Smurfit-Stone, Dana weaken; NexTag breaks; Spectrum Brands, Oriental Trading rework deals

By Sara Rosenberg

New York, Jan. 24 - Smurfit-Stone Container Corp.'s exit term loan weakened following news that the company is being acquired by Rock-Tenn Co., and Dana Holding Corp.'s term loan softened on an expected repayment.

Additionally, NexTag Inc.'s credit facility freed up for trading, with the term loan B quoted above its discount price, and Momentive Performance Materials Holdings LLC's U.S. term loan retreated a little as the company held its amendment and extension conference call.

Over in the primary, Spectrum Brands Holdings Inc. came out with some changes to its term loan, including lowering the spread and trimming the Libor floor, and Oriental Trading Co. upsized its term loan while lowering pricing, floor and discount.

Also, Weather Channel and Rockwood Holdings Inc. began circulating price talk on their proposed bank deals ahead of their launches, and Vertafore Inc. released pricing guidance as its first-lien term loan was presented to lenders during the session.

Furthermore, Revel Entertainment Group LLC is relaunching its credit facility at a smaller size than what was presented late last year, with the mezzanine debt that investors were hoping for now part of the capital structure, and Acosta Sales & Marketing is getting ready to bring its new deal to market.

Smurfit-Stone trades down

Smurfit-Stone's exit term loan lost some ground in the secondary market after the company revealed that it is being purchased by Rock-Tenn for about $3.5 billion, consisting of $1.8 billion of cash and the issuance of 30.9 million shares of common stock, according to a trader.

As part of the transaction, $1.156 billion of Smurfit-Stone debt will be retired and $469 million of Rock-Tenn debt will be retired.

Closing on the transaction is expected in the second quarter, subject to customary conditions, regulatory approvals, and approval by Rock-Tenn and Smurfit-Stone stockholders.

Following this news, Smurfit-Stone's exit term loan softened to par 3/8 bid, par 7/8 offered, from previous levels of 101 3/8 bid, 101 7/8 offered, the trader said.

Rock-Tenn getting loan

To help fund the purchase of Smurfit-Stone and the debt refinancing, Rock-Tenn has a commitment for a $3.7 billion senior credit facility, consisting of a $1.2 billion five-year revolver, a $1.25 billion five-year term loan A and a $1.25 billion six-year term loan B.

At close, $632 million of the revolver is expected to be drawn.

Pro forma leverage will be 2.76 times.

Wells Fargo, SunTrust and Rabobank are the lead banks on the deal.

Rock-Tenn is a Norcross, Ga.-based manufacturer of paperboard, containerboard and consumer and corrugated packaging. Smurfit-Stone is a Chicago-based containerboard and corrugated packaging producer and a paper recycler.

Dana slides with paydown

Also in trading, Dana's term loan moved to par bid, no offers from par 5/8 bid, par 7/8 offered after the company announced that it will be repaying the $863 million tranche in full using proceeds from a $700 million senior notes offering and cash on hand, according to a trader.

The company also said that it received a commitment for a $500 million five-year amended and restated revolving credit facility from Citigroup, Wells Fargo, Bank of America, Barclays, Deutsche Bank, ING Capital and UBS.

Pricing on the revolver can range from Libor plus 250 basis points to 300 bps, and the commitment fee can range from 50 bps to 62.5 bps, based on average daily borrowing availability.

The new facility will replace the company's existing $650 million revolver.

Dana is a Maumee, Ohio-based designer, manufacturer and supplier of products for vehicle manufacturers.

NexTag starts trading

NexTag's credit facility hit the secondary market on Monday, with the $150 million five-year term loan B quoted at 94½ bid, according to a market source.

Pricing on the loan is Libor plus 550 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 931/2. There is 101 soft call protection for one year.

During syndication, the term loan B was downsized from $200 million, pricing flexed up from talk of Libor plus 475 bps to 500 bps, the discount widened from revised guidance of 97½ and initial guidance of 99, and call protection was added.

Also, as part of the changes, the maturity on the B loan had been shortened from seven years, amortization was increased to 5% in years one and two, 10% in year three, 15% in year four and 65% in year five, and the credit agreement provided that no further dividends were to be allowed.

NexTag getting revolver

NexTag's $200 million senior secured credit facility (B1/BB-) also provides for a $50 million revolver.

Deutsche Bank, JPMorgan and Morgan Stanley are the lead arrangers on the deal, with Deutsche the left lead.

Proceeds will be used to fund a distribution to shareholders and for general corporate purposes.

NexTag is a San Mateo, Calif.-based comparison shopping website for products and services.

Momentive moves lower

Momentive Performance Materials' U.S. term loan was a touch weaker from Friday's highs as the company launched a credit facility amendment and extension proposal in the morning, according to traders.

One trader had the loan quoted at par bid, par ½ offered versus par 1/8 bid, par ½ offered on Friday, while a second trader had it par bid, par ½ offered versus par 1/8 bid, par 5/8 offered. Prior to news of a lender call hitting the market at the end of last week, the loan was quoted around 99¼ bid, 99¾ offered.

Under the proposal, the Columbus, Ohio-based specialty chemicals and materials company is looking to extend the maturity of its term loans to May 5, 2015 from Dec. 4, 2013, with pricing on the extended debt set at Libor plus 350 bps, up from non-extended pricing of Libor plus 225 bps.

JPMorgan is leading the amendment and lenders are being offered a 10 bps amendment fee.

Spectrum tweaks pricing

In other news, Spectrum Brands announced on Monday that pricing on its $680 million term loan was moved to Libor plus 400 bps from Libor plus 450 bps and the Libor floor was changed to 1% from 1.5%, according to a market source.

The term loan is still being offered at par and includes 101 soft call protection for one year, the source said.

Credit Suisse is the lead bank on the deal that just launched with a conference call on Jan. 19, and it is asking for commitments by noon ET on Tuesday.

Proceeds, along with cash on hand, will be used to refinance the company's existing $680 million senior secured term loan at a price of 101 due to call protection.

Closing on the transaction is expected to occur this month.

Spectrum cutting costs

Through the refinancing, Spectrum Brands, a Madison, Wis.-based consumer products company, is basically looking to reduce pricing on its term loan borrowings.

The company's existing loan, which is scheduled to mature in June 2016, is priced at Libor plus 650 bps with a 1.5% Libor floor and was sold at an original issue discount of 98 when it was obtained in the summer of 2010.

During syndication of the existing loan, pricing had to be increased from talk of Libor plus 450 bps, the discount widened from 99 and the soft call protection was added.

The loan had also been downsized to $750 million from $1 billion. Since closing, the company has made voluntary prepayments of $50 million in November and $20 million in December, which brought the size down to its current amount of $680 million.

Oriental Trading revises loan

Oriental Trading upsized its six-year first-lien term loan (B2/B) to $220 million from $200 million and moved pricing to Libor plus 550 bps from Libor plus 650 bps, the Libor floor to 1.5% from 1.75% and the original issue discount to 99 from 98, according to a market source.

Credit Suisse and JPMorgan are the lead banks on the loan and asked for commitments on Monday, accelerating the deadline from Wednesday.

Proceeds, along with a $50 million ABL revolver that is being led by GE Capital, will be used to help fund the company's exit from bankruptcy protection. Revolver borrowings at close will now be $11.2 million, down from $21 million because of the term loan upsizing, the source added.

Oriental Trading, an Omaha-based direct marketer of party and school supplies, will have total leverage of around 3.6 times at close.

Weather Channel price talk

Weather Channel started distributing price talk on its proposed $1.625 billion six-year term loan B as the tranche is getting ready to launch with a conference call on Wednesday, according to a market source.

The term loan B is being guided at Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 991/2, the source said, adding that it will include 101 soft call protection for one year.

Deutsche Bank is the lead arranger on the deal and is a joint bookrunner with Credit Suisse, Goldman Sachs and JPMorgan.

Proceeds from Weather Channel's term loan B will be used to replace its existing $1.3 billion term loan B, refinance some junior debt and for general corporate purposes.

Weather Channel dips

After the news came out, Weather Channel's existing term loan B dropped to par bid, 101 offered and then levels tightened up even more to par bid, par ¼ offered, a trader told Prospect News. By comparison, the loan was quoted at par ¼ bid, 101 offered on Friday.

The existing term loan B was obtained in 2010 and is priced at Libor plus 350 bps with a 1.5% Libor floor. The tranche was sold at an original issue discount of 99½ and includes 101 soft call protection for one year.

During syndication of the existing loan, pricing on the loan firmed at the low end of the Libor plus 350 bps to 375 bps talk and the discount was reduced from 99.

Weather Channel is an Atlanta-based media company devoted to bringing weather news via television, internet and mobile devices.

Rockwood floats guidance

Moving back to the topic of pricing, Rockwood Holdings is talking its $1.03 billion credit facility at Libor plus 300 bps with a 1% Libor floor ahead of its Tuesday bank meeting, according to a market source.

The facility consists of a $180 million five-year revolver and an $850 million seven-year term loan, the source said.

The term loan is being offered at an original issue discount of 99½ and has 101 soft call protection for one year, and the revolver is being offered at 99, the source added.

Credit Suisse is the lead bank on the deal that will be used to refinance existing bank debt.

Rockwood is a Princeton, N.J.-based specialty chemicals and advanced materials company.

Vertafore pricing emerges

Also coming out with talk was Vertafore, as it held a conference call on Monday to kick off syndication on its proposed $550 million first-lien term loan, according to a market source.

The term loan due July 2016 is being talked at Libor plus 400 bps with a 1.5% Libor floor at a price of par and includes 101 soft call protection for one year, the source said.

Credit Suisse and Bank of America are the lead banks on the deal that will be used to refinance/reprice an existing $550 million first-lien term loan priced at Libor plus 500 bps with a 1.75% Libor floor that also matures in July 2016.

Vertafore is a Bothell, Wash.-based provider of software and information to the insurance distribution channel.

Revel readies relaunch

Revel Entertainment is set to hold a bank meeting on Tuesday to relaunch its credit facility, which is now sized at $850 million, according to sources.

The facility is comprised of a $700 million six-year first-lien term loan B talked at Libor plus 800 bps and a $150 million 61/2-year second-lien term loan talked at Libor plus 1,100 bps, source said.

The first-lien term loan is being offered with an original issue discount of 981/2, and the second-lien is being offered at 98, sources continued.

Also, both term loans have a 2% Libor floor and are non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

JPMorgan is the lead bank on the gaming and entertainment company's deal that will be used, along with mezzanine debt, to help fund the construction of a casino and hotel in Atlantic City, N.J.

Revel coming back smaller

Initially, Revel approached the market in November with a $1.287 billion deal, consisting of an $800 million first-lien loan talked at Libor plus 700 bps with a 2% Libor floor and an original issue discount of 98 and a $472 million second-lien loan talked at 12.5% with a discount of 97.

The first-lien loan was non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four, while the second-lien was non-callable for three years, then at 106 in year four, 103 in year five and 101½ in year six.

Later in the syndication process, pricing on the first-lien term loan has been changed to Libor plus 825 bps and the discount widened to 97, but investors were hesitant to get involved as they were hoping for some sort of junior debt to decrease the bank deal - a worry that is now being addressed with the addition of the mezzanine debt.

Acosta sets launch

Acosta Sales & Marketing has set a bank meeting for Thursday to launch a proposed credit facility, but details on the structure are not yet available, according to a market source.

Goldman Sachs and Barclays are the lead banks on the deal that will be used to help fund the acquisition by Thomas H. Lee Partners from AEA Investors.

In connection with the buyout, affiliates of Goldman Sachs committed to make an equity investment in the company.

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

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