Revel, Windsor, Scitor break; Michael Foods, Petco, Focus Brands, Univar dip on refinancings

By Sara Rosenberg

New York, Feb. 14 - Revel Entertainment Group LLC, Windsor Quality Food Co. and Scitor Corp. all freed up for trading on Monday, with all of the companies' term loans quoted above their original issue discount prices.

Also, Michael Foods Inc., Petco Animal Supplies Inc., Focus Brands Inc. and Univar Inc. all saw their term loans head lower in trading as refinancing/repricing deals were announced, and all released price talk on their proposed transactions.

In more loan happenings, Datatel Inc. increased the size of its credit facility, while reducing pricing, Savers Inc. tightened pricing on its B loan, Encompass Digital Media Inc. lifted the spread and discount on its deal, and Intelligrated Inc. downsized its term loan and raised pricing.

Furthermore, Fairway Market LLC confirmed two additional lead banks on its proposed deal, and Nexeo Solutions, Hertz Corp., NDS Finance, Allegiant Travel Co. and JMC Steel Group is emerged with plans for new credit facilities.

Revel frees up

Revel's $850 million six-year first-lien term loan B (B3/B) hit the secondary market on Monday, with levels quoted at par ½ bid, 101 offered on the open and then it moved up to 101 bid, 101½ offered, according to traders.

Pricing on the term loan is Libor plus 750 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 981/2. The tranche is non-callable for two years, then at 102 in year three and 101 in year four.

During syndication, the term loan was upsized from $700 million, pricing was lowered from Libor plus 800 bps, the Libor floor was cut from 2% and call protection was changed from non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

As a result of the first-lien upsizing, a $150 million 61/2-year second-lien term loan was eliminated from the capital structure. This tranche was talked at Libor plus 1,100 bps with a 2% floor and a discount of 98. It was non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

Revel funding construction

Proceeds from Revel's credit facility, along with $305 million of mezzanine financing that was upsized from $295 million due to pre-funding of first-lien term loan interest, will be used to help fund the construction of a casino and hotel in Atlantic City, N.J.

JPMorgan is the lead bank on the term loan for the gaming and entertainment company.

Revel had initially launched a $1.287 billion facility in November, consisting of an $800 million first-lien loan talked at Libor plus 700 bps with a 2% Libor floor and an original issue discount of 98, and a $472 million second-lien loan talked at 12.5% with a discount of 97. The first-lien loan was non-callable for one year, then at 103, 102, 101, and the second-lien was non-callable for three years, then at 106, 103, 1011/2.

Price talk on the first-lien term loan had later been changed to Libor plus 825 bps, and the discount widened to 97, but investors were hesitant to get involved as they were hoping for some sort of junior debt to decrease the bank deal - a worry that was addressed with the relaunch in January.

Windsor starts trading

Windsor Quality Food's credit facility also broke for trading, with the $250 million term loan B quoted at par 7/8 bid, 101 3/8 offered on the open and then it moved to par ¾ bid, 101¼ offered, according to a trader.

Pricing on the term loan is Libor plus 350 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, pricing was lowered from Libor plus 400 bps and the call protection was added.

The Houston-based frozen prepared foods company's $450 million senior secured credit facility (B1/BB-) also includes a $60 million revolver and a $140 million term loan A.

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

Scitor breaks

Another deal to free up was Scitor's credit facility, with the $275 million term loan quoted at 101 bid, 101½ offered, according to a trader.

Pricing on the term loan is Libor plus 350 bps with a step-down to Libor plus 325 bps when senior secured leverage is less than 3.75 times. There is a 1.5% Libor floor and 101 soft call protection for one year, and the paper was sold at an original issue discount of 991/2.

During syndication, pricing on the term loan was reduced from Libor plus 400 bps, the step-down and call protection were added, and the discount tightened from 99.

JPMorgan, Jefferies, GE Capital and RBC are the lead banks on the $305 million credit facility (B2/B) that also provides for a $30 million revolver and will be used for a recapitalization.

Scitor is a provider of systems engineering, financial and management consulting, information services, and other services for corporate customers and government programs.

Michael Foods dips

Michael Foods held a conference call on Monday to launch an $840 million term loan, and in connection with the event, lenders were told that price talk is Libor plus 325 bps with a 1.25% Libor floor and a par offer price, and there is 101 soft call protection for six months, according to a market source.

After word of the new deal hit the market, the existing term loan was quoted at 101 bid, 101½ offered, down from 101 3/8 bid, 101 7/8 offered, as it moved towards its call protection paydown level, a trader added.

Bank of America Merrill Lynch, Goldman Sachs and Barclays are the lead banks on the new deal for the Minnetonka, Minn.-based producer and distributor of food products, which will be used to refinance existing debt and fund a dividend payment.

In the summer of 2010, the company got a $790 million term loan priced at Libor plus 450 bps with a 1.75% Libor floor that was sold at an original issue discount of 98. The loan includes 101 soft call protection for one year and was used to help fund the company's buyout by GS Capital Partners.

Petco heads to 101

Petco Animal Supplies, a San Diego-based specialty retailer of pet food, supplies and services, has set a call for Tuesday to launch a $1.225 billion covenant-light term loan that will be used to reprice its existing covenant-light term loan, according to a source.

And, since there is 101 soft call protection for one year on the existing loan, trading levels moved to 101 bid, 101½ offered from 101 1/8 bid, 101 5/8 offered on Friday, a trader remarked.

Indicative talk on the repriced term loan is Libor plus 325 bps to 350 bps with a 1.25% Libor floor and a par offer price, the source said, adding that there's 101 soft call protection for six months.

By comparison, the existing term loan is priced at Libor plus 450 bps with a 1.5% Libor floor and was sold at an original issue discount of 99 when it was obtained late last year to refinance existing debt and fund a dividend.

Credit Suisse, JPMorgan and Bank of America Merrill Lynch are the lead banks on the repricing and are asking for commitments by Feb 23.

Focus Brands softens

Focus Brands is also getting ready to launch a repricing deal with a call on Tuesday, and its existing term loan moved to 99 7/8 bid, par 3/8 offered from 101 1/8 bid, 101½ offered, since it will be getting paid down at par, a trader said.

Indicative price talk on the repriced $251.3 million term loan is Libor plus 425 bps to 450 bps with a 1.5% Libor floor and a par offer price. There is 101 soft call protection for one year.

The existing term loan, which had an original size of $275 million when it was obtained late last year but has since been paid down, is priced at Libor plus 550 bps with a step to Libor plus 525 bps at 3.5 times total leverage and a 1.75% Libor floor. The tranche was sold at an original issue discount of 99 and was used to help fund the acquisition of Auntie Anne's and refinance existing debt.

Credit Suisse is the lead bank on the repricing and is asking for commitments by Feb. 22.

Focus Brands is an Atlanta-based franchisor and operator of ice cream stores, bakeries, restaurants and cafes.

Univar trades down

Univar's extended term loan B, term loan C and term loan D all headed to par 7/8 bid, 101¼ offered from 101 bid, 101 3/8 offered as word surfaced that the debt would be refinanced into one single term loan, according to a trader.

The new $1.98 billion term loan due June 2017 is set to launch with a conference call on Wednesday and is being talked at Libor plus 350 bps with a 1.5% Libor floor, a par offer price and 101 soft call protection for one year, a market source told Prospect News.

Bank of America Merrill Lynch is the lead bank on the deal that, in addition, to refinancing the company's term loans, will be used to pay down revolving credit facility borrowings.

Univar is a Redmond, Wash.-based chemical distributor.

Datatel reworks deal

Moving to the topic of in market deals, Datatel made a number of changes to its credit facility, including upsizing the term loans and reducing pricing on all tranches, according to a market source.

Under the revised structure, the six-year first-lien term loan B is sized at $270 million, up from $255 million, and pricing is Libor plus 350 bps with a step-down to Libor plus 325 bps when leverage is less than 5.0 times. The loan has a 1.5% Libor floor and a par offer price, the source said. Initial talk had been Libor plus 375 bps to 400 bps with a 1.5% floor and a discount in the 99 to 99½ area.

Pricing on the $40 million five-year revolver (size unchanged) was also reduced to Libor plus 350 bps from talk of Libor plus 375 bps to 400 bps, and continues to include a 1.5% floor.

Additionally, the seven-year second-lien term loan is now sized at $150 million, up from $135 million, and pricing is Libor plus 725 bps with a 1.5% Libor floor and an original issue discount of 991/2, compared to initial talk of Libor plus 750 bps to 775 bps with a 1.5% floor and a discount of 99, the source continued. There is still call protection of 103 in year one, 102 in year two and 101 in year three.

Datatel ups dividend

Proceeds from Datatel's credit facility will be used to refinance existing debt and fund a dividend, and, as a result of the upsizing to the term loans, the dividend was increased.

"People know this credit and are happy with it," the source added in explanation of why the deal got enough demand to allow for the size and pricing changes.

Credit Suisse and BMO are the lead banks on the now $460 million credit facility, up from $430 million.

Following the revisions, Moody's Investors Service moved the revolver and first-lien term loan B ratings to Ba3 from B1, but left the second-lien loan rating at Caa1. Standard & Poor's ratings prior to the changes were B on the revolver and first-lien loan and CCC+ on the second-lien.

Datatel is a Fairfax, Va.-based provider of technology services and professional business services to higher education institutions.

Savers cuts pricing

Savers lowered the spread on its $460 million six-year term loan B to Libor plus 300 bps from Libor plus 325 bps, added a step-down to Libor plus 275 bps at less than 2.75 times leverage and trimmed the Libor floor to 1.25% from 1.5%. The term B is now being sold at par instead of at a discount of 991/2, according to a market source.

Recommitments are due at 5 p.m. ET on Tuesday.

JPMorgan is the lead bank on the deal $500 million credit facility (Ba3/B+) that also includes a $40 million revolver.

Proceeds will be used to refinance existing debt and fund the acquisition of 18 stores from Apogee, a thrift store operator owned by Golden Gate Capital.

At close, Savers, a Bellevue, Wash.-based thrift store chain, will have leverage of 3.8 times all senior.

Encompass flexes up

Encompass Digital Media raised pricing on its $195 million senior secured credit facility (B2/B+) to Libor plus 600 bps from Libor plus 550 bps and increased the original issue discount to 98 from 981/2, while leaving the 1.75% Libor floor intact, according to a market source.

The facility consists of a $20 million revolver and a $175 million term loan B.

Following the changes, the deal was oversubscribed, the source added.

Macquarie Capital is the arranger and bookrunner on the deal that will be used to fund the acquisition of the content distribution business of Ascent Media Corp. for a total consideration of about $120 million, including about $113 million in cash and the assumption of certain debt and obligations totaling roughly $7 million.

Encompass rolling mez

In connection with Encompass' purchase of the Ascent business, Tennenbaum Capital Partners, a current lender and equity holder in the company, will roll over $95 million of existing mezzanine debt into a new second-lien term loan that is not being syndicated.

Closing on the acquisition is expected in February, subject to approval by Ascent shareholders, regulatory clearances and the transfer of certain FCC licenses.

Senior leverage at close will be 3.4 times and total leverage will be 5.3 times.

Encompass Digital Media is a Los Angeles-based digital media services provider.

Intelligrated revises loan

Intelligrated also modified to its deal, trimming the six-year term loan B to $125 million from $145 million, lifting pricing to Libor plus 575 bps from Libor plus 550 bps, sweetening call protection to two years at 101 from a one-year 101 soft call and setting amortization at 5% in years one and two, 7.5% in years three and four, and 10% in year five, according to a market source.

As before, the term loan has a 1.75% Libor floor and is being sold at original issue discount of 99, the source said.

Bank of America and SunTrust are the lead banks on the now $155 million credit facility (B2), down from $175 million, which also includes a $30 million five-year revolver.

Proceeds will be used to refinance an existing second-lien loan and fund a dividend payment, which was reduced as a result of the term loan downsizing.

Intelligrated is a Cincinnati-based provider of automated material handling systems.

Fairway adds banks

Fairway Market saw Bank of America Merrill Lynch and Jefferies come aboard as leads on its proposed $175 million credit facility, joining left lead bank Credit Suisse, according to a market source.

As was previously reported, the facility consists of a $25 million five-year revolver and a $150 million six-year term loan, with both tranches talked at Libor plus 700 bps with a 1.5% Libor floor and an original issue discount of 98.

The deal, which includes a full covenant package, is set to launch with a bank meeting on Tuesday.

Proceeds will be used to refinance an existing credit facility and provide some cash for future store expansion.

Fairway is a supermarket chain with locations in New York, New Jersey and Connecticut.

Nexeo readies launch

Nexeo Solutions has set a bank meeting for Wednesday to launch a proposed $840 million credit facility, consisting of a $300 million 61/2-year term loan B and a $540 million ABL revolver, according to a market source.

Bank of America Merrill Lynch, Citigroup and Barclays are the lead banks on the deal.

Proceeds will be used to help fund TPG Capital's acquisition of Ashland Inc.'s chemical distribution business for $930 million. The business will be named Nexeo Solutions.

The transaction is expected to close prior to the end of the March quarter, subject to the receipt of certain regulatory approvals and other standard closing conditions.

Hertz coming soon

Hertz is scheduled to hold a bank meeting on Wednesday to launch a proposed $1.6 billion credit facility that is being led by Deutsche Bank, Barclays, Bank of America Merrill Lynch, Citigroup, Credit Agricole, JPMorgan and Wells Fargo, according to a market source.

The facility consists of a $1.35 billion seven-year term loan and a $250 million seven-year synthetic letter of credit facility, the source said.

Proceeds will be used by the Park Ridge, N.J.-based auto and equipment rental company to refinance existing debt.

NDS set for Thursday

NDS Finance has scheduled a bank meeting for Thursday to launch its proposed $1.05 billion credit facility that will be used to refinance existing debt, according to a market source.

The facility consists of a $250 million euro equivalent six-year term loan A and an $800 million seven-year term loan B, the source said.

JPMorgan is the lead bank on the deal.

NDS is a U.K.-based supplier of open end-to-end digital technology and services to digital pay-television platform operators and content providers.

Allegiant deal emerges

Also launching with a bank meeting on Thursday is a $125 million term loan for Allegiant Travel that is being talked at Libor plus 425 bps with a 1.75% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

Citadel Securities is leading the deal that will be used to fund capital expenditures.

Allegiant Travel is a Las Vegas-based all-jet passenger airline company.

JMC launching new loan

JMC Steel Group is set to hold a bank meeting on Tuesday for a new credit facility that is being led by JPMorgan and will be used to help refinance existing debt and its acquisition by the Zekelman family, according to a market source.

The company said in a news release that it expects to borrow approximately $1.1 billion for the transaction.

Zekelman, a current minority owner in the company, is purchasing the Carlyle Group's majority stake in the company. Carlyle will maintain a minority stake in JMC and participation on the board of directors.

The transaction, which is subject to financing, is expected to close by March 31.

JMC Steel is a Beachwood, Ohio-based manufacturer of steel pipe and tubes.

Kraton closes

In other news, Kraton Polymers LLC completed its $350 million five-year senior secured credit facility (Ba3/BB+), comprised of a $200 million revolver and a $150 million term loan A, according to a news release.

Pricing on the facility is Libor plus 300 bps with no Libor floor.

During syndication, the revolver was upsized from $150 million, the term loan A was downsized from $200 million, and pricing on both tranches was reduced from Libor plus 325 bps.

Bank of America Merrill Lynch, Morgan Stanley, Goldman Sachs, Credit Suisse and Macquarie acted as the leads on the deal that is being used, along with $250 million of senior notes that were upsized from $200 million, to refinance existing notes and term loan debt due in 2013 and 2014.

Kraton Polymers is a Houston-based producer of styrenic block copolymers.

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