Savvis, Ntelos break; Warner Chilcott dips; Calpine seesaws; Midcontinent sets spread, adds step

By Sara Rosenberg

New York, July 30 - Savvis Inc.'s credit facility hit the secondary market on Friday, with the term loan quoted above its original issue discount price, and Ntelos Inc.'s incremental term loan began trading shortly after changes were made to the original issue discount price.

Also, Warner Chilcott plc's strip of term debt was lower after the company announced plans to get new loans and unsecured debt to pay a dividend to shareholders, and Calpine Corp.'s old term loan bounced around with earnings results.

Furthermore, Las Vegas Sands Corp. saw the bid on its strip of institutional bank debt soften a little following the launch of its amend and extend proposal.

Over in the primary market, Midcontinent Communications firmed pricing on its term loan B at the tight end of talk and added a leverage-based step-down as a result of the tranche receiving strong demand from investors.

Savvis frees to trade

Savvis' credit facility broke for trading on Friday, with the $550 million term loan due in 2016 quoted at 98 bid, 98½ offered on the open and then moving up to 98 3/8 bid, 98¾ offered, according to a market source.

Pricing on the term loan is Libor plus 500 basis points with a 1.75% Libor floor, and it was sold at an original issue discount of 97. There is 101 soft call protection for one year.

During syndication, pricing was flexed up from Libor plus 475 bps and the discount firmed at the wide end of the initial 97 to 98 guidance.

The company's $625 million senior secured credit facility (B1/B) also includes a $75 million revolver due in 2014.

Savvis lead banks

Joint lead arrangers and bookrunners on Savvis' credit facility include Bank of America, Morgan Stanley, Credit Suisse and SunTrust, with Bank of America the left lead.

Proceeds will be used to help repay existing debt, including outstanding bank borrowings and the repurchase of about $345 million of the company's 3% convertible senior notes due May 2012, and for general corporate purposes.

A tender offer for the convertibles began on July 1 and expires on July 29.

Savvis is a Town & Country, Mo.-based provider of cloud infrastructure and hosted IT services.

Ntelos breaks

Ntelos' $125 million incremental term loan (Ba3/BB) started trading in the afternoon, after the company cut the discount on the tranche to 99¾ from 99½ in the morning and asked for recommitments by noon ET, according to a market source.

The loan was quoted at par 1/8 bid, par 5/8 offered and trades with the existing term loan debt.

Pricing on the incremental loan due August 2015 is in line with pricing on the existing term loan at Libor plus 375 bps with a 2% Libor floor.

JPMorgan is the lead bank on the deal that will be used, along with revolver borrowings and cash on hand, to fund the acquisition of One Communications Corp.'s FiberNet business for about $170 million.

Completion of the acquisition is anticipated to occur in the fourth quarter, subject to regulatory approvals. Closing on the term loan, however, is expected to occur in mid-August.

Ntelos is a Waynesboro, Va.-based provider of wireless and wireline communications services.

Warner Chilcott slides

Warner Chilcott's strip of term loan debt headed lower in trading after the company announced plans to get new senior secured term loans and unsecured debt for a recapitalization, according to traders.

The strip of debt was quoted by traders at 99½ bid, par offered, down from par 1/8 bid, par 3/8 offered.

On Friday morning, the company said that it plans on getting $2.25 billion in new term loans and unsecured debt to fund a special dividend to the company's ordinary shareholders of $8.50 per share, or approximately $2.15 billion.

Payment of the dividend is expected to take place before the end of the third quarter.

Warner Chilcott sets launch

Warner Chilcott's new term loan debt as well as an amendment to its existing credit facility to allow for the new debt is scheduled to launch with a conference call at 1:30 p.m. ET on Tuesday, according to a market source.

JPMorgan, Bank of America and Goldman Sachs are the lead banks on the Ireland-based specialty pharmaceutical company's deal.

The company estimates that the recapitalization would result in its full-year 2010 adjusted cash net income being reduced by $0.20 to $0.25 per share, and its full year 2011 adjusted cash net income being reduced by $0.65 to $0.70 per share.

These anticipated reductions of adjusted cash net income per share would result from the estimated increased cash interest expense associated with the issuance of the additional debt and the expected repricing impact of the outstanding term debt using current market assumptions, the company said in a news release.

Calpine moves around

Calpine's old term loan softened immediately after the company came out with second-quarter numbers, but it then rebounded to end the day unchanged to maybe a touch better, according to traders.

The old term loan was quoted by one trader at 95 bid, 95¼ offered, unchanged on the day after coming back up from early day levels of 94½ bid, 95 offered, and by a second trader at 95 bid, 95 ½ offered, up from 94 7/8 bid, 95 3/8 offered on Thursday.

For the second quarter, the company reported a net loss of $115 million, or $0.24 per diluted share, compared to a net loss of $78 million, or $0.16 per diluted share, in the previous year.

Operating revenues for the quarter were $1.43 billion, versus $1.445 billion in the second quarter of 2009.

And, adjusted EBITDA for the quarter was $381 million, down 17% from $457 million in the prior year.

Calpine updates outlook

Also on Friday, Calpine updated and tightened its full-year 2010 guidance, which includes the estimated impact of the planned sale of its Colorado power plants.

Including the sale, the company is projecting adjusted EBITDA of $1.65 billion to $1.725 billion.

Additionally, the company is expecting adjusted free cash flow for the year to be $475 million to $550 million. Adjusted free cash flow for the second quarter had been $117 million, compared to $171 million in the second quarter of 2009.

Calpine is a Houston-based power generation company.

Las Vegas Sands dips

Las Vegas Sands' strip of institutional bank debt was a touch lower during Friday's trading session as the company launched its amend and extend transaction, according to traders.

The strip of debt was quoted by one trader at 92¾ bid, 93½ offered, versus 93 bid, 93½ offered, and by a second trader at 92 7/8 bid, 93¼ offered, down from 93 bid, 93½ offered.

Under the proposal, the company is seeking to push out the maturity on $2.25 billion of its term loan debt by 2½ years at pricing of Libor plus 250 bps, up from current pricing of Libor plus 175 bps.

As of March 31, the company had $3.9 billion of delayed-draw and term loan B debt outstanding, but as part of the amend and extend, $750 million of the term loan borrowings would be repaid.

Lenders are being offered a 10 bps amendment fee.

Las Vegas Sands is a Las Vegas-based developer of multi-use integrated resorts.

Midcontinent firms pricing

Moving to the primary, Midcontinent Communications set pricing on its $350 million 61/2-year term loan B at Libor plus 450 bps, the tight end of the initial Libor plus 450 bps to 475 bps talk, and added a step-down to Libor plus 425 bps once leverage falls below 3.5 times, according to a market source.

"Institutional market loved the term B. [It] was well over two times over," the source said.

As before, the term loan B has a 1.75% Libor floor, is offered at an original issue discount of 98½ and carries 101 soft call protection for one year.

Books on the term loan B officially closed on Wednesday at 5 p.m. ET.

Midcontinent pro rata

Midcontinent Communications' $675 million senior secured credit facility (B1/B+) also includes a $125 million 51/2-year revolver and a $200 million 51/2-year term loan A, with both of these tranches priced at Libor plus 400 bps. The revolver has a 50 bps unused fee.

The revolver and term loan A were fully subscribed before the term loan B launch even took place.

Allocations and closing are both expected to take place during the week of Aug. 2.

SunTrust, Wells Fargo, US Bank and RBC are the joint bookrunners on the deal, with SunTrust the left lead. CoBank and Bank of America have signed on as agents.

Midcontinent funding distribution

Proceeds from Midcontinent Communications' credit facility will be used to fund a $320 million distribution to the partnership, refinance about $230 million of debt and for general corporate purposes.

The company is a partnership that was formed in April 2000 as joint venture between Midcontinent Media Inc. and Comcast Corp.

Larry Bentson, the company's founder, passed away in 2009 and left the business to its three top officers. As part of the estate settlement, the company has to pay $160 million to the estate and $160 million to Comcast, which is the $320 million distribution that the credit facility will finance.

Midcontinent Communications is a Minneapolis-based provider of cable television, local and long-distance digital telephone service and high-speed internet access.

Concho launches

In other news, Concho Resources Inc. launched its $800 million add-on to its revolving credit facility on Thursday with price talk that is in line with existing revolver pricing, which is Libor plus 200 bps to 300 bps based on the outstanding debt balance, according to a market source.

With the add-on, the Midland, Texas-based oil and natural gas company's revolver would be increased to $2 billion from $1.2 billion.

JPMorgan and Bank of America are the lead banks on the deal that will be used to help fund the acquisition of all the oil and gas assets of Marbob Energy Corp. for $1.65 billion in cash and Concho securities.

Completion of the acquisition and the private placement of stock are expected to occur on Nov. 1, subject to certain preferential rights to purchase, due diligence, customary purchase price adjustments and other customary conditions.

Charles River not buying WuXi

Charles River Laboratories International Inc. announced late Thursday night in a news release that it has mutually agreed with WuXi PharmaTech Inc. to terminate their previously announced $1.6 billion acquisition agreement as a result of stockholders' concerns.

To help fund the transaction, Charles River was going to get a $1.2 billion senior secured credit facility (Ba1/BBB-), consisting of an about $950 million five-year term loan A and a $250 million five-year revolver.

Initial pricing on both tranches was expected to be Libor plus 275 bps. The spread was going to able to range from Libor plus 200 bps to 275 bps based on leverage. And, the commitment fee on the revolver was going to range from 25 bps to 50 bps based on leverage.

JPMorgan and Bank of America were acting as the lead banks on the deal.

Charles River is a Wilmington, Mass.-based provider of research models and associated services and of preclinical drug development services.

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