Bolthouse dips on botulism; Cablevision A loan up on Dolan proposal; MultiPlan breaks; Boart tweaks deal

By Sara Rosenberg

New York, Oct. 10 - Bolthouse Farms' first-lien term loan headed lower in trading Tuesday as more botulism poisoning cases surfaced, Cablevision Systems Corp.'s term loan A inched higher on the proposed buyout by the Dolan Family Group, MultiPlan Inc.'s term loan add-on freed for trading and Transeastern's term loan was once again lower on continued concerns over the company's financials.

In the primary, Boart Longyear Co. moved some funds out of its second-lien term loan and into its first-lien term loan B, and added original issue discounts to its second-lien term loan and senior unsecured holding company term loan.

Bolthouse Farms' first-lien term loan softened during market hours as The Colorado Department of Public Health and Environment joined the U.S. Food and Drug Administration and the Canadian Food Inspection Agency in suggesting that consumers not drink Bolthouse Farms Carrot Juice, according to a trader.

The carrot juice has been linked to botulism poisoning cases in Florida and Toronto.

As news of additional botulism cases popped up Tuesday, Bolthouse's first-lien term loan dropped to 99¾ bid, par ¼ offered from previous levels of par ¼ bid, par ¾ offered, the trader said.

The company has voluntarily recalled 100% of its carrot juice products, pulling them off the market in the United States, Canada, Mexico and Hong Kong.

Bolthouse is a San Joaquin Valley, Calif., farmer and distributor of fresh produce.

Cablevision rises on Dolan proposal

Cablevision's term loan A traded higher and closer to par on Tuesday in response to Dolan's proposed purchase of the company, and as a result, potential refinancing of all of its debt, according to a trader.

The term loan A closed the day quoted at 99¾ bid, par offered, up about a half a point when compared to previous levels, the trader said.

Meanwhile, the company's term loan B closed the day at 99 7/8 bid, par 1/8 offered, unchanged on the day since it's already trading around par - the level at which the debt would be taken out if the buyout proposal is accepted, the trader explained.

Under the recently proposed transaction, Dolan has offered Cablevision stockholders $27 per share in cash. The proposal values the total equity of Cablevision at about $7.9 billion and implies an enterprise value of about $19.2 billion.

In response to the proposal, Cablevision said that its board of directors appointed a special transaction committee to evaluate and act on the transaction.

Dolan has received commitments from Merrill Lynch and Bear Stearns for $9.55 billion in new credit facilities and $2.81 billion in high-yield bonds for acquisition financing as well as to refinance existing Cablevision debt.

Cablevision is a Bethpage, N.Y., media, entertainment and telecommunications company.

MultiPlan frees to trade

In other trading news, MultiPlan's $360 million term loan add-on (B2/B+) hit the secondary on Tuesday, with levels seen at par bid, par ½ offered, according to a trader.

The add-on is priced at Libor plus 250 basis points and was offered to investors with an original issue discount of 993/4. During syndication, pricing on the add-on was flexed up from original talk at launch of Libor plus 225 bps and the discount was added.

Bank of America and Goldman Sachs are the lead banks on the deal that will be used to fund the acquisition of Private Healthcare Systems, Inc.

MultiPlan is a New York-based independent preferred provider organization network. Private Healthcare is a Waltham, Mass., provider of network and medical management services.

Transeastern drops again

Also in trading, Transeastern's term loan fell by about another point or two during market hours as investors continue to fret over the company's capital structure and participation in the weak Florida housing market, according to a trader.

The term loan closed the day at 63 bid, 65 offered, down from 64 bid, 67 offered, the trader remarked.

The term loan's descent began early in the week of Sept. 25 after an announcement was made that because of housing market conditions, the company cannot support its existing capital structure. Prior to that news, the debt was being quoted in the high 90's.

Transeastern said that it is exploring various options to fix the liquidity problem, including requesting waivers from its lenders regarding potential defaults and permitting future advances under the revolver, and restructuring land bank obligations.

Neither Technical Olympic USA Inc. nor Falcone Group, the participants in the Transeastern joint venture, plan to put any more equity capital into the company until the capital structure problems are resolved.

Technical Olympic is a Hollywood, Fla.-based builder and seller of single family homes.

Boart retranches, adds discounts

Switching to the primary, Boart Longyear shifted some funds from it second-lien term loan to its first-lien term loan B due to oversubscription on the first lien, and added original issue discounts to the second-lien and senior unsecured holding company term loans, according to a market source.

The six-year first-lien term loan B is now sized at $790 million, up from a most recent size of $770 million, the source said. Pricing on the tranche, which received $1.1 billion in orders from more than 80 accounts, remained at Libor plus 325 bps. The term loan B requires that the company amortize $120 million of the debt within the first 18 months.

Meanwhile, the seven-year second-lien term is now sized at $280 million, down from a most recent size of $300 million, the source continued. Pricing on this tranche remained at Libor plus 700 bps and call premiums of 102 in year one and 101 in year two stayed intact, but an original issue discount of 99½ was added to the paper.

The company's $200 million senior unsecured 18-month holdco term loan also saw the addition of a discount as investors ended up being offered the paper at a price of 98, the source remarked. The spread on the tranche remained at Libor plus 850 bps cash pay. "Great deal since it will likely be taken out by an IPO within a year...resulting in a Libor plus 1050 bps return!," the source added.

Boart's $1.395 billion facility also includes a $125 million five-year revolver priced at Libor plus 325 bps.

The recent shift in funds and addition of discounts is not the first changes that the Boart deal has undergone since launching into syndication. Originally, the facility was launched as a $650 million first-lien term loan B and a $320 million 18-month first-lien capital markets term loan that was being talked at Libor plus 325 bps, in addition to the $125 million revolver and $300 million second-lien. However, on Sept. 25, the syndicate decided to upsize the first-lien term loan B by $120 million to $770 million, eliminate the 18-month first-lien capital markets term loan from the capital structure and add the $200 million holdco unsecured term loan.

First-lien leverage is now 3.5 times and operating company leverage is 4.8 times. Originally, first-lien leverage was 4.4 times, it was then reduced to 3.4 times with the first tweaks to the credit facility and now it has stepped up slightly with the new round of changes. Operating leverage was originally 5.7 times, but it was reduced to current leverage levels during the first round modifications.

Credit Suisse is bookrunner on the deal that will be used to help fund the acquisition of a majority interest in Boart Longyear by an investor group led by Macquarie Bank Ltd.

Macquarie's investor group will own a 51% stake in the business, while existing sponsors Advent International, Bain Capital and management will roll over $200-plus million and retain a 49% stake in the company.

Concurrently, Boart Longyear is acquiring two businesses, Northwest Drilling and Drillcorp, increasing Sept. 30 last-12-month EBITDA to $225 million.

Boart Longyear is a Salt Lake City-based drilling-services provider.

Conseco closes

Conseco Inc. closed on its $675 million seven-year senior secured term loan (Ba3/BB-) that is priced at Libor plus 200 bps, according to a company news release.

Bank of America and JPMorgan acted as the lead banks on the deal that was used to refinance the company's existing $478 million term loan debt and strengthen the capital of its insurance subsidiaries.

Conseco is a Carmel, Ind., insurance company.

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