Zayo sets coupon, breaks; Avaya slides in trading; LANDesk revises pricing, discount

By Sara Rosenberg

New York, June 14 - Zayo Group LLC firmed pricing on its term loan B at the middle of guidance and then freed up for trading on Thursday, and Avaya Inc.'s extended and non-extended term loans headed lower in the secondary market as the company held a meeting with investors.

In more loan happenings, LANDesk Software reworked its term loan, raising the coupon and widening the original issue discount, and AWAS Aviation Capital Ltd., WireCo WorldGroup Inc. and Acosta Sales & Marketing released price talk on their new deals with launch.

Also, Fogo de Chao Churrascaria (Holdings) LLC came out with timing and structure on its buyout financing credit facility.

Zayo hits secondary

Zayo's credit facility broke for trading on Thursday afternoon, with the $1.5 billion seven-year term loan B quoted by one trader at 99 5/8 bid, par 1/8 offered, and by a second source at 99 5/8 bid, par 1/8 offered on the open and then at 99 7/8 bid, par 1/8 offered shortly thereafter.

Pricing on the B loan is set at Libor plus 587.5 basis points, the mid-point of the Libor plus 575 bps to 600 bps talk. There is a 1.25% Libor floor and 101 soft call protection for one year, and the debt was sold at an original issue discount of 98.

The company's $1.75 billion senior secured credit facility (B1/B) also provides for a $250 million revolver.

Morgan Stanley Senior Funding Inc. and Barclays Capital Inc. are the lead arrangers on the term loan and bookrunners with RBC Capital Markets LLC, and arrangers on the revolver are SunTrust Robinson Humphrey Inc., Morgan Stanley, Barclays, UBS Securities LLC, RBC and Goldman Sachs & Co.

Zayo buying AboveNet

Proceeds from Zayo's credit facility, $1.25 billion of bonds, $290 million of equity from GTCR and Charlesbank Capital Partners and cash on hand will fund the purchase of AboveNet Inc. for $84 per share in cash and refinance debt at both companies.

The bonds priced on Thursday, with the $750 million senior secured tranche coming at 8 1/8%, with a par issue price and the $500 million senior tranche coming at 10 1/8%, also at a par issue price, a source remarked.

Closing on the acquisition, which is valued at about $2.2 billion, is expected mid-year, subject to customary approvals.

Zayo is a Louisville, Colo.-based provider of fiber-based bandwidth infrastructure and network-neutral colocation and interconnection services. AboveNet is a White Plains, N.Y.-based provider of high-bandwidth connectivity services for businesses and carriers.

Avaya retreats

Avaya's term loans dropped in trading as the company talked to lenders regarding a general business update, according to traders.

One trader had the extended term loan quoted at 87½ bid, 88½ offered, down from 89 bid, 90 offered, and the non-extended term loan quoted at 93¼ bid, 94¼ offered, down from 94½ bid, 95½ offered.

A second trader had the non-extended loan quoted at 93 3/8 bid, 93 7/8 offered, down from 94½ bid, 95½ offered.

The first trader remarked that investors were obviously not pleased with what the company discussed at the meeting, and that its bonds were under pressure, which helped to put pressure on the loans.

Avaya is a Basking Ridge, N.J.-based provider of business collaboration and communications services.

Revel plans update meeting

Revel Entertainment Group LLC told investors that it be holding a business update meeting at noon ET on June 21 with both existing and prospective lenders to discuss operational performance and answer questions, according to a market source.

Prior to the news, the company's term loan B was quoted at 87 bid, 871/2, which was pretty much in line with Wednesday's levels, a trader said. Since the announcement was made late in the day, there were no levels seen post-news.

Earlier in the week, the term loan B weakened to the current context as the New Jersey Division of Gaming Enforcement disclosed Revel's revenue for the month of May to be $13.93 million, and year-to-date revenue to be $27.56 million.

Prior to the numbers being released, the term loan B was quoted at 92¼ bid, 92¾ offered.

Revel is a gaming and entertainment company.

LANDesk tweaks deal

Over in the primary, LANDesk Software came out with changes to its $205 million term loan, including increasing pricing to Libor plus 575 bps from Libor plus 525 bps and moving the original issue discount widened to 98 from 99, according to a market source.

The 1.25% Libor floor and 101 soft call protection for one year were left unchanged.

However, amortization on the loan was enhanced to 5% per year from 1% per year.

Allocation on the company's $220 million credit facility (B2), which also includes a $15 million revolver, are targeted to go out on Friday, the source added.

Wells Fargo Securities LLC is leading the deal that will be used for acquisition funding.

LANDesk is a Salt Lake City-based provider of systems lifecycle management and endpoint security, as well as IT service management products for desktops, servers and mobile devices.

AWAS reveals talk

AWAS Aviation Capital launched its $360 million six-year term loan on Thursday morning to investors, and in connection with the event, price talk surfaced, according to a market source.

The loan is being guided at Libor plus 450 bps to 475 bps with a 1.25% Libor floor and an original issue discount of 981/2, and includes 101 soft call protection for one year, the source said.

Commitments are due on June 26.

Goldman Sachs & Co., RBC Capital Markets LLC and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to fund a portfolio of aircraft.

AWAS is a Dublin-based aircraft leasing company.

WireCo pricing

WireCo WorldGroup also launched its deal during the session, and talk on its $325 million term loan B was disclosed to be in the Libor plus 500 bps area with a 1.25% Libor floor and an original issue discount of 981/2, according to a market source. There is 101 soft call protection for one year.

The company's $460 million senior secured credit facility (Ba2/BB-) due Feb. 15, 2017 also includes a $135 million revolver that has a 50 bps unused fee.

Commitments are due on June 27, the source said.

Proceeds from the Goldman Sachs & Co. and Deutsche Bank Securities Inc.-led deal will be used to help fund the $231.2 million purchase of Koninklijke (Royal) Lankhorst Euronete Group BV and to refinance an existing senior secured credit facility.

WireCo placing notes

In addition to the credit facility, WireCo, plans on privately placing $82.5 million of 11¾% senior unsecured notes due May 15, 2017.

Pro forma for the acquisition, total leverage will be 5.4 times and net leverage will be 5.1 times, based on pro forma adjusted EBITDA of $164.3 million for the 12-month period ended March 31.

WireCo is a Kansas City, Mo.-based manufacturer, engineer and distributor of wire, wire rope, wire rope assemblies and electromechanical cable. Koninklijke is a Netherlands-based manufacturer of ropes, industrial yarns, netting, yachting products and recycled plastic products.

Acosta guidance emerges

Meanwhile, Acosta Sales & Marketing held a conference call on Thursday afternoon to launch its $300 million incremental term loan, for which talk of Libor plus 450 bps with a 1.5% Libor floor, an original issue discount of 98½ and 101 soft call protection for one year was announced, according to a market source.

Lead banks, Goldman Sachs & Co., Barclays Capital Inc. and Bank of America Merrill Lynch, are seeking commitments by 5 p.m. ET on June 21.

Proceeds will help fund the acquisition of Mosaic Sales Solutions that is expected to close in July.

Acosta is a Jacksonville, Fla.-based full-service sales and marketing agency in the consumer packaged goods industry. Mosaic is a sales and merchandising, experiential marketing and interactive firm with U.S. headquarters in Dallas.

Sheridan sets deadline

Sheridan Holdings Inc. launched its $810 million credit facility on Thursday morning, and lenders are being asked to get their commitments in by June 26, a market source told Prospect News.

AS was previously reported, the facility consists of a $100 million five-year revolver (B+) and a $570 million six-year first-lien term loan (B+), both talked at Libor plus 475 bps to 500 bps, and a $140 million seven-year second-lien term loan (B-) talked at Libor plus 825 bps to 850 bps.

Both term loans have a 1.25% Libor floor and an original issue discount of 98, while the revolver has no floor and a discount price of 99.

Included in the first-lien term loan is 101 repricing protection for one year, and the second-lien term loan has call protection of 103 in year one, 102 in year two and 101 in year three, sources continued.

Sheridan lead banks

Credit Suisse Securities (USA) LLC and Barclays Capital Inc. are the joint lead arrangers on Sheridan Holdings' credit facility.

Bookrunners on the transaction include the two lead arrangers, as well as Bank of America Merrill Lynch, UBS Securities LLC and SunTrust Robinson Humphrey Inc., sources added.

Proceeds will be used to refinance existing debt.

Sheridan Holdings is a Sunrise, Fla.-based provider of outsourced health care services.

Fogo de Chao details

In other news, Fogo de Chao Churrascaria set a bank meeting for 10 a.m. ET on Monday in New York to launch its credit facility, which surfaced with a size of $275 million, according to a market source.

The facility consists of a $25 million five-year revolver, a $180 million seven-year first-lien term loan and a $70 million 71/2-year second-lien term loan, the source said, adding that price talk is still to be determined.

J.P. Morgan Securities LLC and Jefferies Finance LLC are leading the deal that will be used to help fund the buyout of the company by Thomas H. Lee Partners LP from GP Investments Ltd.

Closing is expected in the third quarter, subject to regulatory approvals and other customary conditions.

Fogo de Chao is a Dallas-based steakhouse chain in the United States and Brazil.

Kronos wraps deals

Kronos Worldwide Inc. closed on its $725 million credit facility that consists of a $125 million ABL revolver and a $400 million six-year senior secured term loan B, according to a market source.

Pricing on the B loan is Libor plus 475 bps with a 1% Libor floor, and it was sold at a discount of 981/2. There is 101 soft call protection for one year.

During syndication, the term B was downsized from $600 million, pricing flexed up from revised talk of Libor plus 425 bps and initial talk of Libor plus 375 bps, the original issue discount widened from 99 and the tenor was shortened from seven years.

Wells Fargo Securities LLC led the deal that is being used to refinance existing debt, including the company's 6½% senior secured notes due April 2013. Plans for a possible special dividend of up to $1 per share were eliminated as a result of the loan size reduction.

Kronos is a Dallas-based producer of titanium dioxide products.

Valeant closes

Valeant Pharmaceuticals International Inc. closed on its $600 million incremental term loan due Feb. 13, 2019, according to a news release.

Pricing on the loan is Libor plus 375 bps with a 1% Libor floor, and it was sold at an original issue discount of 971/2.

Through the syndication process, the loan was upsized from $500 million, pricing was increased from Libor plus 275 bps and the discount came at the wide end of the 97½ to 98 talk, the source said.

Goldman Sachs & Co. led the deal that is being used to repay borrowings under the company's existing $275 million revolving credit facility and for general corporate purposes, including acquisitions.

Valeant is a Mississauga, Ont.-based specialty pharmaceutical company.

© 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.