Pilot, Western Refining, Digital Cinema break; Wesco B loan emerges; Global Defense floats OID

By Sara Rosenberg

New York, March 25 - Pilot Travel Centers LLC's credit facility freed up for trading on Friday, with levels quoted above its original issue discount price, and Western Refining Inc. and Digital Cinema Implementation Partners LLC hit the secondary market as well.

Over in the primary, Wesco Aircraft Hardware Corp. started marketing its term loan B, but instead of doing an official launch, lenders were simply given price talk and information to listen to the replay of the previously held pro rata bank meeting.

Also launching was Global Defense Technology & Systems Inc.'s credit facility, at which time the original issue discount talk was released.

In more primary happenings, Presidio Inc. set pricing on its term loan B at the tight end of the recently revised guidance, while increasing the Libor floor, the discount and call protection, and Postmedia Network Inc. focused talk and discount on its B loan at the wide end of guidance and added covenants.

Additionally, Kindred Healthcare Inc. flexed pricing higher on its term loan B while setting the Libor floor at the high end of talk, and Isle of Capri Casinos Inc. downsized its revolver.

Furthermore, Catalyst Health Solutions Inc. and Reynolds and Reynolds Co. firmed up timing on the launch of their new deals, and Ranpak Corp. revealed plans to bring a refinancing transaction to market.

Pilot Travel starts trading

Pilot Travel Centers' credit facility made its way into the secondary market on Friday, with the $1 billion seven-year term loan B quoted at par bid, par ½ offered on the break and then it moved up to par ¼ bid, par ¾ offered, according to a trader.

Pricing on the term loan B is Libor plus 325 basis points with a 1% Libor floor, and it was sold at a discount of 991/2. There is 101 soft call protection for one year.

During syndication, pricing on the loan was flexed up from talk of Libor plus 275 bps to 300 bps, the offer price was changed from par and call protection was extended from six months.

The company's $2.6 billion senior secured credit facility (Ba2) also includes an $800 million five-year revolver and an $800 million five-year term loan A, both priced at Libor plus 225 bps, with the revolver having a 35 bps unused fee. Pricing on the tranches will be based on a leverage grid.

Pilot Travel funding recap

Proceeds from Pilot Travel's credit facility will be used to refinance existing debt and back a distribution to sponsors.

In 2009, to fund the acquisition of Flying J. Inc.'s travel plaza business, the company got a $2.15 billion senior secured credit facility comprised of a $500 million revolver, a $500 million term A, an $800 million term loan B and a $350 million term loan C.

Pricing on the existing revolver, term loan A and term loan B is Libor plus 325 bps with a 2% Libor floor. The B loan had been sold at an original issue discount of 99.

Bank of America Merrill Lynch, Wells Fargo Securities LLC and SunTrust Robinson Humphrey Inc. are the lead banks on the new deal for the Knoxville, Tenn.-based operator of travel centers.

Western Refining frees up

Also breaking for trading was Western Refining's $325 million covenant-light term loan B (B3/B) due March 15, 2017, with levels quoted at 99½ bid, par ¼ offered on the open and then it moved up to par bid, par ¾ offered, according to a trader.

Pricing on the term loan B is Libor plus 600 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99. There is hard call protection of 102 in year one and 101 in year two with par prepayment for select asset sales.

During syndication, pricing was increased from Libor plus 550 bps and the discount firmed at the high end of the initial 99 to 99½ talk.

Bank of America Merrill Lynch is the lead arranger on the deal that is being used to refinance an existing term loan due May 30, 2014 priced at Libor plus 750 bps with a 3.25% Libor floor.

Western Refining is an El Paso, Texas-based independent refining and marketing company.

Digital Cinema breaks

Another deal to start trading was Digital Cinema Implementation Partners' $220 million six-year term loan, with levels quoted at 99¾ bid, par ½ offered, according to a trader.

Pricing on the loan is Libor plus 375 bps, after firming at the high end of the Libor plus 350 bps to 375 bps talk, with a 1.25% Libor floor. The tranche was sold at an original issue discount of 99½ and includes 101 soft call protection for one year.

J.P. Morgan Securities LLC is the lead bank on the deal that is being used to refinance existing term loan borrowings.

Digital Cinema is a Mahwah, N.J.-based company formed by AMC Entertainment Inc., Cinemark USA Inc. and Regal Entertainment Group to facilitate the roll-out of a digital cinema infrastructure.

Wesco B loan launches

Moving to the primary, Wesco Aircraft Hardware started syndicating its $415 million six-year term loan B that had previously been postponed due to market conditions, giving lenders official pricing guidance and telling them they have until Wednesday to place their orders, according to a market source.

The term loan B is being talked at Libor plus 300 bps to 325 bps with a 1.25% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year, the source said.

The company's $765 million credit facility (Ba3/BB-) also includes a $150 million five-year revolver and a $200 million five-year term loan A, both talked at Libor plus 300 bps with no Libor floor and an offer price of 99. The revolver has a 50 bps unused fee.

A bank meeting for the revolver and term loan A took place on March 16. Originally, the term loan B was supposed to launch at that time as well, but because of the volatility in the primary, the leads decided to hold off on the institutional tranche until things settled down.

Wesco refinancing debt

Proceeds from Wesco's credit facility will be used to repay existing debt, and since there is an existing lender group and people already know the company, the decision was made not to hold a formal launch for the term loan B, the source explained.

Bank of America Merrill Lynch and Barclays Capital Inc. are the joint lead arrangers and bookrunners on the deal. Also acting as bookrunners are J.P. Morgan Securities LLC, Morgan Stanley & Co. Inc., RBC Capital markets LLC and Sumitomo.

Wesco is a Valencia, Calif.-based integrated inventory management services provider and distributor of hardware and other components to the aerospace industry.

Global Defense reveals OID

Global Defense Technology & Systems held a bank meeting on Friday to kick off syndication on its proposed credit facility, and with the launch, lenders were told that the $132.5 million six-year term loan B is being offered at a discount of 99, according to a market source.

Price talk on the B loan, as well as on a $25 million five-year revolver, emerged a few days ago at Libor plus 500 bps with a 1.5% Libor floor.

Wells Fargo Securities LLC and SunTrust Robinson Humphrey Inc. are the lead banks on the $157.5 million deal that will be used to help fund the buyout of the company by Ares Management LLC in a transaction valued at about $315 million, including the assumption of debt and prior to expenses.

Closing is expected in the second quarter, subject to the tender of a majority of the company's shares and regulatory approvals.

Global Defense Technology is a McLean, Va.-based provider of mission-critical, technology-based systems and services for national security agencies and programs of the U.S. government.

Presidio reworks pricing

Presidio updated pricing on its $325 million term loan B, setting the spread at the low end of talk, widening the Libor floor and original issue discount and sweetening call protection, according to a market source.

The term loan B is now priced at Libor plus 550 bps with a 1.75% Libor floor and an offer price of 981/2, and provides for hard call protection of 103 in year one and 101 in year two, the source said.

By comparison, most recent guidance on the loan had been Libor plus 550 bps to 575 bps after flexing up from initial talk of Libor plus 450 bps. Also, earlier talk was for a 1.5% Libor floor, an offer price of 99½ and 101 call protection for one year.

Commitments towards the company's $360 million credit facility (Ba3/B+), which also includes a $35 million revolver, were due at the end of the day on Friday and allocations are expected to go out during the week of March 28. Initially, the commitment deadline had been set for March 18, but it was known that syndication would take a little longer as a result of market volatility.

Presidio lead banks

Barclays Capital Inc. and Morgan Stanley & Co. Inc. are the joint lead arrangers and bookrunners on Presidio's credit facility, with GE Capital Markets a bookrunner as well.

Proceeds will be used to help fund American Securities' buyout of the Greenbelt, Md.-based provider of advanced technology infrastructure services.

This is not the first deal that Presidio has marketed that needed some revisions before getting done. In December, the company came to market with a dividend recapitalization deal led by J.P. Morgan Securities LLC that ended up as a $200 million term B priced at Libor plus 575 bps with a 1.75% Libor floor, and sold at an original issue discount of 971/2. There is 101 soft call protection for one year.

However, it took a number of changes to get the deal syndicated, including reducing the loan from $300 million, and as a result, reducing the dividend, flexing pricing up from Libor plus 550 bps and, before that, from Libor plus 475 bps, and increasing the discount from 98 and, prior to that, from 981/2.

Postmedia tweaks deal

Also coming out with revisions was Postmedia, as it narrowed down talk on its term loan B and added financial covenants to the previously covenant-light deal, according to a market source.

The term loan B is now guided at Libor plus 500 bps with a 1.25% Libor floor and an original issue discount of 993/4, compared to initial talk of Libor plus 475 bps to 500 bps with a 1.25% Libor floor and an offer price of 99¾ to par, the source said. There is still 101 soft call protection for one year.

As for covenants, the company added an interest coverage ratio of 2.0 times, a total leverage ratio of 4.5 times that steps down to 4.0 times in the fourth quarter of 2012 and a first-lien leverage ratio of 3.0 times that steps down to 2.5 times in the 2012 fourth quarter, the source continued.

Postmedia repaying loans

Proceeds from Postmedia's credit facility will be used to refinance existing term loan A and B borrowings.

The existing term loan A, which is priced at Libor plus 600 bps with a 2% Libor floor, and the term loan B, which is priced at Libor plus 700 bps with a 2% Libor floor, were both being quoted at par ¾ bid, 101¼ offered on Friday in the secondary market, a trader remarked.

The company also has a C$60 million ABL revolver priced at Libor plus 350 bps with a 2% Libor floor that was quoted at par bid, 101 offered in trading, the trader added.

J.P. Morgan Securities LLC, Goldman Sachs & Co. and Morgan Stanley & Co. Inc. are the lead banks on the refinancing deal.

Postmedia Network is an Ontario-based publisher of paid English-language daily newspapers in Canada.

Kindred Healthcare flexes

Kindred Healthcare raised pricing on its $700 million seven-year term loan B (B+) to Libor plus 375 bps from Libor plus 350 bps, set the Libor floor at 1.5%, the high end of the 1.25% to 1.5% talk and disclosed that there will be a 375 bps ticking fee, according to a market source. The loan is still being offered at 99 and has 101 soft call protection for one year.

The company's $1.3 billion senior secured credit facility also includes a $600 million five-year asset-based revolver priced at Libor plus 250 bps.

J.P. Morgan Securities LLC, Morgan Stanley & Co. Inc. and Citigroup Global Markets Inc. are the lead banks on the deal that will be used to help fund the acquisition of RehabCare Group Inc., a St. Louis-based provider of physical rehabilitation services.

Kindred acquisition detail

Under the terms of the agreement, Kindred will pay each stockholder of RehabCare $26.00 per share in cash and 0.471 of a share of Kindred common stock. The equity for the transaction is around $228 million. The transaction is valued at $1.3 billion, including $400 million of existing debt.

The adjusted leverage of the combined company is projected to be about 4.5 times at the end of 2011.

Closing on the acquisition is expected on or about June 30, subject to approvals by the stockholders of both companies, completion of financing, clearance under the provisions of the Hart-Scott-Rodino Act of 1976 and the receipt of licensure and regulatory approvals.

Kindred Healthcare is a Louisville, Ky.-based health care services company.

Isle of Capri downsizes

Isle of Capri Casinos reduced its five-year revolving credit facility to $300 million from $325 million, while leaving pricing at Libor plus 350 bps, according to a market source.

The company's now $800 million credit facility (Ba3/BB-), down from $825 million, also includes a $500 million six-year term loan B priced at Libor plus 350 bps with a 1.25% Libor floor. This tranche, which allocated on March 18, was sold at par and includes 101 soft call protection for one year.

Wells Fargo Securities LLC, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the lead banks on the deal that is being used, along with $300 million of 7 7/8% senior notes, to refinance existing bank debt.

Closing on the credit facility was expected to take place on Friday.

Isle of Capri is a St Louis-based owner and operator of gaming, lodging and entertainment facilities.

Catalyst sets launch

Catalyst Health Solutions, a Rockville, Md.-based pharmacy benefit management company, nailed down timing on its proposed $700 million credit facility with the scheduling of a bank meeting for Monday, according to a market source.

The facility consists of a $200 million revolver and a $500 million term loan, and while official price talk is not out yet, the company had previously said that it expects pricing on the term loan to range from Libor plus 200 bps to 250 bps based on leverage.

Goldman Sachs & Co., Citigroup Global Markets Inc., SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC are the lead banks on the deal that will be marketed to banks only.

Proceeds will be used to fund the acquisition of Walgreens Health Initiatives Inc., a pharmacy benefit management company, from Walgreen Co. for $525 million in cash.

Closing on the transaction is expected to take place in the first half of this year, subject to customary conditions and regulatory approval.

Reynolds firms timing

Reynolds and Reynolds set timing on its proposed $950 million seven-year term loan B, as a conference call has been scheduled for 2 p.m. ET on Monday, according to a market source. The deal was previously expected by some to come on either Monday or Tuesday.

The spread on the B loan is still to be determined, but it will be launched with a 1% Libor floor, an original issue discount in the 99½ area and 101 soft call protection for one year, the source said.

As was previously reported, the loan was initially set to launch on March 21, but it was postponed due to market conditions.

The company is already in market with a $600 million term loan A that is talked at Libor plus 250 bps with no Libor floor. A bank meeting for the A loan was held on March 3 and talk is that the tranche has since filled out.

Reynolds led by Deutsche

Deutsche Bank Securities Inc. is the lead bank on Reynolds and Reynolds' $1.55 billion of new term loan borrowings (Ba2/BB+), which will be used to refinance existing debt.

In 2010, the company obtained a $1.82 billion seven-year term loan as part of a refinancing transaction that is priced at Libor plus 350 bps with a step-down to Libor plus 325 bps at 3.0 times net total leverage and a 1.75% Libor floor. The loan was sold at an original issue discount of 99¼ and includes 101 soft call protection for one year.

Pro forma for the transaction, the Dayton, Ohio-based dealer services company will have total leverage of 3.0 times.

Ranpak deal emerges

Ranpak has set a bank meeting for Wednesday to launch a proposed roughly $290 million credit facility that will be used to refinance existing debt, according to a market source.

The facility consists of a $20 million five-year revolver, a $200 million six-year term loan and a €50 million six-year term loan, the source said, adding that price talk is not yet available.

In addition, the company is getting a $175 million second-lien term loan that has already been placed.

Goldman Sachs & Co. and Bank of America Merrill Lynch are the lead banks on the deal for the Concord Township, Ohio-based manufacturer of in-the-box paper protective packaging systems and materials.

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