Harland Clarke trades up; Alon, Village Roadshow, Tomkins' Air Distribution revise deals

By Sara Rosenberg

New York, Nov. 2 - Harland Clarke Holdings Corp.'s term loans were better during Friday's trading session as the company released third-quarter earnings results.

Moving to the primary market, Alon USA Energy Inc. raised the coupon on its term loan and beefed up amortization, and Village Roadshow Films (BVI) Ltd. added a U.S. co-borrower to its deal.

Tomkins' Air Distribution also made a number of changes, including cutting pricing on its first-lien term loan, firming the second-lien spread at the low end of talk and trimming the discount on the second-lien debt.

In more primary news, Chesapeake Energy Corp. released talk with launch, Web.com Group Inc., Smart & Final Holdings Corp., Hillman Group Inc. and KeyPoint Government Solutions Inc. revised the commitment deadlines on their loans, and Therakos Inc. joined the new issue calendar.

Harland Clarke gains

Harland Clarke's extended and non-extended term loans headed higher in trading on Friday as the company came out with quarterly results, according to a trader.

The extended term loan was quoted at 92 bid, 93½ offered, up from 91 bid, 93 offered, and the non-extended term loan was quoted at 97 bid, 98½ offered, up from 96 bid, 97½ offered, the trader said.

For the third quarter, the company reported a net loss of $19 million, versus net income of $46.6 million in the prior year. The drop was due to net charges of $37 million of non-cash interest expense, a loss on early extinguishment of debt of $34.2 million, a $19.5 million non-cash gain for changes in the fair value of contingent consideration arrangements and a $9.3 million increase in restructuring charges.

Also, net revenues were for the quarter $422.6 million, up 3.7% from $407.7 million in the third quarter of 2011, and adjusted EBITDA was $128 million, up 8.1% from $118.4 million last year.

Harland Clarke is a San Antonio-based provider of integrated payment, marketing and security services and retail products.

Western Dental quoted

Western Dental Services Inc.'s $275 million term loan was seen at 97½ bid, 98½ offered in very light trading on Friday, after breaking at 97½ bid late in the previous session, according to a trader.

Pricing on the term loan is Libor plus 700 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 97.

During syndication, the spread was increased from talk of Libor plus 550 bps to 600 bps and the discount was revised from 981/2.

The company's $300 million senior secured credit facility (B3/B) also includes a $25 million revolver.

Jefferies & Co. and BMO Capital Markets Corp. leading the deal that will help fund the buyout of the company by New Mountain Capital LLC.

Leverage is 4.1 times and there is 52% equity.

Western Dental is an Orange, Calif.-based dental and oral health maintenance organization.

Alon tweaks deal

Over in the primary, Alon USA Energy lifted the spread on its $450 million six-year first-lien covenant-light secured term loan (B2/B+) to Libor plus 725 bps from Libor plus 625 bps, while leaving the 1.25% Libor floor and original issue discount of 98½ intact, according to a market source.

Also, amortization on the loan was revised to 5% per annum from 1% per annum, the source said.

As before, the loan is non-callable for one year, then at 102 in year two and 101 in year three.

Lead banks, Credit Suisse Securities (USA) LLC and Goldman Sachs Lending Partners LLC, are asking for recommitments by 5 p.m. ET on Wednesday.

Alon USA, a Dallas-based refiner and marketer, will use the new debt to repay a roughly $422 million term loan and for general corporate purposes.

Village adds borrower

Village Roadshow's $875 million five-year credit facility saw the addition of a U.S. co-borrower to the structure, according to a market source.

The facility consists of a $325 million revolver and a $550 million term loan B.

Price talk on the term loan B is Libor plus 400 bps with a 1.25% Libor floor and an original issue discount of 99, and the debt is non-callable for two years, then at 101 in year three.

J.P. Morgan Securities LLC and Rabobank are leading the deal that will be used to refinance an existing senior secured credit facility and acquire pictures one year after theatrical release.

Commitments are due on Tuesday. The original deadline had been Oct. 31, but it was extended the other day because of the hurricane.

Village Roadshow is an Australian-based filmed entertainment company.

Tomkins' Air reworked

Tomkins' Air Distribution revised its deal, trimming pricing on its $525 million six-year covenant-light first-lien term loan (B1/B) to Libor plus 375 bps from Libor plus 400 bps, while leaving the 1.25% Libor floor, original issue discount of 99 and 101 soft call protection for one year intact, a source said.

In addition, the $135 million 71/2-year covenant-light second-lien term loan (Caa1/CCC+) saw pricing firm at Libor plus 800 bps, the tight end of the Libor plus 800 bps to 825 bps talk, the discount revised to 98½ from 98, and call protection changed to 102 in year one and 101 in year two from 103 in year one, 102 in year two and 101 in year three, the source continued. The 1.25% Libor floor was unchanged.

The commitments $760 million credit facility, for which recommitments were due at 5 p.m. ET on Friday, also includes a $100 million five-year revolver (B1/B).

Tomkins' Air being acquired

Proceeds from Tomkins' Air Distribution's credit facility will be used to help fund its purchase by Canada Pension Plan Investment Board and Onex Corp. from Tomkins (Pinafore Holdings BV) for about $1.1 billion.

RBC Capital Markets LLC, Barclays and UBS Securities LLC are the lead banks on the deal.

Closing is expected this quarter, subject to customary conditions.

First-lien leverage is 4.5 times and total leverage is 5.7 times.

Tomkins' Air Distribution is a manufacturer of products that are used to distribute, recycle and vent air in non-residential and residential buildings.

Chesapeake discloses talk

Chesapeake Energy held its call on Friday and released talk on its $2 billion unsecured five-year covenant-light term loan (Ba3) at Libor plus 450 bps with a 1.25% Libor floor and an original issue discount on the 99 area, according to a market source.

The loan is non-callable for one year, then at 102 in year two and 101 in year three, the source continued.

Bank of America Merrill Lynch, Goldman Sachs & Co. and Jefferies Finance LLC are leading the deal that will be used to repay an existing term loan and revolver.

Chesapeake Energy is an Oklahoma City-based producer of natural gas and oil and natural gas liquids and a driller of new wells.

Web.com updates timing

Like so many others recently, Web.com changed the commitment deadline on its roughly $570 million first-lien term loan B due October 2017 due to the storm, pushing it out to Thursday from Monday, according to a market source.

Price talk on the B loan is Libor plus 425 bps with a 1.25% Libor floor and an original issue discount of 99 to 991/2, and there is 101 soft call protection for one year.

Proceeds will be used to reprice and existing first-lien term loan that was obtained in October 2011 at a size of $600 million and with pricing of Libor plus 550 bps with a 1.5% Libor floor.

In addition to the repricing, the company is upsizing its revolver to $60 million from $50 million.

J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., SunTrust Robinson Humphrey Inc., Goldman Sachs Lending Partners, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are leading the deal.

Web.com is a Jacksonville, Fla.-based provider of internet services and online marketing services.

Smart & Final extended

Another deal to push out its commitment deadline was Smart & Final, with orders now due by noon ET on Wednesday as opposed to noon ET on Friday, according to a market source.

The company's $870 million credit facility consists of a $150 million ABL revolver (Ba2/BB-), a $510 million seven-year first-lien term loan (B3/B) and a $210 million eight-year second-lien term loan (Caa2/CCC+).

The first-lien term loan is talked at Libor plus 450 bps to 475 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

As for the second-lien term loan, it is talked at Libor plus 850 bps to 875 bps with a 1.25% Libor floor, a discount of 98 to 99 and hard call protection of 102 in year one and 101 in year two.

Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are leading the deal that will help fund the company's $975 million buyout by Ares Management from Apollo Global Management LLC and to refinance existing debt.

Smart & Final is a Commerce, Calif.-based warehouse-style, no membership fee, retailer.

Hillman stays open

Meanwhile, Hillman Group extended the commitment deadline on its $76 million delayed-draw term loan, giving lenders until Monday to place their orders, according to a market source. The original deadline had been this past Thursday.

The loan is talked at Libor plus 350 bps with a 1.5% Libor floor and an original issue discount of 991/2. The spread and floor match that of the existing term loan B, and once the delayed-draw loan is funded, it will be fungible with the existing B loan.

The delayed-draw tranche has an unused fee of 50 bps for the first 30 days, half the spread for the next 60 days, and the full spread from day 90 and thereafter. The delayed-draw period expires at the end of March 2013.

Barclays is leading the deal that will be used for general corporate purposes.

Hillman is a Cincinnati-based distributor of fasteners, key duplication systems, engraved tags and related hardware items.

KeyPoint moves deadline

KeyPoint Government Solutions also revised the commitment deadline on its $160 million credit facility, extending it to Tuesday from Friday, according to a market source.

The facility consists of a $10 million five-year revolver and a $150 million six-year term loan B.

Price talk on the revolver is Libor plus 550 bps to 600 bps with no Libor floor and a 75 bps undrawn fee, and the term loan is talked at Libor plus 550 bps to 600 bps with a 1.25% Libor floor and an original issue discount of 99.

UBS Securities LLC is the lead bank on the deal that will be used to refinance existing debt and fund a dividend.

KeyPoint is a Loveland, Colo.-based investigative and risk-mitigation services company.

Therakos deal emerges

In other news, Therakos set a bank meeting for Thursday to launch a $325 million credit facility that consists of a $35 million revolver, a $210 million first-lien term loan and an $80 million second-lien term loan, according to a market source.

RBC Capital Markets LLC and Jefferies & Co. are leading the deal.

Proceeds will be used to help fund the buyout of the company by the Gores Group from Ortho-Clinical Diagnostics Inc., a Johnson & Johnson subsidiary.

Leverage through the first-lien is 4.1 times total and 3.7 times net, and through the second-lien is 5.6 times total and 5.2 times net, the source remarked.

Closing is expected by year-end, subject to customary conditions.

Therakos is a Raritan, N.J.-based provider of integrated systems for delivering extracorporeal photopheresis, a therapy used to treat niche, but serious disease states arising from immune system imbalances.

GCA closes

The buyout of GCA Services Group Inc. by Blackstone from Nautic Partners LLC and other minority shareholders has been completed, according to a news release.

For the transaction, GCA got a new $540 million senior secured credit facility that consists of a $65 million revolver (B1/B), a $325 million seven-year first-lien term loan (B1/B) and a $150 million eight-year second-lien term loan (Caa1/CCC+). All tranches have a 1.25% Libor floor.

During syndication, the revolver was upsized from $60 million, the first-lien term loan (B1/B) was upsized from $315 million and pricing on both tranches was cut to Libor plus 400 bps from Libor plus 425 bps. The first-lien term loan also saw the addition of a step-down to Libor plus 375 bps when first-lien leverage is less than 3 times, and its original issue discount was changed to 99½ from 99.

Furthermore, as part of the syndication process, pricing on the second-lien term loan was lowered to Libor plus 800 bps from talk of Libor plus 825 bps to 850 bps and the original issue discount was modified to 99 from 981/2.

GCA call premiums

GCA's first-lien loan has 101 one year repricing protection and its second-lien loan has call protection of 103 in year one, 102 in year two and 101 in year three.

Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc. and Jefferies & Co. led the deal.

The additional funds raised through the revolver upsizing are being used for general corporate purposes, and the first-lien term loan upsizing was used to increase the restricted cash balance to cash collateralize letters of credit.

GCA Services is a Cleveland-based facility services company that provides customized janitorial/custodial, facilities operations and maintenance, grounds management, diversified staffing and other ancillary services.

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