Cengage rises; Valeant, Fortress talk, Reynolds OIDs emerge; United Components moves deadline

By Sara Rosenberg

New York, Sept. 13 - Cengage Learning's term loan headed higher during Monday's trading session after the company released quarterly results that showed an improvement in operating income and revenues, but a decline in net income when compared to last year.

Over in the primary market, price talk on Valeant Pharmaceuticals International Inc.'s credit facility, Fortress Investment Group LLC's term loan and Aspen Dental's last-out loan surfaced, and Reynolds Group Holdings Ltd. revealed original issue discounts on its proposed term loans.

Also, United Components Inc. accelerated the commitment deadline on its credit facility due to strong demand and is now focusing on the tight end of talk, and chatter is that NBTY Inc.'s books will likely shut down early, too.

Additionally, Advance Pierre Foods' credit facility had already received a nice amount of interest from investors since launching just a few days ago, HGI Holdings Inc. firmed timing on the launch of its proposed credit facility and Alliance Laundry Systems LLC is getting ready to launch a new deal as well, and Alpha Packaging upsized its credit facility.

Cengage term loan trades up

Cengage's term loan gained some ground in trading after the company announced results for its fiscal fourth quarter, according to traders.

The term loan was quoted by one trader at 89 7/8 bid, 90 3/8 offered, up from 89 3/8 bid, 89 7/8 offered, and by a second trader at 90 bid, 90¼ offered, up from 89 3/8 bid, 89 7/8 offered.

For the fourth fiscal quarter, Cengage reported net income of $48.4 million, compared to net income of $69.6 million in the prior year, but operating income from continuing operations for the quarter was $143.7 million, compared to $45.6 million last year.

Revenues for the quarter were $553.4 million, compared to $438.6 million in the fourth fiscal quarter of 2009.

And, adjusted EBITDA at the end of the quarter, which was June 30, was $868.3 million.

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

Valeant announces talk

Switching to new deal happenings, Valeant released price talk on its $1.875 billion credit facility on Monday morning after spending a few days talking it over and deciding on the levels with the lead banks, according to a market source.

The $250 million revolver and $750 million term loan A are both being talked at Libor plus 375 basis points to 400 bps, with upfront fees based on commitment size, the source remarked.

Meanwhile, the $725 million term loan B and $150 million delayed-draw term loan B are both being talked at Libor plus 400 bps to 425 bps with a 1.75% Libor floor and an original issue discount of 981/2, the source said. The delayed-draw loan has an undrawn fee of 75 bps.

Based on the commitment letter, the deal was initially expected to consist of a $250 million revolver, a $500 million term loan A, an up to $1.972 billion six-year term loan B and a $300 million delayed-draw six-year term loan B - however, tranching was revised in connection with last Wednesday's bank meeting.

Also, the commitment letter had price talk on the revolver and term loan A expected anywhere from Libor plus 425 bps to 525 bps, and pricing on the term loan B anywhere from Libor plus 450 bps to 550 bps, based on ratings.

Valeant funding merger

Proceeds from Valeant's credit facility will be used to fund a merger with Biovail Corp. and to refinance existing debt, including Valeant's 7 5/8% and 8 3/8% senior unsecured notes.

Goldman Sachs, Morgan Stanley and Jefferies are the lead banks on the deal.

The transaction is expected to close before year-end, subject to Valeant and Biovail stockholder approval, which will be sought at a special meeting on Sept. 27, and regulatory approvals.

All stockholders of the merged company are expected to receive an additional one-time $1.00 per share special dividend by Dec. 31. Funding for the dividend will come from the delayed-draw term loan B.

Aliso Viejo, Calif.-based Valeant and Mississauga, Ont.-based Biovail are specialty pharmaceutical companies. The combined company will be based in Mississauga and will be named Valeant Pharmaceuticals International Inc.

Fortress guidance

Fortress Investment Group held a bank meeting on Monday to launch its proposed credit facility, at which time price talk on the $340 million term loan emerged as Libor plus 400 bps with a 1.75% floor and no discount, according to a market source.

The term loan is non-callable for two years, then at 101 in years three and four, the source added.

The $440 million facility also includes a $100 million revolver.

Bank of America is the lead bank on the deal that will be used to refinance existing debt.

Fortress is a New York-based investment management firm.

Aspen last-out talk

Aspen Dental's $45 million six-year last-out term loan is being talked at Libor plus 725 bps to 775 bps with a 1.75% Libor floor and an original issue discount of 98, according to a market source.

As was previously reported, the company's $150 million six-year first-out term loan is being talked at Libor plus 500 bps to 525 bps, with a 1.75% Libor floor and a discount of 98.

The $230 million credit facility, which was launched with a bank meeting on Monday, also includes a $35 million five-year revolver.

UBS and Jefferies are the lead banks on the deal that will be used to help fund the buyout of the company by Leonard Green & Partners LP.

Aspen Dental is a provider of denture and dental care services.

Reynolds OIDs surface

Reynolds Group held a bank meeting on Monday to launch its proposed $1.5 billion of term loan debt (Ba3), and in connection with the event, original issue discounts were announced, according to a market source.

The $1 billion term loan B is being offered to investors at a discount of 98 and the $500 million term loan A is being offered at a discount of 99, the source said.

It was already known that price talk on the term loan B is Libor plus 500 bps and price talk on the term loan A is Libor plus 450 bps, with both tranches carrying a 2% Libor floor.

The term loan B includes 101 soft call protection for one year.

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

Reynolds buying Pactiv

Proceeds from Reynolds' term loans will be used to help fund the acquisition of Pactiv Corp. for $33.25 in cash per share for a total purchase price of $4.6 billion. However, the transaction is valued at $6 billion.

Other funding for the transaction will come from $3.5 billion of bonds and roughly $2 billion of equity.

Closing is targeted by the end of this year, subject to Pactiv shareholder approval, regulatory approvals and customary conditions. The acquisition is not conditioned on the receipt of equity or debt financing.

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.

United Components deadline

United Components moved the commitment deadline on its $425 million term loan B to 5 p.m. ET on Wednesday from Monday as the tranche has received a lot of interest, according to a market source.

Price talk on the term loan B is Libor plus 450 bps to 475 bps with a 1.75% Libor floor and an original issue discount of 98½ to 99. However, the source said that the focus is now on the tight end of that guidance because syndication is going so well.

The company's $500 million credit facility (Ba3), which also includes a $75 million revolver, is expected to allocate on Friday.

Bank of America and Deutsch Bank are leading the deal that will be used to refinance existing bank debt and senior subordinated notes.

United Components is an Evansville, Ind.-based vehicle replacement parts company.

NBTY may close soon

NBTY is expected to accelerate the commitment deadline on its $1.3 billion term loan B to around the middle of this week from Sept. 21 as the tranche is already significantly oversubscribed since launching last Tuesday, according to a market source.

The term loan B is talked at Libor plus 450 bps to 475 bps with a 1.75% Libor floor and an original issue discount of 98½ to 99, but based on the amount of demand, pricing on the tranche is anticipated at the tight end of talk, the source said.

The company's $1.7 billion senior secured credit facility (Ba3/BB) also includes a $200 million revolver and a $200 million term loan A, with both of these tranches talked at Libor plus 425 bps with a 1.75% Libor floor. There are upfront fees based on commitment size.

The revolver and the term loan A were launched to banks on Aug. 11.

NBTY being acquired

Proceeds from NBTY's credit facility, along with $900 million of senior unsecured notes and $1.6 billion in equity, will be used to fund the buyout of the company by the Carlyle Group for $55.00 per share in cash. The transaction is valued at $3.8 billion.

Barclays, Bank of America Merrill Lynch and Credit Suisse are the lead banks on the bank deal, with Barclays the left lead.

Closing on the transaction is expected to occur before the end of the year, subject to customary conditions, including approval of NBTY stockholders, which will be sought at a special meeting on Sept. 22, and regulatory approvals. It is not subject to any financing condition.

NBTY is a Ronkonkoma, N.Y.-based manufacturer and marketer of nutritional supplements.

Advance Pierre nets orders

Advance Pierre Foods' proposed $1.14 billion credit facility, which just launched with a bank meeting this past Wednesday, has seen a bunch of commitments come in with the deal already about half done, according to a market source.

The facility consists of a $75 million ABL revolver, an $835 million first-lien term loan (B1/B+) and a $230 million second-lien term loan.

Price talk on the first-lien term loan is Libor plus 525 bps with a 1.75% Libor floor and an original issue discount of 98. There is 101 soft call protection for one year.

And, price talk on the second-lien term loan is Libor plus 875 bps with a 1.75% Libor floor and an original issue discount of 98. There is call protection of 103 in year one, 102 in year two and 101 in year three.

Advance Pierre lead banks

Credit Suisse, Barclays Capital, Morgan Stanley and BMO Capital Markets are the lead banks on Advance Pierre Foods' credit facility, with Credit Suisse the left lead.

The facility 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.

HGI readies deal

HGI has scheduled a bank meeting for 10:30 a.m. ET on Tuesday to launch its proposed $365 million credit facility (B1/B+), according to a market source, whereas before, timing was described as early to mid-September business.

Goldman Sachs, Jefferies and Morgan Stanley are the lead banks on the deal that consists of a $50 million five-year revolver and a $315 million six-year term loan. Price talk is not yet available.

Proceeds from the facility, along with $150 million of mezzanine debt, will be used to help fund the buyout of the company by Clayton, Dubilier & Rice LLC and GS Capital Partners from the Jordan Co. and members of the Harrington family.

The transaction is expected to close in the beginning of the fourth quarter.

HGI is a Cleveland-based mail-order, direct-to-home provider of specialty medical products for chronic disease patients.

Alliance Laundry launch

Another deal that will be launching on Tuesday is Alliance Laundry's proposed $345 million senior secured credit facility, according to a market source.

The facility consists of a $60 million five-year revolver and a $285 million six-year term loan, the source said.

Bank of America is the lead bank on the deal that will be used to refinance existing debt.

Alliance Laundry is a Ripon, Wis.-based provider of laundry products and services.

Alpha tweaks structure

Alpha Packaging added a $30 million delayed-draw one-year term loan to its proposed credit facility that is being talked at Libor plus 500 bps with a 1.75% Libor floor and an original issue discount of 98, according to a market source. There is a 100 bps unused fee.

The company's now $150 million, up from $130 million credit facility, still includes a $20 million revolver and a $100 million term loan B, with both of these tranches talked at Libor plus 500 bps with a 1.75% Libor floor and a discount of 981/2.

Bank of Ireland, BMO and GE Capital are the lead banks on the deal that will be used to help fund the buyout of the company by Irving Place Capital. The delayed-draw loan is available for acquisitions.

Alpha Packaging is a St. Louis-based manufacturer of bottles and jars for the nutritional, pharmaceutical, personal care and niche food and beverage markets.

Graham Packaging talk

Graham Packaging Co. Inc. is talking its $350 million term loan D (B1/B+) at Libor plus 450 bps with a 1.75% Libor floor and an original issue discount of 99, according to a market source.

Deutsche Bank and Citigroup are the lead banks on the deal that was launched last Wednesday.

Proceeds from the term loan D, along with $250 million of notes, will be used to help fund the acquisition of Liquid Container LP, a West Chicago, Ill.-based operator of blow molded plastic container plants.

Last week, the term loan was upsized from $300 million, while the notes were downsized from $300 million.

At close, leverage will be 4.7 times.

Graham Packaging is a York, Pa.-based designer, manufacturer and seller of technology-based, customized blow-molded plastic containers.

Denny's price talk

Denny's Corp. is talking its $250 million term loan at Libor plus 475 basis points to 500 bps with a 1.75% Libor floor and an original issue discount of 98 to 981/2, according to a market source. There is 101 soft call protection for one year.

The company's $300 million credit facility (B+), which also includes a $50 million revolver, will be used to refinance existing debt.

Bank of America and Wells Fargo are the lead banks on the deal that was launched with a bank meeting last Thursday.

Denny's is a Spartanburg, S.C.-based restaurant franchise operator.

GenOn offered at 98½

GenOn Energy Inc.'s $500 million seven-year term loan B is being offered at an original issue discount of 981/2, according to a market source.

As was previously reported, price talk on the term loan B is Libor plus 450 bps with a 1.75% Libor floor.

The company's $1.5 billion credit facility (B2) also includes a $1 billion revolver.

JPMorgan, Credit Suisse, Deutsche Bank, Morgan Stanley and Goldman Sachs are the lead banks on the deal that will be used to help fund the merger of Mirant Corp. with RRI Energy Inc.

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.

Pet Supplies higher pricing

Pet Supplies Plus' $120 million credit facility closed last week with initial pricing set at Libor plus 575 bps with a 1.75% Libor floor and an original issue discount of 98, according to a market source.

Initial talk on the facility had been Libor plus 525 bps.

Pricing on the facility will drop to Libor plus 550 bps at 2.75 times leverage and Libor plus 525 bps when leverage is 2.5 times.

The deal consists of a $15 million revolver, an $85 million term loan and a $20 million delayed-draw term loan.

BNP Paribas and Societe Generale acted as the lead banks on the facility that was used to help fund the buyout of the company by Irving Place Capital.

Pet Supplies Plus is a Farmington Hills, Mich.-based pet supplies store chain.

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