Primary in spotlight as Sensata, WideOpenWest, Lear, Sports Authority tweak deals; U.S. Security sets talk

By Sara Rosenberg

New York, April 18 - Sensata Technologies increased the size of its credit facility as it shifted some funds out of the high-yield bond market into the loan market, and, at the same time, lowered pricing on the dollar-denominated term loan B debt.

Also in primary happenings, WideOpenWest Holdings LLC reduced spreads on its in-market first- and second-lien bank debt, Lear Corp. opted to move to an all first-lien structure, upsizing its term loan B tranche and reducing pricing, The Sports Authority Inc. retranched its deal and lowered term loan pricing and U.S. Security Holdings Inc. came out with price talk on its credit facility as it was launched to investors.

Sensata Technologies made some changes to its credit facility Tuesday morning, including upsizing its term loan B by $150 million and lowering pricing on the dollar-denominated debt contained in that tranche by 25 basis points, according to a market source.

The term loan B is now sized at the dollar equivalent of $1.35 billion, up from an original size of $1.2 billion, as the company decided to downsize its proposed bond offering to a dollar equivalent of $750 million from an originally anticipated size of $900 million, the source said.

The bond offering, which will be comprised of senior notes and senior subordinated notes, is expected to price late this week.

In addition to the loan upsizing, Sensata reverse flexed pricing on the U.S. portion of its term loan B to Libor plus 175 basis points from original price talk at launch of Libor plus 200 basis points, the source continued.

The term loan B will contain both dollar and euro components; however, the tranching is still to be determined, as is the pricing on the euro portion, the source added.

Meanwhile, Sensata's $150 million revolver was left unchanged in terms of size and pricing, which is currently set at Libor plus 200 basis points.

Lender recommitments toward the deal are due on Wednesday.

Morgan Stanley, Bank of America and Goldman Sachs are the lead banks on the $1.5 billion credit facility (B1/BB-) that will be used, along with the bond proceeds, to fund the leveraged buyout by Bain Capital LLC of Texas Instruments Inc.'s Sensors & Controls business for $3 billion in cash.

Sensata Technologies is an Attleboro, Mass., supplier of engineered sensors and controls to the appliance, climate control, industrial, automotive, lighting and aircraft markets.

WideOpenWest reverse flexes

WideOpenWest was another deal that tweaked pricing on its credit facility during market hours Tuesday, lowering first- and second-lien term loan spreads by 50 basis points each, according to a market source.

With the changes, the company's $510 million seven-year term loan B (B2) is now priced with an interest rate of Libor plus 225 basis points, down from original price talk at launch of Libor plus 275 basis points, the source said.

In addition, the $150 million eight-year second-lien term loan (B3) is now priced with an interest rate of Libor plus 500 basis points, down from original price talk at launch of Libor plus 550 basis points, the source continued.

Call protection on the second-lien loan remained unchanged at 102 in year one and 101 in year two.

WideOpenWest's $720 million credit facility also contains a $60 million revolver (B2) with a 50 basis point commitment fee.

Credit Suisse is the lead bank on the deal that will be used to help fund the leveraged buyout of WideOpenWest by Avista Capital Partners.

Avista Capital is purchasing WideOpenWest from Oak Hill Capital Partners and ABRY Partners. The transaction is expected to close in the first half of 2006.

WideOpenWest is an Englewood, Colo., provider of cable television, high-speed internet and telephone services.

Lear reworks deal

Also on the new deal front, Lear completely changed the structure of its credit facility, eliminating the second-lien term loan tranche and upsizing and lowering pricing on the first-lien term loan B, according to a market source.

The first-lien term loan B (B2/B+) is now sized at $1 billion, up from an original size of $600 million, and pricing on the tranche has been reduced to Libor plus 275 basis points from original price talk at launch of Libor plus 300 basis points, the source said.

Meanwhile, the company's originally proposed $200 million second-lien term loan (B3/B-), which was talked at Libor plus the 450 to 475 basis points, was removed from the capital structure altogether, the source continued.

The extra $400 million of first-lien term loan B debt that the company is now getting compensates for the $200 million second-lien that was done away with and adds $200 million of additional liquidity, the source explained.

JPMorgan Chase Bank, Bank of America, Citibank and Deutsche Bank are the lead banks on the deal.

Proceeds from the new term loan will be used to refinance the company's $400 million term loan scheduled to mature in February 2007, to fund the retirement of the company's outstanding convertible senior notes and for general corporate purposes.

In connection with the new term loan facilities, Lear's primary credit facility is being amended and restated to, among other things, provide additional collateral for both the company's existing revolver and the new term loan, to increase the revolver interest rate to Libor plus 225 basis points and to provide additional flexibility under existing financial covenants through 2007.

Lear is a Southfield, Mich., supplier of automotive interior systems and components.

Sports Authority upsizes

Sports Authority tweaked its credit facility, increasing the term loan tranche while reducing pricing on the paper, and decreasing the size of its revolver, according to a market source.

The seven-year covenant-light term loan B (B1/B) was upsized to $275 million from an original size of $225 million and pricing on the tranche was reduced to Libor plus 225 basis points from original price talk at launch of Libor plus 250 basis points, the source said.

To account for the extra $50 million in term loan B debt, the company downsized its revolver by $25 million and downsized the equity contribution toward the leveraged buyout by $25 million, the source continued.

Whether the $25 million came out of the $685 million five-year ABL revolver or the $65 million five-year first-in, last-out ABL revolver was unclear prior to press time, but some speculated that it came out of the larger $685 million piece bringing that tranche down to a size of $660 million.

The five-year ABL revolver is talked at Libor plus 150 basis points with a 25 basis point commitment fee and the first-in, last-out ABL revolver is talked at Libor plus 300 basis points.

Bank of America, Credit Suisse and Lehman Brothers are the lead banks on the $1 billion credit facility, with Bank of America the left lead.

Proceeds will be used to help fund the leveraged buyout of Sports Authority by Leonard Green & Partners LP and Sports Authority's senior management for $37.25 per share in cash. The total transaction value, including assumed debt, is about $1.3 billion.

Sports Authority is an Englewood, Colo., full-line sporting goods retailer.

U.S. Security talk emerges

U.S. Security released price talk of Libor plus 250 to 275 basis points on all tranches contained in its $205 million credit facility as the deal was presented to lenders via a bank meeting during the Tuesday session, according to a market source.

The facility is comprised of a $40 million revolver, a $135 million term loan and a $30 million acquisition term loan.

RBS Securities is the lead bank on the deal that will be used for a recapitalization.

Senior leverage runs just over three times, while total leverage is at 5.1 times.

The company posted sales of $597 million and EBITDA of $41.4 million in 2005.

U.S. Security is a Roswell, Ga., provider of facility services, such as security, janitorial and maintenance services. It is a Wind Point Partners portfolio company.

GM softens

In secondary happenings, General Motors Corp.'s revolver fell by about half a point as the paper just seems "to be languishing out there" now that the refinancing buzz has died down a bit, according to a trader.

The Detroit-based automotive company's revolver closed the session quoted at 93½ bid, 94½ offered, the trader added.

For a while there has been speculation that GM might be refinancing its revolver since there is some doubt as to whether lenders would allow any borrowings under the facility due to the recent restatement of prior financial statements.

However, talk has now turned to the possibility that the company may only seek an amendment to correct the problem as opposed to doing an all out refinancing, leaving lenders less hopeful of a near-term paydown and resulting in a slow softening of trading levels.

© 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.