Caritor, White Birch, Federal-Mogul break; LCDX softens; Reliant sets talk

By Sara Rosenberg

New York, May 29 - Caritor Inc., White Birch Paper Co. and Federal-Mogul Corp. all freed up for trading during Tuesday's market hours, and LCDX was a touch lower in muted activity.

Meanwhile, in primary happenings, Reliant Energy Inc. price talk started circulating throughout the market as the deal is getting ready for its Wednesday launch.

Caritor's credit facility allocated and freed up for trading on Tuesday, with the strip of term loan and synthetic letter-of-credit facility debt quoted at par ¼ bid, par 5/8 offered, according to a trader.

The $600 million term loan and the $40 million synthetic letter-of-credit facility are both priced at Libor plus 225 basis points.

During syndication, pricing on the term loan and synthetic letter-of-credit facility was increased from original talk at launch of Libor plus 200 bps and a leverage covenant of 4.25 times was added to the tranches that previously carried no financial covenants.

Caritor's $690 million senior secured credit facility (B1/BB-) also includes a $50 million revolver that is priced at Libor plus 200 bps.

Citigroup, UBS and Bank of America are the lead banks on the deal, with Citi the left lead.

Proceeds will be used to help fund the acquisition of Keane Inc. for about $854 million in cash. Keane's common stock holders will receive $14.30 per share.

Other financing will come from a $350 million equity commitment.

Following completion of the transaction, it is expected that the combined company will operate under the Keane name and maintain Keane's headquarters in Boston.

Caritor is a San Ramon, Calif., provider of IT services. Keane is a business process and IT services firm.

White Birch frees to trade

White Birch also saw its credit facility break for trading during the day, with the $450 million seven-year first-lien term loan B (B1/B+) quoted at par bid, par ½ offered and the $100 million 71/2-year second-lien term loan (Caa1/B) quoted at 99½ bid, par ½ offered, according to a trader.

The first-lien term loan B is priced at Libor plus 275 bps, and the second-lien term loan is priced at Libor plus 480 bps.

During syndication, the first-lien term loan B was first downsized from $550 million to $425 million when the second-lien term loan was added to the capital structure with a size of $125 million, and then the first-lien term loan B was upsized to $450 million when the second-lien loan was downsized to $100 million.

Also during syndication, pricing on the first-lien term loan B was increased from Libor plus 250 bps and pricing on the second-lien loan was increased from Libor plus 440 bps.

Credit Suisse is the lead arranger on the deal, which is being used to refinance the company's senior secured first-lien term loan and senior secured second-lien term loan.

White Birch is a Toronto-based newsprint company.

Federal-Mogul breaks

Also hitting the secondary was Federal-Mogul's repriced, upsized and extended debtor-in-possession bank debt, with the term loan quoted at par 1/8 bid, par 3/8 offered, according to a trader.

The $605 million term loan, which was upsized from $275 million and extended by six months, is priced at Libor plus 175 bps. Prior to the amendments, the term loan was priced at Libor plus 200 bps.

Federal-Mogul's DIP also includes a $500 million revolver that was repriced to Libor plus 150 bps from Libor plus 225 bps and extended by six months.

Citigroup and JPMorgan are the lead banks on the deal.

The additional DIP term loan funds are being used to refinance the company's $330 million of tranche C loans.

Federal-Mogul is a Southfield, Mich.-based auto parts manufacturer.

LCDX lower

In other secondary news, LCDX ended Tuesday's trading session at slightly lower levels as activity was sluggish after the long holiday weekend, according to a trader.

The index went out at 100.5 bid, 100.53 offered, down from Friday's closing levels of 100.55 bid, 100.58 offered, the trader said.

Before coming in though, the index had been higher at Tuesday's open, with levels of 100.57 bid, 100.60 offered, the trader added.

Reliant talk emerges

Moving to the primary market, Reliant Energy came out with guidance on its proposed $750 million credit facility as the transaction is gearing up for its launch into syndication with a conference call on Wednesday afternoon, according to a market source.

The $500 million revolver due June 2012 is being talked at Libor plus 175 basis points and the $250 million pre-funded letter of credit facility due June 2014 is being talked at Libor plus 175 bps to 200 bps, the source said.

Deutsche Bank, Goldman Sachs, JPMorgan, Merrill Lynch, ABN Amro and Bear Stearns are the lead banks on the deal, with Deutsche the administrative agent.

Proceeds from the new facility, along with funds from selling $1.25 billion of senior notes, will be used to repay the company's $400 million term loan and to tender for its combined $1.1 billion of 9¼% and 9½% senior secured notes.

The deal is expected to close in June.

Reliant is a Houston-based provider of electricity and energy services to retail and wholesale customers.

Verint closes

Verint Systems Inc. closed on its new $675 million senior secured credit facility (B) consisting of a $650 million seven-year term loan priced at Libor plus 275 bps, with a one-time step down based on ratings and filing of audited financials and a 99½ original issue discount, and a $25 million six-year revolver priced at Libor plus 275 bps.

The pricing grid under the term loan ranges from Libor plus 200 bps to Libor plus 275 bps. 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.

During syndication, pricing on the term loan and the revolver was flexed up from original talk at launch of Libor plus 250 bps, the pricing grid under the term loan was increased by 25 bps and the original issue discount was added to the term loan.

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

Proceeds were used to help fund the acquisition of Witness Systems, Inc. for $27.50 per share, or approximately $950 million on a fully diluted basis, net of cash acquired.

Verint is a Melville, N.Y., provider of analytic software-based solutions for security and business intelligence.

Six Flags closes

Six Flags Inc. closed on its new $1.125 billion senior secured credit facility (Ba3/B/BB-), according to a news release, consisting of an $850 million term loan B due April 2015 priced at Libor plus 225 bps and a $275 million revolver due March 2013 priced at Libor plus 225 bps, with a 50 bps commitment fee.

During syndication, the term loan B was upsized from $800 million, the revolver was downsized from $300 million and pricing on both tranches was reverse flexed from original talk at launch of Libor plus 250 bps.

JPMorgan, Credit Suisse and Lehman acted as the joint lead arrangers and joint bookrunners on the deal.

Proceeds were used to refinance the company's existing credit facility and will be available for working capital and general corporate purposes.

Six Flags is a New York-based regional theme park company.

Linens 'n Things closes

Linens 'n Things Inc. closed on its $700 million amended and restated asset-based revolving credit facility that incorporated a $100 million increase, according to a company news release.

UBS and Bear Stearns acted as the joint bookrunners on the deal, with UBS arranger and administrative agent, Bear and CIT Group/Business Credit co-syndication agents, and Wachovia Bank and Wells Fargo co-documentation agents.

Linens 'n Things is a Clifton, N.J., retailer of home textiles, housewares and home accessories.

Claire's closes

Apollo Management, LP completed its leveraged buyout of Claire's Stores Inc. for $33.00 in cash per share, which represents a transaction value of $3.1 billion, according to a news release.

To help fund the transaction, Claire's got a new $1.65 billion senior secured credit facility (B1/B) that consists of a $200 million six-year revolver priced at Libor plus 275 bps, with a 50 bps commitment fee, and a $1.45 billion seven-year term loan B priced at Libor plus 275 bps that was sold at an original issue discount of 991/2.

During syndication, the original issue discount was added to the term loan B.

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

Other buyout financing came 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.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.