Zuffa talk surfaces; Lear details released with launch; HCA dips; Avis, Hertz rise

By Sara Rosenberg

New York, Oct. 7 - Zuffa LLC came out with price talk on its incremental term loan now that the lead bank had a few days to discuss the deal with potential investors, and chatter is that orders have been making their way into the books once guidance was announced.

Also in the primary market, details on Lear Corp.'s proposed credit facility - such as size, structure and price talk - were revealed on Wednesday in conjunction with the deal's launch.

Over in secondary happenings, HCA Inc.'s term loan B was a little weaker during market hours after news emerged that the company is being investigated by the Securities and Exchange Commission over nursing shift payments.

In addition, Avis Budget Group Inc.'s term loan B was better on the back of the company's convertibles announcement and Hertz Global Holdings Inc.'s strip of institutional bank debt strengthened in sympathy.

Zuffa sets talk

Zuffa released pricing guidance on its $100 million senior secured incremental term loan (Ba3/BB-) on Wednesday, according to a market source.

The term loan is being talked at Libor plus 500 basis points to 550 bps with a 2% Libor floor, and an original issue discount of 97, the source said.

The deal was launched with a bank meeting last Thursday, but talk had not been announced until now because the lead bank wanted to chat with lenders before setting the guidance.

"Going pretty well. Lot of guys have come in since the talk came out," the source added.

Deutsche Bank is the lead bank on the deal that will be used to repay revolving credit facility borrowings and to fund a dividend.

Commitments are due from investors on Friday around midday.

Zuffa is the Las Vegas-based company that owns the Ultimate Fighting Championship brand.

Lear launches term loan

Lear held a conference call on Wednesday to launch a new exit financing credit facility, at which time size and price talk were announced, according to a market source.

The facility consists of a $400 million five-year first-lien term loan talked at Libor plus 575 bps with a 2% Libor floor, and an original issue discount of 981/2, the source said.

Up to $200 million of the first-lien term loan will be delayed-draw for 35 days after the closing date.

The first-lien term loan has a $200 million accordion feature, subject to the pro forma consolidated leverage ratio being less than 2.5 times and Most-Favored-Nation pricing protection will apply.

JPMorgan is the lead bank on the deal that will be used to refinance the company's existing $500 million DIP/exit facility that is priced at Libor plus 1,000 basis points with a 3.5% Libor floor.

Commitments are due from lenders in late October and the company's exit from bankruptcy is targeted for the second week of November.

Lear is a Southfield, Mich.-based automotive parts supplier.

HCA trades lower

Moving to trading news, HCA's term loan B weakened on Wednesday following reports that the SEC is looking into the company's payments for nursing shifts, traders told Prospect News.

The term loan B was quoted by one trader at 93 5/8 bid, 94 1/8 offered, down from 93¾ bid, 94¼ offered on Tuesday. The trader added that the loan had moved as low as 93½ bid, 94 offered before rebounding slightly.

A second trader had the term loan B quoted at 93½ bid, 93 7/8 offered, down from 93 5/8 bid, 94 1/8 offered and the term loan A quoted at 93 1/8 bid, 93½ offered, pretty much unchanged from 93 1/8 bid, 93 5/8 offered on Tuesday.

According to news reports, the SEC is investigating whether HCA made up payments for nursing shifts at its London hospitals.

HCA is a Nashville-based owner and operator of hospitals and surgery centers.

Avis, Hertz gain ground

Avis' term loan B headed higher in trading in response to news of a convertibles offering, and Hertz's strip of institutional bank debt rose in sympathy with Avis, according to traders.

Avis' term loan B was quoted by one trader at 93½ bid, 94½ offered, up from 93 bid, 94 offered, and by a second trader at 94 1/8 bid, 94 5/8 offered, up on the bid side from 94 bid, 94¾ offered.

Meanwhile, Hertz's strip of term loan and letter-of-credit bank debt was quoted at 92¾ bid, 93¾ offered, up three quarters of a point on the day, one trader added.

Late in the day Tuesday, Avis announced that it will be selling $250 million of convertible senior notes and that proceeds from the offering will be used to purchase a convertible note hedge and for general corporate purposes, including the repayment of debt.

Avis is a Parsippany, N.J.-based provider of vehicle rental services. Hertz is a Park Ridge, N.J.-based car rental company.

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