Epicor breaks; Cengage slides with earnings; Star West, U.S. TelePacific tweak deals

By Sara Rosenberg

New York, May 11 - Epicor Software Corp.'s credit facility freed up for trading on Wednesday after the original issue discount on the term loan was set at the wide end of talk, and Cengage Learning's term loan B weakened as investors were disappointed with earnings results.

In more loan happenings, Star West Generation LLC made some changes to its term loan B, including flexing the spread higher and beefing up the call protection, and U.S. TelePacific tightened the original issue discount on its term loan add-on.

Also, SymphonyIRI Group Inc., Quintiles Transnational Corp. and Exopack Holdings Corp. released price talk on their credit facilities as the deals were launched to lenders during the session.

Furthermore, Pre-Paid Legal Services Inc. began floating early guidance on its upcoming facility, and CHG Healthcare Services, Butler Schein Animal Health and EIG Global Energy Partners surfaced with plans to bring new deals to market.

Epicor firms OID

Epicor Software finalized the original issue discount on its $870 million seven-year covenant-light term loan at 99, the high end of the 99 to 99½ talk, while leaving pricing unchanged at Libor plus 375 bps with a 1.25% Libor floor, according to a market source.

Also, 101 soft call protection for one year was added to the loan, the source said.

The company's $945 million senior secured credit facility (Ba3/B+) also includes a $75 million five-year revolver priced at Libor plus 375 bps with step-downs to Libor plus 350 bps at 3.5 times total net first-lien leverage and to Libor plus 325 bps at 3.0 times total net first-lien leverage. The commitment fee is 75 bps with a step-down to 50 bps when total first-lien leverage is below 3.0 times.

Pricing on the tranches firmed in line with what was outlined by the company in the commitment letter filed with the Securities and Exchange Commission.

Epicor starts trading

After pricing was determined, Epicor's credit facility made its way into the secondary market, with levels on the term loan quoted at 99¼ bid, 99 5/8 offered on the open and then it moved to 99 3/8 bid, 99 5/8 offered, according to a trader.

Bank of America Merrill Lynch and RBC Capital Markets LLC are leading the credit facility that will be used to fund Apax Partners' buyout of the company for $12.50 per share in cash and the buyout of Activant Solutions Inc. from Hellman & Friedman LLC, Thoma Bravo, LLC and JMI Equity.

Other funds for the transaction will come from $465 million of senior unsecured notes due in 2019 that priced on Wednesday at par to yield 8 5/8% and $647 million of equity.

Closing is expected to take place on May 13.

Epicor is an Irvine, Calif.-based provider of enterprise business software services. Activant is a Livermore, Calif.-based technology provider of ERP and point-of-sale software.

Cengage down on numbers

Also in trading, Cengage Learning's term loan B dropped after the company came out with results for the third quarter ended March 31 that showed a year-over-year decline in earnings, revenues and adjusted EBITDA, according to a trader.

The B loan was quoted at 95¼ bid, 95¾ offered, down fro 96½ bid, 97 offered, the trader said.

For the quarter, the company reported a net loss of $95.5 million, compared to a net loss of $88.7 million in the previous year.

Revenues for the quarter were $319 million, down from $351.7 million in the third quarter of ended March 31, 2010.

And, adjusted EBITDA for the quarter was $89.7 million, compared to $106.6 million last year.

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

Allen Systems tops par

Allen Systems Group Inc.'s term loan, including the new $115 million add-on (Ba2/BB-), was quoted at par ½ bid, 101 offered on Wednesday, according to a trader, who said that the add-on allocated and freed up earlier this week.

The add-on is priced in line with the existing term loan at Libor plus 475 bps with a 1.75% Libor floor. The add-on was sold at an original issue discount of 991/2, after tightening from 99, the trader said.

Bank of America Merrill Lynch and KeyBanc Capital Markets LLC are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of visionapp AG, a Germany-based provider of software and services for private, public and hybrid cloud services.

Allen Systems is a Naples, Fla.-based enterprise software provider.

Star West ups pricing

Back over in the primary market, Star West Generation raised pricing on its $650 million seven-year term loan B to Libor plus 450 bps from talk of Libor plus 375 bps to 400 bps, while leaving the 1.5% Libor floor and original issue discount of 99½ intact, according to a market source.

Furthermore, call protection on the term loan B was revised to 102 in year one and 101 in year two from just 101 soft call protection for one year, the source said.

Recommitments were due from lenders at noon ET on Wednesday.

Allocations are expected to go out sometime next week, the source added.

Star West getting revolver

Star West Generation's $750 million senior secured credit facility (Ba3/B+) also provides for a $100 million five-year revolver.

Barclays Capital Inc., RBC Capital Markets LLC and Citigroup Global Markets Inc. are the lead banks on the deal.

Proceeds will be used to help fund Highstar Capital's acquisition of 100% of the equity interests of the Arlington Valley and Griffith power generation plants located in Arizona from LS Power.

The transaction is subject to customary regulatory approvals.

U.S. TelePacific cuts OID

U.S. TelePacific modified the original issue discount on its $50 million term loan add-on to 99½ from 99, according to a market source. As before, pricing is in line with existing term loan pricing at Libor plus 450 bps with a 1.25% Libor floor.

The existing $435 million six-year term loan was obtained in February and was sold at par. The tranche includes 101 soft call protection for one year, which the add-on will have as well.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used for acquisition financing.

U.S. TelePacific is a Los Angeles-based competitive local exchange carrier.

SymphonyIRI sets talk

SymphonyIRI Group held a bank meeting with a 2 p.m. ET start time at the Pierre Hotel in New York on Wednesday to kick off syndication on its $450 million credit facility (B1/B+), and in connection with the event, price talk emerged, according to a market source.

Both the $50 million five-year revolver and the $400 million 61/2-year term loan B are being talked at Libor plus 375 bps to 400 bps, with the B loan having a 1.25% Libor floor, 101 soft call protection for one year and an offer price of 991/2, the source said. The revolver has no Libor floor and a 50 bps upfront fee.

The term loan B is covenant-light, while the revolver includes senior secured leverage and interest coverage covenants.

SymphonyIRI to be purchased

Proceeds from SymphonyIRI's credit facility will be used to help fund the buyout of the company by New Mountain Capital LLC and management.

Other funds for the transaction will come from $420 million of equity.

Bank of America Merrill Lynch, Jefferies & Co. and BMO Capital Markets Corp. are the lead banks on the credit facility.

SymphonyIRI is a Chicago-based provider of sales and marketing data and analytic services for customers in the consumer packaged goods and consumer health industries.

Quintiles guidance emerges

Quintiles Transnational launched its credit facility with a conference call on Wednesday afternoon, at which time lenders were told that the $2 billion term loan B due in 2018 is being talked at Libor plus 375 bps with a 1.25% Libor floor, an original issue discount of 99 to 99½ and 101 soft call protection for one year, according to a market source.

The company's $2.225 billion credit facility also provides for a $225 million revolver due in 2016 that is talked at Libor plus 275 bps with a 50 bps unused fee. Upfront fees are 100 bps for commitments of $15 million and 75 bps for commitments of less than $15 million.

J.P. Morgan Securities LLC, Barclays Capital Inc., Morgan Stanley & Co. Inc., Citigroup Global Markets Inc. and Wells Fargo Securities LLC are the lead banks on the deal.

Quintiles refinancing debt

Quintiles will use the proceeds from its credit facility to replace $1.7 billion of existing debt, including $525 million of 9½% senior notes due December 2014.

The tender offer for the notes expires on June 7.

The company had attempted a similar refinancing effort in March, which was later pulled because of market conditions.

At that time, the company was looking to get a $2.43 billion credit facility, comprised of a $2.2 billion term loan B due in 2018 talked at Libor plus 300 bps to 325 bps with a 1.25% Libor floor and an original issue discount of 99½ and a $225 million revolver due in 2016. The term loan B included 101 soft call protection for six months.

Quintiles is a Durham, N.C.-based biopharmaceutical services company offering clinical, commercial, consulting and capital services.

Exopack pricing

Yet another deal to launch during market hours was Exopack, and its $400 million six-year covenant-light term loan is being talked at Libor plus 450 bps with a 1.25% Libor floor and an original issue discount of 991/2, according to a market source.

Bank of America Merrill Lynch and Goldman Sachs & Co. are the lead banks on the $475 million credit facility, which also includes a $75 million five-year ABL revolver.

Proceeds, along with $225 million of senior unsecured notes, will be used to repay all outstanding borrowings under the company's existing revolver, purchase any and all of its outstanding 11¼% senior notes due 2014 and make a distribution to stockholders.

Exopack is a Spartanburg, S.C.-based full-service paper and plastic flexible packaging products manufacturer.

Pre-Paid floats talk

Pre-Paid Legal Services began circulating early price talk of Libor plus 450 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 98½ on its proposed $430 million senior secured credit facility ahead of the Tuesday bank meeting that will launch the transaction, according to a market source.

The facility consists of a $400 million six-year term loan B and a $30 million five-year revolver. The term loan B is coming slightly smaller than the $410 million that was previously outlined in filings with the SEC because the company generated more cash on its balance sheet.

Macquarie Capital, RBC Capital Markets LLC, KeyBanc Capital Markets LLC and Bank of Ireland are the lead banks on the deal.

Pre-Paid funding buyout

Proceeds from Pre-Paid Legal Services' credit facility will be used to help fund its acquisition by MidOcean Partners for $66.50 per share, or about $650 million.

Other funds for the transaction will come from equity.

Commitments towards the credit facility will be due on June 1 and closing is targeted for June 30, subject to stockholder and regulatory approvals.

Pre-Paid Legal Services is an Ada, Okla.-based provider of legal service benefits through a network of independent law firms.

CHG plans repricing

In other news, CHG Healthcare Services has set a call for Thursday to launch a repricing of its $217 million first-lien term loan, with price talk on the transaction expected to come out at launch, according to a market source.

Barclays Capital Inc., Bank of America Merrill Lynch and Goldman Sachs & Co. are the lead banks on the deal.

Current pricing on the first-lien term loan is Libor plus 550 bps with a step-down to Libor plus 525 bps when leverage is less than 4.0 times. There is a 1.75% Libor floor, and the debt was sold at an original issue discount of 98 when it was obtained in late 2010. The original size was $230 million.

The Salt Lake City-based health care staffing provider will pay out the existing loan at 101 as a result of soft call protection.

Butler readies launch

Butler Schein Animal Health is also set to hold a lender call on Thursday, at which time it will launch a proposed $366 million credit facility, according to a market source.

The facility consists of a $50 million revolver and a $75 million term loan A, both talked at Libor plus 300 bps with no Libor floor, and a $241 million term loan B talked at Libor plus 325 bps with a 1.5% Libor floor and an offer price of 99¾ to par, the source said.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to refinance existing bank debt.

Butler Schein Animal Health is a Dublin, Ohio-based companion animal health distribution company.

EIG expected soon

EIG Global Energy Partners is looking at next week to hold a bank meeting for a proposed $100 million secured term loan facility due in 2016, with the firm date still be decided on, according to an informed source.

Price talk is not yet available, the source added.

Goldman Sachs & Co. is the lead arranger and bookrunner on the deal that will be used primarily to invest in funds managed by the company and for continued expansion.

EIG is a Washington, D.C.-based institutional investor to the energy sector.

Town Sports closes

Town Sports International Holdings Inc. completed its $350 million senior secured credit facility (B1/B), comprised of a $50 million five-year revolver and a $300 million seven-year term loan B, according to an 8-K filed with the SEC.

Pricing on the tranches is Libor plus 550 bps, with the B loan having a 1.5% Libor floor, hard call protection of 102 in year one and 101 in year two and an original issue discount price of 99.

During syndication, B loan pricing was increased from revised talk of Libor plus 475 bps and from initial talk of Libor plus 425 bps to 450 bps, the discount widened from 99½ and call protection was sweetened from 101 soft call for one year.

Deutsche Bank Securities Inc. and KeyBanc Capital Markets LLC acted as the lead banks on the deal that was used by the New York-based owner and operator of fitness clubs to repay an existing credit facility and to redeem 11% senior discount notes due 2014.

Springleaf Financial closes

Springleaf Financial Funding Co. closed on its $3.75 billion six-year senior secured term loan (B2/B+) that is priced at Libor plus 425 bps with a 1.25% Libor floor and was sold at an original issue discount of 991/2, according to an 8-K filed with the SEC. There is hard call protection of 102 in year one and 101 in year two.

During syndication, the loan was upsized from $3 billion.

Bank of America Merrill Lynch was the lead arranger on the deal that was used to refinance the company's existing term loan that was obtained last year at pricing of Libor plus 550 bps with a 1.75% Libor floor and sold at an original issue discount of 98½ as well as for general corporate purposes.

Springleaf Financial is an Evansville, Ind.-based provider of loans, retail financing and other credit-related products.

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