CCS term loan breaks; Prestige Brands, Kabel Deutschland, Blue Coat, A&P release guidance

By Sara Rosenberg

New York, Jan. 18 - CCS Corp. gave out allocations on its add-on term loan on Wednesday and then freed up for trading in an otherwise quiet secondary market, with levels quoted above its original issue discount price.

Meanwhile in the primary, which is where investors' attention was being held, Prestige Brands Holdings Inc., Kabel Deutschland Holding AG, Blue Coat Systems Inc. and Great Atlantic & Pacific Tea Co. Inc. (A&P) came out with price talk on their term loans as the deals launched during market hours.

Furthermore, Safety-Kleen Systems Inc. revealed timing and structure on its proposed refinancing transaction, and Rocket Software Inc. emerged with new deal plans.

CCS starts trading

CCS' C$200 million add-on term loan due November 2014 hit the secondary market on Wednesday, with levels quoted at 99¾ bid, par offered, according to a source.

Pricing on the term loan is Libor plus 500 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 99.

During syndication, the discount on the term loan was tightened from 98 due to strong demand.

Deutsche Bank Securities Inc. and Goldman Sachs & Co. are the lead banks on the deal that will be used to refinance revolver borrowings.

CCS is a Calgary, Alberta-based oil and gas environmental services company.

Prestige discloses talk

Switching to the primary, Prestige Brands held a bank meeting on Wednesday morning to launch its senior secured credit facility, at which time price talk on the $620 million seven-year term loan B (Ba3/BB-) was revealed, according to a market source.

The term loan B is talked at Libor plus 450 bps with a 1.25% Libor floor, an original issue discount of 98 and 101 soft call protection for one year, the source said.

Financial covenants include a maximum consolidated total net leverage ratio and a minimum consolidated net cash interest coverage ratio, and amortization is 1% per annum, with the remainder due at maturity.

When the deal was announced last year, the company had said in filings with the Securities and Exchange Commission that the term loan B would be covenant-light and be priced at Libor plus 500 bps with a 1.25% floor.

Commitments towards the B loan are due at 5 p.m. ET on Jan. 26.

Prestige getting revolver

Prestige Brands' $670 million senior secured credit facility also includes a $50 million five-year asset-based revolver that is expected to undrawn at closing.

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and RBC Capital Markets LLC are the lead banks on the deal that will be used, along with $290 million of senior notes, to fund the $660 million purchase of 17 over-the-counter GlaxoSmithKline plc brands and to refinance existing bank debt.

The notes are backed by a commitment for a one-year senior unsecured bridge loan priced at Libor plus 800 bps with a 1.25% Libor floor.

Closing is expected to occur in the first half of the year, subject clearance under the Hart-Scott Rodino Antitrust Improvements Act of 1976 and financing.

Prestige is an Irvington, N.Y.-based marketer of branded consumer products in the over-the-counter health care and household cleaning industries.

Kabel guidance surfaces

Also launching during the session and releasing price talk was Kabel Deutschland, with its $500 million seven-year senior secured term loan (NA/NA/BB+) guided at Libor plus 325 bps with a 1% to 1.25% Libor floor, an original issue discount of 98½ and 101 soft call protection for one year, according to a market source.

Lead banks, Goldman Sachs & Co., BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and RBS Securities Inc., are seeking commitments towards the loan by Thursday.

Proceeds will be used to pay down some of the existing term loan A due in March 2012, term loan C due in March 2013, term loan A-1 due in March 2014, term loan A-2 due in March 2014 and term loan C-1 due in March 2014.

Kabel Deutschland is an Unterfoehring, Germany-based cable operator.

Blue Coat pricing

Blue Coat was yet another deal to launch and come out with price talk on Wednesday, and talk is that the company's bank meeting was packed and that the transaction already has good momentum ahead of its Jan. 30 commitment deadline, according to a market source.

The $360 million first-lien term loan is talked at Libor plus 600 bps with a 1.5% Libor floor, an original issue discount of 98 and 101 soft call protection for one year, the source said.

And, the $85 million second-lien term loan is talked at Libor plus 1,000 bps with a 1.5% Libor floor, an original issue discount of 97 to 98 and hard call protection of 103 in year one, 102 in year two and 101 in year three, the source remarked.

Jefferies & Co. is the lead bank on the $495 million senior secured credit facility, which also includes a $50 million revolver.

Blue Coat funding buyout

Proceeds from Blue Coat's credit facility and around $479 million of equity will be used to fund the acquisition of the company by Thoma Bravo LLC and Ontario Teachers' Pension Plan for $25.81 in cash per share, in a transaction valued at roughly $1.3 billion.

The amount of equity was reduced from an originally expected amount of $514 million as the company decided to go with a larger credit facility. Initially, the company was only planning a $50 million and a $415 million term loan and pricing was expected at Libor plus 650 bps with a 1.5% Libor floor, based on filings with the Securities and Exchange Commission.

Upon completion, Blue Coat, a Sunnyvale, Calif.-based provider of web security and WAN optimization services, will have total leverage of about 3.75 times. Closing is expected this quarter, subject to customary conditions including regulatory and shareholder approvals.

A&P talk emerges

Continuing on the topic of pricing, Great Atlantic & Pacific Tea launched its $350 million term loan in the afternoon with talk of Libor plus 700 bps with a 1.25% Libor floor, an original issue discount of 98, and call protection of 102 in year one and 101 in year two, according to a market source.

J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC are the lead banks on the $750 million exit facility, which also includes a $400 million ABL revolver.

Proceeds will be used to refinance a debtor-in-possession facility, pay Chapter 11 emergence costs and for general corporate purposes.

A&P is a Montvale, N.J.-based operator of supermarkets.

Encompass launches

Encompass Digital Media Inc. held its bank meeting as well on Wednesday, and the $280 million credit facility is "off to a good start" as a number of existing lenders put in orders "based on lower overall leverage and higher pricing," a market source told Prospect News.

As was previously reported, the facility consists of a $30 million five-year revolver and a $250 million 51/2-year term loan B, both talked at Libor plus 650 bps with a 1.5% Libor floor. The B loan is being offered with an original issue discount of 97.

Commitments are due on Jan. 31.

Macquarie Capital is the lead arranger and bookrunner on the deal, and BMO Capital Markets Corp. has signed on as a bookrunner as well.

Total and senior leverage is 4.25 times off of run rate EBITDA.

Encompass being acquired

Proceeds from Encompass' new credit facility, along with just shy of $250 million of rollover and new equity, will be used to fund its buyout by Court Square Capital Partners from Wasserstein & Co. LP and refinance existing debt.

In 2011, the company got a $195 million senior secured credit facility via Macquarie for the acquisition of the content distribution business of Ascent Media Corp. that consisted of a $175 million term loan B and a $20 million revolver. Both tranches priced at Libor plus 600 bps with a 1.75% Libor floor and were sold at an original issue discount of 98.

Closing on the buyout is expected to occur this quarter, subject to regulatory clearances and the transfer of certain FCC licenses.

Encompass is a Los Angeles-based digital media services provider.

Safety-Kleen coming soon

In more primary news, Safety-Kleen released details on timing and tranching on its proposed credit facility that the company first announced late Tuesday, with the deal set to kick off with a conference call at 10:30 a.m. ET on Thursday, according to a market source.

The $400 million five-year credit facility consists of a $150 million revolver and a $250 million term loan B, with price talk still to be determined, the source said.

J.P. Morgan Securities LLC is the left lead on the deal that will be used to refinance an existing senior secured credit facility, including a revolver which matures in August 2012, fund share repurchases and for general corporate purposes.

In its news release, the company said that closing is targeted by mid-February and that the new facility will extend the current maturity and will be similar to the existing agreement.

Safety-Kleen is a Plano, Texas-based used oil recycling and re-refining, parts cleaning and environmental services company.

Rocket Software readies deal

Another deal that joined this week's calendar is Rocket Software, with the company set to launch a $430 million credit facility with a bank meeting at 10 a.m. ET on Friday, according to a market source.

The 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, the source said. Price talk is not yet available.

However, it is known that the term loan B has 101 soft call protection 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, the source remarked.

Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC and Jefferies & Co. are leading the deal that be used to refinance existing debt and fund a dividend.

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

Rocket Software is a Newton, Mass.-based software development firm.

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