SonicWALL breaks; Calumet plummets as bonds pulled; Swift rises on refi; Ntelos sets launch

By Sara Rosenberg

New York, July 22 - SonicWALL Inc.'s credit facility freed up for trading during Thursday's market hours, with the first- and second-lien term loans both quoted above their original issue discount prices.

Also in trading, Calumet Specialty Products Partners LP's strip of institutional bank debt dropped after the company revealed that it will not be going forward with the notes offering that was going to be used for a paydown.

In addition, Swift Holdings Corp.'s term loan strengthened as the company said that it will refinance the debt in connection with a proposed initial public offering of common stock, and Penn National Gaming Inc.'s term loan was a little firmer with numbers.

Over in the primary market, Ntelos Inc. firmed up timing on the launch of its proposed incremental term loan, Bourland & Leverich Supply Co. LLC began floating talk on its term loan, and the syndication of Cedar Fair LP's credit facility has gone well, with the deal filling out.

SonicWALL frees to trade

SonicWALL's credit facility hit the secondary market on Thursday, with both the first- and the second-lien term loans seen higher than the price at which they sold during syndication, according to traders.

The first-lien term loan was quoted by one trader at 98½ bid, no offers, and by a second trader at 98 bid, 98½ offered.

And, the second-lien term loan was quoted by the first trader at 97½ bid, 99 offered, while the second trader said that he didn't see any levels on the tranche.

Pricing on the $155 million 51/2-year first-lien term loan (Ba3/BB-) is Libor plus 625 basis points, and pricing on the $105 million 61/2-year second-lien term loan is Libor plus 1,000 bps, with both tranches having a 2% Libor floor, and both were sold at an original issue discount of 97.

In addition, the first-lien term loan carries 101 soft call protection for one year, and the second-lien term loan is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

SonicWALL revolver

SonicWALL's $275 million credit facility, which is led by Credit Suisse, also includes a $15 million revolver (Ba3/BB-) with a 2% Libor floor that was sold at 97 as well.

During syndication, pricing on the first-lien term loan and the revolver was flexed up from Libor plus 500 bps, pricing on the second-lien term loan was increased from Libor plus 900 bps, the Libor floor on all tranches was revised from 1.75% and the discount on all tranches widened from 98.

Also, the soft call protection on the first-lien loan was added at the time of the other changes, and the call premiums on the second-lien loan was revised from initial talk of 103 in year one, 102 in year two and 101 in year three.

The first-lien term loan has an initial excess cash flow sweep of 75%, which was increased from 50% during syndication.

SonicWALL being acquired

Proceeds from SonicWALL's credit facility will be used to help fund its buyout by Thoma Bravo LLC and Ontario Teachers' Pension Plan for $11.50 per share in cash. The transaction is valued at about $717 million.

Other funding will come from $280 million of equity and cash on hand.

Closing on the buyout is subject to regulatory approval and shareholder approval, which will be sought at a special meeting on July 23. The transaction is not subject to a financing condition.

SonicWALL is a San Jose, Calif.-based provider of IT security and data backup and recovery services.

Calumet nosedives

Calumet Specialty Products Partners' strip of term loan and letter-of-credit facility debt dropped by a number of points in trading following news that a previously expected repayment will not be taking place, according to a trader.

The strip of debt was quoted at 90 bid, no offers, down from 96 bid, 98 offered, the trader said.

On Thursday morning, the company announced that it will not complete its proposed $450 million senior unsecured notes offering due to market conditions.

Proceeds from the notes, along with a $375 million ABL revolver credit facility, were going to be used to repay the company's senior secured term loan in full and refinance its existing revolver.

As a result of the bonds being pulled, the proposed ABL revolver is not moving forwrd either. The debt was being led by Bank of America and JPMorgan and was talked at Libor plus 325 bps.

Calumet is an Indianapolis-based producer and seller of specialty hydrocarbon products.

Swift gains ground

Swift Holdings' term loan saw a fairly significant improvement on news that the debt will be repaid in connection with the company's initial public offering of common stock, according to traders.

The term loan was quoted by one trader at 97¼ bid, 98 offered, up from 94 bid, 95 offered, by a second trader at 97 bid, 97¾ offered, up from 94 bid, 95 offered, and by a third trader at 97 bid, 98 offered.

In an S-1 filed with the Securities and Exchange Commission on Thursday, Swift revealed that it will use proceeds from its IPO, along with a new senior secured credit facility, to refinance its existing bank deal.

As of April, the company had a $1.4913 billion first-lien term loan due May 2014, a $150 million synthetic letter-of-credit facility due May 2014 and a $300 million revolver due May 2012.

Swift, a Phoenix, Ariz.-based transportation services company and truckload carrier, expects its new credit facility to include a revolver and a term loan.

Penn National inches up

Penn National Gaming's term loan B felt a little better after the release of second-quarter earnings results, according to traders.

The term loan B was quoted by one trader at 97 bid, 97¾ offered, up on the bid side from 96¾ bid, 97¾ offered, and by a second trader at 97 bid, 97¾ offered, up from 96¾ bid, 97½ offered.

For the quarter, the company reported net income of $9.2 million, or $0.09 per diluted share, compared to net income of $28.5 million, or $0.27 per diluted share. Adjusted for charges, the quarter's net income was $0.29 per diluted share. Guidance had been for net income of $27.2 million, or $0.26 per diluted share.

Net revenues for the quarter were $598.3 million, up from $580.8 million in the second quarter of 2009 and slightly better than guidance of $588.3 million.

And, EBITDA for the quarter was $142.2 million versus $141.7 million last year and guidance of $141.5 million.

Penn National guidance

Also on Thursday, Penn National Gaming announced guidance for the third quarter and revised full-year estimates.

For the third quarter, the company expects net revenues of $622.9 million, EBITDA of $149.9 million and net income of $31.8 million, or $0.30 per diluted share.

Meanwhile, for the full year, the company changed its net revenues guidance to $2.443 billion from $2.406 billion, its EBITDA guidance to $580.3 million from $578.4 million, and its net income guidance to $104.3 million, or $0.98 per diluted share, from $121 million, or $1.13 per diluted share.

Penn National is a Wyomissing, Pa.-based gaming company.

Ntelos timing emerges

Moving to the primary market, Ntelos nailed down timing on the launch of its proposed $125 million incremental term loan with the scheduling of a conference call for 11 a.m. ET on Friday, according to a market source.

Previously, all that was known on timing was that the deal would be coming soon.

The additional term loan is permitted under the company's existing credit agreement.

JPMorgan is the lead bank on the deal that will be used, along with revolver borrowings and cash on hand, to fund the acquisition of One Communications Corp.'s FiberNet business for about $170 million.

Ntelos provides early numbers

In connection with the upcoming term loan launch, Ntelos came out with preliminary second-quarter earnings results. Final results will be announced on Aug. 5.

For the quarter, the company expects consolidated revenues of about $132 million, consolidated adjusted EBITDA of approximately $56 million and capital expenditures of roughly $22 million.

For the proposed acquisition company, FiberNet, the last 12 months ended June 30 revenues amounted to about $77 million, adjusted EBITDA was $26 million and capital expenditures were approximately $10 million.

Ntelos expects to reduce leverage

Following completion of the acquisition, Ntelos anticipates that its leverage will be in the 3 times zone, and while it is very comfortable with that multiple, the plan is to reduce that ratio over time, company officials remarked earlier this week when first announcing the transaction.

Total debt at June 30 was $632 million, with cash of about $60 million.

Completion of the acquisition is anticipated to occur in the fourth quarter, subject to approval from the FCC and the relevant state public service commissions and anti-trust review under the Hart-Scott-Rodino Act.

Closing on the term loan, however, is expected to occur in mid-August.

Ntelos is a Waynesboro, Va.-based provider of wireless and wireline communications services. FiberNet is a fiber optic network of 3,500 route miles.

Bourland & Leverich talk

Bourland & Leverich began circulating indicative pricing on its $125 million five-year term loan as the deal is getting ready to launch with a bank meeting on Tuesday, according to a market source.

The term loan talk is Libor plus 850 bps to 900 bps with a 2% Libor floor and an original issue discount of 97 to 98, the source said.

Jefferies Finance is the lead arranger on the $200 million senior secured credit facility that also includes a $75 million four-year ABL revolver that will be partially funded at closing.

Proceeds will be used to help fund the acquisition of the company by Jefferies Capital Partners.

Pro forma leverage is 2.9 times and equity will comprise 42% of capitalization.

Bourland & Leverich is a Pampa, Texas-based distributor of oil country tubular goods serving U.S. onshore oil and gas producing regions.

Cedar Fair nets orders

Talk is that Cedar Fair's $1.45 billion senior secured credit facility (Ba2/BB-) has been met with stronger demand, resulting in the deal being fully subscribed by Wednesday's commitment deadline, according to market sources.

The facility consists of a $1.15 billion six-year term loan talked at Libor plus 425 bps with a 1.5% Libor floor and an original issue discount of 99, and a $300 million five-year revolver talked at Libor plus 400 bps.

When the deal first launched on May 21, the term loan was sized at $1.05 billion and price talk was Libor plus 375 bps with a 1.5% Libor floor and an original issue discount of 99 to 991/2, and talk on the revolver was Libor plus 350 bps with no Libor floor.

However, syndication hit a bump when the company delayed its bond offering. Then, last week, the company priced $405 million - down from initial size of $500 million, which is why the term loan was upsized - of senior unsecured notes at 98.613 to yield 9 3/8%.

After the bonds priced, the credit facility was basically relaunched to lenders at the revised terms.

Cedar Fair refinancing debt

Proceeds from Cedar Fair's credit facility and notes will be used to refinance and terminate its existing credit facility.

As of March 28, the company had $1.5 billion of term loan debt with a final maturity in 2012 and $216 million in borrowings under its revolving credit facility that matures in 2011.

Closing on the refinancing is expected to take place on July 29.

JPMorgan, KeyBank, UBS and Fifth Third Bank are the lead banks on the credit facility, with JPMorgan the left lead.

Cedar Fair is a Sandusky, Ohio-based regional amusement-resort operator.

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