Pierre Foods tweaks loan, breaks; HCA rises on paydown; Solutia softens with acquisition

By Sara Rosenberg

New York, March 1 - Pierre Foods Inc. made some changes to its term loan on Monday morning, including increasing the size, lowering the discount and firming pricing at the tight end of talk, and then proceeded to free the deal up for trading late day.

Continuing on the trading front, HCA Inc.'s term loans were higher on repayment news, and Solutia Inc.'s term loan was a little bit lower after the company revealed that it will be making an acquisition and getting some additional debt to help finance the transaction.

And, in other news, Emergency Medical Services Corp. announced plans to come to market later this week with a new credit facility and so did Information Solutions. Also, MSCI Inc. said that it will get a new billion dollar-plus credit facility in connection with its purchase of RiskMetrics Group Inc.

Pierre revises size, pricing

Pierre Foods came out with a couple of modifications to the size and pricing of its term loan early on in the day that resulted from strong investor demand, according to a market source.

Under the revisions, the term loan is now sized at $275 million, up from $260 million, the source said. Prior to launch, the deal was described as $260 million to $265 million, but at the actual meeting, it was presented at the low end of that guidance.

In addition, pricing on the term loan finalized at Libor plus 500 basis points, the low end of the Libor plus 500 bps to 525 bps talk that was presented to lenders at launch. However, prior to launch, pricing guidance on the loan was circulating in the Libor plus 500 bps area.

Also, the original issue discount was reduced to 99½ from the initial talk of 99 and 101 soft call protection for one year was added to the tranche, the source remarked.

As before, the term loan includes a 2% Libor floor.

Pierre frees up

After announcing these changes to Pierre Foods' term loan and getting recommitments in from investors by 3 p.m. ET on Monday, the loan allocated and hit the secondary market, the source said.

The term loan was quoted at par ¼ bid, 101¼ offered when it first started trading late in the day and then it tightened up to par ¼ bid, 101 offered, the source continued.

Deutsche Bank is the lead bank on the deal that will be used to refinance an existing term loan and fund a dividend.

Covenants under the term loan include a leverage test that starts at 4.25 times.

Ratings on the term loan of B2/BB- and corporate ratings of B2/B were confirmed following the revisions to the transaction.

Pierre Foods is a Cincinnati, Ohio-based producer of fully cooked beef, pork, chicken, turkey, peanut butter and bakery products for school, foodservice, retail, vending and convenience store markets.

HCA gains ground

HCA's term loans were better in the secondary market after the company said that it will be repaying some of the debt, according to a trader.

The term loan B was quoted at 95¾ bid, 96¼ offered, up from 95 1/8 bid, 95½ offered, and the term loan A was quoted at 95¼ bid, 96 offered, up from 94½ bid, 94 7/8 offered, the trader said.

On Monday, HCA announced that it will be selling $1 billion of senior secured first-lien notes.

As required by the company's senior secured credit facility, proceeds from the notes offering will be used to repay term loans.

HCA is a Nashville-based owner and operator of hospitals and surgery centers.

Solutia dips in trading

Solutia's term loan was a touch softer during Monday's quiet trading session as the company announced that it will be purchasing Etimex Solar GmbH from Etimex Holding GmbH, according to a trader.

The term loan was quoted at 101¼ bid, 101¾ offered, down an eighth of a point on the day, the trader said.

Under the acquisition agreement, Solutia is buying Etimex Solar for €240 million in cash.

Funding for the transaction will come from some new debt financing as well as from existing cash on hand.

Closing is expected to take place in the second quarter, subject to customary conditions, including receipt of governmental approvals.

Solutia is a St. Louis-based performance materials and specialty chemicals company. Etimex Solar is a supplier of ethylene vinyl acetate encapsulants to the photovoltaic market.

Emergency Medical slates deal

Back over on the primary side of things, news emerged on Monday that Emergency Medical Services will be holding a bank meeting later this week to kick off syndication on a proposed $550 million credit facility, according to a market source.

Bank of America, Barclays and JPMorgan are the lead banks on the deal that will be launched on Thursday, with Bank of America the left lead.

Tranching on the facility is comprised of a $125 million revolver and a $425 million term loan, the source said.

Proceeds will be used to refinance existing debt.

Emergency Medical is a Greenwood Village, Colo.-based ambulance and facility-based physician services company.

Information Solutions sets launch

Another deal that will be launching on Thursday is Information Solutions' proposed $350 million term loan that is talked at Libor plus 325 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

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

Information Solutions is the information services businesses of Santa Ana, Calif.-based First American Corp. that is being separated from First American's financial services businesses and formed into an independent publicly traded company.

The spin-off of the information services and financial services entities is expected to be completed in the first half of this year, but because of outstanding approvals, the company has revised its spin-off target date to June 1.

MSCI to get new loan

MSCI announced on Monday that it has received a commitment for a $1.375 billion senior secured credit facility from Morgan Stanley to help finance the acquisition of RiskMetrics.

The credit facility consists of a $100 million five-year revolver, which is expected to be undrawn at closing, and a $1.275 billion six-year term loan B, with both tranches expected at Libor plus 350 bps with a 1.5% Libor floor.

Based on today's market, the company is assuming an interest rate of around 5% to 5½% on the new term loan B, company officials said in a conference call.

In addition to helping finance the acquisition, the credit facility will be used to refinance existing senior secured credit facilities at MSCI and RiskMetrics and the ongoing working capital needs of the company.

MSCI plans to delever

MSCI said that it expects to delever its balance sheet rather quickly since it should generate very strong free cash flows. At close, net debt to 2009 adjusted EBITDA will be 3.6 times and net debt to 2009 adjusted EBITDA plus run-rate synergies will be 3.1 times.

Under the agreement, MSCI is buying RiskMetrics in a cash and stock transaction valued at $21.75 per share based on MSCI's closing price of $29.98 per share on Feb. 26, or $1.55 billion.

Other funding for the acquisition will come from $642 million of existing cash.

Closing is expected to occur sometime in the June/July timeframe.

MSCI is a New York-based provider of investment decision support tools to investment institutions. RiskMetrics is a New York-based provider of risk management and corporate governance products and services to the financial community.

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