Claire's, Service Net set talk; Verint flexes higher; Kinder cuts pro rata spreads; Local TV breaks

By Sara Rosenberg

New York, May 7 - Claire's Stores Inc. came out with price talk on its credit facility as the deal was launched with a bank meeting during Monday's market hours, and Service Net Solutions LLC started circulating price talk on its credit facility as the deal is getting ready to launch with a bank meeting on Tuesday.

In other primary news, Verint Systems Inc. increased pricing on its credit facility and Kinder Morgan Inc. revealed that it lowered pricing on its pro rata tranches.

Moving to the secondary market, Local TV LLC's credit facility freed for trading, with the term loan quoted in the upper par's.

Claire's Stores held a bank meeting on Monday afternoon to kick off syndication on its proposed $1.65 billion senior secured credit facility (B1/B), and with the launch, price talk on the transaction surfaced, according to a market source.

Both the $1.45 billion seven-year term loan B and the $200 million six-year revolver were presented to lenders with opening price talk set at Libor plus 275 basis points, the source said.

The revolver has a 50 bps commitment fee.

Credit Suisse, Bear Stearns and Lehman Brothers are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds will be used to help fund the Apollo Management, LP's leveraged buyout of the company for $33.00 in cash per share, which represents a transaction value of $3.1 billion.

Other buyout financing is expected to come from $935 million in high-yield bonds and $600 million of equity.

The deal is leveraged 4.4 times through the credit facility and 7.2 times total.

Completion of the transaction is subject to customary closing conditions, including regulatory review and stockholder approval.

Claire's is a Pembroke Pines, Fla., specialty retailer offering costume jewelry and accessories.

Service Net talk emerges

Price talk on Service Net Solutions started floating around the market as the company is getting ready to hold a bank meeting on Tuesday in New York at the W Hotel Union Square to launch its credit facility to investors, according to an informed source.

The $10 million revolver and the $75 million term loan B are both being talked at Libor plus 400 bps, while the $50 million second-lien term loan is being talked at 7% cash pay plus 7% PIK, the source said.

The term loan B carries 101 soft call protection for one year, and the second-lien term loan carries call protection of 103 in year one, 102 in year two and 101 in year three, the source added.

Goldman Sachs is the lead bank on the $135 million deal.

Proceeds will be used to fund GTCR Golder Rauner LLC's buyout of the Jeffersonville, Ind.-based service contract and warranty company.

Verint ups spread

Also in the primary, Verint Systems flexed pricing higher on both tranches under its $675 million senior secured credit facility (B) to Libor plus 275 bps from original talk at launch of Libor plus 250 bps, according to a market source.

Tranching on the deal is comprised of a $650 million seven-year term loan and a $25 million six-year revolver.

In addition, the pricing grid under the term loan was increased by 25 bps so that the range is now between Libor plus 200 bps to 275 bps, the source remarked. The deal flips to different pricing upon resolution of the company's audit issue and concurrent issuance of ratings from both Moody's Investors Service and Standard & Poor's. The flip pricing, which is a one-time event as opposed to one that floats up and down over time, is based on a ratings grid.

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

Proceeds will be used to help fund the acquisition of Witness Systems, Inc. for $27.50 per share in cash. The total enterprise value of the transaction is about $950 million.

Other acquisition financing will come from a $293 million preferred stock investment by Comverse Technology, Inc. and from existing cash of the combined company.

Verint is a Melville, N.Y., provider of analytic software-based services for security and business intelligence. Witness is a Roswell, Ga., provider of workforce optimization software and services.

Kinder trims pro rata pricing

Kinder Morgan reverse flexed pricing on its $1 billion six-year revolver and its $1 billion 61/2-year term loan A to Libor plus 137.5 bps from original talk at launch of Libor plus 162.5 bps, according to a market source.

These pro rata tranches were syndicated in a "club style" to banks, the source added.

Kinder Morgan's $7.3 billion credit facility (Ba2/NA/BB) also includes a $3.3 billion seven-year term loan B that is priced at Libor plus 150 bps with a step down to Libor plus 137.5 bps when leverage falls below 5½ times, and a $2 billion three-year asset-sale bridge term loan C that is priced at Libor plus 137.5 bps.

This monster deal has been tweaked throughout the syndication process as the term loan B was upsized from $2.3 billion because of a $1 billion downsizing to the term loan A from $2 billion, and pricing on the term loan B firmed up at the tight end of original guidance of Libor plus 150 bps to 175 bps with the addition of the step down.

Citigroup, Goldman Sachs, Deutsche Bank, Wachovia and Merrill Lynch are the lead banks on the deal.

Proceeds will be used to help fund the company's public-to-private buyout by management and equity investors.

Under the acquisition, chairman and chief executive officer Richard D. Kinder and other members of management, including co-founder Bill Morgan, current board members Fayez Sarofim and Mike Morgan, and investment partners Goldman Sachs Capital Partners, American International Group, Inc., the Carlyle Group and Riverstone Holdings LLC will acquire all of the outstanding common stock of Kinder Morgan for $107.50 per share in cash.

All in all, the transaction is valued at about $22 billion, including the assumption of about $7 billion of debt.

Kinder Morgan is a Houston-based energy infrastructure provider.

AMR finalizes repricing

AMR Corp. firmed up the details on its term loan B repricing transaction as the new spread was finalized at the wide end of original price talk, according to a market source.

Under the repricing, the term loan B will now carry a spread of Libor plus 200 bps, down from current pricing of Libor plus 325 bps, the source said.

When the deal was first launched, the repricing was being talked at Libor plus 175 bps to 200 bps.

There is no call protection on the term loan B.

Citigroup is the left lead bank on the Fort Worth, Texas, airline's deal that is expected to close on Wednesday.

Local TV frees to trade

Switching to trading news, Local TV's credit facility broke for trading on Monday, with the $275 million six-year term loan quoted at par ½ bid, par ¾ offered, according to a trader.

The term loan is priced at Libor plus 200 bps.

During syndication, pricing on the massively oversubscribed term loan was reverse flexed from original talk at launch of Libor plus 225 bps.

Local TV's $305 million senior secured credit facility (Ba3/B) also includes a $30 million six-year revolver that is priced at Libor plus 200 bps after reverse flexing from Libor plus 225 bps as well.

UBS and Deutsche Bank acted as the joint lead arrangers on the deal.

Proceeds were used to help fund Oak Hill Capital Partners' acquisition of the New York Times Co.'s Broadcast Media Group for $575 million.

The Broadcast Media Group comprises the following stations: WHO-TV in Des Moines, KFSM-TV in Fort Smith, Ark., WHNT-TV in Huntsville, Ala., WREG-TV in Memphis, WQAD-TV in Moline, Ill., WTKR-TV in Norfolk, Va., KFOR-TV in Oklahoma City, KAUT-TV in Oklahoma City and WNEP-TV in Scranton, Pa.

The completion of this acquisition was announced on Monday.

CapRock closes

CapRock Communications completed its acquisition of Arrowhead Global Solutions Inc., a supplier of integrated communication solutions to the U.S. federal government and military, according to a news release.

To help fund the transaction, CapRock got a new $255 million credit facility consisting of a $40 million five-year revolver (Ba3/B) priced at Libor plus 300 bps, with a 50 bps commitment fee, a $150 million five-year term loan B (Ba3/B) priced at Libor plus 300 bps and a $65 million six-year second-lien term loan (Caa1/CCC+) priced at Libor plus 650 bps.

Proceeds from the credit facility are also being used to refinance existing debt.

Credit Suisse acted as the lead bank on the deal.

CapRock is a Houston-based satellite communications provider.

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