SVP, CharterMac, Citco mull changes; Quantum tweaks terms; Verso, El Paso break

By Sara Rosenberg

New York, July 28 - A couple of in-market deals are rumored to be undergoing some changes soon, including SVP Worldwide, which is thinking of carving a second-lien term loan out of its first-lien term loan, CharterMac, which may need to increase term loan pricing to clear the market and Citco, which may end up canceling its mezzanine debt and increasing its first-lien term loans.

In other primary happenings, Quantum Corp. added some features to its credit facility and firmed up pricing on its term loan B tranche.

Switching to the secondary, Verso Papers Holdings LLC and El Paso Corp. both freed for trading, with the Verso term loan B and the El Paso letter-of-credit facility quoted atop par.

SVP Worldwide is rumored to be adding a new second-lien term loan to its capital structure with the funds coming out of its first-lien term loan tranche, and pricing on the first-lien term loan is anticipated to be flexed up, according to market source.

Talk suggests that the first-lien term loan (B1/B+) will be downsized to $170 million from $240 million and pricing will increase to Libor plus 300 basis points from original talk at launch of Libor plus 250 basis points, the source said. Previous rumors that were circulating earlier in the week had price talk on the loan widening out to the Libor plus 275 to 300 basis points range.

To compensate, market sources are hearing that a $70 million second-lien term loan will be added to the capital structure with price talk of Libor plus 600 basis points and call protection of 102 in year one and 101 in year two, the source continued.

It is also rumored that this new potential structure is well oversubscribed.

As for the company's proposed $75 million revolver (B1/B+), it was unclear whether pricing would stay at the original talk of Libor plus 250 basis points or if it would flex up to Libor plus 300 basis points with the first-lien term loan, the source added.

No official changes on the $315 million senior secured credit facility have actually been announced as of yet.

UBS is the lead bank on the deal that will be used to refinance existing debt and fund seasonal working capital build.

SVP is a manufacturer, marketer, and distributor of consumer sewing machines.

CharterMac contemplating flex

In this somewhat buyside favoring primary market, CharterMac's $350 million six-year term loan is heard to be getting lots of tickets at pricing of Libor plus 225 to 250 basis points, creating the anticipation that the Libor plus 200 basis point price that the transaction was launched with will have to be revised to meet the demand, according to a market source.

No official change to the term loan's price talk has been announced as of yet, the source said.

CharterMac's $500 million credit facility (Ba3/BB) also contains a $150 million three-year revolver that is being talked at Libor plus 175 basis points.

UBS and Bank of America are the lead banks on the deal.

Proceeds from the term loan will be used to fund the acquisition of ARCap Investors, LLC in a transaction valued at $284.5 million.

The revolver will replace the company's existing tax credit warehouse facility and will be used for general corporate purposes.

CharterMac is a New York-based full-service real estate finance company. ARCap is a Dallas-based fund manager specializing in the acquisition, management and servicing of high-yield commercial mortgage-backed securities and high-yield direct real estate loans.

Citco considering upsizing

Citco is rumored to planning some changes to its capital structure, with market talk saying that the mezzanine debt will be eliminated and the two first-lien term loans will be upsized to compensate for the lost funds, according to a market source.

These structural changes are expected based on the overwhelming demand that the bank deal has received so far, the source explained.

Currently, Citco's seven-year term loan B is sized at $150 million and talked at Libor plus 275 basis points, and its eight-year term loan C is sized at $150 million and talked at Libor plus 325 basis points.

The nine-year mezzanine debt is sized $95 million and talked at 5% cash pay plus 6% pay-in-kind.

There was no word on how much of the $95 million is expected to be placed into the term loan B tranche and how much is expected to be placed into the term loan C tranche.

Citco's $380 million credit facility also contains a $20 million six-year revolver talked at Libor plus 225 basis points and a $60 million six-year term loan A talked at Libor plus 225 basis points.

UBS is the bookrunner on the deal that will be used to refinance existing debt.

Citco is a provider of administrative, fiduciary and financial services around the world primarily for hedge funds.

Quantum fine-tunes terms, firms spread

Quantum added some new features to its proposed credit facility (B3/B) on Friday, including term loan amortization of 10%, excess cash flow recapture and an accelerated four-year maturity on the term loan if the company's convertibles due in 2010 are not redeemed, according to a market source.

In addition, pricing on the $350 million six-year term loan B firmed up during the session at Libor plus 400 basis points, the source said.

Quantum's $500 million credit facility also includes a $150 million three-year revolver with grid-based pricing.

Covenants under the facility include minimum EBITDA, maximum total leverage, maximum senior leverage, minimum fixed charge coverage ratio and minimum unrestricted cash.

Commitments from lenders are due on Aug. 8.

KeyBanc Capital Markets is the lead arranger, bookrunner and administrative agent on the deal.

Proceeds from the credit facility, along with available cash on hand, will fund the approximately $780 million acquisition of Advanced Digital Information Corp. and for general corporate purposes.

Under the purchase agreement, Advanced Digital shareholders will receive $12.25 per share in cash, with the right to elect, in lieu of cash, 3.461 shares of Quantum stock for each share they own. The stock election is subject to pro-ration such that Quantum will issue no more than approximately 10% of the total merger consideration in Quantum stock.

Quantum is a San Jose, Calif., provider of storage, backup, recovery and archive solutions. Advanced Digital is a Redmond, Wash., provider of intelligent storage solutions for the open systems marketplace.

Acosta expected at wide end

Acosta Sales and Marketing Co.'s $680 million term loan is anticipated to firm up with pricing of Libor plus 275 basis points, the high end of original guidance of Libor plus 250 to 275 basis points, according to a market source.

The deal is expected to allocate early in the week of July 31, with the anticipation that it may be as soon as Monday, the source added.

Acosta's $740 million credit facility also contains a $60 million revolver.

Wachovia and Goldman Sachs are the lead banks on the deal that will be used, along with $385 million of mezzanine debt led by Goldman, to help fund the leveraged buyout of the company by AEA Investors from Berkshire Partners.

Acosta is a Jacksonville, Fla., full-service sales and marketing agency.

Made2Manage flexes up

Made2Manage Systems Inc. revised price talk higher on its proposed $180 million credit facility based on the ratings that emerged on the deal this past Thursday, according to a market source.

The $15 million revolver (B2/B-) and the $100 million term loan B (B2/B-) are now being talked at Libor plus 400 basis points, up from original price talk at launch of Libor plus 325 basis points, the source said.

Meanwhile, the $65 million second-lien term loan (Caa1/CCC) is now being talked at Libor plus 725 basis points, up from original talk at launch of Libor plus 675 basis points, the source added. This tranche contains call protection of 102 in year one and 101 in year two.

BMO Capital is the lead bank on the deal.

Proceeds will be used by the provider of enterprise information systems to help fund the acquisition of Onyx Software Corp., a Bellevue, Wash.-based provider of customer relationship management software.

Indianapolis-based Made2Manage is the primary asset of M2M Holdings Inc., a holding company jointly owned by Battery Ventures VI, LP and Thoma Cressey Equity Partners.

United Surgical cuts pricing

United Surgical Partners International Inc. reverse flexed pricing on its $200 million seven-year term loan B (Ba2/BB-) to Libor plus 175 basis points from Libor plus 200 basis points, according to a market source.

However, pricing will step up to Libor plus 200 basis points if the company loses either one of its current loan ratings, the source added.

The loan was originally launched with spread guidance of Libor plus 200 to 225 basis points, but, based on the amount of interest it received, the 225 basis point price talk had basically been taken off the table during the syndication process.

Allocations on the deal are expected to go out toward the end of the July 31 week.

Bear Stearns and SunTrust are joint lead arrangers on the deal, with Bear acting as bookrunner.

The term loan will have two covenants - a debt to EBITDA requirement and an EBITDAR to interest plus rents requirement.

At close, leverage will be 2.7x.

Proceeds will be used to fund a tender offer for the company's approximately $160 million 10% senior subordinated notes due 2011 and to repay some revolver borrowings.

United Surgical Partners is an Addison, Texas, owner and operator of surgical facilities.

La Petite price talk

La Petite Academy, Inc. is talking its $20 million five-year revolver (B1/B) and $110 million six-year first-lien term B (B1/B) at Libor plus 325 basis points and its $85 million 61/2-year second-lien term loan (B3/CCC) at Libor plus 725 basis points, according to a syndicate document.

The revolver has a 50 basis point commitment fee.

Credit Suisse and JPMorgan are the joint lead arrangers on the $215 million senior secured credit facility, which launched with a bank meeting this past Thursday.

Proceeds will be used to refinance the company's existing senior credit facility and 10% senior notes due 2008.

La Petite is a Chicago-based for-profit preschool provider.

Verso frees to trade

In secondary happenings, Verso's credit facility broke for trading, with the $285 million seven-year term loan B quoted at par 1/8 bid, par 3/8 offered, according to a trader.

The term loan B is priced with an interest rate of Libor plus 175 basis points. During syndication, pricing on the paper was reverse flexed from original talk at launch of Libor plus 200 basis points.

Verso's $485 million credit facility (Ba2/BB) also contains a $200 million six-year revolver with an interest rate of Libor plus 200 basis points and a 50 basis point commitment fee.

Credit Suisse is the lead arranger on the deal that will be used to help fund Apollo Management's leveraged buyout of International Paper's Memphis, Tenn.-based coated and supercalendered papers business for about $1.4 billion.

El Paso breaks

Also hitting the secondary market on Friday was El Paso's new deal, with the $500 million letter-of-credit facility quoted at par ¼ bid, par ¾ offered, according to a trader.

The letter-of-credit facility is priced with an interest rate of Libor plus 200 basis points.

El Paso's $1.75 billion credit facility also includes a $1.25 billion revolver with an interest rate of Libor plus 200 basis points.

Citigroup and JPMorgan are the lead banks on the deal, with JPMorgan administrative agent.

El Paso is a Houston-based provider of natural gas and related products.

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