Merrill, Per-Se cut spreads; Cablevision pulls deal; Petroleum Geo, SFX, Wolf Hollow, Paxson break

By Sara Rosenberg

New York, Dec. 19 - Merrill Corp. reverse flexed pricing on its term loan Monday by 25 basis points and added a step down to the tranche. And, Per-Se Technologies Inc. reduced pricing on its term loan by 25 basis points as well.

In other primary doings, Cablevision Systems Corp.'s subsidiary, CSC Holdings Inc., cancelled its proposed multi-billion dollar credit facility as the company opted to terminate its special dividend payment because of newly found technical violations in its existing credit facility.

In the secondary, Petroleum Geo-Services ASA allocated and freed for trading, with its term loan quoted in the mid-par to 101 type of context. SFX Entertainment Inc. also broke for trading on Monday, with levels on its term loan starting out in the upper-pars before dropping into the lower-par region. Wolf Hollow I LP broke as well, with its first-lien term loan trading in the high-par to 101 area and its second-lien term loan wrapped around the mid-101 region. And, Paxson Communications Corp.'s term loan broke for trading wrapped around the mid-par area.

Merrill reduced pricing on its $475 million seven-year term loan to Libor plus 225 basis points from original price talk at launch of Libor plus 250 basis points based on strong demand, according to a market source.

Furthermore, the syndicate added a step down to the term loan tranche under which pricing can drop to Libor plus 200 basis points if the company meets a specified leverage test, the source said.

Pricing on the company's $60 million five-year revolver was left unchanged at Libor plus 250 basis points, the source added.

Credit Suisse First Boston and Bank of America are joint lead arrangers on the $535 million credit facility (B1/B+), with CSFB the left lead.

Proceeds will be used to fund the acquisition of WordWave Inc. from Berkshire Partners LLC and Highland Capital Partners.

The deal is expected to allocate some time this week, and closing is anticipated by Dec. 31, subject to submission and approval of the governing regulatory agencies.

Merrill is a St. Paul, Minn., provider of electronic and paper document and information management services. WordWave is a provider of litigation support, court reporting, captioning and transcription services for law firms, courts, governmental agencies and corporations.

Per-Se reverse flexed

Per-Se Technologies lowered pricing on its $435 million term loan to Libor plus 225 basis points from original price talk at launch of Libor plus 250 basis points, according to a market source.

Bank of America is the lead arranger on the deal and administrative agent.

The $485 million credit facility (B1/B+) also contains a $50 million revolver.

Proceeds will be used to fund the acquisition of NDCHealth Corp. for $19.50 per share, with at least $13.00 paid in cash and up to $6.50 paid in Per-Se stock.

Per-Se's total consideration for the purchase is about $665 million, which includes refinancing NDCHealth's approximately $270 million of outstanding debt, consisting of $200 million in 10½% senior subordinated notes due Dec. 1, 2012 and about $70 million in bank debt.

To fund the refinancing and the cash distribution to shareholders, Per-Se plans on using the new debt, issuing up to $240 million of Per-Se stock and using some cash on hand.

Per-Se is an Alpharetta, Ga., provider of connective health care solutions to physicians and hospitals. NDCHealth is and Atlanta-based provider of products and services to the health care industry.

Cablevision yanks deal

Cablevision has pulled its $4.5 billion credit facility (Ba3/BB+/BB) and its $1 billion bond offering from the market as plans for the $3 billion dividend to shareholders that was going to be paid with proceeds from the debt transactions was scrapped, according to sources.

The company's board of directors actually decided on Sunday not to proceed with the dividend because, as the financing for the payment was being prepared, technical covenant violations were found under CSC's existing credit facility and there is the possibility that there are certain technical covenant violations under other debt instruments, sources explained.

Cablevision is in the process of and intends promptly to complete a comprehensive covenant compliance review, seek waivers under its credit facility and, if necessary, seek waivers under its other debt instruments, according to an 8-K filed with the Securities and Exchange Commission Monday.

Cablevision believes that its operations have not been impacted by these actual and possible covenant violations and believes it has sufficient liquidity to meet its operating requirements, the SEC filing added.

The decision to cancel the dividend and the financing plans instead of just postponing them stemmed from the company's desire to do a thorough review of the technical covenant violation without restricting itself to a time limit, company officials explained in a conference call Monday.

The credit facility that has been pulled from the market consisted of $2.5 billion term loan B with an interest rate of Libor plus 200 basis points, a $1 billion revolver with an interest rate of Libor plus 150 basis points and a $1 billion term loan A with an interest rate of Libor plus 150 basis points.

Bank of America and Citigroup were acting as the lead banks on the deal, with Bank of America the left lead.

In addition to funding the special dividend, proceeds from the credit facility were going to be used to refinance the existing credit facility.

Cablevision is a Bethpage, N.Y., cable television company.

Petroleum Geo-Services free to trade

Petroleum Geo-Services allocated its credit facility on Monday, with the $850 million seven-year term loan freeing for trading in the par ½ bid, 101 offered context, where, according to a couple of sources, it closed out the day, while another source had it closing out the session at par ¾ bid, 101 offered.

The term loan is priced with an interest rate of Libor plus 250 basis points with a step down to Libor plus 225 basis points at 2.25x leverage. During syndication, pricing on the tranche was flexed up from Libor plus 200 to 225 basis points range.

The $1 billion senior secured credit facility (Ba3/B+) also contains a $150 million five-year revolver with an interest rate of Libor plus 225 basis points. Original price talk at launch on this tranche had been Libor plus 175 to 200 basis points, but the spread was flexed up during syndication.

UBS Securities LLC, Credit Suisse First Boston and Barclays Capital acted as the lead banks on the deal, which closed Monday as well.

Proceeds from the credit facility were used to retire approximately $741.4 million of the company's outstanding 10% senior notes due 2010 and refinance its existing $110 million revolver.

"In completing our refinancing we have gained increased financial and strategic flexibility. We continue to explore a separation of PGS, guided by the belief that direct access to the capital markets for both Geophysical and Production would allow us to capture more growth opportunities in the years to come," said Svein Rennemo, president and chief executive officer, in a company news release.

Petroleum Geo-Services is an Oslo, Norway-based oilfield service company.

SFX trades atop par

SFX Entertainment (Clear Channel Entertainment) also freed for trading on Monday, with its $325 million 71/2-year term loan B quoted at par 5/8 bid, 101 on the break and then dropping to par 1/8 bid, par 5/8 offered, where it closed the session, according to a trader.

"They probably just took it out too strong. More sellers than buyers," the trader said in explanation of why levels fall back quickly after the break.

The term loan is priced with an interest rate of Libor plus 225 basis points. The tranche was originally talked at Libor plus 175 basis points but pricing was flexed up during syndication.

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

The $575 million senior secured credit facility (B1/B+) also contains a $250 million 61/2-year revolver with an interest rate of Libor plus 175 basis points.

Proceeds will be used to help back the 100% spinoff of Clear Channel Entertainment from Clear Channel Communications Inc.

Clear Channel Entertainment is a Houston-based producer and promoter of live entertainment.

Wolf Hollow breaks

Wolf Hollow's new deal broke for trading Monday as well, with the $130 million first-lien term loan (B1/BB-) opening around par ¾ bid, 101 offered and then moving up to par 7/8 bid, 101 offered, where it closed out the day, according to a trader.

Meanwhile, the company's $110 million second-lien term loan (B2/B) was quoted at 101¼ bid, 101¾ offered steadily throughout the session, the trader said.

The first-lien term loan is priced with an interest rate of Libor plus 225 basis points and the second-lien term loan is priced with an interest rate of Libor plus 450 basis points.

Wolf Hollow's $400 million credit facility also contains a $25 million revolver (B1/BB-) with an interest rate of Libor plus 250 basis points and a $135 million synthetic letter-of-credit facility (B1/BB-) with an interest rate of Libor plus 225 basis points.

Originally, the revolver was sized at $50 million and the synthetic letter-of-credit facility was sized at $110 million, but $25 million was shifted from the revolver to the letter-of-credit facility during syndication.

Goldman Sachs is the lead bank on the deal that will be used to fund a portion of the acquisition of the Wolf Hollow power plant, a 720 mega watt, combined cycle, gas-fired power plant located in Granbury, Texas.

Paxson wraps around mid-par

Lastly, hitting the secondary was Paxson's $325 million term loan with levels quoted at par ¼ bid, par ¾ offered, according to a trader.

The term loan is priced with an interest rate of Libor plus 325 basis points.

Citigroup is the lead bank on the loan that was carved out of the company's newly priced and downsized bond offering.

Proceeds from the term loan and the bond offering will be used to fund the tender for the company's $365 million senior secured floating-rate notes due 2010, approximately $496.3 million 12¼% senior subordinated discount notes due 2009 and $200 million 10¾% senior subordinated notes due 2008.

Paxson is a West Palm Beach, Fla., television broadcasting company.

Calpine up on court decision

Calpine Corp.'s second-lien bank debt headed higher by about half a point as news surfaced that the court held up its prior decision that gave the company until Jan. 22 to repay misused funds to the Bank of New York collateral account, according to a trader,

Wilmington Trust Co., trustee for bondholders, had been trying to force Calpine into repaying the funds at a sooner date, by saying that if the funds weren't repaid immediately it could create a default on $3 billion in second-lien secured debt.

The funds in question are the approximately $312 million that was previously ruled to be improperly spent on asset purchases.

The San Jose, Calif.-based power company's second-lien debt closed out the session quoted at 77 bid, 79 offered, the trader added.

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