American General Finance, Reynolds, CF Industries, Sheridan break; Securus adds call premiums

By Sara Rosenberg

New York, April 16 - American General Finance Corp., Reynolds and Reynolds Co., CF Industries Holdings Inc. and Sheridan Production Partners freed for trading during Friday's market hours, with all of the companies' term loans seen trading above their original issue discount prices.

Over in the primary market, Securus Technologies Inc. added soft call protection to its term loan and Intersil Corp.'s credit facility has been extremely well-received since launching just a few days ago, with the books on the term loan already more than full.

Also, U.S. Renal Care Inc. is hoping to launch its new deal before month's end and RCN Corp. has firmed up timing on the launch of its two credit facilities, with one set to kick off late this month and the other set for early next month.

American General Finance frees up

American General Finance was a main focus as the company's $3 billion five-year senior secured term loan (B1) hit the secondary market and the loan was described by one trader as "trading very well" with a lot of activity.

The term loan was quoted at 101¼ bid, 101¾ offered on the break and then it settled in at 101 1/8 bid, 101 3/8 offered, traders said.

Pricing on the term loan is Libor plus 550 basis points with a 1.75% Libor floor, and it was sold at an original issue discount of 981/2.

During syndication, the size firmed from the up to $3 billion description at launch and was increased from the $2 billion size that was discussed prior to the bank meeting as a result of an early positive response from investors.

In addition, the Libor floor was reduced during syndication from 2% and the original issue discount finalized at the tight end of the 98 to 98½ talk.

American General lead bank

Bank of America is the lead bank on American General Finance's term loan that will be used to repay existing debt and fund lending activities.

The borrower under the facility will be a newly formed, wholly owned special purpose subsidiary of the company.

American General is the Evansville, Ind.-based consumer finance unit of American International Group.

Reynolds and Reynolds starts trading

Also allocating and breaking for trading was Reynolds and Reynolds' credit facility, with the $1.82 billion seven-year term loan quoted around the par-type context, according to traders.

The term loan was quoted by one trader at 99 7/8 bid, par 1/8 offered, by a second trader at 99 7/8 bid, par 3/8 offered and by a third trader at par bid, par ½ offered. A fourth trader said that he saw it open at 99¾ bid, par offered and then move up to par bid, par ¼ offered.

Pricing on the term loan is Libor plus 350 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 991/4.

There is a step down in pricing to Libor plus 325 bps at 3.0 times net total leverage, and there is also 101 soft call protection for one year.

During syndication, pricing on the term loan firmed at the tight end of the Libor plus 350 bps to Libor plus 375 bps talk, and the step down and the call protection were added. Furthermore, the original issue discount firmed from initial talk at launch that just had it described as still to be determined.

Reynolds and Reynolds getting revolver

Reynolds and Reynolds'$1.895 billion senior secured credit facility (Ba3/BB-) also includes a $75 million revolver.

Deutsche Bank, Credit Suisse and Bank of America are the bookrunners on the deal, with Deutsche the left lead.

Proceeds will be used to refinance existing debt.

Closing on the new credit facility is expected to take place on Wednesday.

Reynolds and Reynolds is a Dayton, Ohio-based dealer services company.

CF Industries tops 101

CF Industries broke for trading on Friday as well, with the $2 billion five-year term loan B quoted at 101 bid, 101½ offered on the open and then tightening up to 101¼ bid, 101½ offered, according to a trader.

Pricing on the term loan B is Libor plus 350 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 991/2. Pricing will step down to Libor plus 300 bps upon the issuance of at least $750 million of equity to repay debt and to Libor plus 275 bps when leverage is below 2.0 times.

The company's $2.5 billion credit facility (Ba1/BBB/BBB-) also includes a $500 million revolver that carries the same initial pricing and the same step-down following an equity sale as the term loan B. Pricing will also be based on a leverage grid.

During syndication, the leverage-based step down was added to the well-oversubscribed term loan B and the revolver was upsized from $300 million.

CF Industries buys Terra

Proceeds from CF Industries' credit facility were used to fund the acquisition of Terra Industries Inc., the completion of which was announced on Thursday, for $37.15 in cash and 0.0953 of a share of CF Industries common stock for each share of Terra stock.

The company is planning to do a $1.6 billion senior notes offering, which is expected to price during the April 19 week, and a $1 billion common stock offering, with proceeds going toward the reduction of borrowings under its $1.75 billion bridge loan and the term loan B.

Morgan Stanley and the Bank of Tokyo-Mitsubishi UFJ acted as the lead banks on the credit facility, with Morgan Stanley the administrative agent.

CF Industries is a Deerfield, Ill.-based producer and distributor of nitrogen and phosphate fertilizer products. Terra is a Sioux City, Iowa-based producer and marketer of nitrogen and methanol products.

Sheridan breaks

Sheridan Production Partners' $600 million seven-year term loan was another deal to free for trading on Friday, with levels quoted at 99 bid, par offered, according to a trader.

The term loan is priced at Libor plus 550 bps with a 2% Libor floor, and it was sold at an original issue discount of the 981/2.

There is a step-down in pricing to Libor plus 450 bps if the company achieves public corporate ratings of B2/B or better.

During syndication, pricing was flexed up from Libor plus 450 bps with the addition of the step down and, as a result of the increased pricing, the loan was downsized from $700 million.

Sheridan refinancing debt

Proceeds from Sheridan Production Partners' term loan will be used to refinance an existing revolver.

Because of the term loan downsizing, the revolver will stay at up to $400 million rather than getting paid down to $300 million.

UBS and JPMorgan are the lead banks on the deal.

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

Securus adds soft call

Switching to the primary, Securus Technologies added soft call protection of 102 in year one and 101 in year two to its $170 million term loan, while leaving all other terms unchanged, according to a buyside source.

Pricing on the term loan is Libor plus 600 bps with a 2% Libor floor and an original issue discount of 98.

The company's $210 million credit facility (B) also includes a $40 million revolver.

Jefferies is the lead bank on the deal that will be used to refinance existing debt and for general corporate purposes.

Securus is a Dallas-based provider of inmate communications services and offender and case management software design.

Intersil nabs interest

Intersil's credit facility (Ba2/BB+) has attracted a lot of attention since launching with a bank meeting on April 13, so much so that the $390 million six-year senior secured term loan is "already well oversubscribed," a market source told Prospect News on Friday.

The term loan is being talked in the Libor plus 350 bps area with a 1.5% to 1.75% Libor floor and an original issue discount of 99.

Prior to the launch, filings with the Securities and Exchange Commission outlined pricing on the term loan at Libor plus 375 bps if the rating is Ba3/BB- or better and Libor plus 400 bps if the rating is B1/B+ or lower. The filings also said that the term loan would carry a 1.75% Libor floor and would be offered with an original issue discount of 99.

Intersil funding acquisition

Proceeds from Intersil's credit facility will be used to help fund the acquisition of Techwell Inc. for $18.50 per share. Net of Techwell's cash and equivalents, the transaction values Techwell at about $370 million.

The $465 million facility, which is led by Morgan Stanley and Bank of America, also includes a $75 million 31/2-year revolver that is being talked in the Libor plus 325 bps area, subject to a leverage-based grid, with a 50 bps undrawn fee, a 1.5% to 1.75% Libor floor and an original issue discount of 981/2.

Closing on the acquisition is expected to occur during Intersil's second quarter, subject to customary regulatory approvals and the satisfaction of other transaction conditions, including the tender of at least 50% of Techwell's outstanding shares.

Intersil is a Milpitas, Calif.-based designer and manufacturer of high-performance analog and mixed-signal semiconductors. Techwell is a San Jose, Calif.-based fabless semiconductor company.

U.S. Renal Care readies deal

U.S. Renal Care is looking at April 28 to hold a bank meeting for the launch its proposed $155 million credit facility, according to a market source.

Tranching on the facility is comprised of a $30 million revolver and a $125 million term loan, the source said.

Price talk is not yet available.

RBC is the lead bank on the deal.

U.S. Renal Care getting mezzanine

In addition to the credit facility, U.S. Renal Care also plans on getting $47.5 million of mezzanine debt.

Proceeds from the financings will be used to help fund the acquisition of Dialysis Corp. of America Inc. in a transaction valued at about $112 million.

Under the terms of the agreement, U.S. Renal Care will begin a tender offer for all of the outstanding common shares of Dialysis Corp. of America for $11.25 per share in cash, followed by a merger to acquire all remaining outstanding shares at the same cash price paid in the tender offer.

The transaction is expected to close in May.

U.S. Renal Care is a Plano, Texas-based provider of outpatient dialysis services. Dialysis Corp. of America is a Linthicum, Md.-based provider of outpatient kidney dialysis centers.

RCN nails down timing

RCN has set timing on the launch of its Metro Fiber credit facility and its Cable facility that are being obtained in connection with the company's buyout by ABRY Partners in a transaction valued at $1.2 billion, including the assumption of debt.

The Metro Fiber $265 million credit facility is scheduled to launch with a bank meeting in New York on April 30, and the bank meeting for the Cable $620 million credit facility is set for May 7, the source said.

Previously, timing on the deals was described as expected early May business.

SunTrust, GE Capital and Societe Generale are the bookrunners on the deals, with SunTrust the left lead and the administrative agent.

RCN facility details

RCN's Metro Fiber credit facility consists of a $25 million five-year revolver and a $240 million six-year term loan. Expected ratings on this facility are mid single-Bs.

And, the Cable facility consists of a $40 million five-year revolver and a $580 million six-year term loan. Expected ratings on this facility are high single-Bs.

Under the acquisition agreement, ABRY is buying RCN for $15 per share in cash.

Other financing for the transaction will come from equity.

Closing on the buyout is expected in the second half of this year, subject to receipt of stockholder approval, regulatory approvals and satisfaction of other customary conditions. The transaction is not subject to any financing condition.

RCN is a Herndon, Va.-based broadband services provider.

SRAM attracts agents

In other news, SRAM Corp. has received some agent level commitments toward its in-market $315 million credit facility that is being led by GE Capital, according to a market source.

The commitments came from Mizuho, who signed on as syndication agent, and JPMorgan, who signed on as documentation agent.

The facility consists of a $25 million revolver and a $290 million term loan, with both tranches talked at Libor plus 350 bps with a 1.5% Libor floor.

The term loan is being offered at an original issue discount of 99.

Proceeds will be used by the Chicago-based bike components company to refinance existing debt.

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