Warner extends deadline; Summit Materials, Vanguard, Del Monte tweak deals; WideOpenWest breaks

By Sara Rosenberg

New York, Jan. 21 - Warner Chilcott plc decided to give investors a bit more time to throw in their consents towards its recently announced amendment proposal that would reduce pricing and the Libor floor. Even with the extension, however, some are skeptical that the transaction will go through.

On the new deal front, Summit Materials LLC came out with some changes to its credit facility, including increasing the revolver size, lowering pricing on all tranches, setting the Libor floor and revising maturities.

Also making some modifications was Vanguard Health Systems Inc. as it upsized its term loan and firmed the original issue discount at the tight end of talk, and Del Monte Corp. lowered pricing on its pro rata credit facility.

Moving to the secondary market, WideOpenWest's first-lien term loan add-on freed up for trading on Thursday with levels quoted wrapped around the mid-par context.

Warner Chilcott revises timing

Warner Chilcott extended the consent deadline for its amendment proposal to Tuesday while leaving all other terms unchanged, a buyside source told Prospect News.

"That was in response to people being [annoyed] about the two-day turnaround," the source remarked. "Still don't think it passes."

Under the amendment, which was first announced on Wednesday, pricing on the term loan B-1 and B-2, and additional term loans, would be reduced to Libor plus 325 basis points from Libor plus 350 bps.

Also, the Libor floor under the term loan A, term loan B-1, term loan B-2 and additional term loans would be lowered to 1.75% from 2.25%.

There would be no changes made to the revolving credit facility.

Lenders are not being offered a consent fee.

Warner Chilcott threatens refinancing

In connection with the amendment, Warner Chilcott told investors that existing term loan lenders that do not consent to the amendment will be refinanced at par plus accrued interest with the proceeds of new money replacement term loans.

Existing term loan A lenders that consent to the amendment will exchange their loans for replacement term A loans on the effective date, existing B-1 lenders that consent will get replacement B-1 loans and existing B-2 lenders that consent will get replacement B-2 loan.

The replacement term loan B-1 and term loan B-2 will trade as a strip.

Majority consent is required for the amendment to pass.

Credit Suisse is the administrative agent, but Bank of America is the left lead on the deal.

Warner Chilcott holds steady

Warner Chilcott's strip of term loan B-1 and B-2 debt held firm on Thursday in the secondary market after softening a little during the previous session on the repricing news, according to traders.

One trader had the strip of debt quoted at par 1/8 bid, par 3/8 offered, up from par bid, par ¼ offered, and a second trader had the debt quoted at par bid, par 3/8 offered, unchanged on the day.

Prior to the amendment announcement, the strip was being quoted in the par ½ bid, 101 offered context.

The first trader said that the term loan strip was an eighth of a point better on Thursday when compared to the previous day's closing levels because the "general idea is that the repricing may not go through."

He also said that there were some buyers in the name, which may have accounted for the slight rise as well.

Warner Chilcott is a Rockaway, N.J.-based specialty pharmaceutical company.

Summit Materials reworks deal

Moving to new deal happenings, Summit Materials went out to lenders on Thursday morning with revisions on its credit facility's size, pricing and tenor, and asked that recommitments be in by 4 p.m. ET that afternoon, according to a market source.

Under the changes, the revolver is now sized at $50 million, up from an initial size of $37 million, and now has a four-year maturity instead of a three-year maturity, the source said.

The $136.4 million term loan was left alone in terms of size but now matures in 4½ years as opposed to in 3½ years.

Pricing on both the revolver and the term loan was reverse flexed to Libor plus 475 bps from initial talk at launch of Libor plus 500 bps and a 2% Libor floor was established for both tranches, whereas before the floor was labeled as still to be determined, the source continued.

The original issue discount on the term loan was left unchanged at 99.

Summit Materials lead banks

Citigroup, UBS and Jefferies are the lead banks on Summit Materials' now $186.4 million credit facility (B2) - up from $173.4 million - with Citi the left lead.

Proceeds will be used to fund the acquisition of Hinkle Contracting Corp., a Paris, Ky.-based construction company.

Since the deal launched last Friday, market chatter has been that it was going well with lots of investor interest.

Summit Materials is a Washington D.C.-based company that was formed in early 2009 to acquire and grow companies in the aggregates and heavy-side building materials industry.

Vanguard ups term loan

Also on the topic of changes, Vanguard Health Systems increased the size of its term loan on the back of its bond offering being downsized and finalized the original issue discount on the tranche at 99, the low end of initial guidance of 98½ to 99, according to sources.

The term loan is now sized at $815 million, up from $765 million, while the company's senior notes offering ended up at $950 million, down from $1 billion. The 8% notes priced on Wednesday night at 98.555 to yield 8¼%.

Pricing on the term loan was left unchanged at Libor plus 350 bps with a 1½% Libor floor.

Vanguard's now $1.075 billion credit facility (Ba2/B+) - up from $1.025 billion - also includes a $260 million revolver that is priced at Libor plus 350 bps with a 1½% Libor floor as well.

Vanguard refinancing debt

Proceeds from Vanguard's credit facility will be used to refinance debt, including repaying and terminating the existing credit facility.

The notes, along with cash on hand, will be used to fund a tender for the company's 9% senior subordinated notes due 2014 and 11¼% senior discount notes due 2015, and to fund a dividend to existing stockholders.

Bank of America and Barclays are the lead banks on the credit facility.

Commitments are due from lenders on Friday and closing on the facility is expected to take place on Jan. 29.

Vanguard is a Nashville, Tenn.-based owner and operator of acute care hospitals and complementary facilities and services.

Del Monte trims spread

Del Monte reduced pricing on its $1.1 billion senior secured credit facility (Baa3) to Libor plus 275 bps from initial talk of Libor plus 300 bps, according to a market source.

In fact, the Libor plus 300 bps pricing was removed from the credit facility's leverage-based pricing grid so that now it ranges from Libor plus 200 bps to Libor plus 275 bps, the source remarked.

Tranching on the well met deal is a $500 million five-year revolver and a $600 million five-year term loan A.

The revolver and term loan A are being sold to lenders as a strip. Commitments of $50 million get a 62.5 bps upfront fee, while commitments of $25 million get a 37.5 bps fee.

Covenants include a maximum leverage ratio and a minimum fixed-charge coverage ratio.

Bank of America, BMO and Barclays are the lead banks on the deal that will be used to refinance existing debt.

Del Monte is a San Francisco-based producer, distributor and marketer of branded food and pet products.

Spansion nets interest

In other news, syndication of Spansion Inc.'s $450 million five-year term loan is heard to be "coming along very well" ahead of Friday's commitment deadline, according to a market source.

The term loan is talked at Libor plus 550 bps with a 2.5% Libor floor and an original issue discount in the 98 area, and carries 101 soft call protection for one year.

Barclays and Morgan Stanley are the lead banks on the exit financing term loan.

Also as part of the exit package, the company will be getting a new $65 million ABL revolver; however, different banks are leading this part of the transaction.

Total leverage is less than 2.0 times.

Spansion is a Sunnyvale, Calif.-based maker of flash memory products.

WideOpenWest frees to trade

Switching to trading happenings, WideOpenWest's $250 million first-lien add-on term loan (B1/B-) hit the secondary market on Thursday with levels quoted at par bid, 101 offered, according to a fund manager.

The term loan is priced at Libor plus 650 bps and was sold at par.

Credit Suisse is the lead bank on the deal that will be used to fund an acquisition.

WideOpenWest is a Denver-based provider of bundled services that include high speed internet, cable television and telephone services.

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