Sears slides with forecast; YRC falls; Lightower dips on repricing; Emerald tweaks deadline

By Sara Rosenberg

New York, Jan. 10 - Sears Holdings Corp.'s term loan dropped in the secondary market on Friday on the back of disappointing quarterly and full-year earnings expectations being announced, YRC Worldwide Inc.'s term loan B retreated with its canceled refinancing and teamsters issues, and Lightower Fiber Networks' term loans were weaker with first-lien repricing news.

Moving to the primary, Emerald Expositions Holding Inc. accelerated the commitment deadline on its incremental term loan B, Verint Systems Inc. revealed timing and talk on its term loan, and Dematic, Ply Gem Industries Inc., AlixPartners LLP and MRI Software surfaced with deal plans.

Sears softens

Sears' term loan fell in trading on Friday following the company's release of estimated fourth quarter and full-year numbers, according to a trader.

The loan was quoted at 99 5/8 bid, par 3/8 offered, down from par ¾ bid, 101¾ offered, the trader said.

For the quarter ending Feb. 1, the company expects to report a net loss of between $250 million and $360 million, or between $2.35 and $3.39 loss per diluted share. Adjusted for various items (pension expense, store closures and severance), net loss is expected to be between $213 million and $316 million, or between $2.01 and $2.98 loss per diluted share.

By comparison, in the prior year's quarter, net loss was $489 million, or $4.61 loss per diluted share. However, when adjusted to pension settlements, non-cash impairment charges and other items, the company reported net income of $119 million, or $1.12 per diluted share.

Sears also revealed that for its current fourth quarter, it anticipates consolidated adjusted EBITDA between negative $65 million and $65 million, compared to $429 million in last year's fourth quarter.

Sears full-year expectations

For the full-year ending Feb. 1, Sears is guiding its net loss at between $1.3 billion and $1.4 billion, or between $11.85 and $12.88 loss per diluted share, versus a net loss of $930 million, or $8.78 loss per diluted share, last year.

Consolidated adjusted EBITDA for the full-year is expected between negative $284 million and negative $414 million, compared to $626 million in the prior year.

As of Jan.4, the company had total cash of about $1 billion, availability under its credit facilities of $2.3 billion and $6 million in commercial paper outstanding, with commercial paper capacity of $500 million.

Sears is a Hoffman Estates, Ill.-based retailer.

YRC heads lower

YRC's term loan was seen at 94 bid, 95 offered, down from 97½ bid, 99½ offered as, late in the previous session, the company cancelled plans for a bank meeting to launch a $1.15 billion credit facility and news surfaced that teamsters rejected the company's proposal that would have extended and modified an existing memorandum of understanding, according to a trader.

Ratification of the memorandum proposal was one condition to the company's debt reduction agreement.

The Credit Suisse Securities (USA) LLC-led credit facility that was cancelled consisted of a $450 million ABL revolver and a $700 million five-year senior secured term loan, and was going to be used to refinance the existing bank debt.

Prior to the refinancing being announced, the term loan B was trading in the 95 bid, 96 offered context. It then rose to the high-90s when the new credit facility was announced a few days ago. On Friday morning, guys were seeing the B loan in the high-80s to low-90s area before it recovered some of those losses, the trader added.

YRC is an Overland Park, Kan.-based less-than-truckload carrier.

Lightower retreats

Lightower's first-lien term loan softened to par bid, par ½ offered from par ½ bid, 101 offered and its second-lien term loan dropped to 101½ bid, 102½ offered from 102 bid, 103 offered as investors were told that a repricing of the first-lien debt is coming to market, according to a trader.

The company will hold a call on Monday to launch the repricing of its $1,095,000,000 first-lien term loan due April 2020 to Libor plus 325 basis points with a 0.75% Libor floor from Libor plus 350 bps with a 1% Libor floor, a source remarked.

J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc. and SunTrust Robinson Humphrey are leading the deal.

Lightower is a Boxborough, Mass.-based metro fiber and bandwidth provider.

Emerald shutting early

Over in the primary, Emerald Expositions moved up the commitment deadline on its fungible $200 million covenant-light incremental term loan B due June 2020 to noon ET on Monday from Wednesday, according to a market source.

Pricing on the incremental loan is Libor plus 425 bps with a 1.25% Libor floor, in line with the existing term B, and it is offered at an original issue discount of 99. The debt has 101 soft call protection until June 16, 2014.

Bank of America Merrill Lynch and Morgan Stanley Senior Funding Inc. are leading the deal that will be used with a $140 million equity investment from Onex Partners III to fund the acquisition of George Little Management LLC for $335 million.

Closing is expected this month, subject to customary regulatory approvals.

Emerald is a San Juan Capistrano, Calif.-based operator of large business-to-business tradeshows. George Little Management is a White Plains, N.Y.-based operator of tradeshows, consumer events and digital platforms.

Verint timing emerges

Verint released timing on its fungible $300 million covenant-light tack-on term loan due Sept. 6, 2019, with a call to launch the deal set for 10:30 a.m. ET on Monday and commitments due on Jan. 17, a market source said.

Also, talk on the loan came out at Libor plus 300 bps with a 25 bps step-down at Ba3/BB- ratings, a 1% Libor floor, an original issue discount of 99¾ and 101 soft call protection through March 6, 2014, the source continued.

Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are leading the loan that will be used with about $100 million in cash on hand and a revolver draw to fund the $514 million acquisition of KANA Software Inc. from Accel-KKR.

Closing is expected in the fiscal quarter ended April 30, subject to the expiration of applicable regulatory waiting periods and the satisfaction or waiver of other customary conditions.

Verint is a Melville, N.Y.-based provider of actionable intelligence and value-added services. KANA is a Silicon Valley, Calif.-based provider of customer service services delivered both on premises and in the cloud.

Dematic readies call

Dematic is planning on holding a call at 11 a.m. ET on Monday to launch a $570 million first-lien covenant-light term loan due Dec. 28, 2019 that is talked at Libor plus 325 bps with a 1% Libor floor and 101 soft call protection for six months, according to a market source.

Of the total term loan amount $535 million is offered at par and will be used to reprice an existing term loan from Libor plus 400 bps with a 1.25% Libor floor, and $35 million is offered at a discount of 99½ and is a tack-on that will be used for general corporate purposes, the source said.

Commitments are due on Jan. 17.

Credit Suisse Securities (USA) LLC is leading the deal.

Last year, the company attempted a term loan repricing talked at Libor plus 325 bps with a 1% to 1.25% Libor floor and 101 repricing protection for one year, but that transaction was pulled in February 2013.

Dematic is an engineering company that provides warehouse logistics and materials handling services.

Ply Gem coming soon

Ply Gem scheduled a bank meeting for 11:30 a.m. ET in New York on Monday to launch a $380 million seven-year first-lien covenant-light term loan that has 101 soft call protection for six months, according to a market source.

Commitments are due on Jan. 23, the source said.

Credit Suisse Securities (USA) LLC is leading the deal that will be used with $550 million of senior unsecured notes due 2022 to help redeem $756 million of 8¼% senior secured notes due 2018 and $96 million 9 3/8% senior notes due 2017.

Ply Gem is a Cary, N.C.-based manufacturer of exterior building products.

AlixPartners repricing

AlixPartners will hold a conference call at 11 a.m. ET on Monday to launch a repricing of $752 million of first-lien covenant-light term loans, split between an $80 million term loan B-1 due June 2017 and a $672 million term loan B-2 due July 2020, according to a market source.

Current pricing on the B-1 loan is Libor plus 325 bps with no Libor floor and current pricing on the B-2 loan is Libor plus 400 bps with a 1% Libor floor.

The repriced loans will have 101 soft call protection for six months.

Lead bank, Deutsche Bank Securities Inc., is seeking commitments by Jan. 17, the source added.

AlixPartners is a New York-based performance improvement, corporate turnaround and financial advisory services firm.

MRI on deck

MRI Software scheduled a bank meeting for Wednesday to launch a $165 million credit facility, according to sources.

The facility consists of a $15 million revolver and a $150 million first-lien term loan, sources said.

Goldman Sachs Bank USA is leading the deal.

In addition, the company is getting a privately placed $65 million second-lien term loan.

MRI Software is a Solon, Ohio-based provider of real estate enterprise software applications and hosted services.

JLL/Delta deadline emerges

In other news, JLL/Delta Patheon Holdings LP set a commitment deadline of Jan. 23 on its $1.35 billion credit facility that launched with a bank meeting on Thursday, according to a market source.

As previously reported, the facility consists of a $200 million five-year revolver, an $810 million seven-year term loan B talked at Libor plus 400 bps to 425 bps with a 1% Libor floor and an original issue discount of 991/2, and a €250 million seven-year term loan B talked at Euribor plus 425 bps to 450 bps with a 1% floor and a discount of 991/2.

The B loans have 101 soft call protection for six months.

JLL/Delta lead banks

UBS Securities LLC, J.P. Morgan Securities LLC, Jefferies Finance LLC, KeyBanc Capital Markets and Morgan Stanley Senior Funding Inc. are leading JLL/Delta Patheon's new credit facility.

Proceeds, along with $772 million of equity, will be used to form the company through the combination of DSM Pharmaceutical Products with Patheon Inc.

Under the agreement, JLL Partners and Royal DSM will acquire Patheon for $9.32 per share, implying an equity value of about $1.4 billion and a total enterprise value of $1.95 billion. Patheon will then be merged with DSM Pharmaceutical Products, and the combined company will be 51% owned by JLL and 49% by DSM.

DSM will receive a seller note of $200 million, thereby valuing DSM Pharmaceutical at $670 million.

Closing is expected in the first half of the year, subject to customary conditions.

JLL/Delta Patheon is a contract development and manufacturing organization for the pharmaceutical industry.

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