SS&C talk surfaces; Commonwealth Brands firms timing; Calpine falls on earnings blunder

By Sara Rosenberg

New York, Nov. 4 - SS&C Technologies Inc. came out with price talk on its credit facility as the deal was launched via a bank meeting Friday.

Meanwhile, Commonwealth Brands Inc. firmed up timing for the launch of its proposed credit facility, although details on the size and structure of the deal are expected to emerge in the Nov. 7 week.

In secondary doings, Calpine Corp.'s second-lien bank debt plummeted into the low-70s after the company had to readjust its third quarter and year-to-date earnings release to account for previously erroneous EBITDA calculations.

SS&C Technologies announced price talk of Libor plus 275 basis points on both tranches of its proposed $350 million credit facility (B2/B) at the Friday meeting that officially kicked off syndication on the deal, according to a market source.

The facility is comprised of a $75 million six-year revolver and a $275 million seven-year term loan B.

JPMorgan and Wachovia are joint lead arrangers and joint bookrunners on the deal, with JPMorgan left lead and administrative agent, Wachovia syndication agent and Bank of America documentation agent.

Proceeds from the credit facility will be used to help fund The Carlyle Group's acquisition of the company. Sunshine Acquisition Corp., an affiliate of Carlyle, will purchase SS&C for $37.25 in cash for each share of SS&C common stock, or approximately $941 million.

The transaction is expected to be completed during the fourth quarter and is subject to various conditions, including stockholder approval, the expiration of the waiting period under the Hart-Scott-Rodino Act, the closing of the debt financing arrangements and other customary closing conditions.

SS&C is a Windsor, Conn.-based provider of investment and financial management software and related services.

Commonwealth sets launch

Commonwealth Brands has scheduled a bank meeting for Thursday to launch its proposed credit facility that will be used to help fund the refinancing of all the company's existing debt, which includes outstanding bank and bond debt, a company spokesman told Prospect News Friday.

Previously it was known that the deal would be launching in the Nov. 7 week but a specific date had been unavailable.

Deutsche Bank and Lehman Brothers are the lead banks on the credit facility, with Deutsche left lead.

Details on the new credit facility are anticipated to surface early in the week.

When asked whether the company would be approaching the high yield market as well in its quest to complete this total debt refinancing, the spokesman declined to comment, saying that more information should come out in the coming days.

The refinancing is expected to be completed by year-end.

Commonwealth Brands is a Bowling Green, Ky., cigarette manufacturer.

Calpine off on math oops

Calpine's second-lien loan dropped by about four points after the company announced the need to correct the EBITDA calculations that were shown in its most recently released earnings numbers.

The second-lien paper was quoted at 73 bid, 75 offered, down from prior closing levels of 77 bid, 79 offered, according to a trader.

Trading in Calpine's stock had been halted on Thursday after original third quarter numbers had been released but second-lien bank debt levels hung in at the 77 bid, 79 offered context throughout the session as investors were awaiting some clarity on what was going on.

Then came the answer. Late Thursday night, Calpine said that it needed to correct its third quarter non-GAAP measure of EBITDA to represent a non-cash impairment charge of $136.8 million relating to the sale of its Ontelaunee Energy Center, which was accidentally added back in the line item "(Gain) on asset sales."

For the third quarter, EBITDA as adjusted for non-cash and other charges was revised to $379.6 million from $516.4 million EBITDA, as adjusted for the quarter of $656.2 million remains unchanged.

The San Jose, Calif.-based energy company also corrected its EBITDA, as adjusted for non-cash and other charges for the nine months ended Sept. 30, to $880.4 million from $1.1234 billion. This includes a similar correction for the impairment of the Morris Power Plant of $106.2 million, which was also inadvertently added back in the line item "(Gain) on asset sales".

These revisions do not have an impact on the company's reported loss per share, cash on hand or operating cash flow, the company added.

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