U.S. Renal, Archway break; Paradigm, Party City, Connolly deals emerge; Liberty sets talk

By Sara Rosenberg

New York, July 2 - U.S. Renal Care Inc.'s credit facility made its way into the secondary market on Monday, with the first- and second-lien term loans both quoted above their original issue discount prices, and Archway Marketing Services Inc. started trading, too.

Over in the primary, Paradigm Holdco Sarl and Party City Holdings Inc. revealed timing and structure on their facilities, Connolly Inc. emerged with new deal plans, Liberty Cablevision of Puerto Rico LLC is circulating some price talk on its term loan ahead of its launch, and Hologic Inc. is getting ready to bring its term loan B to market.

U.S. Renal frees up

U.S. Renal Care's credit facility broke for trading on Monday morning, with the $305 million covenant-light seven-year first-lien term loan (B1/B+) and the $120 million covenant-light 71/2-year second-lien term loan (Caa1/CCC+) quoted at 99¼ bid, par ¼ offered on the open and then they moved to par bid, 101 offered, according to a market source.

Pricing on the first-lien term loan is Libor plus 500 basis points after firming recently at the tight end of the Libor plus 500 bps to 525 bps talk. There is a 1.25% Libor floor as well as 101 soft call protection for one year, and it was sold at an original issue discount of 981/2.

Meanwhile, the second-lien term loan is priced at Libor plus 900 bps, after flexing last week from Libor plus 850 bps. This debt has a 1.25% Libor floor was sold at a discount of 98 and includes call protection of 103 in year one, 102 in year two and 101 in year three.

U.S. Renal being acquired

Proceeds from U.S. Renal's credit facility will be used to help fund the buyout of the company by Leonard Green & Partners LP from Cressey & Co.

Barclays Capital Inc., RBC Capital Markets LLC and Goldman Sachs & Co. are the lead banks on the deal.

Included in the $485 million credit facility is a $60 million five-year revolver (B1/B+).

U.S. Renal is a Dallas-based owner, operator and developer of dialysis centers.

Archway starts trading

Archway Marketing Services' credit facility also hit the secondary, with the $110 million six-year term loan quoted at 99 bid, par offered, according to a market source.

Pricing on the loan, as well as on a $35 million six-year delayed-draw for three years term loan and a $30 million five-year revolver, is Libor plus 525 basis points with a 1.25% Libor floor, and the tranches were sold at an original issue discount of 99.

GE Capital Markets and ING Financial Markets LLC are leading the $175 million deal that will help fund the buyout of the company by Investcorp from Tailwind Capital, Black Canyon Capital and management.

Senior leverage will be 3.7 times and total leverage will be 5.2 times.

Archway is a Rogers, Minn.-based marketing logistics and fulfillment services company.

LHP gains ground

LHP Hospital Group Inc.'s $275 million six-year term loan B moved to 97¾ bid, 98¾ offered, from 97½ bid, 98½ offered during its second day of trading, according to a trader. The loan had freed up on Friday at 96½ bid, 97½ offered and had moved up by a point before the close.

Pricing on the term B is Libor plus 750 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 96. There is soft call protection of 102 in year one and 101 in year two.

During syndication, the Plano, Texas-based provider of hospital capital and expertise lifted the spread on its loan from talk of Libor plus 675 bps to 700 bps, moved the discount 96 to 97 from 98 before firming at the wide end of the revised talk and sweetened the soft call protection from just 101 in year one.

Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch and Regions Bank are leading the $375 million senior secured deal (B3/B) that also provides for a $100 million five-year revolver and will be used to refinance existing debt and for acquisitions.

Paradigm details

Switching to the primary, Paradigm told investors that it will be holding a bank meeting at 10:30 a.m. ET on July 10 for its proposed credit facility that is sized at $460 million, according to a market source.

The facility consists of a $40 million five-year revolver, a $290 million seven-year first-lien term loan and a $130 million eight-year second-lien term loan, with talk not yet out, the source said.

Previously, it was known that the deal would come to market this summer and would include first-and second-lien debt, but specifics had been unavailable.

UBS Securities LLC and RBC Capital Markets LLC are leading the transaction that will help fund the buyout of the company by Apax Partners and JMI Equity from Fox Paine & Co. for about $1 billion.

Paradigm is a software vendor focused on the oil and gas exploration and production space with a significant presence across Europe, the Americas, the Middle East, Africa, China and Australasia.

Party City surfaces

Party City disclosed that it will hold a bank meeting on July 10 to launch a $1.45 billion credit facility, comprised of a $400 million ABL revolver and a $1.05 billion term loan, according to market sources.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Goldman Sachs & Co., Morgan Stanley Senior Funding Inc. and Barclays Capital Inc. are leading the deal that will be used, along with $700 million of notes, to fund the buyout of the company by Thomas H. Lee Partners LP from Advent International Corp., Berkshire Partners LLC, Weston Presidio and management.

The transaction is valued at $2.69 billion.

Party City is a Rockaway, N.J.-based designer, manufacturer and distributor of party goods, including paper and plastic tableware, metallic balloons, accessories, novelties, gifts and stationery.

Connolly readies deal

Connolly set a bank meeting for July 12 to launch a proposed $400 million credit facility that is being led by RBC Capital Markets LLC and SunTrust Robinson Humphrey Inc., according to market sources.

The facility consists of a $30 million revolver, a $240 million first-lien term loan and a $130 million second-lien term loan, sources said.

Proceeds will be used to help fund the buyout of the company by Advent International, which is expected to close this month.

Connolly, an Atlanta-based provider of technology-enabled recovery audit services, will have first-lien leverage of 3.97 times and second-lien leverage of 6.13 times.

Liberty floats talk

Liberty Cablevision of Puerto Rico released talk of Libor plus 450 bps with a 1.5% Libor floor and an original issue discount that is still to be determined on its $175 million term loan that is targeted to launch with a bank meeting on July 10, a market source said.

The company's $185 million five-year credit facility (B+) also includes a $10 million revolver.

Scotia Capital (USA) Inc. is leading the deal that will fund the company's merger with San Juan Cable LLC (OneLink Communications). LGI Broadband Operations Inc., a subsidiary of Liberty Global Inc. and owner of Liberty Cablevision of Puerto Rico, will buy San Juan Cable with Searchlight Capital Partners LP in a transaction that values the company at about $585 million before transaction costs.

Closing is expected in the fourth quarter, subject to regulatory approval, and the combined business will be 60%-owned by Liberty Global and 40%-owned by Searchlight.

Liberty Global is an Englewood, Colo.-based cable company.

Hologic coming soon

Hologic scheduled a bank meeting for July 9 to launch its proposed $1.75 billion seven-year term loan B, a market source remarked. The $300 million undrawn five-year revolver and $1 billion five-year term loan A already launched in May.

Pricing on the revolver and term loan A is expected at Libor plus 275 bps, Libor plus 287.5 bps or Libor plus 300 bps depending on ratings at close, and pricing on the term loan B is expected at Libor plus 350 bps with a 1% Libor floor and there is 101 soft call protection for one year, according to regulatory filings.

Goldman Sachs & Co., J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are leading the $3.05 billion senior secured credit facility (Ba2/BBB-) that will help fund the purchase of Gen-Probe Inc. for $82.75 per share in cash, or a total enterprise value of about $3.7 billion.

Hologic plans notes

Hologic also intends on using $750 million of senior notes for the acquisition, as well as $826 million of cash and marketable securities on hand. The notes were upsized from an originally expected amount of $500 million as the term loan B was downsized from $2 billion.

Pro forma net leverage will be 5.6 times, net leverage will be 5.1 times and total secured leverage will be 3.1 times.

Closing is expected in early August, subject to approval of Gen-Probe's shareholders and necessary foreign clearances. Hart-Scott-Rodino has already been cleared.

Hologic is a Bedford, Mass.-based developer, manufacturer and supplier of diagnostics products, medical imaging systems and surgical products. Gen-Probe is a San Diego-based developer, manufacturer and marketer of molecular diagnostic products and services.

P.F. Chang's closes

The buyout of P.F. Chang's China Bistro Inc. (Wok Acquisition Corp.) by Centerbridge Partners LP for $51.50 per share in cash has been completed, according to a news release.

For the transaction, P.F. Chang's got a new $380 million senior secured credit facility (Ba3/B+), comprised of a $75 million five-year revolver and a $305 million seven-year term loan B. The former was upsized from $70 million, while the latter was upsized from $280 million.

Pricing on the B loan is Libor plus 500 bps, after firming at the low end of the Libor plus 500 bps to 550 bps talk, and a step-down was added to Libor plus 475 bps at net secured lease adjusted leverage of less than 3.5 times. There is a 1.25% Libor floor and it was sold at an original issue discount of 99.

Wells Fargo Securities LLC, Deutsche Bank Securities Inc. and Barclays Capital Inc. led the deal for the Scottsdale, Ariz.-based owner and operator of two restaurant concepts in the Asian niche.

Waupaca acquisition completed

The purchase of Waupaca Foundry Inc. by KPS Capital Partners LP from ThyssenKrupp Budd Co. has closed, a news release said, and for the transaction, Waupaca Foundry got a new $485 million credit facility consisting of a $225 million ABL revolver and a $260 million term loan (BB-).

Pricing on the term loan is Libor plus 725 bps with a 1.25% Libor floor, and it was sold at a discount of 98. There is soft call protection to 102 in year one and 101 in year two.

The spread increased from Libor plus 550 bps, the discount widened from 98½ and the soft call was revised from just 101 for one year during the syndication process.

GE Capital Markets Inc., RBC Capital Markets and Wells Fargo Capital Finance led the deal.

Waupaca Foundry is a Waupaca, Wis.-based producer of gray and ductile iron castings for the automotive, truck, agriculture, construction, hydraulics and commercial vehicle markets.

Zayo wraps deal

Zayo Group LLC closed on its $1.87 billion senior secured credit facility (B1/B) that was used to help fund the acquisition of AboveNet Inc., refinance some debt and for general corporate purposes, according to a news release.

The facility consists of a $250 million revolver, a $1.5 billion seven-year term loan B and a $120 million add-on seven-year term loan B.

Pricing on the B loans is Libor plus 587.5 bps with a 1.25% Libor floor, and there is 101 soft call protection for one year. The original term B was sold at a discount of 98 and the add-on was sold at par.

Pricing on the original term loan B firmed at the middle of the Libor plus 575 bps to 600 bps talk. The add-on was brought to market shortly after the original deal allocated.

Zayo lead banks

Morgan Stanley Senior Funding Inc. and Barclays Capital Inc. acted as the lead arrangers on the original term loan and bookrunners with RBC Capital Markets LLC. The add-on was led by Morgan Stanley.

As for the revolver, the arrangers were SunTrust Robinson Humphrey Inc., Morgan Stanley, Barclays, UBS Securities LLC, RBC and Goldman Sachs & Co.

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.

Smart Balance buys Udi's

Smart Balance Inc. closed on its roughly $126 million acquisition of Udi's Healthy Foods LLC, for which it got a new $280 million senior secured credit facility (B1/B+), a news release said.

The BMO Capital Markets and Citigroup Global Markets Inc.-led facility consists of a $240 million six-year term loan priced at Libor plus 575 bps with a 1.25% Libor floor, an original issue discount of 98 and 101 soft call protection for one year, and a $40 million five-year revolver.

Pricing on the term loan was flexed up from talk of Libor plus 500 bps to 525 bps and the discount was revised from 99.

Smart Balance, a Paramus, N.J.-based distributor of health foods. Udi's Healthy is a Denver-based maker of gluten-free foods, has pro forma adjusted leverage is 4.4 times.

AlixPartners recapitalizes

The recapitalization of AlixPartners LLP has been completed, under which the company was purchased by CVC Capital Partners from Hellman & Friedman, according to a news release.

With the buyout, AlixPartners got a new $890 million credit facility that includes a $75 million five-year revolver (Ba3/B+), a $100 million five-year term loan B-1 (Ba3/B+), a $505 million seven-year term loan B-2 (Ba3/B+) and a $210 million 71/2-year second-lien term loan (B3/B-).

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Goldman Sachs & Co., Jefferies & Co. and UBS Securities LLC led the deal for the performance improvement, corporate turnaround and financial advisory services firm.

AlixPartners pricing

AlixPartners' term loan B-1 is priced at Libor plus 425 bps with a 1.25% Libor floor and was sold at an original issue discount of 99 and the term loan B-2 is priced at Libor plus 525 bps with a 1.25% floor, and it was sold at a discount of 981/2. Both tranches have 101 soft call protection for one year.

Pricing on the second-lien loan is Libor plus 950 bps with a 1.25% Libor floor, and it was sold at a discount of 97. The tranche is non-callable for one year, then at 102 in year two and 101 in year three.

During syndication, the B-1 and B-2 were created by splitting up a single $600 million seven-year first-lien term loan B that was talked at Libor plus 475 bps to 500 bps (after flexing from Libor plus 425 bps) with a 1.25% floor and a discount of 99. At first, the B-1 was sized at $75 million and the B-2 was sized at $525 million, but $20 million was then shifted between the tranches.

Also, the second-lien loan was downsized from $220 million, flexed up from revised talk of 400 bps higher than the term loan B-2 and from Libor plus 800 bps before that, sold wide of initial 98 talk and saw call protection sweetened from 103 in year one, 102 in year two and 101 in year three.

SXC closes

SXC Health Solutions Corp. announced that it wrapped its acquisition of Catalyst Health Solutions Inc. for which it got a new $1.8 billion five-year senior secured credit facility (Ba2/BBB-).

The facility consists of a $700 million revolver and a $1.1 billion term loan A, with both tranches priced at Libor plus 200 bps.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Barclays Bank Inc. and SunTrust Robinson Humphrey Inc. led the deal.

SXC is a Lisle, Ill.-based provider of pharmacy benefits management and health care information technology services. Catalyst is a Rockville, Md.-based provider of pharmacy benefits management.

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