Univar breaks; LCDX heads lower; Alltel, CCS set term loan OIDs; Education Media sees interest

By Sara Rosenberg

New York, Nov. 5 - Univar NV's credit facility freed up for trading during Monday's market hours, with the term loan B quoted right around its original issue discount price, and LCDX was choppy with equities.

In other news, Alltel Communications Inc. came out with the official discount guidance on its term loan B-2 and has already attracted a good amount of commitments, and CCS Income Trust announced the original issue discount on its in-market first-lien term loan.

Also in the primary, Education Media & Publishing's Monday bank meeting saw strong attendance, and based on some initial feedback, sentiment toward the deal appears to be positive.

Univar's credit facility hit the secondary market on Monday, with the $975 million term loan B (B2/B+) quoted pretty close to its original issue discount of 99.

According to one trader, by late afternoon, the term loan B was quoted at 99 1/8 bid, 99½ offered.

A second trader, however, saw the paper quoted at 98¾ bid, 99 1/8 offered in the late afternoon, down from the 99 bid, 99 3/8 offered levels that were seen on the break.

The term loan B is priced at Libor plus 300 basis points.

The term loan B is part of a $2.35 billion credit facility that also includes a $1 billion asset-based revolver at Libor plus 150 bps, a $100 million first-in, last-out asset-based term loan at Libor plus 275 bps and a $275 million term loan A (B2/B+) at Libor plus 275 bps.

The revolver, asset-based term loan and term loan A were launched to U.S. and European investors in early September, but the syndicate waited until Oct. 18 to launch the term loan B because of primary market conditions.

Bank of America and Deutsche Bank are the lead banks on the deal, with Bank of America the left lead.

Proceeds from the credit facility are being used to help fund the acquisition of Univar by a wholly owned Dutch subsidiary of Ulysses Luxembourg Sarl, a portfolio company of CVC Capital Partners, for €53.50 in cash per share.

Univar is a Netherlands-based distributor of industrial chemicals and a provider of related specialty services.

LCDX softens with stocks

LCDX 9 traded lower on Monday as the stock market softened, according to a trader.

The index went out around 97.10 bid, 97.30 offered, down from Friday's levels of 97.45 bid, 97.60 offered, the trader said.

As for equities, Nasdaq closed down 15.20 points, or 0.54%, Dow Jones Industrial Average closed down 51.70 points, or 0.38%, S&P 500 closed down 7.48 points, or 0.50%, and NYSE closed down 93.44 points, or 0.93%.

Alltel reveals official B-2 OID guidance

Alltel announced at its bank meeting on Monday afternoon that its $6 billion 71/2-year term loan B-2 will be offered to investors at an original issue discount in the 97 to 97½ area, according to a market source. By comparison, late last week, early discount guidance was heard to be at 971/2.

The entire B-2 will be not be available to be syndicated because Barclays, one of the lead banks on the deal, has opted to hold on to its piece rather than sell it at the discount level, the source said.

As was already reported, price talk on the loan is Libor plus 275 bps and the tranche carries soft call protection of 103 in year one, 102 in year two and 101 in year three.

The Monday bank meeting was very well attended, with about 350 people present, the source continued.

By late day, there was already over $2 billion in orders in the book for the loan, the source added.

The term loan B-2 is part of a $16.25 billion senior secured credit facility that also includes a $1.5 billion six-year revolver, a $4 billion 71/2-year term loan B-1, a $4 billion 71/2-year term loan B-3 and a $750 million one-year delayed-draw, with 71/2-year final maturity, term loan, with all of these tranches priced at Libor plus 275 bps as well.

The term loan B-1 carries no call protection, and the term loan B-3 is non-callable for three years.

The revolver, term loan B-1, term loan B-3 and delayed-draw term loan are not officially being syndicated at this time.

Goldman Sachs, Citigroup, Barclays and RBS Securities are the joint bookrunners on the credit facility, with Goldman and Citi the joint lead arrangers.

The facility has a consolidated net senior secured debt to consolidated EBITDA covenant beginning June 30, 2008 based on consolidated EBITDA for the relevant rolling four-quarter measurement period ended as of such date.

Proceeds from the credit facility will be used to help fund the leveraged buyout of the company by TPG Capital and GS Capital Partners for $71.50 per share in cash. The transaction is valued at $27.5 billion.

Other financing will come from $4.6 billion in equity and $5.2 billion in senior unsecured cash-pay notes and $2.5 billion in senior unsecured payment-in-kind option debt - all or a portion of which may take the form of a senior unsecured PIK option bridge loan.

The bonds/bridge loans were revised from their original structure, which called for $4.7 billion in senior unsecured cash-pay notes and $3 billion senior unsecured PIK notes.

The delayed-draw term loan will be available to purchase or otherwise acquire licenses and rights in the 700 MHz auction to be conducted by the Federal Communications Commission.

Pro forma for the transaction, Alltel Communications' senior secured debt to adjusted EBITDA will be 4.6 times and net debt to adjusted EBITDA will be 7.0 times. Total consolidated Alltel Corp. (the holding company) net debt to adjusted EBITDA will be 7.7 times and adjusted EBITDA to Alltel Corp. consolidated cash interest expense will be 1.5 times.

Alltel is a Little Rock, Ark., provider of wireless voice and data communications services.

CCS term loan OID emerges

CCS Income Trust revealed on Monday that its C$1.3 billion seven-year first-lien funded term loan will be sold to investors with an original issue discount of 97, according to a market source.

Previously, the discount on the funded term loan was labeled as still to be determined.

The company's C$500 million six-year revolver and C$100 million seven-year delayed-draw for 24 months term loan are still expected to be sold at a discount, but the discount level on these tranches is still to be determined, the source added.

The revolver, funded term loan and delayed-draw term loan, which launched with a bank meeting on Oct. 22, are all still being talked at Libor plus 300 bps.

The revolver and the delayed-draw term loan both have an undrawn fee of 125 bps.

The funded and delayed-draw term loans carry call protection of 103 in year one, 102 in year two and 101 in year three.

The term loan and delayed-draw term loan will be funded in U.S. dollars, and the revolver will be divided between Canadian and U.S. dollars.

There will be a senior secured leverage covenant in the credit agreement.

Goldman Sachs and Deutsche Bank are the lead banks on the C$1.9 billion senior secured deal (B1/BB-), with Goldman the left lead.

Proceeds will be used to help fund the buyout of the company for roughly C$3.5 billion by an investor group led by David Werklund, founder, president and chief executive officer of CCS, and including CAI Capital Partners, Goldman Sachs Capital Partners, Kelso & Co., Vestar Capital Partners, British Columbia Investment Management Corp., Alberta Investment Management and O.S.S. Capital Management LP.

Other buyout financing will come from a C$600 million senior unsecured bond offering and about C$1.8 billion in equity.

The delayed-draw loan will be available for acquisitions.

CCS Income Trust is a Calgary, Alta.-based provider of integrated and environmentally responsible services to upstream and downstream oil and gas companies in Canada and the United States.

Education Media well attended

Education Media & Publishing's Monday morning bank meeting for its $7.15 billion credit facility was very well attended and some are already speculating that the deal will be attractive to investors, especially given its pricing.

"It was [a] full room. I would guess there were 150 to 200 people there. I don't know how many of that was underwriters but there seemed to be a lot of accounts there," a market source told Prospect News.

"I think this is one that will go well. Good coupon. It's a good time in the cycle for education publishers. [And], management presented well," the source added.

As was previously reported, the credit facility consists of a $500 million six-year revolver talked at Libor plus 375 bps, with a 50 bps commitment fee, a $4.95 billion 61/2-year first-lien term loan talked at Libor plus 375 bps, and a $1.7 billion seven-year second-lien mezzanine loan talked at Libor plus 850 bps.

The first-lien term loan is being offered with an original issue discount in the 99 area and carries call protection of 103 in year one, 102 in year two and 101 in year three.

The second-lien mezzanine facility is being offered at par and is non-callable for 18 months, then at 104 for a year, at 102 for a year and at par after that.

In addition to Monday's New York bank meeting, the company held a bank meeting in London last Thursday to launch the transaction and a presentation was made last Tuesday in Barcelona at Credit Suisse's leveraged finance conference.

Originally, the company's New York bank meeting was scheduled for the afternoon, but the launch was moved to the morning as a result of Alltel scheduling its bank meeting for the afternoon.

Credit Suisse, Lehman Brothers and Citigroup are the lead banks on the deal.

Proceeds will be used to help fund Houghton Mifflin Co.'s acquisition of the Harcourt Education, Harcourt Trade and Greenwood-Heinemann divisions of Reed Elsevier for $4 billion, consisting of $3.7 billion in cash and $300 million of common stock of Houghton Mifflin Riverdeep Group plc, Houghton's parent company.

Existing investors, including J&E Davy, have committed to provide $235 million of new equity financing to support the transaction.

In connection with the acquisition, Boston-based Houghton Mifflin will be renamed Education Media & Publishing.

Manor Care increases OID

Manor Care Inc. widened the original issue discount on its $700 million seven-year term loan B to the 97 area from the 98 context, according to a market source.

Pricing on the term loan is still set at Libor plus 275 bps.

Manor Care's $900 million senior secured credit facility (Ba3) also includes a $200 million six-year revolver priced at Libor plus 275 bps, with a 50 bps commitment fee.

JPMorgan, Credit Suisse and Bank of America are the lead banks on the deal.

The facility will have a senior secured leverage test.

Proceeds will be used to help fund the buyout of the company by the Carlyle Group for $67.00 in cash per share. The transaction is valued at $6.3 billion.

Other buyout financing will come from $1.33 billion in equity and $4.6 billion in CMBS debt that is priced at Libor plus 250 bps.

Manor Care is a Toledo, Ohio, provider of short-term post-acute services and long-term care.

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