Neiman Marcus, Windsor break; Patheon, U.S. Foodservice, Therakos tweak deals; Vesta pulled

By Sara Rosenberg

New York, Nov. 30 - Neiman Marcus Group Inc.'s first-lien incremental term loan freed up for trading during Friday's market hours, with levels quoted above the original issue discount price, and Windsor Financing LLC broke too.

Moving to the primary, Patheon Inc. made some changes to its term loan, including revising the maturity, adding a financial covenant, changing the accordion and extending the MFN protection, and, as a result, the commitment deadline was pushed out by a day.

Also, U.S. Foodservice Inc. upsized its term loan, and Therakos Inc. revised maturities on its term loans, flexed second-lien pricing higher and widened the original issue discount on its first-lien term loan.

Furthermore, Vesta Corp. pulled its deal from market, Sequa Corp., Riverbed Technology Inc. and Custom Building Products came out with price talk with launch, and Dematic emerged with new loan plans and Ancestry.com set timing on its facility.

Neiman hits secondary

Neiman Marcus' $500 million first-lien incremental term loan due May 2018 broke for trading on Friday, with levels quoted at par bid, par ½ offered, according to a trader.

Price talk on the term loan is Libor plus 350 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 991/2.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the lead banks on the deal.

Proceeds will be used to refinance all roughly $500 million of the company's 10 3/8% senior subordinated notes due 2015 outstanding through a tender offer that expires on Dec. 12.

With the add-on term loan, the company sought an amendment to its existing term loan and asset-based credit facility to allow for the new debt.

Neiman Marcus is a Dallas-based chain of department stores.

Windsor tops OID

Another deal to start trading was Windsor Financing's $246 million five-year term loan B (Ba2/BB+), with levels quoted at par bid, 101 offered, according to a market source.

Pricing on the loan is Libor plus 500 bps with a 1.25% Libor floor, and it was sold at a discount of 99. The debt is non-callable for 18 months, then at 102 for months 19 to 30 and 101 for months 31 to 42.

During syndication, pricing was increased from talk of Libor plus 375 bps to 400 bps, the Libor floor widened from 1%, the maturity was changed from seven years and the call protection was sweetened from just 101 soft call for one year.

Morgan Stanley Senior Funding Inc. is the lead bank on the deal that will be used to refinance senior secured and subordinated secured notes and fund reserve accounts.

Windsor is a Charlotte, N.C.-based limited liability company that finances the operations of some electric and steam generating plants.

BWIC emerges

In more secondary news, a $22.5 million revolving credit facility Bid-Wanted-In-Competition was announced on Friday morning, and market players are being asked to place their bids by 12:30 p.m. ET on Monday, according to a trader.

The portfolio includes $6 million of Delphi's revolver, $2.5 million of Summit Materials LLC's revolver, $5 million of Iasis Healthcare LLC's revolver, $4 million of Vanguard Health Systems Inc.'s revolver and $5 million of Terex Corp.'s revolver, the trader added.

Patheon revises terms

Switching to the primary, Patheon shortened the maturity on its $565 million term loan B to six years from seven years and added to the previously covenant-light loan a 5.5 times net first-lien leverage ratio with a step-down to 4.25 times, incorporating a 35% covenant cushion, according to a market source.

Additionally, the incremental facility is now $105 million plus additional amounts subject to 3.75 times first-lien leverage, whereas before it was $140 million plus additional amounts subject to 4 times first-lien leverage, the source said.

And, the MFN pricing protection was revised to 50 bps for the life of the facility from 50 bps for 18 months.

Price talk on the B loan was left at Libor plus 550 bps to 575 bps with a 1.25% Libor floor and an original issue discount of 981/2, and the debt still includes 101 soft call protection for one year.

Patheon getting revolver

Patheon's $650 million senior secured credit facility (B+) also includes an $85 million revolver that will be governed by the same financial covenant as the term loan, the source continued.

With the changes to terms, commitments are now being asked for by 5 p.m. ET on Wednesday, changed from the original deadline of noon ET on Tuesday.

Morgan Stanley Senior Funding Inc., UBS Securities LLC, Credit Suisse Securities (USA) LLC and KeyBanc Capital Markets LLC are leading the deal.

Proceeds, along with up to $30 million of equity from JLL Partners Fund V LP, will be used to fund the $255 million acquisition of Banner Pharmacaps from VION NV, to repurchase $280 million of existing senior secured notes, to repay revolver borrowings and for general corporate purposes.

Closing is expected by year-end, subject to regulatory approvals and other customary conditions.

Patheon is a Durham, N.C.-based provider of contract development and manufacturing services to the pharmaceutical industry. Banner is a High Point, N.C.-based specialty pharmaceutical business dedicated to the research, development and manufacturing of gelatin-based dosage forms.

U.S. Foodservice ups size

U.S. Foodservice lifted its term loan due 2017 (B3/B-) to $450 million from $350 million, while leaving pricing at Libor plus 425 bps with a 1.5% Libor floor and an offer price of 98 for new investors and a 2% extension fee for existing 2014 lenders that extend their commitments, according to a market source.

The new loan is fungible with the existing extended term loan tranche, which carries the same spread and floor and the new debt.

Allocations are expected during the week of Dec. 3, the source said.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., BMO Capital Markets Corp., Goldman Sachs & Co., J.P. Morgan Securities LLC, KKR Capital Markets, Morgan Stanley Senior Funding Inc., Natixis and Wells Fargo Securities LLC are leading the deal that will be used to repay non-extended term loan debt due in 2014.

The company is also getting $400 million of bonds, upsized from $350 million that will be used to repay bank debt, the source continued, adding that the additional proceeds from the loan and bond upsizings will fund a repayment of ABL facility borrowings.

U.S. Foodservice is a Columbia, Md.-based broadline foodservice distributor.

Therakos reworks deal

Therakos set pricing on its $210 million first-lien term loan (B2/B) at Libor plus 625 bps, the wide end of the Libor plus 600 bps to 625 bps talk, moved the original issue discount to 97 form 98 and shortened the maturity to five years from six years, according to a market source. The 1.25% Libor floor and 101 soft call protection for one year were unchanged.

The company also raised pricing on its $80 million second-lien term loan (Caa2/CCC+) to Libor plus 1,000 bps from talk of Libor plus 950 bps to 975 bps, and shortened the maturity to ½ years from seven years, the source said. The 1.25% floor, discount of 97 and call protection of 103 of year one, 102 in year two and 101 in year three were left intact.

Furthermore, an interest coverage covenant was added, joining an already in place maximum total leverage covenant, and a $50 million unrestricted basket was removed.

Therakos funding buyout

Proceeds from Therakos' $325 million credit facility, which also includes a $35 million revolver (B2/B), will be used to help fund its purchase by the Gores Group from Ortho-Clinical Diagnostics Inc., a Johnson & Johnson subsidiary.

RBC Capital Markets LLC and Jefferies & Co. are the lead banks on the deal.

First-lien leverage is 4.1 times and second-lien leverage is 5.6 times. On a net basis, first-lien leverage is 3.7 times and second-lien leverage is 5.2 times.

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.

Vesta cancels loan

Vesta withdrew its $200 million five-year first-lien term loan from market, according to a market source. This decision was made just a few days after first-lien loan terms were sweetened and a $95 million six-year second-lien term loan was removed from the capital structure.

The source said that management decided to cancel the deal, which had cleared at revised terms.

The first-lien loan was most recently talked at Libor plus 700 bps with a 1.25% Libor floor and a discount of 98, after flexing from initial talk of Libor plus 500 bps with a 1.25% floor and a discount of 99.

Also, the first-lien loan had soft call protection of 103 in year one, 102 in year two and 101 in year three, which had been revised earlier from just 101 soft call protection for one year.

Meanwhile, the second-lien term loan that was pulled a few days ago was talked at Libor plus 925 bps with a 1.25% Libor floor and an original issue discount of 98, and included call protection of 103 in year one, 102 in year two and 101 in year three.

Credit Suisse Securities (USA) LLC was leading the deal that would have funded a dividend.

Vesta is an Atlanta-based provider of non-retail electronic payment solutions.

Sequa sets talk

Also on the new deal front, Sequa held a bank meeting on Friday to launch its credit facility, and with the event, price talk on the $1.3 billion covenant-light term loan B was announced, according to a market source.

The term loan B is talked at Libor plus 400 bps to 425 bps with a 1.25% Libor floor and an original issue discount of 99, and includes 101 soft call protection for one year, the source said.

The company's $1.5 billion 41/2-year senior secured credit facility, for which commitments are due on Dec. 12, also provides for a $200 million revolver.

Barclays, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Goldman Sachs & Co., Morgan Stanley Senior Funding Inc. and RBC Capital Markets LLC are leading the deal that will refinance the company's existing capital structure.

Senior secured leverage is 4 times and total leverage is 5.3 times.

Sequa is a Tampa, Fla.-based diversified industrial company that operates in the aerospace and metal coatings industries.

Riverbed reveals guidance

Riverbed Technology disclosed talk with its bank meeting as well. It came in at Libor plus 325 bps to 350 bps with a 1% Libor floor and an original issue discount of 99½ on the $500 million seven-year senior secured term loan (Ba3/BBB-), a source said.

Lead banks, Morgan Stanley Senior Funding Inc. and Goldman Sachs & Co., are asking for commitments by Dec. 13, the source remarked.

Proceeds will help fund the acquisition of Opnet Technologies Inc. for $36.55 in cash and 0.2774 of a share of Riverbed common stock per Opnet share. The transaction has an equity value of $1 billion and an enterprise value of $921 million.

Closing is expected by year-end, subject to the tender of a majority of Opnet shares, financing and the expiration or termination of Hart-Scott-Rodino.

Riverbed is a San Francisco-based IT performance company. Opnet is a Bethesda, Md.-based provider of solutions for application and network performance management.

Custom Building launches

Custom Building Products launched during the session its $315 million seven-year term loan B with talk of Libor plus 475 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

The company's $345 million credit facility also provides for a $30 million five-year revolver.

Bank of America Merrill Lynch and RBC Capital Markets LLC are leading the deal that will be used to refinance existing debt and fund a dividend.

Custom Building Products is a Seal Beach, Calif., provider of installation solutions for tile and stone.

Dematic preps deal

Dematic set a bank meeting for 1 p.m. ET on Monday to launch a $615 million credit facility that is being led by Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Barclays, according to a market source.

The facility consists of a $75 million revolver and a $540 million term loan B, of which $50 million is a deposit letter-of credit facility, the source said.

Proceeds will help fund the purchase of the company by AEA Investors and Teachers' Private Capital from Triton, and with the transaction, about €450 million of outstanding bonds will be redeemed.

Leverage through the loan is 3.5 times, the source remarked.

Closing is expected by January, subject to regulatory approval processes.

Dematic is an engineering company that provides intelligent warehouse logistics and materials handling services.

Ancestry.com timing

Ancestry.com revealed that it will be holding a bank meeting on Monday afternoon for its $720 million senior secured credit facility, according to a market source.

The facility consists of a $50 million five-year revolver and a $670 million seven-year covenant-light term loan.

Official talk is not yet out, but filings with the Securities and Exchange Commission said the revolver and term loan would be priced at Libor plus 450 bps, with the term loan having a 1.25% Libor floor and an original issue discount of 99. The revolver is anticipated to have a 50 bps unused fee and a 50 bps upfront fee.

Barclays, Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and RBC Capital Markets LLC are leading the deal.

Ancestry.com plans notes

Ancestry.com also expects to get $300 million of senior unsecured notes that are backed by a commitment for a senior unsecured bridge loan with pricing of Libor plus 825 bps with a 1.25% Libor floor. The spread on the bridge loan will increase by 50 bps after three months and every three months thereafter up to an undisclosed cap.

Proceeds from the credit facility, bonds and equity will be used to fund the company's buyout by Permira Funds for $32 per share in cash. The transaction is valued at $1.6 billion.

Closing is expected in early 2013, subject to stockholder approval and other customary conditions.

Ancestry.com is a Provo, Utah-based online family history resource.

NSG well met

In other news, NSG Holdings LLC's $230 million credit facility (Ba1/BB+) has received strong interest from investors, creating the expectation that it will be oversubscribed by Monday's commitment deadline, according to a market source.

The facility consists of a $146 million term loan B talked at Libor plus 375 bps to 400 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, a $44 million debt service reserve letter-of-credit facility talked at Libor plus 375 bps to 400 bps with a 1% upfront fee and a $40 million performance letter-of-credit facility talked at Libor plus 275 bps to 300 bps with a 1% upfront fee.

BNP Paribas Securities Corp. is leading the deal that will be used to refinance existing debt and fund a dividend.

NSG Holdings is a subsidiary of Northern Star Generation LLC, a Houston-based power generation company.

Plains Exploration closes

Plains Exploration & Production Co. completed its $5 billion senior secured credit facility (Ba1/BB) that includes a $3 billion five-year revolver, a $750 million five-year term loan A and a $1.25 billion seven-year term loan B, according to an 8-K filed with the SEC.

The revolver pricing can range from Libor plus 150 bps to 250 bps based on utilization, term loan A pricing is Libor plus 300 bps and it was sold at a discount of 991/4, and term loan B pricing is Libor plus 300 bps with a 1% Libor floor and it was sold at an original issue discount of 991/2. The B loan has 101 soft call protection for one year.

During syndication, pricing on the term B was reduced from talk of Libor plus 325 bps to 350 bps and the discount was tightened from 99.

Plains Exploration leads

J.P. Morgan Securities LLC, Barclays, Bank of America Merrill Lynch, BMO Capital Markets Corp., Citigroup Global Markets Inc., RBC Capital Markets LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC and Wells Fargo Securities LLC led Plains Exploration's credit facility.

Proceeds are being used to help fund the $560 million acquisition of a 50% working interest in the Holstein Field from Shell Offshore Inc. and the $5.55 billion purchase of oil and natural gas interests in the Gulf of Mexico from BP Exploration & Production Inc., to refinance some existing debt and for general corporate purposes.

Plains Exploration is a Houston-based oil and gas company.

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