Kabel Deutschland breaks; Genesys spread anticipated at low end; Safety-Kleen OID emerges

By Sara Rosenberg

New York, Jan. 20 - Kabel Deutschland Holding AG allocated its upsized senior secured term loan F and the debt then emerged in the secondary market on Friday, with levels quoted well above its original issue discount price.

Over in the primary, pricing on Genesys' term loan B is expected to firm at the tight end of talk even with the recent conversion to covenant-light status, and original issue discount guidance on Safety-Kleen Systems Inc.'s in-market term loan B surfaced.

Additionally, Rocket Software Inc. launched its credit facility at previously expected terms, and the transaction is heard to have attracted interest already as some early orders have been placed, and Caribbean Restaurants LLC emerged with plans for a new deal.

Kabel frees up

Kabel Deutschland's $750 million seven-year senior secured term loan F (NA/NA/BB+) began trading on Friday, with one trader quoting the tranche at par bid, par ½ offered. A second trader said the loan broke at 99¼ bid, par offered and then moved up to 99¾ bid, par ¼ offered by the afternoon.

Pricing on the loan is Libor plus 325 basis points with a 1% Libor floor, and it was sold at an original issue discount of 981/2. There is 101 soft call protection for one year.

During the short syndication process, which first kicked off with a bank meeting this past Wednesday, the loan was upsized from $500 million and the Libor floor firmed at the tight end of the 1% to 1.25% talk as a result of strong demand.

Goldman Sachs & Co., BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and RBS Securities Inc. are the mandated lead arrangers on the Unterfoehring, Germany-based cable operator's deal.

Proceeds will be used to repay a portion of the company's existing term loan A due in March 2012, term loan C due in March 2013, term loan A-1, term loan A-2 and term loan C-1 due in March 2014.

Genesys expected pricing

Switching to the primary, Genesys' $550 million seven-year term loan B continues to be well oversubscribed with the recent change to covenant-light, and as a result of the large demand, the anticipation is that pricing will finalize at the tight side of guidance, according to a market source.

Officially, the loan is still talked at Libor plus 525 bps to 550 bps, but unofficially, the deal is expected to price at Libor plus 525 bps, the source said. The 1.5% Libor floor, original issue discount of 98 and 101 soft call protection for one year will likely be unchanged.

The loan was originally launched with leverage and interest coverage covenants, but, as was already reported, on Thursday, these covenants were removed.

Allocations are targeted to go out early next week, the source added.

Genesys lead banks

Goldman Sachs & Co., Citigroup Global Markets Inc., RBC Capital Markets LLC and Macquarie Capital are leading Genesys' $600 million facility (Ba3), which also provides for a $50 million five-year revolver.

Proceeds will be used, along with about $225 million of mezzanine debt and over 50% equity, to fund the company's roughly $1.5 billion buyout by Permira from Alcatel-Lucent.

Closing is expected early this year, subject to review by the Committee of Foreign Investment in the United States and other customary regulatory approvals and consultations in various countries.

Genesys, a Daly City, Calif.-based supplier of contact center technology software, will have senior leverage in the mid 3.0 times area and total leverage in the low 5.0 times area.

Safety-Kleen reveals OID

Safety-Kleen came out with original issue discount talk of 98 on its $250 million term loan B, according to a market source. Price talk on the tranche of Libor plus 450 bps with a 1.25% Libor floor had already surfaced earlier in the week.

The company's $400 million five-year credit facility (BB-), which launched with a bank meeting this past Thursday, also provides for a $150 million revolver.

Lead bank J.P. Morgan Securities LLC is seeking lender commitments by Feb. 2.

Proceeds will be used to refinance an existing senior secured credit facility, including a revolver that matures in August 2012, fund share repurchases and for general corporate purposes.

Safety-Kleen, a Plano, Texas-based used oil recycling and re-refining, parts cleaning and environmental services company, expects to close on the transaction by mid-February.

Rocket Software launches

Rocket Software held its bank meeting on Friday morning, and chatter is that some lender commitments have already been placed well ahead of the Feb. 3 commitment deadline, a market source told Prospect News.

The $430 million credit facility consists of a $25 million five-year revolver, a $300 million six-year first-lien term loan B and a $105 million seven-year second-lien term loan.

Price talk came out earlier this week, with the first-lien term loan guided at Libor plus 575 bps to 600 bps and the second-lien loan guided at Libor plus 925 bps to 950 bps. Both tranches have a 1.5% Libor floor and an original issue discount of 971/2.

Call protection on the term loan B is 101 soft call for one year, and the second-lien loan is non-callable for one year, then at 103 in year two and 101 in year three.

Rocket funding recap

Proceeds from Rocket Software's credit facility will be used to refinance existing debt and fund a dividend.

Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC and Jefferies & Co. are the lead banks on the deal.

As a result of this transaction, the company's total leverage will increase to 3.9 times from 1.0 times. Leverage through the first-lien loan will be 2.9 times.

Rocket Software, a Court Square portfolio company, is a Newton, Mass.-based software development firm.

Caribbean readies deal

Caribbean Restaurants joined the forward calendar, setting a bank meeting for Wednesday to launch a proposed $210 million credit facility, according to a market source.

The facility consists of a $20 million revolver and a $190 million term loan, the source said.

Jefferies & Co. is the leading the deal that will be used to refinance existing bonds.

Caribbean Restaurants is an operator of Burger King restaurants in Puerto Rico.

PennantPark adds lead

In other news, PennantPark Investment Corp.'s $325 million three-year revolver saw the addition of J.P. Morgan Securities LLC as a lead arranger, joining left lead SunTrust Robinson Humphrey Inc., according to a market source.

The revolver, which has a one-year term out period, is talked at Libor plus 275 bps with a 50 bps unused fee.

The facility will be governed by advance rates against investments.

Proceeds will be used to refinance an existing $315 million revolver, and at close, about 70% plus of the new deal will be funded.

PennantPark is a New York-based investment company that has elected to be treated as a business development company. As of Sept. 30, the company's portfolio totaled around $830 million.

Sterling wraps syndication

Sterling Infosystems Inc.'s $180 million credit facility (B2/B) has filled out at initial terms, which includes pricing of Libor plus 575 bps with a 1.5% Libor floor and an original issue discount of 98, according to a market source.

The facility, which is expected to allocate on Tuesday or Wednesday, consists of a $20 million revolver and a $160 million term loan.

GE Capital Markets and RBS Citizens are the lead banks on the deal that will be used to refinance existing debt and fund an acquisition.

The deal launched with a bank meeting on Jan. 5. Originally, it was going to launch on Nov. 30, but that meeting was postponed since the company was still negotiating the purchase agreement.

Sterling Infosystems is a New York-based background screening company.

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