Ineos Group, Schrader term loans break above OIDs; Travelport reworks coupon and discount

By Sara Rosenberg

New York, April 27 - Ineos Group Holdings SA's covenant-light senior secured term loan freed up for trading on Friday, with levels on the U.S. debt quoted above the original issue discount prices, and Schrader hit the secondary too.

Switching to the primary, Travelport Ltd. made some issuer-friendly changes to its term loan that has been met with strong demand, including lowering the coupon and revising the original issue discount, and the commitment deadline was accelerated as well.

Ineos tops OID

Ineos Group's $3.025 billion covenant-light senior secured term loan (B1/B+) made its way into the secondary market on Friday, with the $375 million three-year U.S. tranche and the $2 billion six-year U.S. tranche both quoted at 99½ bid, par ½ offered on the open. The three-year loan then moved to par ¼ bid, 101 offered, and the six-year loan moved to par ¼ bid, par 5/8 offered, according to a trader.

Pricing on the three-year loan is Libor plus 425 basis points and pricing on the U.S. six-year loan is Libor plus 525 bps. There is also a €500 million six-year euro tranche priced at Euribor plus 550 bps. All tranches have a 1.25% floor and soft call protection of 102 in year one and 101 in year two. The three-year loan was sold at a discount of 99, and the six-year debt was sold at 981/2.

Barclays Capital Inc. and J.P. Morgan Securities LLC are joint global coordinators and joint bookrunners on the deal, and Goldman Sachs & Co. and UBS Securities LLC are mandated lead arrangers and joint bookrunners.

Ineos repaying debt

Proceeds from Ineos' term loan and $775 million of 7½% bonds will be used to refinance senior secured revolver, term loan C and term loan D borrowings.

On Thursday, the Lyndhurst, England-based chemical company upsized its term loan from $1.5 billion as the three-year loan was increased from an earlier amount of up to $300 million, and plans for a euro piece were eliminated. The six-year debt was raised from initial expectations of about $1.2 billion. As a result, the bonds were downsized from around $2.2 billion.

Also, pricing on the three-year loan was flexed down from talk of Libor plus 450 bps to 475 bps, the U.S. six-year loan firmed at the tight end of Libor plus 525 bps to 550 bps guidance, the euro six-year loan firmed at the low end of Euribor plus 550 bps to 575 bps talk, and the discount on the six-year debt came at the tight end of the 98 to 98½ guidance.

Initially, the six-year loan was guided in the low 7% context, with the floor at 1.25%, and the three-year loan was expected in the loan 6% area. Formal talk hadn't emerged until Wednesday.

Schrader starts trading

Also freeing up was Schrader's credit facility, with the $235 million covenant-light first-lien term loan (B1/B) quoted at 98½ bid, 99½ offered on the break and then it moved to 98¾ bid, 99¾ offered, and the $100 million covenant-light second-lien term loan (Caa1/B-) quoted at 98¾ bid, 99¾ offered, according to sources.

Pricing on the first-lien loan, which was upsized from $230 million, is Libor plus 500 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 98, after flexing from talk of Libor plus 450 bps to 475 bps with a 1.25% floor and a discount of 981/2. There is 101 soft call protection for one year.

The second-lien loan is priced at Libor plus 925 bps with a 1.25% Libor floor, and was sold at a discount of 971/2, after widening from Libor plus 850 bps to 900 bps with a 1.25% floor and a discount of 98. There is hard call protection of 103 in year one, 102 in year two and 101 in year three.

Pricing was lifted on the loans as a result of the company's decision to remove the interest coverage and leverage ratios from the first-lien tranche and the leverage ratio from the second-lien tranche.

Schrader lead banks

Barclays Capital Inc., Goldman Sachs & Co. and Citigroup Global Markets Inc. led Schrader's $370 million credit facility, which also includes a $35 million revolver (B1/B).

Proceeds, along with equity, were used to fund the purchase of the company by Madison Dearborn Partners LLC from Tomkins for $505 million in cash plus a small minority equity interest. Closing on the transaction was announced on Friday.

The upsizing to the first-lien term loan was done to cover the larger original issue discount prices.

Total leverage is around 4.4 times.

Schrader is a manufacturer of tire pressure monitoring systems, valve products and tire hardware and related accessories for both original equipment manufacturers and aftermarket customers.

iStar inches up

In more trading news, iStar Financial Inc.'s old term loan A-1 and term loan A-2 were better by an eight of a point on the day, moving to par bid, par ¼ offered, despite news of a first quarter loss, according to a source.

The new term loan A-1 was unchanged at 99½ bid, par ¼ offered, and the new term loan A-2 was also flat at par ½ bid, 101 offered, the source said.

For the first quarter, the company reported a net loss of $54.8 million, or $0.66 per diluted common share, compared to net income of $67.4 million, or $0.71 per diluted common share, last year.

Total revenues were $94.7 million, versus $110.2 million in the prior year.

And, adjusted EBITDA was $95.1 million, compared to $90.4 million in the 2011 quarter.

Furthermore, with earnings, the New York-based finance company disclosed that it paid down $144.8 million of its old term loan A-1 after the first quarter ended.

Travelport reworks pricing

Moving to the primary, Travelport revised spread and original issue discount lower on its $175 million 11/2-lien term loan, and moved the commitment deadline to Friday from this coming Wednesday, according to a market source.

The loan, due Nov. 22, 2015, is now priced at Libor plus 950 bps with a 1.5% Libor floor and an original issue discount of 97, versus initial talk of Libor plus 1,100 bps with a 1.5% floor and a discount of 96, the source said. There is still hard call protection of 103 in year one, 102 in year two and 101 in year three.

Credit Suisse Securities (USA) LLC and UBS Securities LLC are the lead banks on the deal that will be used to repay the company's non-extended term loan due in 2013.

Travelport is an Atlanta-based provider of transaction processing services to the travel industry.

Pisces readies allocations

Pisces Energy LLC is planning on allocating its $185 million four-year first-lien term loan early in the week of April 30, according to a market source.

The loan is priced at Libor plus 1,000 bps with a 2% Libor floor and an original issue discount of 97, and is non-callable for two years, then at 105 in year three and 103 in year four, the source said.

UBS Securities LLC is leading the deal that will be used to acquire properties in the Gulf of Mexico shelf from Exxon Mobil and BHP Billiton, prefund development capital expenditures and recapitalize the balance sheet.

Pisces Energy, a Metairie, La.-based producer, developer, acquirer and exploiter of crude oil and natural gas properties in the Gulf of Mexico, expects to close on the loan in mid-May.

Plato fills out

Plato Learning successfully wrapped syndication on its $390 million credit facility at revised terms and it is expected that allocations will go out during the week of April 30, according to a market source.

The facility consists of a $25 million five-year revolver (Ba3), a $225 million six-year first-lien term loan (Ba3) at Libor plus 600 bps with a 1.5% Libor floor and an original issue discount of 981/2, and a $140 million seven-year second-lien term loan (Caa1) at Libor plus 975 bps with a 1.5% floor and a discount of 98.

There is 101 soft call protection for one year on the first-lien term loan, and the second-lien loan is non-callable for one year, then at 103 in year two and 101 in year three.

Credit Suisse Securities (USA) LLC and Jefferies & Co. are the lead banks on the deal.

Plato buying Archipelago

Proceeds from Plato Learning's credit facility will be used with $60 million of equity to fund the acquisition of Archipelago Learning for $11.10 per share in cash, or about $291 million.

During syndication, the first-lien term loan was downsized from $240 million as the second-lien loan was upsized from $125 million, the spread on the first-lien loan flexed from talk of Libor plus 450 bps to 475 bps, the spread on the second-lien loan flexed from talk of Libor plus 875 bps to 900 bps, and the Libor floor on both tranches was increased from 1.25%. Also, second-lien call protection was sweetened from 103 in year one, 102 in year two and 101 in year three.

Closing on the transaction is expected in the second quarter, subject to regulatory approvals and the approval of Archipelago Learning shareholders.

Plato is a Bloomington, Minn.-based provider of education technology services. Archipelago Learning is a Dallas-based subscription-based software-as-a-service provider of education products.

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