HIT Entertainment up on buyout; UPC softens; Web.com, Tensar, PODS, Open Link tweak deals

By Sara Rosenberg

New York, Oct. 24 - HIT Entertainment's term loans headed higher during Monday's trading session following news that the company is being acquired by Mattel Inc., and UPC Financing Partnership's term loan AB was down from its recent breaking levels.

Moving to the primary, Web.com Group Inc. went out to lenders early on in the day with revised original issue discount talk on its first- and second-lien term loans that is wider than previous guidance and, as a result, a new commitment deadline was announced.

Also, Tensar International Corp. Inc. made changes to its first- and second-lien term loans, lifting pricing and sweetening discounts, and PODS Enterprises Inc. raised the spread on its facility for a second time.

On the flip side, Open Link Financial Inc. upsized its term loan and tightened pricing, and Open Text Inc.'s pro rata credit facility has been well met since launching early this month, with the deal filling out at initial terms and the hope being that allocations could go out later this week.

HIT gains ground

HIT Entertainment's first- and second-lien term loans were stronger on Monday after news emerged that the company is being purchased by investment-grade rated Mattel from Apax Partners for $680 million in cash, according to a trader.

The first-lien term loan was quoted at 98 bid, par offered, up from 97 bid, 99 offered on Friday, and the second-lien term loan was quoted at 94 bid, 96 offered, up from 91½ bid, 93½ offered, the trader said.

Closing on the acquisition is expected in the first quarter of 2012, subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

Mattel expects to fund the transaction with cash and debt.

HIT Entertainment is a London-based children's entertainment producer and rights owner. Mattel is an El Segundo, Calif.-based toy company.

UPC slides from break

UPC Financing Partnership's $500 million term loan AB (Ba3/B+) retreated to 98¾ bid, 99½ offered, from 99 bid, 99¾ offered on the break late Friday, according to a trader, who guessed that the shift may have come because investors were adjusting their positions.

The non-amortizing loan due Dec. 31, 2017 is priced at Libor plus 350 basis points with a 1.25% Libor floor and was sold at an original issue discount of 97. There is a 101 soft call protection for one year.

Originally, commitments were going to be due this Tuesday, but pricing moved up to Friday due to good demand, and the deal wrapped at initial terms.

Citigroup Global Markets Inc. and Goldman Sachs & Co. are the joint bookrunners on the loan that will be used to repay revolver borrowings.

UPC is a subsidiary of Liberty Global, an Englewood, Colo.-based provider of video, voice and broadband internet services.

Web.com reworks OIDs

Over in the primary, Web.com made some new changes to its credit facility, this time updating original issue discount guidance on its $600 million six-year first-lien term loan B (Ba3/B) and $150 million seven-year second-lien term loan (B3/CCC+), according to a market source.

Both term loans are now being offered at a price of 88 to 89, the source said. By comparison, at launch, the tranches were talked at a discount of 96½ to 97 and, as of a few weeks ago, unofficial chatter was circulating around in the low-90s area.

The first-lien term B is still priced at Libor plus 550 basis points with a 1.5% Libor floor and has 101 soft call protection for one year, and the second-lien term loan remained at Libor plus 950 bps with a 1.5% floor and is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

Prior to the deal's September launch, regulatory filings had the first-lien term loan B expected at Libor plus 425 bps with a 1.25% Libor floor, and the second-lien term loan expected at Libor plus 800 bps with a 1.25% Libor floor and call protection of 102 in year one and 101 in year two.

Web.com sets deadline

With the changes to discount talk, Web.com is now asking lenders to get their commitments in by noon ET on Wednesday, the source remarked.

Early this month, a number of non-pricing related changes were made to the credit agreement, including shortening the maturity on the first-lien term loan B from seven years and on the second-lien term loan from eight years.

Also, amortization on the first-lien term loan had been reset at 1% in year one and 5% thereafter, from just 1% per annum, and the excess cash flow sweep was revised to 75% in year one and 50% in year two with step-downs to 25% and 0% versus being 50% with step-downs to be agreed upon.

And, the accordion feature on the first-lien was reduced to $50 million from $200 million plus unlimited amounts up to 3.75 times first-lien leverage, the $100 million accordion under the second-lien was eliminated and most-favored-nation language moved to 25 bps from 50 bps.

Web.com getting revolver

Web.com's $800 million senior secured credit facility, which is being led by J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. and SunTrust Robinson Humphrey Inc., also includes a $50 million five-year revolver (Ba3/B).

First-lien leverage is 4.0 times, while second-lien leverage is 5.0 times.

Proceeds will be used to fund the acquisition of a majority stake in Network Solutions from General Atlantic LLC for $405 million in cash and 18 million shares of common stock, refinance existing debt and for general corporate purposes.

Completion of the transaction is expected in the fourth quarter, subject to shareholder approval, which will be sought at a special meeting on Tuesday, and regulatory approval, which has been obtained.

Web.com is a Jacksonville, Fla.-based provider of internet services and online marketing services. Network Solutions is a Herndon, Va.-based provider of website services, online marketing and domain-name registration.

Tensar raises pricing

Another company to come out with modifications on Monday was Tensar International, as pricing and original issue discounts on its term loans were sweetened, and lenders were given until the end of the week to place their orders, according to a market source.

Under the new terms, the $190 million five-year first-lien B loan (B1/B) is priced at Libor plus 750 bps with a 1.75% Libor floor and an original issue discount of 95 versus initial talk of Libor plus 700 bps with a 1.75% floor and a discount of 97, the source said.

Meanwhile, the $110 million 51/2-year second-lien term C (Caa1/CCC+) is now priced at Libor plus 1,175 bps with a 1.75% floor and a discount of 95, compared to earlier guidance of Libor plus 1,000 bps with a 1.75% floor and a discount of 96, the source continued.

The first-lien term loan B still has 101 call protection for one year, and the second-lien term loan C is still non-callable for one year, then at 102 in year two and 101 in year three.

Tensar ABL details

Tensar's $325 million credit facility also provides for a $25 million four-year ABL revolver that has grid-based pricing ranging from Libor plus 250 bps to 300 bps and a 50 bps unused fee. Pricing on this tranche was left unchanged, the source remarked.

Barclays Capital Inc. is the lead bank on the deal that will be used to refinance the company's existing capital structure.

Tensar is an Atlanta-based provider of specialty products and engineering services used in the development of commercial, residential, industrial and municipal sites as well as in transportation infrastructure.

PODS ups spread

PODS Enterprises revised the coupon on its $225 million credit facility once again, this time increasing it to Libor plus 700 bps, according to a market source. Earlier the spread had been moved to Libor plus 650 bps from Libor plus 600 bps.

The 1.5% Libor floor and original issue discount of 97 were left intact, but at the time of the first pricing flex, the discount has been revised from 981/2.

GE Capital Markets and Barclays Capital Inc. are the lead banks on the deal, comprised of a $25 million revolver, a $154 million term loan and a $46 million delayed-draw for six months term loan that has a 100 bps unused fee.

Proceeds will be used for acquisition funding and to refinance existing debt.

PODS is a Clearwater, Fla.-based provider of portable on-demand storage and moving products and services.

Open Link revises loan

Open Link Financial also updated terms on its credit facility. In this case, however, the term loan was upsized and pricing was lowered as a result of strong investor interest, according to a market source.

The term loan is now $340 million, up from $325 million, and pricing is Libor plus 625 bps with a 1.5% Libor floor and a discount of 98 versus initial talk of Libor plus 650 bps with a 1.5% floor and a discount of 96 to 97, the source said.

As before, the loan includes 101 soft call protection for one year.

The company's now $390 million credit facility (B2/B+), up from $375 million, also provides for a $50 million revolver.

Recommitments are due at noon ET on Tuesday.

Open Link trims mez

As a result of the increase to the term loan amount, Open Link reduced its planned mezzanine financing to $175 million from $190 million, the source continued.

Proceeds from the credit facility and the mezzanine debt will be used to fund the buyout of the company by Hellman & Friedman from the Carlyle Group.

Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC are the joint lead arrangers on the credit facility.

Closing on the transaction is expected in the fourth quarter, subject to standard conditions.

Open Link is a Uniondale, N.Y.-based provider of cross-asset trading, risk management and operations processing software services.

Open Text nets interest

Open Text's $700 million senior secured credit facility has attracted interest from lenders, enough to fully subscribe the deal at original terms with no changes expected, a market source told Prospect News on Monday.

The facility consists of a $100 million revolver as well as a $600 million term loan A, and pricing on both tranches opens up at Libor plus 250 bps.

Pricing on the facility can step up to Libor plus 275 bps if leverage is 2.25 times or more and step down to Libor plus 225 bps if leverage is less than 1.5 times.

The revolver has a flat unused fee of 30 bps.

Upfront fees on the revolver and A loan, which were sold as a strip, were 50 bps for orders of $50 million, 30 bps for $35 million or more, and 25 bps for $25 million or more.

Open Text refinancing debt

Proceeds from Open Text's credit facility will be used to add cash to the balance sheet, refinance existing bank debt, including the revolver borrowings that were used to fund the acquisition of Global 360 Holding Corp., and for working capital purposes.

Barclays Capital Inc. and RBC Capital Markets LLC are the joint lead arrangers and joint bookrunners on the deal.

Initially, the company was planning a $100 million revolver, a $200 million delayed-draw term loan A and a $600 million term loan B, but given market conditions, the choice was made prior to launch to go the all pro rata route.

Open Text is a Waterloo, Ont.-based enterprise software company.

Fundtech readies launch

In other news, Fundtech Ltd. firmed up timing on its $225 million senior secured credit facility with the scheduling of a bank meeting for Tuesday morning, according to a market source. Previously, the deal was labeled as late October business.

The facility consists of a $25 million five-year revolver and a $200 million six-year term loan, with price talk not yet available, the source remarked.

RBC Capital Markets LLC and BMO Capital Markets Corp. are leading the deal.

Proceeds will be used, along with $175 million of equity and $50 million of eight-year senior subordinated mezzanine financing from Newstone Capital Partners, to fund the buyout of the company by GTCR for $23.33 in cash per ordinary share and refinance existing debt.

Fundtech, BankServ merging

In connection with the buyout, GTCR plans on combining Fundtech with its existing portfolio company, BankServ, a Las Vegas-based software-as-a-service provider of financial services and banking technology that offers wire transfer, swift messaging, remote deposit capture, mobile and online payment processing technology.

Closing is expected in the fourth quarter, subject to receipt of Fundtech shareholder approval, which will be sought at a special meeting on Tuesday, and satisfaction of other conditions.

Fundtech is a provider of software services that facilitate payments processing, financial messaging and cash management for financial institutions.

The combined company, Fundtech Inc., would be based in Fundtech's existing U.S. headquarters in Jersey City, N.J.

PolyOne coming soon

PolyOne Corp. has scheduled a bank meeting for Tuesday afternoon to launch its proposed $600 million credit facility, which consists of a $300 million ABL revolver and a $300 million term loan B (Ba1/BB-), according to a market source.

Bank of America Merrill Lynch and Wells Fargo Securities LLC are the lead banks on the deal that will be used, along with cash on hand, to fund the acquisition of ColorMatrix Group Inc. for $486 million.

Closing is expected late this year, subject to regulatory approvals.

PolyOne is an Avon Lake, Ohio-based provider of specialized polymer materials and services. ColorMatrix is a Berea, Ohio-based specialty provider of liquid colorants, additives and fluoropolymers.

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