Reynolds, Academy Sports, Capsugel, Terex break for trading; Dynegy, OM Group revise deals

By Sara Rosenberg

New York, July 27 - Reynolds Group, Academy Sports + Outdoors, Capsugel and Terex Corp. all hit the secondary market on Wednesday, and Ardent Health Services LLC strengthened from its recent breaking levels.

Over in the primary, Dynegy Inc. and OM Group Inc. moved some funds around between their term loans, and while Dynegy had to increase pricing on its GasCo tranche, OM Group was able to lower pricing on its debt.

Also, C.H.I. Overhead Doors released price talk on its first- and second-lien term loans in connection with its bank meeting, Immucor Inc. came out with targeted timing for the launch of its credit facility, Level 3 Financing Inc. nailed down timing on its term loan B II, and Unifrax I LLC surfaced with new deal plans.

Reynolds frees up

Reynolds Group's new $2 billion senior secured term loan due August 2018 (Ba3/BB-) broke for trading on Wednesday, with levels seen at 99¼ bid, 99¾ offered, according to a trader.

Pricing on the term loan is Libor plus 525 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is two years of 101 soft call protection and a delayed-draw fee that is the full spread for 90 days from closing.

With this new deal, the company's existing term loan due February 2018 is being repriced at Libor plus 525 bps with a 1.25% Libor floor from Libor plus 325 bps with a 1% floor. This tranche is getting 101 soft call protection for one year.

During negotiations, the delayed-draw fee on the new loan was revised from half the spread for 30 days and the full spread thereafter, and call protection was added to the new and existing loans.

Reynolds acquiring Graham

Proceeds from Reynolds' new term loan will be used to help fund the purchase of Graham Packaging Co. Inc. for $25.50 per share, or a total of about $4.5 billion, including assumed debt.

Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. are leading the deal.

Other funds for the transaction are coming from cash on hand, $1.5 billion of 7 7/8% senior secured notes that priced at 99.268 to yield 8% and $1 billion of 9 7/8% senior unsecured notes that priced at 99.318 to yield 10%.

The senior unsecured notes were upsized from $500 million, with the additional proceeds earmarked for the repurchase of any Graham senior notes that are tendered in connection with change of control offers at 101. Any remaining proceeds will be used to repay other debt.

Reynolds amending loan

In order to allow for the new financing structure, Reynolds has to amend its existing credit facility, and, as already reported, this amendment was approved by lenders.

The amendment is still subject to final documentation.

Lenders are being paid a 5 bps amendment fee. Originally, there was no fee, but that was changed during the amendment process.

Closing on the acquisition is expected in the second half of this year, subject to customary regulatory approvals and conditions, including the approval of Graham's stockholders.

Reynolds is an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products. Graham is a York, Pa.-based supplier of plastic containers.

Academy Sports starts trading

Also making its way into the secondary market was Academy Sports, with its $840 million covenant-light term loan (B2/B) getting as high as par ½ bid, par ¾ offered before coming in to par bid, par ¼ offered, according to a trader.

Pricing on the term loan is Libor plus 450 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, pricing on the loan was reduced from talk of Libor plus 475 bps to 500 bps, and the discount moved from 981/2.

The company's $1.49 billion credit facility also includes a $650 million asset-based revolver.

Academy Sports lead banks

Morgan Stanley & Co. Inc., Credit Suisse Securities (USA) LLC, Barclays Capital Inc., Goldman Sachs & Co., Mizuho Securities USA Inc. and KKR Financial are leading Academy Sports' term loan and are all involved in the revolver too, but J.P. Morgan Securities LLC is the left lead on that asset-based tranche.

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

Other funds for the transaction will come from $450 million of senior notes that priced on Monday at par to yield 9¼%

Academy Sports is a Katy, Texas-based chain of sporting goods and outdoor stores.

Capsugel tops par

Yet another deal to begin trading was Capsugel, with its $920 million seven-year term loan B quoted at by one trader at par ¼ bid, par ¾ offered on the open and then he saw it move to par 3/8 bid, par 5/8 offered. A second trader was quoting the loan at par ¼ bid, par 5/8 offered.

Pricing on the term loan B is Libor plus 400 bps with a 1.25% Libor floor, and it was sold at a discount of 991/2. There is 101 soft call protection for one year.

The spread on the B loan was reduced from Libor plus 450 bps and the original issue discount tightened from 99 earlier this week due to strong oversubscription.

The company's $1.07 billion senior secured credit facility (B1) also includes a $150 million five-year revolver.

Capsugel funding buyout

Proceeds from Capsugel's credit facility, along with €325 million of notes that priced on July 20 at par to yield 9 7/8%, will be used to help fund the acquisition of the company by Kohlberg Kravis Roberts & Co LP from Pfizer Inc. for $2.375 billion in cash.

UBS Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., Mizuho Securities USA Inc. and KKR Capital Markets are the lead banks on the deal.

Closing on the transaction is expected in the third quarter, subject to customary conditions, including regulatory approval in certain jurisdictions, such as the United States and the European Union.

Capsugel is a Peapack, N.J.-based manufacturer of hard capsules and drug-delivery systems.

Terex seen above OID

Terex's credit facility freed up as well, with the $462 million six-year U.S. term loan B quoted at 99 3/8 bid, 99¾ offered, and then it rose to par 1/8 bid, par ½ offered, according to a trader.

Pricing on the U.S. term loan B is Libor plus 400 bps, after flexing earlier from Libor plus 450 bps, with a 1.5% Libor floor, and it was sold at an original issue discount of 99.

The company's $1.25 billion credit facility (Ba2/BB) also includes a $288 million six-year euro equivalent term loan B priced at Euribor plus 450 bps with a 1.5% floor and sold at a discount of 99, and a $500 million five-year revolver priced at Libor plus 450 bps with a 1.5% floor.

Both the dollar and euro term loans have 101 soft call protection for one year.

Terex acquiring Demag

Proceeds from Terex's credit facility will be used to help fund a tender offer for the purchase Demag Cranes AG for €45.50 per share.

Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., UBS Securities LLC and RBS Securities Inc. are the lead banks on the deal.

As of July 1, the minimum acceptance level of 51% for the voluntary public tender offer had been exceeded, and early termination under the Hart-Scott-Rodino Antitrust Improvements Act had been received.

Terex is a Westport, Conn.-based diversified manufacturer. Demag is a Dusseldorf, Germany-based provider of industrial cranes, crane components, harbor cranes and port automation technology.

Ardent heads higher

Ardent Health Services' $200 million term loan B add-on due September 2015 was quoted at 99½ bid, par offered on Wednesday, according to a trader. By comparison, the loan broke for trading on Tuesday at 98 7/8 bid, 99 3/8 offered, and then moved up to close out its first day of trading at 99¼ bid, 99¾ offered.

Pricing on the term loan B add-on matches existing pricing at Libor plus 500 basis points with a 1.5% Libor floor. It was sold at an original issue discount of 98½ and includes 101 soft call protection for one year.

During syndication, the spread on the add-on firmed at the low end of the Libor plus 500 bps to 525 bps talk. The plan was that depending on where the add-on spread finalized, existing term loan B pricing would have been maneuvered to match - a contingency that proved unnecessary.

Ardent purchasing hospitals

Proceeds from Ardent Health Services' add-on will be used to fund acquisitions of hospitals, including the purchase of SouthCrest Hospital in Tulsa, Okla., and Claremore Regional Hospital in Claremore, Okla., from Community Health Systems Inc.

Bank of America Merrill Lynch, Barclays Capital Inc. and GE Capital Markets are the lead banks on the deal that was syndicated to existing lenders only.

The company's existing term loan B was obtained in the early part of 2010 as part of a dividend recapitalization. It was sized at $325 million and sold at an original issue discount of 98.

Ardent Health Services is a Nashville, Tenn.-based operator of acute care hospitals and specialty care facilities.

Dynegy restructures

Switching to the primary, Dynegy reduced its GasCo term loan to $1.1 billion from $1.3 billion and increased pricing to Libor plus 775 bps with a 1.5% Libor floor and an original issue discount of 98 from initial talk of Libor plus 650 bps with a 1.5% floor and a discount of 99, according to a market source.

As for the CoalCo term loan, that was increased to $600 million from $400 million, while pricing was left unchanged at Libor plus 775 bps with a 1.5% Libor floor and a discount of 98, the source said.

Also, GasCo call protection was changed to match that of the CoalCo tranche, which is non-callable for two years, then at 102 in year three and 101 in year four. Initially, GasCo had call protection of 103 in year one, 102 in year two and 101 in year three.

Lastly, both terms loans now mature in five years instead of in six years, the source added.

Lead banks Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. are asking for recommitments by 5 p.m. ET on Thursday and allocations are expected on Tuesday.

Dynegy refinancing debt

Proceeds from the GasCo loan will be used to repay Dynegy Holdings Inc.'s existing senior secured credit facility, repay existing debt relating to Sithe Energies Inc., make a distribution and fund cash collateralized letters of credit and cash collateral for existing collateral requirements.

The distribution, sized at $400 million, is being split into $200 million from GasCo and $200 million from CoalCo, as opposed to the entire amount coming from GasCo. Additionally, the CoalCo loan will be used to fund cash collateralized letters of credit and cash collateral for existing collateral requirements and for general working capital and general corporate purposes.

GasCo and CoalCo are being created through a reorganization. GasCo will be a subsidiary that owns eight primarily natural gas-fired intermediate and peaking power generation facilities, and CoalCo will be a subsidiary that owns six primarily coal-fired baseload power generation facilities.

Dynegy is a Houston-based producer and seller of electric energy, capacity and ancillary services.

OM Group revises deal

OM Group also announced changes to its credit facility, including upsizing the U.S. term loan B tranche, downsizing the euro term loan B tranche and cutting pricing on the debt, according to market sources.

The U.S. B loan is now sized at $350 million, up from $300 million, and priced at Libor plus 425 basis points with a 1.5% Libor floor and an original issue discount of 99, sources said. Previously, the spread was talked at Libor plus 475 bps to 500 bps.

Meanwhile, the euro term loan B is sized at $250 million, down from $300 million, and priced at Euribor plus 475 bps with a 1.5% floor and a discount of 99. The spread was lowered from talk of Euribor plus 500 bps.

There continues to be 101 soft call protection for one year on both term loans, sources added.

OM Group revolver, A loan

OM Group's $900 million senior secured deal (Ba2/BB-) also includes a $200 million revolver and a $100 million term loan A, both priced in line with talk at Libor plus 375 bps with no Libor floor.

Bank of America Merrill Lynch, PNC Capital Markets LLC and BNP Paribas Securities Corp. are leading the deal that will be used to fund the €700 million acquisition of Vacuumschmelze Holding GmbH, a Hanau, Germany-based manufacturer of industrial use advanced magnetic materials and fabricated products.

Closing is expected by the end of the third quarter, subject to customary conditions and regulatory approvals, and net debt to EBITDA is expected to be below 2.0 times.

OM Group is a Cleveland-based solutions provider of specialty chemicals, advanced materials, electrochemical energy storage and unique technologies.

C.H.I. talk emerges

In more primary happenings, C.H.I. Overhead Doors held a bank meeting on Wednesday to launch its credit facility, and in connection with the event, first- and second-lien term loan price talk was disclosed, according to a market source.

The $127.5 million six-year first-lien term loan is talked at Libor plus 525 bps with a 1.5% Libor floor and an original issue discount of 99, and the $51 million 61/2-year second-lien term loan is talked at Libor plus 925 bps with a 1.5% floor, a discount of 98 and call protection of 103 in year one, 102 in year two and 101 in year three, the source said.

GE Capital Markets and Wells Fargo Securities LLC are leading the $203.5 million deal, which also includes a $25 million five-year revolver and will be used to help fund the buyout of the company by Friedman Fleischer & Lowe from JLL Partners.

C.H.I. is a garage door company and a manufacturer of commercial sectional and rolling steel.

Immucor eyes next week

Immucor is tentatively set to hold a bank meeting for its $700 million senior secured credit facility on Tuesday, a market source told Prospect News. Timing on the deal had previously been described as early August business.

The facility, led by Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, consists of a $100 million five-year revolver and a $600 million seven-year term loan.

Proceeds will be used to help fund the buyout of the company by TPG Capital for $27.00 per share in cash. The transaction has a fully diluted equity value of $1.973 billion.

At close, no more than $25 million can be drawn under the revolver, the company revealed in filings with the Securities and Exchange Commission.

Immucor plans notes

In addition to the credit facility, Immucor expects to issue high-yield bonds, which are backed by a commitment for a $400 million senior unsecured bridge loan that has already been syndicated.

Closing on the buyout is expected in the second half of the year, subject to satisfaction of the minimum tender condition of 84% of the company's shares, approval under the Hart-Scott-Rodino Antitrust Improvements Act, the receipt of any applicable consents or approvals under German antitrust or merger control laws and other customary conditions.

The stock tender offer expires on Aug. 18. If the minimum tender condition is not met, the parties have agreed to complete the transaction through a one-step merger after receipt of shareholder approval.

Immucor is a Norcross, Ga.-based provider of automated instrument-reagent systems to the blood transfusion industry.

Level 3 sets launch

Level 3 firmed up timing on the launch of its $650 million six-year senior secured covenant-light term loan B II, with the scheduling of a conference call for Thursday, according to a market source.

While official price talk is not expected to come out until the launch, the company has previously said in filings with the Securities and Exchange Commission that the debt is expected to be priced at Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 99 and will have 101 soft call protection for one year.

And, in a conference call Wednesday, company officials remarked that the loan is being talked at Libor plus 425 bps with a 1.25% to 1.5% Libor floor.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc. and Credit Suisse Securities (USA) LLC are the lead banks on the deal.

Level 3 leverage multiples

Pro forma for the transaction, Level 3 expects gross debt-to-adjusted EBITDA after synergies to be 5.0 times and net debt-to-adjusted EBITDA, post synergies, to be 4.4 times.

Proceeds from the new term loan B II will be used to help fund the acquisition of Global Crossing Ltd. for 16 shares of Level 3 stock per Global Crossing share and refinance existing debt. Based on Level 3's closing stock price on April 8, the transaction is valued at $23.04 per Global Crossing common or preferred share, or about $3 billion, including the assumption of $1.1 billion of net debt as of Dec. 31.

Closing is expected before the end of this year, subject to regulatory approvals and the approval of the stockholders of each company.

Level 3 is a Broomfield, Colo.-based provider of fiber-based communications services. Global Crossing is a Florham Park, N.J.-based IP, Ethernet, data center and video services provider.

Unifrax plans add-on

Meanwhile, firm on next week's calendar is Unifrax as the company scheduled a bank meeting in New York for Monday afternoon to launch a proposed $150 million term loan add-on, according to a market source.

Wells Fargo Securities LLC is the lead bank on the deal that will be used for acquisition financing.

Unifrax is a Niagara Falls, N.Y.-based supplier of high-temperature insulation products.

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