Wendy's firm on buyout buzz; Willbros changes expected; Sophos tranching, Telx spread set

By Sara Rosenberg

New York, June 11 - Wendy's/Arby's Restaurants LLC's term loan was steady to stronger during a very quiet trading session on Friday as talk of a possible acquisition of the company made its way around the market.

Meanwhile, over in the primary, Willbros Group Inc. is looking at various options to fund its acquisition of InfrastruX Group Inc., including bringing the credit facility back to its original structure but at higher pricing.

Also, Sophos plc set tranche sizes on its credit facility, Telx Group Inc. firmed pricing on its term loan B at the high end of talk, and Charles River Laboratories International Inc.'s all pro rata credit facility is being marketed in an early round to banks.

Wendy's strong on acquisition talk

Wendy's/Arby's term loan was unchanged to higher on the day, depending on which trader was asked, as investors reacted to the company's recent disclosure that it has received some buyout interest.

The Atlanta-based quick-service restaurant company's term loan was quoted by one trader at 99 5/8 bid, par offered, up from 99½ bid, 99 7/8 offered, and by a second trader at 99½ bid, par ¼ offered, unchanged on the day.

Late in the day on Thursday, Wendy's/Arby's chief executive officer and founding partner Nelson Peltz said in an SC 13D/A filing with the Securities and Exchange Commission that an oral inquiry was received from a third party expressing interest on a preliminary basis in a potential acquisition of the company.

Peltz remarked that he is considering the proposal as well as other alternatives and expects to discuss the possible transaction with potential debt and/or equity financing sources and other interested third parties. He also expects to engage one or more financial advisors in connection with the proposal.

Willbros mulls restructuring

Moving to the primary, Willbros Group is considering options for funding the acquisition of InfrastruX Group Inc., being that its $250 million six-year senior secured second-lien notes offering is no longer being marketed, and one of those possibilities is moving those funds back into its term loan B, according to a market source.

When the bank deal was first launched in early April, the four-year term loan B was sized at $300 million and was talked at Libor plus 450 basis points to 500 bps with a 2% Libor floor and an original issue discount of 98 to 981/2. Pricing could step down by 50 bps after an interim period.

However, the loan was not getting done at those terms, so the company decided to leave price talk unchanged but downsize the term loan B to $50 million and approach the high-yield market with $250 million of notes.

By the time the notes were ready to be launched, the high-yield market was not as robust as it had been, making the revised financing not as attractive as the company had originally thought. The notes were being talked in the 12% area, but never priced.

Willbros may flex up

If Willbros' term loan B ends up being remarketed at its original size of $300 million, chances are that pricing on the loan will be flexed up from the current talk as a result of the change in market conditions over the past few weeks, the source remarked.

The company's senior credit facility also includes a $175 million three-year revolver, and the size of this tranche is not in question at this time.

At launch, the revolver was being talked at Libor plus 425 bps, with a step-down to Libor plus 375 bps after an interim period. Upfront fees on the revolver were being offered anywhere from 112.5 bps to 137.5 bps, based on commitment size.

Ratings on the facility when it was sized at $475 million were B2/BB-, and when the deal was downsized and the bonds were introduced, the ratings were revised to Ba3/BB+.

Willbros acquisition details

Under the acquisition agreement, Wilbros will be paying stockholders of privately held InfrastruX cash of $360 million and 7.9 million of new Willbros shares.

In addition, InfrastruX stockholders will be eligible for contingent earn-out payments of up to $125 million. Those earn-out payments begin as EBITDA for the InfrastruX business exceeds $69.8 million in 2010 and $80 million in 2011.

Crédit Agricole Corporate and Investment Bank and UBS Securities are the joint bookrunners on Willbros' term loan B, and Crédit Agricole is the bookrunner on the revolver.

Willbros is a Houston-based independent contractor for the oil, gas, power, refining and petrochemical industries. InfrastruX is a Seattle, Wash.-based provider of electric power and natural gas transmission and distribution infrastructure services.

Sophos sets tranche sizes

Sophos firmed tranche sizes on its term loan debt, with the term loan A ending up at $75 million euro equivalent and the term loan B ending up at $225 million, according to a market source.

Initial indications were that the term debt would be comprised of a $90 million term loan A and a $210 million term loan B, but those sizes were said to be likely to change from the start.

In addition, revised price talk on the term loans is expected to come out early in the week of June 14, the source said. Currently the debt is being talked in the Libor plus 475 bps area with a 2% Libor floor and an original issue discount in the 99 context.

RBC and HSBC are the lead banks on the $320 million senior secured credit facility (B2/B+), which also includes a $20 million six-year revolver.

Sophos being acquired

Proceeds from Sophos' credit facility will be used to help fund the buyout of the company by Apax Partners in a transaction valued at $830 million.

When the transaction is completed, the founders of the company will retain a significant minority shareholding. TA Associates, a minority shareholder in Sophos since 2002, will sell its full interest to Apax in this transaction.

Leverage is around 3.8 times.

Sophos is a Boston-based IT security and data protection firm.

Telx firms spread

Telx Group finalized pricing on its $150 million term loan B at Libor plus 600 bps, the wide end of initial talk of Libor plus 550 bps to 600 bps, according to a market source.

In addition, the loan now provides for call protection of 102 in year one and 101 in year two.

The 2% Libor floor and original issue discount of 98 were left unchanged, the source said.

Goldman Sachs, Deutsche Bank, RBC and SunTrust are the lead banks on the $175 million senior secured credit facility (B1/B-), which includes a $25 million revolver.

Proceeds will be used to refinance existing debt and for general corporate purposes.

Telx is a New York-based provider of network neutral, global interconnection and colocation services.

Charles River doing early round

Charles River Laboratories' roughly $1.2 billion senior secured credit facility (Ba1/BBB-) is being marketed to some banks in an early syndication round, according to a market source.

The source went on to say that a general meeting has not yet been scheduled and may not even take place depending on how this initial phase of marketing pans out.

The facility consists of an about $950 million five-year term loan A and a $250 million five-year revolver.

Initial pricing on both tranches is expected to be Libor plus 275 bps.

Pricing on the debt will be based on leverage:

• If the leverage ratio is 2.75 times, pricing is Libor plus 275 bps;

• If the ratio is 2.0 times to 2.75 times, pricing is Libor plus 250 bps;

• If the ratio is 1.25 times to 2.0 times, pricing is Libor plus 225 bps; and

• If the ratio is less than 1.25 times, pricing is Libor plus 200 bps.

Also, the commitment fee on the revolver can range from 25 bps to 50 bps based on leverage.

Charles River lead banks

JPMorgan and Bank of America are the lead banks on Charles River's credit facility that will be used to help fund the acquisition of WuXi PharmaTech Inc. for $21.25 per WuXi American Depositary Share. The transaction is valued at $1.6 billion.

Under the acquisition agreement, each WuXi share will be exchanged for $11.25 in cash and $10 of Charles River common stock determined by an exchange ratio.

Adjusted combined leverage will be 3.3 times.

Closing is expected by the fourth quarter, subject to approval by each company's shareholders and the satisfaction of customary conditions and regulatory approvals.

Charles River is a Wilmington, Mass.-based provider of research models and associated services and of preclinical drug development services. WuXi is a China-based drug research and development outsourcing company.

Open Mobile completes facility

In other news, Open Mobile wrapped its senior secured credit facility (B2) after downsizing the deal to $128.5 million and firming term loan pricing at the wide end of talk, according to sources.

The facility consists of a $15 million revolver and a $113.5 million term loan. Pricing on the term loan is Libor plus 475 bps with a 2% Libor floor, and it was sold at an original issue discount of 981/2, sources said.

By comparison, at launch, the facility was presented as a $15 million revolver and a $160 million term loan, with the term loan guided at Libor plus 400 bps to 425 bps with a 2% floor and a discount of 98½ to 99. During syndication, term loan talk was revised to Libor plus 450 basis points to 475 bps with a discount of 981/2, before firming up at the high end, and the tranche size was reduced.

Morgan Stanley and SunTrust acted as the joint bookrunners on the deal that was used to refinance existing debt.

Open Mobile is a provider of pre-paid wireless service in Puerto Rico. It is owned primarily by MC Venture Partners, Columbia Capital and Leap Wireless.

Cincinnati Bell closes

Cincinnati Bell Inc. closed on its $970 million senior secured credit facility (Ba3/BB), consisting of a $210 million four-year revolver and a $760 million seven-year term loan, according to a news release.

Pricing on the term loan is Libor plus 500 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 97. There is 101 soft call protection for one year.

During syndication, pricing on the term loan was increased from Libor plus 375 bps, the discount widened from talk in the 98 to 99 area and call protection was added.

Bank of America, Morgan Stanley and Barclays acted as the lead banks on the deal that was used to fund the $525 million acquisition of CyrusOne, refinance existing debt and for general corporate purposes.

Cincinnati Bell is a Cincinnati, Ohio-based provider of integrated communications services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.