Cengage up with amend/extend chatter; Reynolds dips on paydown; FoxCo breaks above OID

By Sara Rosenberg

New York, Sept. 14 - Cengage Learning Acquisitions Inc.'s extended and non-extended term loans strengthened in trading on Friday with amendment and extension rumors, Reynolds Group Holdings Ltd.'s term loan were softer on repayment news and FoxCo Acquisition Sub LLC's term loan freed up.

Over in the primary, CNO Financial Group Inc. moved up the commitment deadline on its deal, and Alkermes Inc. set the coupon on its term loan B at the low end of talk, trimmed the Libor floor and downsized the tranche so as to create a now shorter-dated loan.

Also, Samson Investment Co. upsized its loan and Ikaria Acquisition Inc. reduced the Libor floor and original issue discount on its incremental debt.

Furthermore, Valeant Pharmaceuticals International Inc. released price talk on its incremental term loan B, and Kindred Healthcare Inc. came out with original issue discount talk as the deals were presented to investors during the session.

Additionally, SBA Communications Corp. announced and launched a new term loan, Sheridan Production Partners, Pep Boys - Manny, Moe & Jack and HHI Group Holdings LLC revealed loan plans, and Acosta Sales & Marketing is getting ready to bring a repricing to market.

Cengage rises

Cengage Learning's term loans were better in the secondary market on Friday as rumors were floating around that that the company may bring a new amendment and extension offer, according to traders.

The extended term loan B was quoted by one trader at 91 bid, 92 offered, up from 89¾ bid, 90½ offered, and by a second trader at 90 bid, 91 offered, up from 89½ bid, 90½ offered.

Meanwhile, the non-extended term loan was quoted by the first trader at 95½ bid, 96¼ offered, up from 94¼ bid, 95¼ offered, and by the second trader at 95¼ bid, 96¼ offered, up from 94 bid, 94¾ offered.

In April, the company completed an amendment and extension resulting in a roughly $1.3 billion extended term loan due 2017 priced at Libor plus 550 basis points. There is also a roughly $1.5 billion non-extended term loan due in July 2014 priced at Libor plus 225 bps and an about $556 million incremental term loan due July 2014 priced at Libor plus 375 bps.

Cengage releases earnings

Also on the topic of Cengage, results for the fiscal fourth quarter came out on Thursday showing a net loss of $24.9 million, versus a net loss of $15.9 million in the prior year.

Revenues for the quarter were $507.5 million, compared to $472.9 million for the three months ended June 30, 2011.

And, adjusted EBITDA for the quarter was $194.4 million, compared to $201.5 million last year.

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

Reynolds slides

Reynolds Group's term loans headed lower in trading as the company disclosed that it will be refinancing the debt with new term loans and bonds, according to a trader.

The term loan B was quoted at par bid, par ½ offered, down from par ¾ bid, 101¼ offered, and the term loan C was quoted at par ¼ bid, 101¼ offered, down from 101½ bid, 102 offered, the trader said.

On Friday, the company hosted a conference call to launch a $2.775 billion term loan (B1/B+) due September 2018 and a €250 million term loan (B1/B+) due September 2018, that are both talked at Libor/Euribor plus 425 bps with a 1% floor, a par offer price and 101 repricing protection for one year.

Proceeds from these new loans, and around $1.55 billion raised from a $3.25 billion bond deal that was upsized from $1 billion, will be used to repay existing term loans. Remaining bond proceeds will be used to refinance 7¾% secured notes and add about $500 million in cash to the balance sheet.

As a result of the increase to the bonds, it is expected that the new term loans will be downsized, but amounts are still to be determined, a market source added.

Reynolds seeks amendment

In connection with the refinancing, Reynolds is looking to amend its existing credit facility to permit the replacement of the old loans with the new loans. The debt is being done under the current credit agreement because company want to leave the existing revolver in place, the source said.

Credit Suisse Securities (USA) LLC is the sole lead arranger and bookrunner on Reynolds' new deal, and HSBC Securities (USA) Inc. is a co-arranger.

Reynolds is an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products.

FoxCo starts trading

FoxCo's $765 million covenant-light term loan (B2/B+) broke for trading, with levels quoted around par ¼ bid, 101¼ offered, according to a market source.

Pricing on the loan is Libor plus 450 bps with a 1% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

During syndication, the loan was upsized from $715 million, pricing firmed at the tight end of the Libor plus 450 bps to 475 bps talk and the discount was tightened from 99.

Deutsche Bank Securities Inc. and UBS Securities LLC are the lead banks on the deal that will be used to refinance existing term loan debt and bonds and to fund a dividend payment.

As a result of the upsizing, the amount of the shareholder distribution was increased.

FoxCo is a Fort Wright, Ky.-based owner and operator of television stations.

BWIC surfaces

In more secondary happenings, a $36.4 million Bid-Wanted-In-Competition was announced on Friday and market players are being asked to get their bids in by 11 a.m. ET on Monday, according to a trader.

The portfolio includes about 35 names.

Some of the larger portions of debt being offered are Texas Competitive Electric Holdings' non-extended term loan, Freescale Semiconductor Inc.'s term loan B-1, First Data Corp.'s 2017 U.S. term loan and Univision Communications Inc.'s initial term loan, the trader added.

CNO shutting early

Switching to the new deal front, CNO Financial Group accelerated the commitment deadline on its $700 million credit facility (Ba3/B+) to noon ET on Tuesday from Sept. 21, according to a market source.

The facility consists of a $50 million three-year unfunded revolver, a $250 million four-year term loan B-1 and a $400 million six-year term loan B-2.

Price talk on the term B-1 is Libor plus 350 bps with a 1% Libor floor and an original issue discount of 99 to 991/2, and on the term B-2 is Libor plus 400 bps to 425 bps with a 1.25% Libor floor and a discount of 99. Both have 101 soft call protection for one year.

Amortization on the term loan B-1 is 20% in years one and two and 30% in years three and four, while the term loan B-2 amortizes at a rate of 1% per year.

CNO lead banks

Goldman Sachs & Co. and J.P. Morgan Securities LLC are leading CNO's credit facility that will be used to help repay all $224 million outstanding under its existing senior secured credit facility, to repurchase up to $275 million of 9% senior secured notes due 2018 for about $323 million and to repurchase about $200 million of 7% convertible senior debentures due 2016 from Paulson & Co. for around $334 million.

Other funds for the transaction will come from $250 million of new senior secured notes due 2020 and cash on hand.

Closing on the refinancing is expected in late September.

CNO is a Carmel, Ind.-based insurance company.

Alkermes reworks deal

Alkermes restructured its transaction, reducing the seven-year senior secured term loan B to $300 million from $375 million and revising pricing to Libor plus 375 bps with a 1% Libor floor and a discount of 99, from earlier guidance of Libor plus 375 bps to 400 bps with a 1.25% floor and a discount of 99, according to a market source.

With the downsizing, a new $75 million four-year term loan B was added, and talk on this tranche is Libor plus 325 bps with a 1% Libor floor and an original issue discount of 991/2, the source said.

Both loans have 101 soft call protection for one year.

Also changed was the commitment deadline, with investors now having until noon ET on Tuesday to place their orders, moved up from Thursday, the source continued.

Morgan Stanley Senior Funding Inc, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are leading the $375 million of terms loans (B1/BB) that will be used by the Dublin, Ireland-based biopharmaceutical company to refinance existing credit facility debt.

Samson ups loan

Samson Investment increased its six-year covenant-light term loan (B1/B+) to $1 billion from $750 million and moved the commitment deadline to Tuesday from Thursday, according to a market source.

The loan is talked at Libor plus 500 bps to 525 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Barclays, RBC Capital Markets LLC, Citigroup Global Capital Markets Inc. and Mizuho Securities USA Inc. are leading the deal that will be used to pay down revolver debt.

Samson is a Tulsa, Okla.-based private exploration and production company.

Ikaria tweaks pricing

Ikaria reduced the Libor floor on its $175 million five-year first-lien term loan (B1/BB) to 1.25% from 1.5% and changed the original issue discount to 99½ from 98, while leaving the spread at Libor plus 650 bps, according to a market source. There is 101 soft call protection for one year.

Earlier in the syndication process, the loan was upsized from $125 million.

Recommitments are due at 5 p.m. ET on Monday, the source added.

Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc. and Fifth Third Securities Inc. are leading the deal that will be used for a dividend recapitalization.

Ikaria is a Hampton, N.J.-based biotherapeutics company in the critical care market.

Valeant sets talk

Also in the primary, Valeant Pharmaceuticals held a bank meeting on Friday morning to launch its $1 billion seven-year incremental term loan B (Ba1/BBB-), and shortly before the event, talk emerged at Libor plus 375 bps with a 1% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year, according to a market source.

J.P. Morgan Securities LLC is leading the deal that will be used with $1.75 billion of bonds to fund the acquisition of Medicis Pharmaceutical Corp. for $44 per share in cash, or about $2.6 billion, and repurchase Medicis convertible senior notes.

Backing the debt is a commitment for a $2.75 billion unsecured bridge loan priced at Libor plus 612.5 bps with a 1.25% Libor floor. The spread will rise by 50 bps every three months until a specified cap.

Leverage will be around 4.2 times at close, which is expected in the first half of 2013, subject to approval by Medicis stockholders and expiration of any applicable regulatory waiting period.

Valeant is a Mississauga, Ont.-based specialty pharmaceutical company. Medicis is a Scottsdale, Ariz.-based specialty pharmaceutical company focused on dermatological and aesthetic conditions.

Kindred OID guidance

Kindred Healthcare disclosed original issue discount talk of 97 to 97½ on its $100 million incremental term loan B a few hours before a 2 p.m. conference call took place to officially kick start syndication, according to a market source.

As previously reported, the loan, due June 1, 2018, is priced at Libor plus 375 bps with a 1.5% Libor floor. The spread and floor matches pricing on the existing term loan.

J.P. Morgan Securities LLC is the lead bank on the deal.

Kindred Healthcare, a Louisville, Ky.-based health care services company, will use the term loan to refinance drawings under its existing ABL facility.

SBA comes to market

SBA Communications launched with a call on Friday morning a $300 million incremental term loan B talked at Libor plus 275 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

Lead arrangers, Citigroup Global Markets Inc., Barclays and J.P. Morgan Securities LLC, are seeking commitments by Sept. 20.

Proceeds will be used to help fund the purchase of 3,252 tower sites from TowerCo for $1.2 billion in cash and 4.6 million shares of class A common stock.

When the acquisition was announced in June, the company said that it got a commitment for a $900 million two-year bridge loan with pricing of Libor plus 350 bps, and that the refinancing of the bridge loan would happen through various debt markets.

Closing on the transaction is expected in the fourth quarter, subject to customary conditions.

SBA is a Boca Raton, Fla.-based provider and owner and operator of wireless communications infrastructure.

Sheridan readies loan

Sheridan Production Partners set a lender call for 4 p.m. ET on Tuesday to launch an $800 million seven-year term loan and will also host a separate call for lenders to go through the structure at 11 a.m. ET on Wednesday, according to a market source.

Talk on the loan has come out at Libor plus 400 bps to 425 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source remarked.

UBS Securities LLC, Bank of America Merrill Lynch and Citigroup Global Markets Inc. are leading the deal that will be used to refinance existing debt.

The company had approached the market earlier this year with an $800 million refinancing term loan, but the deal was pulled in May as a result of unfavorable conditions. Talk on that loan had been Libor plus 400 bps with a 1.25% Libor floor, a discount of 99 and 101 soft call protection for one year.

Sheridan Production Partners is a Houston-based oil and gas production company.

Pep Boys plans deal

Pep Boys will be holding a conference call on Sept. 21 to launch a $200 million term loan B for which price talk of Libor plus 400 bps with a 1.25% Libor floor and an original issue discount of 99 has been announced, according to a market source. All-in yield is 5.5%.

The B loan has 101 soft call protection for one year, the source said.

Wells Fargo Securities LLC and Bank of America Merrill Lynch are leading the deal that will be used to refinance an existing term loan and senior subordinated notes.

Pep Boys is a Philadelphia-based automotive aftermarket chain.

HHI joins calendar

HHI Group Holdings LLC scheduled a bank meeting for Wednesday to launch a $580 million credit facility that consists of a $75 million revolver and a $505 million term loan B, according to a market source.

Goldman Sachs & Co., UBS Securities LLC, Macquarie Capital and Nomura are leading the deal that will help fund the purchase of the company by American Securities from KPS Capital Partners LP and MC Capital Inc.

HHI is a Royal Oak, Mich.-based manufacturer of wheel bearings, engine timing drive systems and forged parts for various power train and wheel-end applications.

Acosta repricing

Acosta Sales & Marketing set a conference call on Monday to launch a repricing of its term loan B that would take the spread down to Libor plus 350 bps from Libor plus 425 bps, but leave the 1.5% Libor floor intact, according to a market source.

Goldman Sachs & Co. is the lead bank on the deal.

The repricing will not affect the company's existing incremental term loan.

Acosta is a Jacksonville, Fla.-based full-service sales and marketing agency in the consumer packaged goods industry.

© 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.