Mondrian loan starts trading; SRA International reworks discount price; Pro Mach firms spread

By Sara Rosenberg

New York, July 5 - Mondrian Investment Partners Ltd.'s term loan B made its way into the secondary market on Tuesday afternoon, with levels on the debt quoted above its original issue discount price.

Over in the primary, SRA International Inc. widened the original issue discount on its term loan and reset the commitment deadline, and Pro Mach Inc. formally set pricing on its credit facility at the wide end of talk.

Furthermore, Autoparts Holdings Ltd. and OM Group Inc. revealed that they will be coming to market later this week with new credit facilities, and DG FastChannel Inc. firmed timing on the launch of its deal.

Mondrian frees up

Mondrian Investment Partners' $440 million seven-year senior secured term loan B (Ba2/BB) broke for trading on Tuesday, with levels quoted at 97½ bid, 98½ offered on the open and then it moved up to 97¾ bid, 98¾ offered, according to a market source.

Pricing on the money manager's B loan is Libor plus 425 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 97. There is 101 soft call protection for one year.

During syndication, the loan was downsized from $500 million, pricing firmed at the high end of the Libor plus 400 bps to 425 bps talk, the discount widened from guidance of 99 to 991/2, a total leverage covenant was added to the originally covenant-light deal, and amortization was beefed up to 10% per annum from 1% per annum.

Morgan Stanley & Co. Inc. and Deutsche Bank Securities Inc. are the lead banks on the deal that will be used to buy out a minority shareholder and pay a dividend.

SRA raises OID

Moving to the primary, SRA International revised the original issue discount on its $875 million seven-year term loan to 95 from 99, while keeping pricing at recently modified levels of Libor plus 525 bps with a 1.25% Libor floor, according to a market source. There is still 101 soft call protection for one year.

Specifically, in late June, pricing on the term loan had been increased from talk of Libor plus 425 bps to 450 bps, and the Libor floor was cut from 1.5%. There was no change to the discount at that time.

The company's $975 million senior secured credit facility (B1/B) also includes a $100 million five-year revolver.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. are the joint lead arrangers and bookrunners on the deal, and are now asking for commitments on Wednesday. Originally, the deadline had been last Thursday.

SRA being acquired

Proceeds from SRA International's credit facility will be used to help fund the company's buyout by Providence Equity Partners for $31.25 in cash per share for a total value of $1.88 billion.

Other funds for the transaction will come from $415 million of senior notes, which are backed by a commitment for a $415 million senior unsecured interim loan, equity and shares of SRA common stock contributed by the rollover investor.

Bridge loan pricing is Libor plus 725 bps with a 1.25% Libor floor, increasing to a specified cap.

Closing is expected during the first quarter of fiscal year 2012, which begins on July 1, subject to shareholder approval and regulatory approvals.

SRA is a Fairfax, Va.-based provider of technology and strategic consulting services to government organizations and commercial clients.

Pro Mach sets pricing

As expected, Pro Mach firmed the spread on its $255 million senior secured deal (B2/B+) at Libor plus 475 bps, the high end of the Libor plus 450 bps to 475 bps talk, according to a source.

The facility, which is anticipated to break for trading on Wednesday, consists of a $35 million five-year revolver and a $220 million six-year term loan B, with the B loan having a 1.5% Libor floor and 101 soft call protection for one year, and sold at an original issue discount of 99. The revolver has no floor.

Barclays Capital Inc. is leading the deal that will be used to help fund the buyout of the company by the Resolute Fund II LP, an affiliate of the Jordan Co., from Odyssey Investment Partners LLC.

Closing is expected shortly, subject to customary conditions.

Leverage is 4.5 times senior secured and 4.4 times net total.

Pro Mach is a Cincinnati-based provider of packaging machinery services and related aftermarket products to clients in the food, beverage, household goods and pharmaceutical industries.

OM Group deal emerges

In more primary happenings, OM Group, a Cleveland-based solutions provider of specialty chemicals, advanced materials, electrochemical energy storage and unique technologies, has scheduled a bank meeting for Thursday with a 10 a.m. ET start time at the Le Parker Meridien in New York to launch a proposed $900 million senior secured credit facility, according to a market source.

The facility consists of a $200 million revolver, a $100 million term loan A and a $600 million U.S. and euro denominated term loan B, the source said. Price talk is not yet available.

Bank of America Merrill Lynch, PNC Capital Markets LLC and BNP Paribas Securities Corp. are leading the deal that will be used to fund the €700 million purchase of Vacuumschmelze Holding GmbH, a Hanau, Germany, manufacturer of industrial use advanced magnetic materials and fabricated products.

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

Autoparts readies deal

Also announcing a Thursday bank meeting was Autoparts Holdings, as it will launch a proposed $730 million senior secured credit facility that consists of a $50 million revolver, a $530 million first-lien term loan and a $150 million second-lien term loan.

Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc. and Nomura are the joint lead arrangers on the deal, a source said, adding that price talk is not yet available.

Proceeds, along with about $307 million of equity, will be used to fund the acquisition of Honeywell's automotive Consumer Products Group by Rank Group in a cash transaction valued at about $950 million.

Closing is expected in the third quarter, subject to regulatory approval and customary conditions.

Autoparts Holdings is a Danbury, Conn.-based supplier to the light and heavy-duty vehicle aftermarket for replacement parts.

DG FastChannel reveals timing

DG FastChannel scheduled its bank meeting for Thursday as well, according to a market source, who said that the company will be launching an up to $640 million credit facility.

The facility, which was previously labeled as July business, consists of an up to $150 million five-year revolver and a $490 million seven-year term loan B, the source added.

Based on filings with the Securities and Exchange Commission, the revolver was expected to be sized at $100 million, while the term loan B is coming at the same amount as was outlined in the filings.

Official price talk is not available. The filings said that pricing on the B loan is expected at Libor plus 350 bps with a 1.25% Libor floor and an original issue discount of 991/2, and the revolver is anticipated to initially be priced at Libor plus 275 bps with a 50 bps unused fee. The spread on the revolver can range from Libor plus 200 bps to 300 bps based on leverage.

DG buying MediaMind

Proceeds from DG FastChannel's credit facility will be used to help fund the acquisition of MediaMind Technologies Inc. for $22 per share in cash through a tender offer, which commenced on June 28 and expires on July 22.

The total transaction value is $517 million equity value or $414 million enterprise value, taking into account over $100 million in cash on MediaMind's balance sheet.

Closing is expected in the third quarter, subject to the successful completion of the tender offer, regulatory approval and customary conditions. Early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has already been obtained.

J.P. Morgan Securities LLC and Bank of America Merrill Lynch are the lead banks on the deal.

DG FastChannel is an Irving, Texas-based provider of digital media services to the advertising, entertainment and broadcast industries. MediaMind is a New York-based provider of integrated digital advertising services.

Walter Investment closes

In other news, Walter Investment Management Corp. completed its acquisition of GTCS Holdings LLC (Green Tree), a St. Paul, Minn.-based fee-based business services company, which provides high-touch, third-party servicing of credit-sensitive consumer loans, according to a news release.

To help fund the transaction, Walter got a new $810 million senior secured facility consisting of a $45 million five-year revolver, a $500 million five-year first-lien term loan (B1/B+) and $265 million 51/2-year second-lien term loan (B3/B).

Pricing on the first-lien loan and the revolver is Libor plus 625 bps, and pricing on the second-lien loan is Libor plus 1,100 bps, with all tranches having a 1.5% Libor floor. Both terms loans were sold at a discount of 98. Call protection on the first-lien term loan is 102 in year one and 101 in year two, and on the second-lien loan is non-callable for two years, then at 103 in year three and 101 in year four.

Walter lead banks

Credit Suisse Securities (USA) LLC and RBS Securities Inc. were the joint bookrunners and lead arrangers on Walter's credit facility.

During syndication, pricing on the revolver and first-lien term loan was increased from Libor plus 525 bps, pricing on the second-lien was raised from Libor plus 900 bps, the discounts on both terms loans widened from 99, call protection on the first-lien term loan was sweetened from 101 for one year, and call protection on the second-lien was revised from 103 in year one, 102 in year two and 101 in year three.

Leverage through the first-lien is 2.22 times and through the second-lien is 3.36 times.

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

NRG wraps refi

NRG Energy Inc., a Princeton, N.J.-based power generation company, closed on its $3.9 billion senior secured deal (Baa3) that was used to refinance an existing credit facility, according to a news release.

The new facility consists of a $1.6 billion seven-year term loan B priced at Libor plus 300 bps with a 1% Libor floor, that was sold at a discount of 993/4, and a $2.3 billion five-year revolver priced at Libor plus 275 bps with a 50 bps unused fee. The term B has 101 soft call protection for one year.

During syndication, pricing on the B loan firmed at the low end of the Libor plus 300 bps to 325 bps talk and the discount came in the middle of the 99½ to par guidance.

Morgan Stanley & Co. Inc., Bank of America Merrill Lynch, Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and RBS Securities Inc. led the deal.

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