Clear Channel dips; Sedgwick, Protection One set talk; BWAY, LNR, World Kitchen ready launches

By Sara Rosenberg

New York, May 11 - Clear Channel Communications Inc.'s term loan B headed lower on Tuesday on the back of its earnings news as the overall secondary market felt heavy, and Cengage Learning's term loan B managed to hold steady because of its favorable numbers.

Over in the primary market, Sedgwick Claims Management Services Inc. and Protection One Inc. came out with price talk on their credit facilities as the deals were presented to lenders during the session, and Citgo Petroleum Corp. launched its term loan.

Also, BWAY Holding Co., LNR Property Corp. and World Kitchen LLC revealed timing on the launch of their credit facilities, and details on the size and structure of TransUnion's proposed credit facility surfaced, but a bank meeting has yet to be scheduled.

Furthermore, Omnicare Inc. made some changes to its revolving credit facility, including increasing the size and reducing pricing as a result of strong demand.

Clear Channel slides

Clear Channel's term loan B weakened in trading as the market in general was down probably around another half a point to a point depending on the name, according to traders.

The term loan B was quoted by one trader at 80½ bid, 81½ offered, down from 80¾ bid, 81¾ offered, by a second trader at 79¾ bid, 80¾ offered, down from 81½ bid, 82½ offered, and by a third trader at 80 bid, 81 offered, down from 81 bid, 82 offered.

The third trader said that the term loan B had popped up by about a quarter to a half a point late Monday after earnings came out, but investors didn't seem to be digesting the news as well on Tuesday and there was some selling pressure.

Clear Channel earnings results

Late Monday, Clear Channel parent CC Media Holdings Inc. said that for the first quarter, it had a consolidated net loss of $179.6 million, compared to a consolidated net loss of $428 million in the prior year.

Revenues for the quarter were $1.26 billion, an increase of 5% from $1.21 billion in the first quarter of 2009.

Also, cash flow provided by operating activities for the quarter was $30.2 million, cash flow used for investing activities was $71.7 million, and cash flow used for financing activities was $360.3 million for a net decrease in cash of $401.7 million.

Clear Channel is a San Antonio-based media and entertainment company.

Cengage stays firm

Cengage Learning came out with numbers for the quarter ended March 31 that were pretty good, and as a result, the company's term loan B did not succumb to the pressure that many other names felt on Tuesday, according to traders.

The term loan B was quoted by one trader at 86½ bid, 87½ offered, and by a second trader at 86 bid, 87 offered, with both claiming that levels were flat on the day.

For the quarter, Cengage reported a net loss of $88.7 million, compared to a net loss of $1.133 billion in the previous year.

Revenues for the quarter were $355.8 million, compared to $310.5 million in the 2009 quarter.

And, adjusted EBITDA for the 12 months ended March 31 was $775.2 million.

Cengage is a Stamford, Conn.-based provider of teaching, learning and research services for the academic, professional and library markets.

Sedgwick releases guidance

Moving to the primary market, Sedgwick Claims Management Services held a bank meeting on Tuesday morning to kick off syndication on its proposed $660 million credit facility, and in connection with the launch, price talk was announced, according to a source.

Both the $60 million five-year revolver (B1) and the $400 million six-year first-lien term loan (B1) were launched with talk of Libor plus 375 bps to 400 bps with a 1.5% Libor floor, and the term loan is being offered at an original issue discount of 99, the source said.

Meanwhile, the $200 million seven-year second-lien term loan (B3) was launched with talk of Libor plus 750 bps with a 1.5% Libor floor and an original issue discount of 981/2, the source continued.

In addition, the second-lien term loan is non-callable for two years, then at 103 in year three, 102 in year four and 101 in year five.

Sedgwick lead banks

Bank of America and Barclays Capital are the lead banks on Sedwick's credit facility that will be used to help fund the buyout of the company by Stone Point Capital LLC and Hellman & Friedman LLC for $1.1 billion, including repayment of debt.

The company is being acquired from Fidelity National Financial Inc., Thomas H. Lee Partners LP, Evercore Capital Partners and other minority shareholders.

Closing on the transaction is expected to take place during the second quarter, subject to usual and customary conditions and the receipt of regulatory approvals.

Sedgwick is a Memphis, Tenn.-based provider of claims and productivity management services to corporate and institutional clients.

Protection One price talk

Another deal to launch on Tuesday morning was Protection One, and it, too, came out with official price talk in conjunction with its bank meeting, according to a market source.

The $390 million six-year term loan was presented with talk of Libor plus 425 bps with a 1.75% Libor floor and an original issue discount of 981/2, the source said.

By comparison, a recent filing with the Securities and Exchange Commission had the term loan expected to be priced at Libor plus 400 bps with a 1.75% Libor floor and an original issue discount of 99 if the corporate family rating is B2/B or better, and Libor plus 475 bps with a 2% Libor floor and a discount of 98½ if the rating is lower.

On Tuesday, Standard & Poor's affirmed its B+ corporate credit rating on Protection One and rated the company's senior secured credit facility at BB.

Protection One getting revolver

Protection One's $415 million credit facility also includes a $25 million five-year revolver that has a 75 bps commitment fee.

Financial covenants under the facility include a maximum total leverage ratio, a minimum interest coverage ratio and a maximum amount of capital expenditures.

Proceeds from the bank debt, which is being led by JPMorgan and Barclays, $150 million of mezzanine financing and $340 million in equity will be used to fund the buyout of the company by GTCR for $15.50 per share. The total purchase price, including the refinancing of debt, is roughly $828 million.

The mezzanine notes are priced at 12.5% in cash plus 1% PIK, and TCW/Crescent Mezzanine has committed to purchase the debt.

Closing is expected in the second quarter, subject to minimum levels of participation in the tender offer and regulatory approvals.

Protection One is a Lawrence, Kan.-based provider of electronic security services to the residential, commercial and wholesale markets.

Citgo Petroleum launches

Also launching with a bank meeting on Tuesday was Citgo Petroleum's proposed $300 million five-year term loan, which is being led by BNP Paribas, RBS and UBS, according to a market source.

Unofficial talk on the loan has been circulating at Libor plus 350 bps with a 1.75% Libor floor and an original issue discount of 981/2. However, no official talk was announced at the meeting. Instead investors were told to talk to their BNP salesperson, the source said.

In addition to the term loan, the company is getting a new $700 million revolver that is already fully circled.

Proceeds from the credit facility, along with $1.5 billion of bonds, will be used to refinance existing debt. As a condition of the deal, the company must raise at least $1 billion between the term loan and the new bonds.

Citgo is a Houston-based refiner and marketer of transportation fuels, lubricants, petrochemicals and other industrial products.

BWAY timing surfaces

BWAY has scheduled a bank meeting for Wednesday to launch its proposed $565 million senior secured credit facility, according to a market source.

The facility consists of a $490 million term loan and a $75 million revolver, with price talk not yet available, the source said.

Deutsche Bank, Bank of America and Barclays are the lead banks on deal that will be used to help fund the buyout of the company by Madison Dearborn Partners LLC for $20 in cash per share. The transaction is valued at roughly $915 million, including the assumption of debt.

The Atlanta-based supplier of general line rigid containers has also received a commitment for a $200 million senior unsecured bridge loan to help fund the buyout.

Closing is expected to take place in the second or third quarter, subject to shareholder approval, regulatory approvals and other customary conditions.

LNR readies launch

LNR Property is getting ready to launch its proposed $445 million five-year term loan on Thursday, according to a market source.

Price talk on the term loan is Libor plus 550 basis points with a 2% Libor floor, and there is 101 soft call protection for one year, the source said.

Goldman Sachs and Bank of America are the lead banks on the deal that will be used to refinance existing debt.

LNR is a Miami-based real estate, investment, finance and management company.

World Kitchen set for Thursday

Also scheduled to launch on Thursday is World Kitchen's proposed $220 million credit facility that is being led by BMO Capital Markets and will be used to refinance existing debt and fund capital expenditures, according to a market source.

The facility consists of a $90 million revolver, a $60 million term loan, $20 million Canadian dollar equivalent term loan, and a $50 million capital expenditures facility, with all tranches talked at Libor plus 425 basis points with a 1.5% Libor floor, the source said.

The revolver has a 50 bps commitment fee and the capital expenditures facility has a 100 bps commitment fee.

Total leverage at close will be 2.4 times.

World Kitchen is a Rosemont, Ill.-based manufacturer and marketer of bakeware, dinnerware, kitchen and household tools, rangetop cookware and cutlery products.

TransUnion reveals structure

Word came out early this month that TransUnion would be approaching the market with a new credit facility, and now it is known that the deal will be sized at $1.19 billion, according to a market source.

Tranching on the facility is a $250 million revolver and a $940 million term loan, with price talk still to be determined, the source said.

It is possible that the bank meeting for the facility will take place sometime this month, depending on, among other things, the strength of the primary. Timing, however, is still very fluid, the source remarked.

Deutsche Bank, Bank of America and JPMorgan are the lead banks on the deal that will be used to help fund Madison Dearborn Partners LLC's acquisition of a 51% interest in itself from the Pritzker family.

Closing on the buyout of the Chicago-based provider of credit and information management is subject to satisfaction of customary conditions and regulatory approvals.

Omnicare tweaks deal

Omnicare upsized its five-year revolving credit facility (Baa3/BBB-) to $400 million from $350 million and lowered pricing by 25 basis points across the grid so that initial pricing is now Libor plus 300 bps, down from Libor plus 325 bps, according to a market source.

The revolver includes a 50 bps unused fee.

SunTrust, JPMorgan, Barclays and Citigroup are the bookrunners on the deal that will be used for general corporate purposes.

Senior leverage is around 1.43 times and total leverage is around 3.64 times.

Omnicare is a Covington, Ky.-based pharmaceutical services company.

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