Celanese starts trading; Sun Healthcare floats talk; Knology moves deadline; Reynolds upsizes

By Sara Rosenberg

New York, Sept. 27 - Celanese Corp.'s extended U.S. term loan broke for trading during Monday's market hours although allocations have not yet gone out, so trades are being done on a when-issued basis.

Over in the primary market, Sun Healthcare Group Inc. began circulating price talk on its term loan as the deal is gearing up for its bank meeting, Knology Inc. accelerated the commitment deadline on its term loan B, Reynolds Group Holdings Ltd. upsized its term loan B again and Nalco Co.'s term loans are already oversubscribed since launching just a few days ago.

Also, early indications are that Brickman Group Ltd.'s recently launched credit facility will go very well, and other deals, like DineEquity Inc. and Burger King Holdings Inc., are receiving a good amount of interest as well.

In other news, Advance Pierre Foods is hoping to give out allocations on its credit facility within the next few days now that the second-lien term loan has filled out at revised terms and the first-lien loan is done at initial terms.

Celanese frees up

Celanese's extended U.S. term loan hit the secondary market on Monday, with levels quoted at 99¼ bid, 99½ offered on the break and then widening out to 99 bid, 99½ offered, according to a market source.

Allocations are expected to go out on Tuesday. Currently, the debt is trading on a when-allocated basis, the source explained.

Also, the size of the extended tranche is still to be determined. Initially, the company was looking to push out the maturity on $1 billion of its term loan borrowings, but it may end up extending more than that amount.

The extended term loan will mature in 2016, 21/2-years later than the non-extended term loan, and is priced at Libor plus 300 basis points, compared to Libor plus 150 bps on the non-extended.

During the negotiation process, pricing on the extended term loan was flexed up from initial talk of Libor plus 275 bps and 101 soft call protection for one year was added to the tranche.

Celanese plans paydown

In connection with the amendment and extension, Celanese will be repaying $800 million of its term loan borrowings.

Funds for the paydown are coming from $600 million of notes that the company recently priced at par to yield 6 5/8% and cash on hand. The notes were upsized from $400 million, resulting in the paydown being upsized.

Deutsche Bank and Bank of America are leading the amend and extend transaction.

Lenders were offered a 5 bps consent fee.

Celanese is a Dallas-based chemical company.

Sun Healthcare talk

Moving to the primary, Sun Healthcare released price talk of Libor plus 475 bps with a 1.75% Libor floor and an original issue discount of 98½ on its proposed $225 million term loan ahead of the Wednesday bank meeting that will officially kick off syndication on the tranche, according to a market source.

Of the total term loan amount, $75 million will cash collateralize letters of credit.

The company's $285 million credit facility also includes a $60 million revolver.

Credit Suisse, JPMorgan and RBC are the lead banks on the deal that will be used to help repay the company's 9 1/8% senior subordinated notes and outstanding term loans and for general corporate purposes.

The refinancing is in connection with the company's separation into two publicly traded companies - new Sun and Sabra Health Care REIT Inc.

Sabra revolver, notes

As part of the separation, Sabra Health Care REIT is also planning new debt financing, which will include a $100 million revolving credit facility and $225 million of notes.

The separation will be done through a distribution to Sun stockholders of the common stock of the new Sun Healthcare Group.

Completion of the separation is expected in the fourth quarter, subject to regulatory, stockholder, final board and other approvals.

New Sun will be a provider of nursing, rehabilitative and related specialty health care services, and manager of rehabilitation therapy, medical staffing services and hospice businesses. Sabra will be the owner of substantially all of Sun's currently owned real property portfolio and intends to operate as a real estate investment trust.

Knology shutting B loan books early

Knology moved up the commitment deadline on its $570 million term loan B to Tuesday from Wednesday as the tranche is heavily oversubscribed, according to market sources.

Price talk on the term loan B is Libor plus 450 bps with a 1.75% Libor floor and an original issue discount of 981/2.

The Wednesday commitment deadline on the company's $50 million revolver and $150 million term loan A was left unchanged, sources added.

Both the revolver and the term loan A are being talked at Libor plus 400 bps.

Credit Suisse and SunTrust are the lead banks on the $770 million deal (B1/B+) that will be used, along with cash on hand, to fund the acquisition of Sunflower Broadband for $165 million in cash and to refinance existing debt.

Knology is a West Point, Ga.-based provider of interactive communications and entertainment services. Sunflower is a provider of video, voice and data services to residential and business customers.

Reynolds modifies size again

Reynolds increased its term loan B again, this time to $1.52 billion from $1.5 billion, according to a market source. Initially, the term loan B had been sized at $1 billion.

Pricing on the term loan B is Libor plus 475 bps with a 1.75% Libor floor and an original issue discount of 99. There is 101 soft call protection for one year.

Upon the first upsizing, which resulted in the company's bonds being downsized, pricing on the term loan B was reduced from Libor plus 500 bps, the Libor floor was cut from 2% and the discount was tightened from 98.

The company's now $2.02 billion in new loans (Ba3/BB) also includes a $500 million term loan A priced at Libor plus 450 bps with a 1.75% Libor floor, which was reduced from 2% last week, and a discount of 99.

Reynolds buying Pactiv

Proceeds from Reynolds' term loans, along with the notes, will be used to help fund the acquisition of Pactiv Corp.

Credit Suisse, HSBC and Australia and New Zealand Banking Group are the lead banks on the credit facility.

Commitments were due from lenders on Monday and allocations are expected to go out on Tuesday.

Reynolds is a Chicago-based manufacturer and supplier of consumer food and beverage packaging and storage products. Pactiv is a Lake Forest, Ill.-based consumer and foodservice/food packaging company.

Nalco sees strong demand

Nalco's $750 million of term loans (BB+) were already oversubscribed by Monday afternoon, after first launching last Thursday, and lenders still have until Wednesday to throw in their orders, according to a market source.

The debt is comprised of a $100 million term loan C-1 talked at Libor plus 175 bps with an original issue discount of 951/2, and a $650 million term loan B-1 talked at Libor plus 325 bps, with a 1.5% Libor floor and an original issue discount of 991/2.

Deutsche Bank is the lead bank on the deal that will be used to refinance existing term loan debt.

Nalco is a Naperville, Ill.-based manufacturer and seller of specialized service chemical programs.

Brickman nets interest

Brickman's $550 million credit facility (B1/B+), which just launched with a bank meeting on Friday, has already received a high indication of interest from lenders, as well as some orders, according to a market source.

"Well known name. High performing credit. Big question is that [the term loan is] covenant-light. They're covenant-light today, and they priced [the new deal] to make up for the lack of covenants," the source said.

The $500 million six-year covenant-light term loan is talked at Libor plus 575 bps with a 1.75% Libor floor and an original issue discount of 98. There is soft call protection of 102 in year one and 101 in year two.

A $50 million five-year revolver is also included in the new deal.

Brickman dividend recap

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

Barclays and Bank of America are the lead banks on the deal, with Barclays the left lead.

Commitments towards the facility are due on Oct. 7.

Brickman is a Gaithersburg, Md.-based commercial landscaping company.

DineEquity gets attention

Also moving along nicely is DineEquity's up to $975 million credit facility (Ba2/BB-), which has seen a fair amount of commitments come in since its launch last Thursday, according to a market source.

The facility consists of a $50 million to $75 million five-year revolver and a $900 million seven-year term loan B, with both tranches talked at Libor plus 475 bps. The term loan B has a 1.75% Libor floor, is being offered at an original issue discount of 98½ and has 101 soft call protection for one year.

Barclays and Goldman Sachs are the lead banks on the deal that will be used, along with $825 million of notes, to refinance existing debt, including the company's $1.385 billion of notes.

Senior leverage is 3.5 times and total leverage is 5.7 times.

DineEquity is a Glendale, Calif.-based owner of Applebee's Neighborhood Grill & Bar and IHOP Restaurants.

Burger King well met

Demand for Burger King's $1.75 billion institutional term loan has been "pretty strong" on the U.S. side, and the reception in Europe has been "very good," although Europe is it a bit behind since the European launch took place about a week after the U.S. one, according to a market source.

Price talk on the term loan is Libor/Euribor plus 475 bps with a 1.75% Libor floor and an original issue discount of 981/2.

Commitments are due on Friday.

JPMorgan and Barclays Capital are the lead banks on the $1.9 billion credit facility (Ba3/BB-), which also includes a $150 million revolver.

Proceeds from the facility will be used to help fund the acquisition of the company by 3G Capital for $24 per share, or $4 billion, including the assumption of outstanding debt.

Burger King selling notes

In addition to the credit facility, Burger King plans on selling $900 million of high-yield bonds to help fund its buyout.

The notes were launched to investors on Monday.

Closing on the transaction is expected to take place in the fourth quarter, subject to satisfaction of the minimum tender condition of 79.1% of the company's common shares, the receipt of approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the receipt of financing and other customary conditions.

Burger King is a Miami-based fast food hamburger chain.

Advance Pierre readies

Advance Pierre Foods is targeting allocating its credit facility later this week now that syndication on the $230 million second-lien term loan has been successfully completed following the widening of the original issue discount and addition of more call protection, according to a market source.

The second-lien loan is being sold at a discount of 961/2, up from the initial talk of 98, the source said.

And, call protection on the loan is now non-callable for 18 months, 106 for the next six months, 103 in year three and 101 in year four, the source said. Most recently call protection had been talked at non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four, and at launch it was talked at 103 in year one, 102 in year two and 101 in year three.

Pricing on the second-lien loan is Libor plus 950 bps with a 1.75% Libor floor. The spread was flexed up earlier in the syndication process from Libor plus 875 bps.

Advance Pierre first-lien

Advance Pierre Foods' $1.14 billion credit facility also includes a $75 million ABL revolver and an $835 million first-lien term loan (B1/B+). Pricing on the first-lien term loan firmed in line with initial talk at Libor plus 525 bps with a 1.75% Libor floor, a discount of 98 and 101 soft call protection for one year.

Credit Suisse, Barclays Capital, Morgan Stanley and BMO Capital Markets are the lead banks on the deal that is being obtained in connection with the creation of the company through the merger of Pierre Foods Inc., Advance Food Co. Inc. and Advance Brands LLC.

Following completion of the merger, Oaktree Capital Management, the current majority shareholder of Pierre Foods, will maintain a majority share of the combined company. The current shareholders of Advance Food, the Allen and McLaughlin families, will own a minority share of the combined company.

Advance Pierre Foods will be a Cincinnati-based supplier of value-added protein and handheld convenience food products to the foodservice, school, retail, club, vending and convenience store channels.

FTI closes

In other news, FTI Consulting Inc. closed on its new $250 million five-year senior secured revolving credit facility, according to a news release.

Bank of America and JPMorgan acted the joint lead arrangers and bookrunners on the deal that was used to refinance an existing $175 million credit facility set to mature on Sept. 30, 2011 and that will be available for general corporate purposes.

FTI is a Baltimore-based management services company.

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