NFR breaks; Apex shutting early; Tesoro, LMI Aerospace, ATI Physical, Unifrax set talk

By Sara Rosenberg

New York, Jan. 16 - NFR Energy LLC's second-lien term loan freed up for trading on Wednesday, with levels seen above its original issue discount price.

Over in the primary, Apex Tool Group moved up the commitment deadline on its credit facility, Tesoro Corp., LMI Aerospace Inc., ATI Physical Therapy Inc. and Unifrax I LLC came out with price talk as their deals were presented to investors during the session, and Crossmark and Healogics Inc. surfaced with plans to bring new deals to market.

NFR starts trading

NFR Energy's $650 million senior secured covenant-light second-lien term loan (Caa1/B) due Dec. 31, 2018 hit the secondary market on Wednesday, with levels seen at par ¼ bid, par ¾ offered, according to a trader.

Pricing on the loan is Libor plus 750 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is call protection of 102 in year one and 101 in year two for any debt refinancing.

Earlier in the week, the loan was upsized from $500 million, the spread firmed at the tight end of the Libor plus 750 bps to 775 bps talk and the discount tightened from 98.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Natixis are leading the deal that is being used with equity to fund the acquisition of TLP Energy LLC for $655 million and certain Eagle Ford Shale assets from two independent oil and gas companies for $81 million.

NFR Energy is a Houston-based independent energy company that is in the process of changing its name to Sabine Oil & Gas LLC.

Apex revises deadline

Moving to the primary, Apex Tool accelerated the commitment deadline on its $1.01 billion senior secured credit facility (B1/B) to 5p.m. ET on Jan. 23 from Jan. 25, according to a market source.

The facility consists of a $175 million five-year revolver and an $835 million seven-year covenant-light term loan.

Talk on the term loan is Libor plus 400 bps to 425 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

Barclays, Goldman Sachs & Co., Morgan Stanley Funding Inc., RBC Capital Markets LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are leading the deal that will be used to help fund the buyout of the Sparks, Md.-based tool manufacturer by Bain Capital from Cooper Industries and Danaher Corp. for about $1.6 billion.

Senior secured leverage is 3.6 times and net total leverage is 5.4 times.

Closing is expected in the first half of this year, subject to customary conditions, including regulatory approvals.

Tesoro reveals talk

Tesoro held a call on Wednesday afternoon to launch its $500 million three-year term loan B (Ba1), and shortly before the call kicked off, talk on the debt emerged at Libor plus 275 bps with an offer price of 99¾ to par and 101 soft call protection for one year, according to a market source.

J.P. Morgan Securities LLC is leading the transaction.

Proceeds from the loan and cash will fund the purchase of BP's integrated Southern California refining and marketing business for $1.18 billion, plus the value of inventory at the time of closing.

Closing is expected by mid-year, subject to regulatory approval.

Tesoro is a San Antonio-based refiner and marketer of petroleum products.

LMI sets guidance

LMI Aerospace released with its bank meeting talk on its $225 million six-year term loan B of Libor plus 400 bps to 425 bps with a 1.25% Libor floor and an original issue discount of 99, a market source said. The debt has 101 soft call protection for one year.

RBC Capital Markets and Wells Fargo Securities LLC are leading the $325 million senior secured credit facility (B1/B+), which also includes a $100 million five-year revolver with a 50 bps unused fee that can step-down to 37.5 bps based on leverage.

According to prior filings with the Securities and Exchange Commission, the credit facility was actually entered into on Dec. 28.

The deal that funded included a $75 million five-year revolver and a $225 million six-year term loan, with both tranches priced at Libor plus 475 bps. The term loan has a 1.25% Libor floor and 101 soft call protection for one year, and the revolver has a 50 bps unused fee.

LMI timeline

Commitments for LMI Aerospace's credit facility are due on Jan. 30 and allocations are expected to go out during the week of Feb. 4, according to an 8-K filed with the Securities and Exchange Commission.

Proceeds are being used to back the company's already completed acquisition of Valent Aerostructures LLC, refinance existing debt and provide for working capital needs.

LMI Aerospace is a St. Charles, Mo.-based supplier of structural assemblies, kits and components and provider of design engineering services to the aerospace and defense industries. Valent is a Kansas City, Mo.-based provider of structural components, major sub-assemblies and machined parts for airframe manufacturers.

ATI Physical pricing

ATI Physical Therapy set guidance on its $285 million seven-year term loan B at Libor plus 500 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

The company's $335 million secured credit facility (Ba3/B+), which launched with a bank meeting on Wednesday, also provides for a $50 million revolver.

Leads, Jefferies & Co. and Ally Commercial Finance, are seeking commitments by Jan. 30, the source continued.

Proceeds from the credit facility, $160 million of mezzanine debt from Crescent Mezzanine Partners and equity will back the buyout of the company by KRG Capital Partners from GTCR that was completed in December.

ATI Physical Therapy is a Bolingbrook, Ill.-based operator of physical therapy clinics.

Unifrax talk emerges

Unifrax launched its $400 million covenant-light term loan on Wednesday with talk of Libor plus 400 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

Goldman Sachs & Co. is the lead bank on the $450 million credit facility, which also includes a $50 million revolver.

Proceeds will be used to refinance existing debt and to help fund an acquisition.

Unifrax is a Niagara Falls, N.Y.-based supplier of high-temperature insulation products.

Walter launches

Walter Investment Management Corp. held its call in the morning, launching a $475 million first-lien add-on term loan (B2) due Nov. 28, 2017 at previously outlined talk of Libor plus 450 bps with a 1.25% Libor floor, a discount of 99 to 99½ and 101 repricing protection until Nov. 28, 2013.

Commitments are due on Jan. 23 and closing is targeted for Jan. 31.

Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc. and Bank of America Merrill Lynch are the joint bookrunners on the deal, with Barclays and the Royal Bank of Scotland plc joint lead arrangers.

According to an 8-K filed with the SEC, pro forma first-lien debt to adjusted EBITDA is 2.2 times, net first-lien debt to adjusted EBITDA is 1.6 times, total debt to equity is 1.8 times and total debt to adjusted EBITDA is 2.7 times.

Proceeds will fund the initial installments for the purchase of the mortgage servicing rights related to the $93 billion in UPB of servicing from Bank of America, and for general corporate purposes.

Walter is a Tampa, Fla.-based asset manager, mortgage servicer and mortgage portfolio.

Crossmark coming soon

In more new deal happenings, Crossmark scheduled a bank meeting for Friday to launch a $490 million credit facility that consists of a $75 million revolver, a $310 million covenant-light first-lien term loan and a $105 million covenant-light second-lien term loan, according to a market source.

Bank of America Merrill Lynch, Barclays, Credit Suisse Securities (USA) LLC and UBS Securities LLC are leading the deal.

Proceeds will help fund the purchase of the company by Warburg Pincus from management.

Crossmark is a Plano, Texas-based sales and marketing services company in the consumer goods industry.

Healogics on deck

Healogics set a bank meeting for Tuesday to launch a $430 million credit facility that will be used to refinance existing debt and fund a distribution to shareholders, according to a market source.

The facility consists of a $30 million revolver (B), a $290 million first-lien term loan (B) and a $110 million second-lien term loan (CCC+), the source said.

RBC Capital Markets, GE Capital Markets Corp., BMO Capital Markets and Jefferies & Co. are leading the deal.

Healogics is a Jacksonville, Fla.-based provider of outpatient wound care management services.

Varel closes

Varel International Energy Funding Corp. completed its $240 million credit facility, comprised of a $20 million four-year revolver and a $220 million 41/2-year first-lien term loan, a news release said.

Pricing on the term loan is Libor plus 775 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 98. The debt is non-callable for one year, then at 103 in year two, 102, in year three and 101 in year four.

The company also got $85 million in mezzanine debt that is priced at 10% plus 4% PIK and was sold at discount of 98. This tranche is non-callable for two years, then at 103 in year three, 102 in year four and 101 in year five.

During syndication, the term loan was downsized from $230 million, the mezzanine was upsized from $75 million and pricing on the mezzanine was revised from 11% plus 1.5% PIK.

Credit Suisse Securities (USA) LLC led the deal that was used to refinance existing debt.

Varel is a Carrollton, Texas-based manufacturer of drill bits for oil and gas and mining.

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