Revel term loan falls some more; ResCap better with Berkshire bid; Tank, LHP, WOW set talk

By Sara Rosenberg

New York, June 12 - Revel Entertainment Group LLC's term loan continued its downward spiral in trading on Tuesday on the back of disappointing May revenue results, and Residential Capital LLC (ResCap) saw a small improvement on its term loans with news of an acquisition bid by Berkshire Hathaway Inc.

Moving to the primary, Tank Holding Corp. and LHP Hospital Group Inc. released price talk on their loans as the deals were presented to lenders during the session, and WideOpenWest Finance LLC (WOW) began circulating guidance on its upcoming transaction.

Revel slides further

Revel Entertainment's term loan B was once again weaker as, at the start of this week, the company's May revenue results came in below expectations, according to a trader.

The term loan B was quoted at 87 bid, 87½ offered, down from 89 bid, 90½ offered on Monday and from 92¼ bid, 92¾ offered on Friday, the trader said.

For the month of May, the company had total revenue of $13.93 million, and year-to-date revenue is $27.56 million. The numbers were released by the New Jersey Division of Gaming Enforcement on Monday.

Revel, a gaming and entertainment company, commenced operations on March 28 and opened to the public on April 2.

ResCap gains ground

Residential Capital's term loan A-1 and term loan A-2 under its debtor-in-possession financing facility were better in trading on Tuesday as word emerged that Berkshire Hathaway is looking to buy the company's businesses, according to a source.

The term loan A-1 was ups an eighth of a point at 99 5/8 bid, par offered, and the term loan A-2 was up a quarter of a point at par bid, par 3/8 offered, the source said.

The company is currently involved in a Chapter 11 process that is expected to result in the sale of substantially all of its assets, and it has already reached an agreement to sell its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial Inc. and its mortgage origination and servicing businesses to Nationstar Mortgage LLC.

In a court document, it was revealed that Berkshire is offering to be the stalking-horse bidder for either or both the mortgage businesses and loan portfolio on more beneficial terms than those offered by Ally and Nationstar.

Berkshire bid details

Specifically, Berkshire is proposing to buy Residential Capital's mortgage businesses at the same roughly $2.4 billion price as Nationstar, but with a break-up fee of $24 million, compared to $72 million fee under the Nationstar agreement, and zero expense reimbursement, versus $10 million under the Nationstar plan.

Also, Berkshire would like to purchase Residential Capital's loan portfolio on substantially the same terms as the agreement with Ally, but with an increased price of $1.45 billion, compared to $1.4 billion under the Ally offer.

The loan portfolio acquisition offer by Berkshire includes a 3% break-up fee.

Residential Capital is a New York-based mortgage originator and servicer.

Tank discloses guidance

Tank Holding held a bank meeting on Tuesday morning to kick off syndication on its proposed $405 million credit facility (B1), and in connection with the launch, price talk was announced, according to a market source.

The $50 million six-year revolver is talked at Libor plus 375 basis points with no Libor floor, the source remarked.

And, the $355 million seven-year covenant-light term loan is talked at Libor plus 500 bps to 525 bps with a 1.25% Libor floor, an original issue discount of 98½ and 101 soft call protection for one year, the source continued.

GE Capital Markets and RBC Capital Markets LLC are leading the deal that will help fund the company's buyout by Leonard Green & Partners from Olympus Partners.

Tank is a Lincoln, Neb.-based manufacturer of polyethylene and steel material handling products.

LHP Hospital launches

LHP Hospital also held a bank meeting, and its $275 million six-year term loan B was launched with talk of Libor plus 675 bps to 700 bps with a 1.5% Libor floor and an original issue discount of 98, according to a market source.

The $375 million senior secured deal (B3) also provides for a $100 million five-year revolver.

Commitments are due on June 25, the source remarked.

Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch and Regions Bank are leading the deal that will be used to refinance existing debt and for acquisitions.

LHP Hospital is a Plano, Texas-based provider of hospital capital and expertise to not-for-profit hospitals and hospital systems.

WideOpenWest pricing

WideOpenWest started going out with talk of Libor plus 500 bps with a 1.25% Libor floor, a discount of 98½ and 101 soft call protection for one year on its $1.92 billion seven-year first-lien term loan B as a bank meeting has been set for Wednesday morning to launch the deal, according to sources.

The company's $2.12 billion credit facility (B1) also includes a $200 million five-year revolver.

Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., RBC Capital Markets, SunTrust Robinson Humphrey Inc. and the Bank of Tokyo-Mitsubishi-UFJ Ltd. are leading the deal.

Proceeds, along with $1.02 billion of senior notes backed by a bridge loan and around $200 million of equity, will fund the purchase of Knology Inc. for $19.75 per share, or about $1.5 billion.

Closing is subject to stockholder approval, regulatory approvals and customary conditions.

WideOpenWest is a Denver-based provider of residential and commercial high-speed internet, cable television and telephone services. Knology is a West Point, Ga.-based provider of interactive communications and entertainment services.

Smart Balance talk emerges

Pricing guidance on Smart Balance Inc.'s $240 million six-year term loan B surfaced at Libor plus 500 bps to 525 bps with a 1.25% Libor floor and an original issue discount of 99, and the debt includes 101 soft call protection for one year, a market source told Prospect News.

The company's $280 million senior secured credit facility, which launched with a bank meeting on Monday, also provides for a $40 million five-year revolver.

Lead banks, BMO Capital Markets and Citigroup Global Markets Inc., are asking for commitments by June 22.

Proceeds will fund the purchase of Udi's Healthy Foods LLC, a Denver-based maker of gluten-free foods, for $125 million and to refinance existing debt. The acquisition is expected to close in July.

Smart Balance, a Paramus, N.J.-based distributor of health foods, anticipates pro forma adjusted leverage to be 4.4. times.

AWAS readies deal

In other news, AWAS Aviation Capital Ltd. is set to launch a $360 million term loan on Thursday, according to sources.

Goldman Sachs & Co. is the lead bank on the deal.

AWAS is a Dublin-based aircraft leasing company.

EquiPower well met

EquiPower Resources Holdings' $975 million credit facility is oversubscribed, with lenders still having until Thursday to commit to the transaction, according to a market source.

The facility consists of a $90 million revolver (Ba3/BB) talked at Libor plus 475 bps to 500 bps with no Libor floor, a $685 million first-lien term loan (Ba3/BB) talked at Libor plus 475 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 981/2, and a $200 million second-lien term loan (B2/BB) talked at Libor plus 850 bps to 875 bps with a 1.5% Libor floor and a discount of 98.

The first-lien loan has 101 soft call protection for one year and the second-lien loan has hard call protection of 103 in year one, 102 in year two and 101 in year three.

Barclays Capital Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to refinance existing debt, to pay deferred costs associated with hedge restructuring, to fund a debt service reserve and to pay a small dividend.

EquiPower is a Hartford, Conn.-based competitive power generation company.

Jazz Pharmaceuticals closes

Jazz Pharmaceuticals plc completed its $680 million acquisition of EUSA Pharma, a news release said, which was funded with a new $575 million credit facility (Ba3/BBB-).

The facility consists of a $100 million five-year revolver priced at Libor plus 400 bps with no Libor floor and a $475 million six-year term loan B priced at Libor plus 425 bps with a 1% Libor floor. The revolver was sold at 99 and the B loan was sold at 981/2. Included in the term loan is 101 soft call protection for one year.

During syndication, pricing on the revolver was increased from talk of Libor plus 325 bps to 350 bps. Also, the term loan B was downsized from $500 million, pricing was lifted from talk of Libor plus 350 bps to 375 bps, the discount widened from 99 and the call protection was added.

Barclays Capital Inc., J.P. Morgan Securities LLC and Citigroup Global Markets Inc. led the deal.

Jazz Pharmaceuticals is a Dublin, Ireland-based specialty biopharmaceutical company. EUSA is a specialty pharmaceutical company with headquarters in Langhorne, Pa., and Oxford, England.

© 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.