GenOn, Denny's break; Charter, LifePoint, MGM Studios rise; Emdeon, Tomkins tweak deals

By Sara Rosenberg

New York, Sept. 20 - GenOn Energy Inc.'s credit facility freed up for trading during Monday's market hours, with the term loan B quoted above its original issue discount price, and Denny's Corp. broke as well.

In more trading happenings, Charter Communications Inc. and LifePoint Hospitals Inc. were stronger on paydown news, and Metro-Goldwyn-Mayer Inc. (MGM Studios) was better with buyout rumors.

Over in the primary market, Tomkins plc cut pricing on its term loan B, Emdeon Inc. lowered pricing and the original issue discount on its term loan, GenTek Inc. came out with tranching details on its proposed credit facility and Angelica Corp. released more details on its upcoming credit facility, including firm timing and the revolver size.

Also, J.T. Baker Holdings SA released price talk on its term loan as the deal was presented to lenders, Ascend Performance Materials LLC launched a new term loan but is waiting on ratings to come out with specifics on the tranche, and CCGI Holding and Lantiq emerged with new deal plans.

GenOn frees up

GenOn's credit facility hit the secondary market on Monday, with the $700 million seven-year term loan B quoted at par ¼ bid, par ¾ offered on the break and then moving in a little to par 1/8 bid, par ½ offered, according to a trader.

Pricing on the term loan B is Libor plus 425 basis points with a 1.75% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, the term loan B was upsized from $500 million as the company's bond offering was cut to $1.225 billion from $1.4 billion, the spread was lowered from Libor plus 450 bps, the discount was tightened from 98½ and soft call protection was added.

The company's $1.7 billion credit facility (B2) also includes a $1 billion revolver that is priced at Libor plus 350 bps with a 75 bps unused fee.

JPMorgan, Credit Suisse, Deutsche Bank, Morgan Stanley and Goldman Sachs are the lead banks on the deal.

GenOn funding merger

Proceeds from GenOn's credit facility and notes will be used to help fund the merger of Mirant Corp. with RRI Energy Inc.

Under the agreement, Mirant stockholders will receive a fixed ratio of 2.835 shares of RRI Energy common stock for each share of Mirant common stock they own. Mirant stockholders will own about 54% of the equity of the combined company, and RRI Energy stockholders will own approximately 46%.

Closing is expected before the end of the year, subject to stockholder approval, U.S. antitrust approval and approval by the Federal Energy Regulatory Commission. The closing is also subject to the refinancing.

GenOn will be a Houston-based power producer with about 24,700 megawatts of electric generating capacity and a pro forma market capitalization of $3.1 billion.

Denny's starts trading

Another deal to free up for trading was Denny's, with its $250 million term loan quoted at par bid, par ½ offered in light trading, according to a trader.

Pricing on the term loan is Libor plus 475 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 981/2. There is 101 soft call protection for one year.

During syndication, pricing on the term loan firmed at the tight end of talk of Libor plus 475 bps to 500 bps at a discount of 98 to 981/2.

The company's $300 million credit facility (B1/B+) also includes a $50 million revolver that is priced at Libor plus 475 bps with a 1.75% Libor floor as well.

Bank of America and Wells Fargo are the lead banks on the deal that will be used by the Spartanburg, S.C.-based restaurant franchise operator to refinance existing debt.

Charter heads higher

Charter Communications' old term loan B-1 moved up in trading after the company announced that it started an optional offer to prepay up to $750 million of the $3.3 billion tranche, according to traders.

The term loan B-1 was quoted by one trader at 96¾ bid, 97½ offered, up from 95½ bid, 96 offered, and by a second trader at 97¼ bid, 97½ offered, up from 95¾ bid, 96 offered.

Meanwhile, the extended term loan was quoted by the first trader at 97 bid, 97½ offered, unchanged on the day, and by the second trader at 97 bid, 97¼ offered, up from 96½ bid, 96¾ offered.

Funds for the paydown will come from the sale of $1 billion of senior notes - upsized from $750 million - and any remaining proceeds from the notes will be used for general corporate purposes.

Charter is a St. Louis-based broadband communications company and cable operator.

LifePoint also up

LifePoint Hospitals' non-extended term loan was stronger on Monday as well, as it too revealed plans for a paydown from notes, according to a trader.

The non-extended term loan was quoted at 99¾ bid, par ¼ offered, up from 99 bid, 99½ offered, the trader remarked.

And, the extended term loan was quoted at 99 1/8 bid, 99 7/8 offered, unchanged on the day, the trader added.

Specifically, the Brentwood, Tenn.-based hospital company plans to repay $249.2 million of its term loan B using proceeds from a $400 million senior notes offering.

Remaining proceeds will be used for general corporate purposes, which may include the repurchase of common stock.

MGM gains on buyout talk

MGM Studios' term loan revved higher on chatter that the company is in early talks to be acquired by Sahara India Pariwar for more than $2 billion, according to traders.

The term loan was quoted by one trader at 45½ bid, 46¼ offered, up from 43½ bid, 44 offered, and by a second trader at 46 1/8 bid, 46 5/8 offered, up from 43 1/8 bid, 43 7/8 offered.

MGM Studios is a Los Angeles-based motion picture, television, home video and theatrical production and distribution company.

Tomkins revises pricing

Moving to the primary, Tomkins lowered pricing on its $1.7 billion six-year term loan B to Libor plus 450 bps from Libor plus 475 bps, and firmed the original issue discount at 99, the tight end of the initial 98 to 99 talk, while leaving the 1.75% Libor floor unchanged, according to a market source.

There is also 101 soft call protection for one year.

Tomkins' $2.3 billion credit facility (Ba2) also includes a $300 million revolver and a $300 million term loan A.

Citigroup and Bank of America are the lead arrangers and joint bookrunners on the deal, with Barclays Capital, RBC Capital Markets and UBS bookrunners as well.

Proceeds will be used to help fund the acquisition of the company by Pinafore Acquisitions Ltd., a company jointly owned by Onex Corp. and Canada Pension Plan Investment Board, for 325p per share in cash.

Tomkins selling notes

Other funding for the buyout of Tomkins will come from $1.15 billion of second-lien bonds and about $2 billion of equity.

The second-lien notes offering was upsized from $1 billion and, as a result, the equity portion was downsized.

Also, the company was initially planning on selling $600 million of secured bonds, but that tranche was canceled upon the term loan B being upsized from $1.1 billion. Also, the company reduced the amount that it expects to draw under its revolver by $100 million because of the term loan B upsizing.

Closing is expected to take place on Sept. 24.

Tomkins is a London-based engineering and manufacturing group providing products for the industrial, automotive and building products markets.

Emdeon cuts pricing

Emdeon reverse flexed pricing on its $100 million term loan add-on to Libor plus 300 bps from Libor plus 325 bps and lowered the original issue discount to 99½ from 99, while leaving the 1.5% Libor floor unchanged, according to a market source.

Citigroup is the lead bank on the deal and is asking for recommitments by Wedensday.

Proceeds will be used to help fund the acquisition of Chamberlin Edmonds & Associates Inc., an Atlanta-based provider of government program eligibility and enrollment services to acute care facilities, for $260 million in cash.

Closing on the acquisition is expected to occur in the fourth quarter, subject to customary conditions, including expiration or early termination of the waiting period under the Hart-Scott-Rodino Act.

Emdeon is a Nashville, Tenn.-based provider of revenue and payment cycle management services to the health care system.

GenTek reveals tranching

GenTek disclosed on Monday that its proposed credit facility consists of a $425 million five-year term loan and a $30 million four-year revolver, according to sources.

As was previously reported, the deal is set to launch with a bank meeting on Wednesday at 10 a.m. ET in New York, but when timing was announced, structure was not yet available.

Goldman Sachs is the lead bank on the $455 million facility that will be used for a dividend recapitalization.

Leverage is 3.0 times.

GenTek is a Parsippany, N.J.-based provider of specialty inorganic chemical products and valve actuation systems and components for automotive and heavy duty/commercial engines.

Angelica details emerge

Angelica nailed down timing on the launch of its proposed $185 million credit facility with the scheduling of a bank meeting for the afternoon of Oct. 4, whereas before, the deal was described as early October business, according to a market source.

In addition, it is now known that the facility consists of a $35 million revolver, a $50 million term loan A and a $100 million term loan B, the source said. Prior to now, tranching on the term loans was available, but there was no mention of a revolver.

Macquarie and Jefferies are the joint lead arrangers on the deal that will be used to fund a $35 million dividend payment to the sponsor, Trilantic Capital Partners, and to completely refinance an existing credit facility and mezzanine debt.

Pro forma first-lien/total leverage will be 3.5 times.

Angelica is a St. Louis-based provider of outsourced linen management services to the health care industry.

J.T. Baker sets talk

J.T. Baker held a bank meeting on Monday to launch its proposed credit facility, and in connection with the event, price talk on the term loan was announced, according to a market source.

The $125 million term loan was presented with talk of Libor plus 500 bps with a 1.75% Libor floor and an original issue discount of 98, the source said.

Credit Suisse is the lead bank on the $145 million credit facility (Ba3), which also includes a $20 million revolver.

Proceeds will be used to back the already completed acquisition of Mallinckrodt Baker Inc. by New Mountain Capital LLC from Covidien for roughly $280 million.

J.T. Baker is a Phillipsburg, N.J.-based specialty chemical manufacturer.

Ascend launches

Ascend Performance Materials held a bank meeting on Monday morning to launch a proposed term loan, but pricing, structure and tranching are being left as to be determined until ratings are received, according to a market source.

However, a second source said that chatter around the market is that the debt might be structured as an $800 million six-year term loan B.

Morgan Stanley and Bank of America are the lead banks on the loan will be used to refinance existing debt and fund a dividend.

In addition, the company is getting a $275 million ABL revolver led by Wells Fargo that is being dome through a club-style syndication.

Following the transaction, Ascend Performance Materials, a Houston-based producer of nylon chemicals, will have leverage of 3.2 times.

CCGI readies deal

CCGI Holding is scheduled to hold a bank meeting on Thursday morning to launch its proposed $275 million credit facility that consists of a $25 million five-year revolver and a $250 million six-year term loan, according to a market source.

Jefferies and UBS are the lead banks on the deal that will be used to refinance existing debt.

CCGI was formed through the recent merger of Covad Communications Group, MegaPath and Speakeasy, at which time the companies' existing debt was left outstanding.

Total leverage before merger synergies is 3.1 times and including synergies is 2.0 times.

CCGI is a San Jose, Calif.-based provider of IT broadband and telecommunications services to small- and medium-sized businesses.

Lantiq plans new facility

Lantiq revealed that it will be holding a bank meeting on Wednesday to launch its proposed $245 million credit facility, according to a market source.

The facility consists of a $225 million term loan and a $20 million revolver, the source said.

Deutsche Bank and Barclays are the lead banks on the deal that will be used to refinance the company's capital structure, which is currently all equity funded.

Lantiq is a Neubiberg, Germany-based provider of broadband and voice telephony semiconductor services.

Energy Transfer closes

In other news, Energy Transfer Equity LP closed on Monday on its new $200 million five-year revolving credit facility priced at Libor plus 300 bps with a 50 bps commitment fee, according to an 8-K filed with the Securities and Exchange Commission.

Pricing on the revolver can range from Libor plus 275 bps to 375 bps and the commitment fee can range from 50 bps to 75 bps, based on leverage.

Credit Suisse acted as the lead bank on the deal.

Proceeds were used to replace the company's existing $500 million revolver.

Energy Transfer Equity is a Dallas-based natural gas midstream, transportation and storage company.

© 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.