USIC, Ikaria, Hoffmaster break; BWAY talk emerges; Calpine, AutoTrader, AWAS, Telx set launches

By Sara Rosenberg

New York, May 12 - United States Infrastructure Corp. (USIC), Ikaria Holdings Inc. and Hoffmaster Group Inc. allocated and freed up for trading on Wednesday, with all of the companies' term loans quoted above their original issue discount prices.

Over in the primary market, BWAY Holding Co. came out with price talk on its proposed term loan as the transaction was presented to lenders during the session, Calpine Corp. revealed timing on its facility and AutoTrader.com, AWAS and Telx Group Inc. surfaced with plans for new deals.

Also in the primary, Del Taco LLC's (Sagittarius Restaurants LLC) credit facility is now fully syndicated on the back of the recent changes that were made, and the hope is to allocate the deal early next week.

USIC frees to trade

United States Infrastructure's credit facility hit the secondary market on Wednesday, with the $113.5 million term loan quoted at 99½ bid, par offered on the break and then moving up to par bid, par ½ offered, according to traders.

Pricing on the term loan is Libor plus 400 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 99.

The company's $158.5 million five-year credit facility also includes a $45 million revolver priced at Libor plus 400 bps with a 1.5% Libor floor, which was sold at a discount of 981/2.

USIC lead banks

GE Capital and BNP Paribas are the lead banks on United States Infrastructure's credit facility, with GE the left lead.

Proceeds will be used to help fund the buyout of the company by Omers from Kohlberg & Co.

During syndication, pricing on the term loan and the revolver was lowered from Libor plus 425 bps, and the discount on the term loan tightened from 98½ as a result of strong demand.

United States Infrastructure is a Carmel, Ind.-based provider of utility infrastructure locating services.

Ikaria starts trading

Also freeing up for trading was Ikaria's $250 million six-year term loan, with levels quoted at 98¼ bid, 98¾ offered, according to a trader.

Pricing on the term loan is Libor plus 500 bps with a 2% Libor floor, and it was sold at an original issue discount of 98.

At launch, the term loan was sized at $320 million and was talked at Libor plus 400 bps with a 2% Libor floor and a discount of 99. The loan was then reduced to $270 million, pricing was moved to Libor plus 500 bps and the discount widened to 981/2. It was then downsized again to its final amount of $250 million, and the discount was once again increased to its final level of 98.

Ikaria getting revolver

Ikaria's $290 million credit facility (B1/BB-) also includes a $40 million five-year revolver that has a 75 bps unused fee and a 2% Libor floor.

Credit Suisse is the lead bank on the deal that will be used to refinance existing debt and fund a dividend.

As a result of the term loan downsizings, the amount of the dividend payment was reduced.

Ikaria is a Clinton, N.J.-based biotherapeutics company whose acute care products and therapies address the needs of critically ill patients.

Hoffmaster breaks

Another deal to start trading was Hoffmaster Group, with both its $160 million first-lien term loan and $65 million second-lien term loan quoted at 98 bid, 99 offered, according to a trader.

Pricing on the first-lien term loan is Libor plus 500 bps with a 2% Libor floor, and it was sold at an original issue discount of 971/2. There is 101 soft call protection for one year.

And, pricing on the second-lien term loan is 13.5% with an original issue discount of 971/2. The tranche is non-callable for one year, then at 102 in year two and 101 in year three.

Hoffmaster led by CS

Credit Suisse is the lead bank on Hoffmaster's $255 million credit facility, which also includes a $30 million revolver.

Proceeds will be used to fund a dividend and to refinance existing debt.

During syndication, pricing on the first-lien term loan was increased from Libor plus 425 bps and the discount widened from 981/2, and the second-lien loan was downsized from $90 million and pricing changed from initial talk of Libor plus 825 bps with a 2% Libor floor and a discount of 98. Also, call protection on the second-lien was revised from 103 in year one, 102 in year two and 101 in year three.

Hoffmaster is an Oshkosh, Wis.-based manufacturer of premium disposable tableware products.

BWAY reveals talk

Switching to the primary, BWAY held a bank meeting on Wednesday to kick off syndication on its proposed credit facility, and in connection with the launch, price talk on the term loan was announced, according to a market source.

The $490 million term loan was presented to lenders with talk of Libor plus 375 bps with a 1.75% Libor floor and an original issue discount that is still to be determined, the source said.

The company's $565 million senior secured credit facility also includes a $75 million revolver.

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

BWAY being acquired

Proceeds from BWAY's credit facility will be used to help fund the buyout of the company by Madison Dearborn Partners LLC for $20 in cash per share. The transaction is valued at roughly $915 million, including the assumption of debt.

The company has received a commitment for a $200 million senior unsecured bridge loan to help fund the acquisition as well.

Closing is expected to take place in the second or third quarter, subject to shareholder approval, regulatory approvals and other customary conditions.

In connection with the buyout, BWAY has begun a cash tender offer for any and all of its outstanding 10% senior subordinated notes due 2014. The tender offer is scheduled to expire on June 9.

BWAY is an Atlanta-based supplier of general line rigid containers.

Calpine timing disclosed

Calpine firmed up timing on the launch of its proposed $1.4 billion credit facility with the scheduling of a bank meeting for Monday, according to a market source.

The facility, which will reside at a Calpine subsidiary level, consists of a $1.3 billion amortizing seven-year term loan and a $100 million revolver.

Since the new debt is at a subsidiary, Calpine does not need to obtain an amendment from existing term loan holders to complete the transaction.

The company previously explained that the arrangement also allows it to take advantage of the lower cost of capital of subsidiary-level financing without sacrificing flexibility.

Credit Suisse, Citigroup and Deutsche Bank are the lead banks on the deal.

Calpine buying Pepco assets

Proceeds from Calpine's credit facility, along with $535 million of corporate cash, will be used to help fund the acquisition of 4,490 MW of power generation assets from Pepco Holdings Inc. for $1.65 billion plus adjustments.

Pro forma net debt to adjusted EBITDA as of Dec. 31 is 4.8 times.

And, pro forma adjusted EBITDA for 2010 is estimated between $1.625 billion and $1.725 billion, while for 2011, it is estimated between $1.685 billion and $1.885 billion.

Closing on the acquisition is expected to take place by June 30, subject to customary conditions, approval from the Federal Energy Regulatory Commission and antitrust review under the Hart-Scott-Rodino Act. No shareholder approval is required.

Calpine is a Houston-based power generation company.

AutoTrader.com launching Thursday

AutoTrader.com has scheduled a bank meeting for Thursday to launch its proposed $525 million credit facility (BB+), according to a market source.

The facility consists of a $100 million revolver, a $100 million term loan A and a $325 million term loan B, with all tranches talked at Libor plus 350 bps, the source said.

The term loan B has a 1.5% Libor floor, while the pro rata will likely not have a Libor floor, the source added.

Goldman Sachs and Wells Fargo are the lead banks on the deal that will be used to help fund Providence Equity Partners' acquisition of a 25% interest in the company from Cox Enterprises Inc., which will maintain majority ownership and operating control.

Closing is expected to take place as soon as all necessary approvals have been obtained.

AutoTrader.com is an Atlanta-based Internet automotive shopping and advertising site.

AWAS preparing term loan

AWAS is getting ready to launch a $530 million six-year term loan with a bank meeting on Friday, according to a market source.

Goldman Sachs and Credit Agricole are the lead banks on the deal.

Proceeds will be used to refinance existing debt.

AWAS is a Dublin-based aircraft leasing company.

Telx sets launch

Telx is scheduled to hold a bank meeting on Friday to launch its proposed $175 million senior secured credit facility (B1/B-), according to a market source.

The facility consists of a $150 million term loan B and a $25 million revolver, the source said, with price talk not yet available.

Goldman Sachs, Deutsche Bank, RBC and SunTrust are the lead banks on the deal that will be used to refinance existing debt and for general corporate purposes.

Telx is a New York-based provider of network neutral, global interconnection and colocation services.

Del Taco readies allocations

Now that Del Taco's credit facility has been successfully syndicated as a result of changes that were announced at the end of last week, the target is to give out allocations on Monday and close shortly thereafter, according to a market source.

The company's $195 million five-year credit facility (B1/B) consists of a $35 million revolver and a $160 million term loan that is priced at Libor plus 550 bps with a 2% Libor floor and an original issue discount of 971/2.

The term loan also includes call protection of 102 in year one and 101 in year two.

Last Friday, pricing on the term loan was raised from Libor plus 450 bps, the discount widened from the initial 98 to 99 talk and the call protection was added.

Del Taco affected by ratings

The change in pricing on Del Taco's term loan was partly a result of ratings that the company recently received, a source previously told Prospect News.

The source explained that a Caa1 corporate rating is difficult for a number of investors. Currently, Moody's Investors Service's corporate rating for Del Taco is Caa2, but it is expected to be upgraded to Caa1 following the completion of the transaction.

Wells Fargo is the left lead bank on the deal, and, early on, GE Capital signed on as a co-lead arranger.

Prior to launch, the facility was expected to be sized at $190 million, comprised of a $40 million revolver and a $150 million term loan. However, at the bank meeting, lenders were presented with the current structure.

Del Taco, a Lake Forest, Calif., operator and franchiser of restaurants, will use the new credit facility to refinance existing debt.

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