan is a Mont-Saint-Hilaire, Quebec-based pharmaceutical company focused on the treatment of gastrointestinal disorders. Eurand is an Amsterdam-based specialty pharmaceutical company.

Intelligrated reveals talk

Also announcing pricing guidance in conjunction with its launch was Intelligrated with its $145 million six-year term loan B talked at Libor plus 550 bps with a 1.75% Libor floor and an original issue discount of 99, according to a market source, who said there's 101 soft call protection for one year.

Commitments towards the company's $175 million credit facility (B2), which also includes a $30 million five-year revolver, are due on Feb. 10.

Bank of America is the lead bank on the deal and, like with Axcan, opted to hold a conference call to launch the facility as opposed to a bank meeting because of the poor weather conditions.

Proceeds will be used to refinance an existing second-lien loan and fund a $95 million dividend payment.

Intelligrated, a Cincinnati-based provider of automated material handling systems, will have first-lien leverage of 3.8 times following completion of the transaction.

MotorCity readies deal

MotorCity Casino Hotel has set a bank meeting for Tuesday to launch a new credit facility and began floating talk of Libor plus 525 bps with a 2% Libor floor on the $615 million six-year term loan, according to sources.

Original issue discount guidance on the term loan has not yet been released, sources added.

The $635 million credit facility also includes a $20 million five-year revolver.

Bank of America and Citadel are leading the deal for the Detroit casino that will be used to refinance existing debt.

ECI tweaks deal

Electrical Components International (ECI) decided to downsize its revolver to $15 million from $30 million and add a $15 million synthetic revolver to its capital structure, according to a market source.

In addition, the company firmed pricing on its $160 million term loan and new synthetic revolver at Libor plus 525 bps with a 1.5% Libor floor and an original issue discount of 981/2, the source said. This is the wide end of initial talk on the term loan of Libor plus 500 bps to 525 bps.

The synthetic revolver and the term loan will allocate on a pro rata basis to all lenders who have committed to the term loan.

Credit Suisse is the lead bank on the $190 million deal (B1/B+) that will be used to refinance existing debt and has asked for recommitments by noon ET on Friday.

Electrical Components is a St. Louis-based provider of wire harnesses, subassemblies and assembly services.

Allied reworks loan

Allied Security also changed tranching on its facility, upsizing its six-year first-lien term loan to $420 million from $395 million and downsizing its seven-year covenant-light second-lien term loan to $165 million from $190 million, according to a market source.

In addition, pricing on the first-lien term loan was lowered to Libor plus 375 bps with a 1.25% Libor floor and an original issue discount of 99¾ from Libor plus 400 bps with a 1.5% floor and a discount of 99, the source said, and pricing on the second-lien term loan was cut to Libor plus 700 bps from Libor plus 750 bps, while the 1.5% Libor floor and discount of 99 were left unchanged.

As before, the second-lien loan includes call protection of 103 in year one, 102 in year two and 101 in year three.

Allied getting revolver

Allied Security's $660 million credit facility, which is being led by Credit Suisse and Bank of America, also includes a $75 million five-year revolver.

Recommitments are due from lenders on Friday afternoon.

Proceeds will be used to refinance existing bank and mezzanine debt.

Rating under the original structure, were Ba3/B+ on the revolver and first-lien term loan, and B3/CCC+ on the second-lien loan.

Allied Security is a Conshohocken, Pa.-based security services company.

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