Skilled Healthcare breaks, first-lien term loan wrapped around 1011/2, second lien nearing 103

By Sara Rosenberg

New York, July 20 - Skilled Healthcare Group Inc.'s $275 million credit facility broke for trading early Tuesday morning with both the first- and second-lien term loans quoted at 101 bid, 101½ offered on the open but steadily moving higher throughout the day.

The $140 million six-year first-lien term loan (B1/B), which is priced with an interest rate of Libor plus 275 basis points, was quoted at 101¼ bid, 101¾ offered by late day, according to traders.

"It crept up and when it got to 1/4-¾ range it hung around there," a trader said.

The $100 million 61/2-year second-lien term loan (B3/CCC+), which is priced with an interest rate of Libor plus 700 basis points, was quoted at 102½ bid, 103 offered by late day, according to traders.

"The second [lien] has 103 call protection so we knew it would move up to around 103 because of that," a trader said.

Both term loans were trading very actively throughout the day, the trader added.

The facility also contains a $35 million five-year revolver (B1/B) with an interest rate of Libor plus 275 basis points and a 50 basis points commitment fee.

At launch, the revolver and the first-lien term loan were priced at Libor plus 300 basis points, but pricing was lowered during syndication due to strong demand. Also at launch, the third-lien term loan was sized at $85 million and priced at Libor plus 750 basis points but was increased and flexed down also on strong demand. In fact, the deal was said to be multiply oversubscribed.

Credit Suisse First Boston and Goldman Sachs are joint lead arrangers and joint bookrunners on the refinancing deal.

Skilled Healthcare is a Foothill Ranch, Calif., operator of long-term care facilities and a provider of a full continuum of post-acute care services.

J.L. French oversubscribed

Syndication of J.L. French Automotive Castings Inc.'s $470 million credit facility is off to a running start as the $250 million seven-year term loan B had already received more than $100 million in commitments by Tuesday afternoon and the $120 million eight-year second-lien term loan was already three times oversubscribed, according to a market source.

Furthermore, price talk on the deal surfaced at Tuesday's bank meeting with the term loan B talked in the Libor plus 350 basis points area, the second-lien term loan talked at Libor plus 700 to 750 basis points and the $100 million five-year revolver talked in the Libor plus 350 basis points area, the source said.

Prior to the emergence of price talk, market speculation was that J.L. French would price just north of Libor plus 300 basis points based on a comparison with the in-market Progressive Moulded Products Ltd.'s C$415 million credit facility that is priced at that rate on all three of its tranches (C$50 million five-year revolver, U.S. dollar equivalent C$75 million five-year term loan A and U.S. dollar equivalent C$290 million seven-year term loan B).

The comparison between the two deals was made because J.L. French is a Sheboygan, Wis., automotive parts supplier and Progressive Moulded is a supplier of plastic automotive interior subsystems.

Goldman Sachs is the sole lead bank on the J.L. French deal.

Proceeds from the new credit facility, along with a proposed $165 million preferred equity securities offering that is also being led by Goldman, will be used to refinance the existing credit facility and to fund the purchase of the company's 11½% senior subordinated notes due 2009 in a tender offer.

The tender offer is set to expire on Aug. 10.

Stanadyne nears subscription

Although a bank meeting just took place on Tuesday, Stanadyne Corp.'s $100 million credit facility was already "almost subscribed" before the end of day as investors obviously didn't hesitate to throw in their commitments, according to a market source.

The facility consists of a $35 million five-year asset-based revolver (BB) with an interest rate of Libor plus 225 basis points and a $65 million six-year second-lien, covenant light term loan (B+) with an interest rate of Libor plus 375 basis points.

"[The] ABL is bullet proof and [the] second lien is a good risk reward," the source said in explanation of the strong demand.

Goldman Sachs is the sole lead bank on the deal.

Proceeds will be used to help fund a leveraged buyout of the company by an affiliate of Kohlberg & Co. LLC. The LBO, which is expected to close during the third quarter, is subject to customary closing conditions.

Stanadyne is a Windsor, Conn., provider of technology and services for engine components and fuel systems.

WilTel gets big commitments

WilTel Communications Group Inc.'s $360 million six-year term loan B had "a lot of big commitments in already" even though the deal just launched via a bank meeting on Tuesday, according to a market source.

Furthermore, price talk on the term loan came at Libor plus 350 to 375 basis points since the deal received a B3 rating from Moody's Investors Service, the source said.

"It's two times net leverage. They have $200 million of cash on the balance sheet. [And], they have a lot of existing guys and they know the credit so they'll say put one in for $50 [million] or something. That one will for sure go well," the source added.

WilTel's $385 million credit facility also contains a $25 million five-year revolver with a commitment fee of 50 basis points.

Credit Suisse First Boston is the sole lead arranger and sole bookrunner on the refinancing deal.

WilTel is a Tulsa, Okla., telecommunications provider to enterprises, carriers and the federal government.

Venetian oversubscribed

Venetian Casino Resort's proposed $975 million senior secured credit facility (B1/B+) is already oversubscribed since launching Monday, according to a market source, a fact that is not too surprising being that a nice amount of orders had already come in right after the bank book was posted last Thursday.

Some factors working in favor of the deal are the ratings, the collateral package and it being a known credit that people like.

The facility consists of a $125 million revolver due in 2009, a $90 million 18-month delay draw term loan A due in 2009, a $105 million six-month delay draw term loan B due in 2011 and a $655 million term loan B due in 2011.

The delay draw term loan A has a 150 basis points unused fee, and the delay draw term loan B has a 75 basis points unused fee.

Price talk on the term loan B (including the delay draw portion) is Libor plus 250 to 275 basis points. Prior to launch, market speculation had the term loan B talked in the Libor plus 275 basis points area.

Goldman Sachs is the sole lead arranger and bookrunner on the deal, as well as syndication agent. Bank of Nova Scotia is the administrative agent on the loan.

Proceeds will be used by the Las Vegas hotel and casino to refinance existing debt and to finance construction of the new Palazzo casino resort project.

Closing on the credit facility is expected to take place in August.

Duane Reade cuts pricing

Duane Reade Inc. reverse flexed its $155 million six-year term loan B (B1/B) to Libor plus 325 basis points from Libor plus 400 basis points, according to a fund manager.

Furthermore, the syndicate changed the call protection provisions, making it 102 in year one and 101 in year two, instead of 103 in year one, 102 in year two and 101 in year three, the fund manager added.

Bank of America and Credit Suisse First Boston are joint lead arrangers and joint bookrunners on the term loan.

The New York drugstore chain is also getting a $250 million asset-based revolver (B+) via Bank of America.

Proceeds from the loan, combined with proceeds from a bond deal and an equity contribution, will be used to help fund the company's acquisition by an affiliate of Oak Hill Capital Partners LP.

Regal Cinemas stronger

Regal Cinemas Corp.'s term loan was quoted at 101½ bid "post repricing" showing an overall positive market sentiment toward the amendment, a trader said.

The company closed on its repricing of the $1.65 billion 61/2-year term loan B Tuesday that lowered the interest rate to Libor plus 225 basis points with a stepdown to Libor plus 200 basis points from a grid of Libor plus 275 and 250 basis points, according to a market source.

Originally the amendment went out to lenders without the stepdown to Libor plus 200 basis points provision, but about two or three days into the process, the syndicate started talking to accounts about the grid, and since everybody seemed okay with it, the provision was added.

"I believe everybody rolled over. They had to sign a consent. If they didn't sign they could get paid down at par. But why get paid down at par when it's bid at 1011/2?" the source said.

Credit Suisse First Boston was the lead bank on the Centennial, Colo., theater chain's facility.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.