Handful of primary deals get tweaked; PGS, Verso set talk; Affinion, Weight Watchers, Solutia break

By Sara Rosenberg

New York, Jan. 24 - A number of primary deals underwent some changes on Wednesday, with Totes Isotoner Corp. shifting some funds between tranches and revising spreads, Wastequip Inc. reverse flexing, McJunkin Corp. upsizing, and Global Tel*Link Corp. upsizing and reverse flexing.

In other news, PGS Inc. and Verso Paper Finance Holdings LLC price talk surfaced as the transactions were launched during the session.

As for the secondary market, Affinion Group Holdings Inc.'s new unsecured term loan freed for trading after being upsized, and Weight Watchers International Inc. (WTW) and Solutia Inc. broke as well.

Totes Isotoner made a round of changes to its credit facility, including moving funds between its first- and second-lien term loans, lowering pricing on the two term loans and adding a step down provision to the first-lien tranche, according to a market source.

The six-year first-lien term loan B (B2/B) is now sized at $135 million, up from $125 million, pricing was reverse flexed to Libor plus 250 basis points from original talk of Libor plus 275 bps, and a step down was added under which pricing can drop to Libor plus 225 bps when leverage, based on the average revolver balance over the last four quarters, is 4.5 times or below, the source said.

Meanwhile, the seven-year second-lien term loan (Caa1/CCC+) is now sized at $55 million, down from $65 million, and pricing was reverse flexed to Libor plus 600 bps from original talk of Libor plus 650 bps, the source added.

The company's $275 million credit facility also includes an $85 million five-year ABL revolver priced at Libor plus 175 bps with a 37.5 bps commitment fee. No changes have been made to the revolver throughout the syndication process.

Credit Suisse is the lead bank on the deal that will be used to fund a recapitalization of Totes, which includes the acquisition of a majority stake in the company by MidOcean Partners.

Bruckmann, Rosser, Sherrill & Co., LLC, an existing investor, and the current Totes senior management team will continue to maintain a significant ownership position in the company.

Totes Isotoner is a Cincinnati marketer of branded umbrellas, gloves, slippers and other weather-related accessories.

Wastequip trims pricing

Wastequip reduced pricing on its $85 million six-year delayed-draw term loan B and $246 million six-year term loan B tranches to Libor plus 225 bps from original talk at launch of Libor plus 250 bps as the deal was well-received by investors, according to a market source.

Pricing on the company's $50 million five-year revolver was left unchanged at Libor plus 250 bps, the source added.

Credit Suisse is the lead bank on the $381 million credit facility (Ba3/B+) that will be used to help fund Odyssey Investment Partners, LLC's leveraged buyout of the company from DLJ Merchant Banking Partners.

Wastequip is a Cleveland-based designer, manufacturer and marketer of equipment used to collect, process and transport solid, liquid and semi-liquid waste materials.

McJunkin ups ABL size

McJunkin announced Wednesday that it increased the size of its ABL revolver (Ba1/BB) to $300 million from $200 million while leaving pricing unchanged at Libor plus 175 bps, according to a market source.

The company's $575 million term loan B (B2/B+) was left unchanged in terms of size and price talk, which is currently set at Libor plus 275 bps, the source said.

Goldman Sachs and Lehman are the lead banks on the now $875 million deal (up from $775 million), with Goldman the left lead.

Proceeds will be used to help fund Goldman Sachs Capital Partners' acquisition of the company.

McJunkin is a Charleston, W.Va., distributor of industrial and oilfield supplies.

Global Tel*Link reworks deal

Yet another deal to undergo some revisions was Global Tel*Link, as it upsized its funded first-lien term loan and cut pricing on all tranches, according to a market source.

The funded first-lien term loan is now sized at $110 million, up from $100 million, with the additional funds being used toward a dividend, the source said.

In addition, pricing on the funded first-lien term loan, the $20 million revolver, the $10 million funded synthetic letter-of-credit facility, the $40 million delayed-draw for six months synthetic letter-of-credit facility and the $50 million delayed-draw for six months first-lien term loan was reverse flexed to Libor plus 350 bps from original talk at launch of Libor plus 375 bps, the source added.

The revolver has a 50 bps commitment fee.

The delayed-draw synthetic letter-of-credit facility and delayed-draw term loan will both carry a delayed-draw fee of 100 bps in the first three months and 125 bps in months four to six.

Credit Suisse is the lead bank on the now $230 million (up from $220 million) credit facility (B+).

Proceeds from the funded institutional debt will be used to refinance about $75 million of existing debt and repurchase redeemable preferred stock held by The Gores Group, while proceeds from the delayed-draw tranches will be used to fund the acquisition of the former MCI's division serving corrections facilities.

The former MCI corrections division provides managed telecommunications services to state and county departments of correction, including customer service, call equipment management, billing and IT capabilities.

Global Tel*Link is a Mobile, Ala., specialized telecommunications company.

PGS price talk

Also in primary happenings, PGS released price talk of Libor plus 250 to 275 bps on its $240 million term loan B as syndication on the deal officially kicked off with a bank meeting during Wednesday's market hours, according to a buyside source.

The company's $280 million credit facility (BB-) also includes a $40 million revolver.

Wachovia and Goldman Sachs are the lead banks on the deal that will be used to help fund Veritas Capital Partners' acquisition of Pearson Government Solutions from Pearson plc for about $600 million. As part of the agreement Pearson plc will retain a minority interest in the business.

PGS is an Arlington, Va., business solutions company that serves national and local governments, education institutions and corporations.

Verso sets guidance

Verso Paper came out with price talk in the Libor plus 600 bps area on its $225 million six-year senior unsecured loan as a conference call to launch the deal was held during the session, according to a market source.

Credit Suisse and Citigroup are the joint lead arrangers on the deal.

The loan will carry call premiums of 102 in year one and 101 in year two, and is being offered at an original issue discount of 99.

Proceeds will be used to pay a dividend to equity holders.

Verso Paper is a Memphis, Tenn.-based coated and supercalendered papers company.

David's Bridal upsizes, cuts spread

David's Bridal Inc. increased the size of its term loan B as it downsized its senior subordinated notes, and at the same time pricing on the term loan B was reduced, according to a fund manager.

With the changes, the seven-year term loan B (B2/B) is now sized at $340 million, up from $315 million, and pricing on the paper was reverse flexed to Libor plus 200 bps from original talk at launch of Libor plus 250 bps, the fund manager said.

Meanwhile, the senior subordinated notes transaction was reduced to $150 million from $175 million, the fund manager added.

The company's now $450 million credit facility also includes a $110 million six-year asset-based revolver.

Bank of America, Credit Suisse and JPMorgan are the lead banks on the deal, with Bank of America the left lead.

Proceeds will be used to fund Leonard Green & Partners, LP's acquisition of the 269-store David's Bridal and 10-store Priscilla of Boston businesses from Federated Department Stores, Inc. for about $750 million.

David's Bridal is a Conshohocken, Pa., retail chain specializing in bridal gowns.

Wire Rope allocations expected shortly

Wire Rope Corp. of America is anticipating allocating its credit facility soon now that final changes have been made to the transaction, according to a market source.

Under the revisions, the term loan was upsized to $125 million from $110 million and pricing on the tranche was lowered to Libor plus 250 bps from Libor plus 275 bps, the source said.

The now $185 million credit facility (up from $170 million) also includes a $60 million asset-based revolver.

CIBC and Jefferies are the lead banks on the term loan, with CIBC the left lead. HSBC is the lead bank on the revolver.

Proceeds will be used to help fund Fox Paine Management III, LLC's acquisition of the company from KPS Special Situations Fund II.

Wire Rope is a St. Joseph, Mo., producer and marketer of specialty wire ropes.

Affinion increases term loan, breaks

Affinion upsized its five-year senior unsecured term loan (Caa1/B-), and shortly after revising the deal, allocations went out and the paper started trading, according to sources.

The term loan was increased to $350 million from $300 million, and cash pay pricing firmed up at Libor plus 625 bps - in line with original talk, one source said.

Once final terms were decided upon, the loan opened up for trading at par ½ bid, 101 offered, where it closed the session as well, a trader remarked. However, during trading, the paper got as low as par bid, par ½ offered on some opportunistic selling, the trader added.

The company has the option of cash pay or pay-in-kind on the term loan. If Affinion opts for PIK, then the rate is Libor plus 700 bps, the source remarked.

Pricing on the term loan will step up by 50 bps on Sept. 1, 2008 and March 1, 2010.

The term loan is non-callable for six months, callable at par for months seven through 18, and then callable at 102, 101, par in subsequent years.

It was issued to investors at an original issue discount of 99.

Deutsche Bank and Bank of America are joint lead arrangers and bookrunners on the deal, with Deutsche also the administrative agent and Bank of America the syndication agent.

Proceeds will be used to redeem preferred stock and to pay a dividend to stockholders.

High yield players on both the buy-side and sell-side have told Prospect News that these PIK loans, which are being run off the high yield syndicate desks, are "hot market deals."

Although they come with bond-like structures sell-side sources say they are loans and will not receive league table credit as bonds, the involvement by junk bond syndicates notwithstanding. (The loans will count in Prospect News' bank loan league tables, not the high yield rankings.)

"The market is not rejecting anything right now," a sell-side source said on Wednesday night, and added that issuers are likely taking advantage of the novel structures to ultimately reduce their costs of capital by raising it in the syndicated loan market as opposed to the high yield bond market.

Affinion is a Norwalk, Conn., direct marketer of membership clubs and insurance products.

Weight Watchers trades atop par

Another deal that freed for trading was Weight Watchers, with the $500 million term loan B quoted at par 1/8 bid, par 3/8 offered, according to a trader.

The term loan B is priced at Libor plus 150 bps with a step down to Libor plus 125 bps at 3.0 times leverage. The step was added to the tranche during syndication.

Weight Watchers' $1.2 billion in new term loan debt (Ba1/BB) also includes a $700 million term loan A add-on priced at Libor plus 125 bps.

In addition, the company's existing term loan A debt and revolving credit facility will have their pricing grids revised to reflect the increase in debt, resulting in the two tranches being repriced at Libor plus 125 bps from Libor plus 100 bps.

Credit Suisse is the lead bank on the deal.

Proceeds from the incremental term loan debt will be used to refinance the debt of the company's subsidiary, WeightWatchers.com., and to fund a modified Dutch auction self-tender offer for 8.3 million shares of its common stock at a price of $54 per share.

Weight Watchers is a New York-based provider of weight management services.

Solutia frees to trade

Solutia's new debtor-in-possession financing debt also hit the secondary on Wednesday, with the term loan add-on and repriced existing term loan debt quoted at par ¾ bid, 101¼ offered, according to a trader.

The $325 million term loan add-on is priced at Libor plus 300 bps after being reverse flexed during syndication from original talk of Libor plus 350 bps. In conjunction with the reverse flex, pricing on the company's existing $650 million of term loan debt was repriced at Libor plus 300 bps from Libor plus 350 bps.

Solutia's $400 million of new DIP debt also includes a $75 million revolver add-on that is priced at Libor plus 225 bps.

Proceeds from the incremental bank debt are being used to fund the acquisition of Akzo Nobel's stake in Flexsys, the joint venture between Akzo Nobel and Solutia, and provide the company with further liquidity for operations and the ability to fund mandatory pension payments that come due in 2007.

With the add-ons, the company extended the maturity on its entire DIP facility by one year to March 31, 2008.

Citigroup is the lead arranger on the deal.

Solutia is a St. Louis-based manufacturer and provider of interlayers for laminated glass, aftermarket window films, specialty chemicals and an integrated family of nylon products.

Ford trades up

Another active name in the secondary market was Ford Motor Co. as its term loan continues to trade stronger and stronger, according to a trader.

The term loan closed the day at 101 5/8 bid, 101 7/8 offered, up from previous levels of 101 3/8 bid, 101 5/8 offered, the trader said.

"Everybody just wants to buy them," the trader added.

Ford is a Dearborn, Mich.-based automaker.

GEO closes

The GEO Group, Inc. closed on its $515 million senior secured credit facility (BB) consisting of a $365 million seven-year term loan B and a $150 million five-year revolver, according to a company news release.

BNP Paribas acted as the lead bank on the deal.

Proceeds were used to fund the acquisition of CentraCore Properties Trust, a Palm Beach Gardens, Fla.-based correctional real estate investment trust, for $427.6 million.

GEO is a Boca Raton, Fla., provider of correctional and mental health services.

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