CityCenter breaks; Del Monte, Rovi, Encompass timing emerges; Walter Energy to approach SMAs

By Sara Rosenberg

New York, Jan. 14 - CityCenter Holdings LLC's extended term loan freed up for trading during Friday's market hours, with levels quoted well above par.

Over in the primary, Del Monte Foods Co., Rovi Corp. and Encompass Digital Media Inc. all announced firm timing for the launches of their new bank deals, and Walter Energy Inc. disclosed plans for a senior managing agent round on its credit facility.

Also, Booz Allen Hamilton Holding Corp.'s term loan B is already oversubscribed, and initial indications on the term loan A are that the tranche will go really well, meaning that before the deal is done, there might be a shift to more term loan A debt and less term loan B debt.

CityCenter frees up

CityCenter's $500 million extended term loan hit the secondary market on Friday, with levels quoted at par ½ bid on the open and then moving up to 101 bid, 102 offered, according to a trader.

Pricing on the loan, which was extended to 2015, is Libor plus 650 basis points with a 1% Libor floor.

The amendment and restatement was done club style with some banks. There was no bank meeting or lender call for the deal.

Bank of America acted as the left lead bank on the deal. Other banks involved included UBS Securities LLC, BNP Paribas Securities Corp. and RBS Securities Inc.

CityCenter, a joint venture between MGM Resorts International and Dubai World, is a mixed-use development, built on 76 acres along the Las Vegas Strip between the Bellagio and Monte Carlo resorts.

Del Monte readies deal

Del Monte Foods has set a bank meeting for Thursday morning in New York to launch its proposed $3.25 billion credit facility that consists of a $750 million ABL revolver and a $2.5 billion term loan, according to a market source.

Prior to now, timing was simply labeled as expected January business.

The size of the credit facility is a bit larger than previously expected, as the company's filings with the Securities and Exchange Commission had the revolver amount at $500 million.

JPMorgan, Barclays, Morgan Stanley, Bank of America and KKR Capital Markets are leading the financing.

Del Monte funding buyout

Proceeds from Del Monte's credit facility will be used to help fund the acquisition of the company by Kohlberg Kravis Roberts & Co. LP, Vestar Capital Partners and Centerview Partners for $19.00 per share in cash. The transaction is valued at $5.3 billion, including the assumption of $1.3 billion in net debt.

Based on filings with the Securities and Exchange Commission, other funds for the transaction are expected to come from $1.6 billion of senior notes, which are backed by a commitment for a $1.6 billion senior unsecured increasing rate bridge loan, and $1.7 billion of equity.

Completion of the transaction is anticipated by the end of March, subject to customary closing conditions, including receipt of shareholder and regulatory approvals.

Del Monte is a San Francisco-based branded pet and consumer products company.

Rovi coming soon

Rovi has scheduled a bank meeting for Wednesday to launch $600 million of debt, consisting of a $300 million term loan A and a $300 million term loan B, according to a market source, who said that price talk is expected to be announced at the meeting.

The company announced plans to come to market with a new term loan back in December, but at that time, it was said that the deal would be sized at $500 million.

Morgan Stanley, JPMorgan and Bank of America are the lead banks on the deal that will be used for general corporate purposes, including the repurchase of common stock and outstanding convertible notes. The company's board has already authorized up to $400 million of stock purchases and up to $200 million of purchases of the outstanding convertible notes.

Rovi is a Santa Clara, Calif.-based provider of next generation guidance services, including TotalGuide, discovery, metadata, advertising and networking technologies.

Encompass sets launch

Encompass Digital Media nailed down timing on its proposed $195 million senior secured credit facility, with the scheduling of a bank meeting for 10 a.m. ET at the Palace Hotel in New York on Thursday, according to a market source.

Previously, it was known that the deal would launch during the week of Jan. 17, but a specific date had been unavailable.

The facility consists of a $20 million revolver and a $175 million term loan B, with price talk not yet out, the source said.

Macquarie Capital is the lead on the deal that will be used to fund the acquisition of the content distribution business of Ascent Media Corp. for total consideration of about $120 million, including about $113 million in cash and the assumption of certain debt and obligations totaling roughly $7 million.

Encompass second-lien

In connection with Encompass' purchase of the Ascent business, Tennenbaum Capital Partners, a current lender and equity holder in the company, will roll over $95 million of existing mezzanine debt into a new second-lien term loan that will not be syndicated.

Furthermore, Encompass has received a commitment from lenders under its existing secured credit facility for an amendment that would support the completion of the acquisition.

Closing is expected in February, subject to approval by Ascent shareholders, regulatory clearances and the transfer of certain FCC licenses.

Senior leverage at close will be 3.4 times and total leverage will be 5.3 times.

Encompass Digital Media is a Los Angeles-based digital media services provider.

Walter plans SMA round

Walter Energy is scheduled to hold a senior managing agent bank meeting on Thursday for its proposed $2.725 billion senior secured credit facility, according to a market source, who said that timing on the retail bank meeting is still to be determined.

The facility consists of a $375 million five-year revolver, a $600 million five-year term loan A and a $1.75 billion seven-year term loan B, with official price talk not yet available, the source remarked.

Filings with the SEC had previously outlined pricing on the facility at Libor plus 350 bps if corporate ratings are Ba3/BB-, and Libor plus 375 bps if the ratings are lower.

The filings also said that the term loan B is expected to have a 1.5% Libor floor and the revolver has a 50 bps unused fee.

Walter buying Western

Proceeds from Walter Energy's credit facility will be used to help fund the acquisition of Western Coal Corp. for C$11.50 per share, to refinance existing debt and for working capital. The transaction represents a total enterprise value of C$3.3 billion, net of cash on the balance sheet for Western Coal.

Morgan Stanley, Credit Agricole and the Bank of Nova Scotia are the lead arrangers on the credit facility, with Morgan Stanley the administrative agent.

Financial covenants include a minimum interest coverage ratio and a maximum leverage ratio.

Walter Energy is a Tampa, Fla.-based producer and exporter of metallurgical coal for the steel industry. Western Coal is a Vancouver, B.C.-based producer of metallurgical coal.

Booz Allen may upsize A

Booz Allen's $350 million term loan A has been receiving some strong interest from banks, and being that the tranche is cheaper than the company's proposed $700 million term loan B, there is a good chance that the term loan A will be upsized and the term loan B will be downsized, a market source told Prospect News.

In fact, there was already a shift to more term loan A debt, as prior to the deal's Thursday launch, it was thought that the A loan would be sized at $300 million and the B loan would be sized at $750 million.

The possibility of more A loan borrowings is not a reflection on how the market is receiving the term loan B, the source remarked. The B tranche was already oversubscribed before the deal even launched.

The source also said that the term loan A is not yet oversubscribed, but that's a function of banks taking longer to commit to a deal than institutional investors. The tranche does have good momentum.

Booz Allen price talk

As was previously reported, Booz Allen's term loan A is talked at Libor plus 250 bps, and its term loan B is talked at Libor plus 300 bps to 325 bps with a 1% Libor floor and an original issue discount of 991/2. There is 101 soft call protection for one year on the term loan B.

Bank of America, Credit Suisse, Barclays, Morgan Stanley, Goldman Sachs and Sumitomo are the lead banks on the deal, with Bank of America the left lead.

Proceeds from the $1.05 billion of term loans (Ba2/BBB-), along with cash on hand, will be used to refinance $1.021 billion of bank debt and $222 million of mezzanine debt.

The company expects to keep its existing revolving credit facility in place but will be amending the $250 million tranche.

Booz Allen Hamilton is a McLean, Va.-based provider of management and technology consulting services to the U.S. government in the defense, intelligence and civil markets.

CommScope closes

The Carlyle Group completed is acquisition of CommScope Inc. for $31.50 per share in cash, according to a news release. The transaction is valued at $3.9 billion.

To help fund the buyout, CommScope got a new $1.4 billion senior secured credit facility led by JPMorgan, consisting of a $400 million asset-based revolver and a $1 billion seven-year covenant-light term loan (Ba3/BB).

Pricing on the term loan is Libor plus 350 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

During syndication, the spread was reduced from Libor plus 400 bps and the original issue discount was tightened from 99.

CommScope is a Hickory, N.C.-based provider of infrastructure services for communication networks.

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