Presidio breaks; Delta sets talk; Ernest Health discloses OIDs; Grede cancels loan plans

By Sara Rosenberg

New York, March 31 - Presidio Inc.'s credit facility hit the secondary market on Thursday, with the term loan B quoted above its original issue discount price, and EnergySolutions Inc. saw the bid soften on its B loan as disappointing earnings results were announced.

Over in the primary, Delta Air Lines Inc. released price talk on its credit facility, and Ernest Health Inc. came out with original issue discount guidance on its term loans, as both deals were launched to lenders during the session.

Additionally, Grede Holdings LLC removed its credit facility from market, Citco Group of Cos. surfaced with plans to launch a new deal next week and Wesco Aircraft Hardware Corp. firmed pricing on its term loan B at the low end of talk.

Presidio frees up

Presidio's credit facility made its way into the secondary market on Thursday afternoon, with the $325 million term loan B quoted at 99 bid, par offered, according to a market source.

Pricing on the B loan is Libor plus 550 basis points with a 1.75% Libor floor, and it was sold at an original issue discount of 981/2. There is hard call protection of 103 in year one and 101 in year two.

During syndication, pricing firmed at the low end of revised talk of Libor plus 550 bps to 575 bps, but up from initial talk of Libor plus 450 bps, the Libor floor was increased from 1.5%, the original issue discount widened from 991/2, and call premiums were sweetened from just 101 call protection for one year.

Proceeds from the $360 million senior secured credit facility (Ba3/B+), which also includes a $35 million revolver, will be used to help fund the buyout of the company by American Securities.

Barclays Capital Inc. and Morgan Stanley & Co. Inc. are the joint lead arrangers and bookrunners on the deal for the Greenbelt, Md.-based provider of advanced technology infrastructure services, with GE Capital Markets a bookrunner as well.

EnergySolutions bid slides

EnergySolutions saw levels on its term loan B widen out in trading to par ¼ bid, 101 offered from par 3/8 bid, par 7/8 offered as the company came out with fourth quarter earnings results that showed a year-over-year decline in net income and EBITDA, according to a trader.

Specifically, for the quarter, the company reported net income of $6.3 million, or $0.07 per share, compared with net income of $22.5 million, or $0.25 per share, in the previous year.

EBITDA for the quarter was $46.5 million, compared with $49.4 million in the fourth quarter of 2009.

Revenue for the quarter, however, rose slightly to $450.2 million, compared with $448.3 million in the same period last year.

EnergySolutions outlook

EnergySolutions also announced on Thursday that for the full year 2011, it expects EBITDA to be in the range of $130 to $140 million.

Capital expenditures for the year are anticipated to be in the range of $25 million to $35 million.

The company said that it expects possible reductions in some of its government-funded projects as well as some government project completions during 2011 and expects that the year will be a base-building year as the Zion Station decommissioning project ramps up and progress is made on strategic initiatives.

EnergySolutions is a Salt Lake City-based provider of nuclear services.

Delta reveals talk

Switching to the primary, Delta Air Lines held a call on Thursday to launch its proposed $2.6 billion credit facility (Ba2/BB-), and in connection with the event, it was disclosed that the entire deal is being talked at Libor plus 375 bps to 400 bps with a 1.25% Libor floor, according to a market source.

The Atlanta-based airline company's facility consists of a $1.225 billion five-year revolver and a $1.375 billion six-year term loan B, with the B loan being offered at an original issue discount of 99 and providing for 101 soft call protection for one year, the source said.

J.P. Morgan Securities LLC is the lead bank on the facility that will be used to refinance the company's old first-lien synthetic revolver/term loan, old revolver and old second-lien term loan.

The company's $250 million term loan that was obtained earlier this month at pricing of Libor plus 300 bps with a 1.25% Libor floor is not being taken out as part of this refinancing. The loan had been sold at an original issue discount of 99½ and includes 101 soft call protection for one year.

Ernest Health OIDs emerge

Ernest Health also launched a new deal to lenders during market hours, at which time original issue discount guidance was released on the first- and second-lien term loans, according to a market source.

The $120 million five-year first-lien term loan is being talked with an original issue discount of 99, the source said. As was already reported, the loan is also being guided with pricing of Libor plus 475 bps with a 1.5% Libor floor.

As for the $54 million six-year second-lien term loan, that was launched with a discount of 981/2, the source continued. Price talk on the loan surfaced earlier at Libor plus 800 bps with a 1.75% Libor floor. There is call protection of 103 in year one, 102 in year two and 101 in year three.

The company's $204 million credit facility also provides for a 30 million five-year revolver talked at Libor plus 475 bps with a 1.5% Libor floor.

Ernest Health replacing debt

Proceeds from Ernest Health's credit facility, which is being led by CIT Group and was launched with a bank meeting that was, according to the source, "very well attended," will be used to refinance existing debt.

Following completion of the transaction, first-lien leverage will be 3.5 times and leverage through the second lien will be 5 times.

Commitments towards the credit facility are due on April 14.

Ernest Health is an Albuquerque, N.M.-based developer and operator of inpatient rehabilitation and related post-acute health care services.

Golden Nugget launches

Landry's Golden Nugget Atlantic City held a bank meeting on Thursday as well, launching a $110 million five-year senior secured credit facility that consists of a $10 million revolver and a $100 million term loan.

Price talk on the facility was announced as to be determined at the meeting, a market source said.

Jefferies & Co. is the lead bank on the deal that will be used to fund the purchase, renovation and rebranding of the Trump Marina Hotel and Casino in Atlantic City by Tilman J. Fertitta, chairman, president, chief executive officer and owner of Landry's Inc., a full-service restaurant, hospitality and entertainment company.

Grede Holdings pulls deal

In more loan happenings, Grede Holdings withdrew its $265 million senior secured credit facility from market due to unfavorable primary conditions, according to a source.

The facility, led by Bank of America Merrill Lynch and GE Capital Markets, consisted of a $90 million ABL revolver and a $175 million term loan B (B1/B+).

Most recent talk on the B loan had been Libor plus 600 bps with a 1.5% Libor floor and an original issue discount of 981/2. This talk had been revised from initial guidance at launch of Libor plus 550 bps with a 1.5% floor and a discount of 99. The tranche included 101 soft call protection for one year.

Proceeds were going to be used to fund the acquisition of two foundries in Mexico from Grupo Proeza and to pay a shareholder distribution.

Grede is a Southfield, Mich.-based designer, developer and manufacturer of cast, machined and assembled components for the transportation and industrial markets.

Citco readies launches

Meanwhile, Citco told lenders that it will be holding a bank meeting on Monday in London and a meeting on Tuesday in New York to launch a proposed $490 million seven-year term loan, according to a market source.

UBS Securities LLC and Deutsche Bank Securities Inc. are the lead banks on the deal that will be used to refinance existing debt.

The company's existing credit facility was obtained in 2006 as part of a refinancing initiative. At close, the $475 million deal consisted of a $20 million six-year revolver and a $60 million six-year term loan A, both priced at Libor plus 225 bps, a $197.5 million seven-year term loan B priced at Libor plus 275 bps and a $197.5 million eight-year term loan C priced at Libor plus 325 bps.

Citco is a provider of financial services to hedge funds, private equity and real estate firms, institutional banks, companies and high net worth individuals.

Wesco sets spread

Wesco Aircraft Hardware firmed pricing on its $415 million six-year term loan B at Libor plus 300 bps, the low end of the Libor plus 300 bps to 325 bps talk, while leaving the 1.25% Libor floor, original issue discount of 99½ and 101 soft call protection for one year unchanged, according to a market source.

The company's $765 million credit facility (Ba3/BB-) also includes a $150 million five-year revolver and a $200 million five-year term loan A, both priced at Libor plus 300 bps with no Libor floor and an offer price of 99. The revolver has a 50 bps unused fee.

A bank meeting for the revolver and term loan A took place on March 16. The term loan B, however, was not launched at that time because of market conditions. Instead, on March 25, institutional lenders were simply given price talk on the B loan, information to listen to the replay of the pro rata bank meeting and till March 30 to place their orders.

Wesco lead banks

Bank of America Merrill Lynch and Barclays Capital Inc. are the joint lead arrangers and bookrunners on Wesco's deal with J.P. Morgan Securities LLC, Morgan Stanley & Co. Inc., RBC Capital markets LLC and Sumitomo.

Proceeds will be used to refinance existing debt.

Because the deal is a refinancing and there is an existing lender group, the decision was made not to hold a formal launch for the term loan B, a source previously explained to Prospect News.

Allocations on the credit facility are expected to go out on Monday.

Wesco is a Valencia, Calif.-based integrated inventory management services provider and distributor of hardware and other components to the aerospace industry.

Digital Cinema closes

Digital Cinema Implementation Partners LLC completed its $220 million six-year term loan (Baa1), according to a news release.

Pricing on the loan is Libor plus 375 bps, after firming at the high end of the Libor plus 350 bps to 375 bps talk, with a 1.25% Libor floor. The tranche was sold at an original issue discount of 99½ and includes 101 soft call protection for one year.

J.P. Morgan Securities LLC and GE Capital Markets Inc. acted as the co-lead arrangers and bookrunners on the deal, with Barclays Capital Inc. and Credit Suisse Securities (USA) LLC bookrunners too.

Proceeds are being used to deploy digital projection systems.

Digital Cinema is a Mahwah, N.J.-based company formed by AMC Entertainment Inc., Cinemark USA Inc. and Regal Entertainment Group to facilitate the roll-out of a digital cinema infrastructure.

Jarden wraps refi

Jarden Corp. closed on its $1.275 billion senior secured facility (Ba1/BB+) comprised of a $500 million seven-year term loan B, a $525 million five-year term loan A (which was upsized from $500 million) and a $250 million five-year revolver, according to a news release.

Pricing on the term loan B is Libor plus 300 basis points, and pricing on the term loan A and the revolver is Libor plus 225 bps. There is no Libor floor on any of the tranches. The term loan B was sold at par, and upfront fees for the revolver and term loan A were 50 bps for orders of $50 million, 30 bps for orders of $30 million and 20 bps for orders of $20 million.

Proceeds were used by the Rye, N.Y.-based consumer products company to refinance existing debt.

Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC acted as the lead banks on the deal.

Vision completes deal

Vision Solutions Inc. closed on Thursday on its Jefferies & Co.-led $345 million credit facility - comprised of a $15 million revolver, a $240 million first-lien term loan and a $90 million second-lien term loan - that was used to fund a dividend to stockholders, repay existing bank debt and redeem preferred stock, according to a market source.

Pricing on the first-lien term loan is Libor plus 450 bps with a 1.5% Libor floor and pricing on the second-lien loan is Libor plus 800 bps with a 1.5% Libor floor. Both were sold at an original issue discount of 99. The second-lien loan has call protection of 103 in year one, 102 in year two and 101 in year three,

During syndication, pricing on the first-lien term loan firmed at the wide end of initial talk of Libor plus 425 bps to 450 bps with a discount of 99 to 991/2. Also, the second-lien loan was downsized from $130 million, and as a result, the size of the dividend payment was reduced, and pricing firmed at the high end of the Libor plus 775 bps to 800 bps talk.

Vision Solutions is an Irvine, Calif.-based provider of high availability, disaster recovery and system management services for IBM Power Systems.

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