Dana, Nuance free to trade wrapped around 101; Activant, Cinram, Protection One set talk

By Sara Rosenberg

New York, April 11 - Dana Corp. allocated its debtor-in-possession financing facility on Wednesday after which the term loan tranche broke for trading wrapped around the 101-type context. And Nuance Communications Inc. hit the secondary as well with its term loan also seen wrapping around the 101 area.

In primary happenings, Activant Solutions Inc., Cinram International Inc. and Protection One Inc. came out with price talk as all three deals were launched to investors during Wednesday's session.

Dana's debtor-in-possession financing facility freed up for trading during market hours Wednesday, with the $700 million term loan quoted at par ¾ bid, 101¼ offered on a consistent basis throughout the day, according to a trader.

The term loan is priced with an interest rate of Libor plus 225 basis points. During syndication, pricing on the term loan was reverse flexed from Libor plus 275 basis points on strong investor interest.

Dana's $1.45 billion 24-month debtor-in-possession facility (B3/BB-) also contains a $750 million asset-based revolver with an interest rate of Libor plus 225 basis points and an unused fee of 37.5 basis points.

Originally the DIP was supposed to have a tenor of 18 months, but was recently amended to extend the term to 24 months.

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

Dana already borrowed the $700 million DIP term loan on March 30 and used the proceeds to refinance its pre-bankruptcy revolver and to pay other pre-bankruptcy obligations, as well as for working capital and general corporate expenses.

In connection with this U.S. DIP transaction, Dana Canada is getting a $100 million Canadian revolver with an interest rate of Libor plus 225 basis points.

Dana is a Toledo, Ohio, engineer, manufacturer, supplier and distributor of systems and components for vehicle manufacturers.

Nuance breaks

Nuance Communications' credit facility also freed up for trading, with the $355 million seven-year term loan B quoted at par ¾ bid, 101 ¼ offered steadily throughout the session, according to a trader.

The term loan B is priced with an interest rate of Libor plus 200 basis points. During syndication, pricing on the term loan B was reverse flexed from Libor plus 225 basis points on strong market demand.

Nuance's $430 million senior secured credit facility (B1/B) also contains a $75 million six-year revolver with a 50 basis point commitment fee.

UBS Investment Bank and Credit Suisse acted as joint lead arrangers on the deal, UBS, Credit Suisse and Citigroup acted as joint bookrunners, and Citigroup and Bank of America acted as co-arrangers, with UBS administrative agent and Citigroup documentation agent.

Proceeds from the facility, which actually closed at the end of March, were used to fund the acquisition of Dictaphone Corp. for $359 million in cash.

Nuance is a Burlington, Mass.-based provider of speech and imaging solutions for businesses and consumers. Dictaphone is a Stratford, Conn.-based provider of dictation, transcription, speech recognition and natural language processing systems in the healthcare market.

Activant sets talk on revised deal

Activant Solutions released price talk on its credit facility as the deal was launched with a revised structure that included a bigger-than-expected term loan B tranche, according to a market source.

The term loan B was presented to lenders with a size of $390 million, up from an originally expected size of $340 million, as the company shifted its proposed senior notes offering into its proposed senior subordinated notes offering and downsized the total bond transaction by $50 million to $175 million, the source said.

Price talk on the enlarged term loan B emerged at Libor plus 250 basis points, the source continued.

Activant decided to launch its $40 million revolver (size unchanged) with opening price talk of Libor plus 250 basis points as well, the source added.

Deutsche Bank, JPMorgan and Lehman are the lead banks on the now $430 million senior secured credit facility (B2/B), with Deutsche left lead.

Proceeds from the credit facility, along with bond proceeds, will be used to help fund the leveraged buyout of Activant by Hellman & Friedman LLC and Thoma Cressey Equity Partners.

The transaction is subject to customary regulatory approvals, as well as satisfaction of other customary closing conditions, and is expected to close by May 8.

Activant, currently owned by HM Capital Partners LLC, is an Austin, Tex.-based technology provider of business management solutions.

Cinram spread guidance

Cinram revealed price talk on its $850 million credit facility (B1) on Wednesday as well, as it too was launched to investors via a bank meeting during market hours, according to a source.

The company's $700 million term loan was launched with opening price talk of Libor plus 150 basis points and the company's $150 million revolver was launched with opening price talk of Libor plus 175 basis points, the source said.

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

There is a $150 million accordion feature contained in the credit agreement.

Covenants include a minimum interest coverage ratio of 4.00:1.00, a maximum total leverage ratio of 2.75:1.00, maximum capital expenditures of $150 million per annum, and a minimum amount of unrestricted cash and cash equivalents and available commitments under the revolver at all times of $37.5 million.

Proceeds will be used to refinance existing debt in connection with the company's conversion to an income trust. The conversion will be carried out through to a plan of arrangement, under which current shareholders will exchange their common shares for units of the newly created Cinram International Income Fund and/or class B exchangeable limited partnership units of a limited partnership owned by the fund on a one-for-one basis.

Cinram is a Toronto-based provider of pre-recorded multimedia products and logistic services.

Protection One talk surfaces

Price talk on Protection One's $66.8 million term loan add-on (B2/B+) emerged Wednesday as the company held a conference call for existing lenders to launch the deal, and revealed plans to reprice the existing term loan debt as well, according to a market source.

The term loan add-on was launched with opening price talk of Libor plus 250 basis points, the source said.

In addition, the company asked lenders to lower pricing on its existing $233.2 million of term loan debt to Libor plus 250 basis points from current pricing of Libor plus 300 basis points, the source added.

Bear Stearns is the lead bank on the deal.

Proceeds from the term loan add-on will be used to fund a $75 million cash dividend to all common stockholders, and to make related payments to members of management who are option holders.

Protection One is a Lawrence, Kan., electronic security company.

AutoNation closes

AutoNation Inc. closed on its $1.2 billion credit facility (Ba2/BB+/BB+) consisting of a $600 million term loan due 2010 with an interest rate of Libor plus 125 basis points and a $600 million revolver with an interest rate of Libor plus 100 basis points.

During syndication, the term loan was upsized from $300 million due to the amount of lender commitments received for the deal.

JPMorgan acted as the lead bank on the deal.

Proceeds are being used to finance the purchase of 50 million shares of the company's common stock at a price per share of $23 pursuant to a common stock tender offer and $309.4 million of its 9% senior notes due 2008 pursuant to a debt tender offer and consent solicitation.

AutoNation is a Fort Lauderdale, Fla., automotive retailer.

Water Pik closes

The Carlyle Group and Zodiac SA completed their leveraged buyout of Water Pik Technologies Inc. for $27.75 in cash for each share of common stock, according to a news release.

To help fund the acquisition, Water Pik got a new $290 million credit facility consisting of a $165 million seven-year first-lien term loan with an interest rate of Libor plus 225 basis points, a $75 million 71/2-year second-lien term loan with an interest rate of Libor plus 650 basis points and a $50 million six-year revolver with an interest rate of Libor plus 225 basis points and a 50 basis point commitment fee.

ING Capital LLC and Credit Suisse acted as the lead banks on the deal.

Water Pik is a Newport Beach, Calif., designer, manufacturer and marketer of swimming pool products and personal health care products.

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