U.S. Foodservice, R.J. O'Brien tweak deals; Oneida, Semco/Cap Rock set talk; Maxim Crane breaks

By Sara Rosenberg

New York, June 25 - U.S. Foodservice Inc. made some more changes to its credit facility, this time retranching the institutional debt and adding soft call protection, and R.J. O'Brien & Associates, Inc. added a covenant to its transaction.

In other primary happenings, Oneida Ltd. revealed price talk on its term loan ahead of Tuesday's launch, and Semco Energy Inc. and Cap Rock Holding Corp. released price talk on their in-market credit facilities.

Meanwhile, over in the secondary, Maxim Crane Works Holdings Inc.'s credit facility freed up for trading, with the term loan B quoted atop par.

U.S. Foodservice announced a second round of modifications to its credit facility on Monday morning that included eliminating the synthetic letter-of-credit facility tranche, upsizing the term loan B and adding call protection to the resized B loan, according to a market source.

The term loan B is now sized at $2.065 billion, up from $1.565 billion, and the paper now carries 101 soft call protection for one year, the source said.

Pricing on the term loan B is Libor plus 275 basis points, after flexing up late last week from original talk at launch of Libor plus 250 bps, and the loan is being offered to investors with an original issue discount of 991/2, which was also added last week.

In response to the term loan B upsizing, the $500 million synthetic letter-of-credit facility was eliminated from the capital structure, the source said. This tranche was also priced at Libor plus 275 bps, after flexing up from Libor plus 250 bps, and was also being offered at 991/2.

U.S. Foodservice's $3.365 billion credit facility (B2) also includes a $1.2 billion ABL revolver that is priced at Libor plus 150 bps and a $100 million cash flow revolver that is priced at Libor plus 275 bps.

Pricing on the cash flow revolver was increased from talk of Libor plus 250 bps late last week as well.

Citigroup, Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley and Royal Bank of Scotland are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by Clayton, Dubilier & Rice, Inc. and Kohlberg Kravis Roberts & Co. LP from Royal Ahold NV in a transaction valued at $7.1 billion.

Completion of the transaction, which is expected to occur in the second half of the year, is subject to regulatory approvals, approval of Ahold's shareholders and customary closing conditions.

U.S. Foodservice is a Columbia, Md., broadline foodservice distributor.

R.J. adds leverage covenant

R.J. O'Brien & Associates added a total leverage ratio to its first- and second-lien debt, removed the super-priority from its revolver and eliminated the PIK toggle feature on its second-lien term loan, according to a market source.

The new total leverage covenant under the revolver and first-lien term loan opens at 9.25 times, with steps down by one turn annually starting Dec. 31, 2008 until 2011, when the test hits 5.0 times, the source said.

Meanwhile, the new total leverage covenant under the second-lien term loan is set a quarter of a turn back from the first-lien ratio, meaning it opens at 9.5 times, the source continued.

The $50 million six-year revolver (B2/BB-) and the $385 million seven-year first-lien term loan (B2/B) are both still being talked at Libor plus 250 bps, and the $150 million eight-year second-lien term loan (B3/CCC+) is still being talked at Libor plus 600 bps, the source added.

Under the PIK option that was removed from the second-lien term loan, pricing would have stepped up by 75 bps if PIK were elected.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

Lehman Brothers and Deutsche Bank are the joint lead arrangers on the $585 million senior secured deal.

Proceeds will be used to help fund the acquisition of the company by Spectrum Equity Investors and Technology Crossover Ventures. The O'Brien family will retain a substantial minority ownership in the company.

R.J. O'Brien is a Chicago-based futures brokerage firm.

Oneida guidance emerges

Oneida released price talk of Libor plus 350 bps on its $120 million seven-year first-lien term loan (B3) as the deal is getting ready to launch with a bank meeting on Tuesday, according to a market source.

Corporate ratings are B2/B, the source added.

Credit Suisse is the lead arranger on the deal, which will be used to refinance existing debt.

Oneida is an Oneida, N.Y, maker of flatware, dinnerware, crystal and metal serving pieces.

Semco Energy/Cap Rock price talk

Semco Energy and Cap Rock came out with price talk on their $635 million of in-market secured credit facilities during Monday's market hours, according to a market source.

The $130 million five-year revolver and the $360 million seven-year term loan at Semco (opco level) are both being talked at Libor plus 125 bps, and the $145 million seven-year term loan at Cap Rock (holdco level) is being talked at Libor plus 200 bps, the source said.

All of these tranches are primarily being syndicated to banks, the source remarked, adding that the Semco revolver and term loan are being sold on a pro rata basis.

RBC Capital and Union Bank of California are the lead banks on the deal, which launched with a bank meeting in New York last Wednesday, with RBC the left lead.

Proceeds from the opco facility will be used to refinance existing debt, and proceeds from the holdco loan will be used to help fund Cap Rock's acquisition of Semco in a transaction valued at approximately $867 million, including the assumption of approximately $515 million of debt.

Semco is a Port Huron, Mich., distributor of natural gas to customers in Michigan and Alaska. Cap Rock is a Midland, Texas, utility holding company with electric utility transmission and distribution assets serving 28 counties in Texas.

Nelson ups spreads, adds OID

Nelson Education increased pricing on its first- and second-lien term loans and added original issue discounts to the two tranches, according to a buyside source.

The C$330 million U.S. dollar equivalent first-lien term loan (Ba3/B+) is now priced at Libor plus 250 bps, up from original talk of Libor plus 225 bps, and it is now being sold at 99¾ as opposed to at par, the source said.

The C$181.5 million U.S. dollar equivalent second-lien term loan (Caa1/CCC+) is now priced at Libor plus 575 bps, up from Libor plus 525 bps, and it too is now being sold at 99¾ as opposed to at par, the source continued.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

Lastly, the company's C$50 million U.S. dollar equivalent revolver no longer has a super-priority status.

Originally, the revolver was rated Ba3/BB-, but given the elimination of super-priority it is expected that Standard & Poor's will change its rating to B+, the source added.

Commitments were due from lenders on Monday.

RBC Capital is the lead bank on the C$561.5 million U.S. dollar equivalent deal.

Proceeds will be used to help fund the acquisition of Nelson Education by Omers Capital Partners and Apax Partners from the Thomson Corp.

Nelson Education is a Scarborough, Ont., provider of books and online resources for the educational market in Canada.

Maxim frees to trade

Moving to the secondary, Maxim Crane Works' credit facility broke for trading on Monday, with the $340 million term loan B quoted at par 1/8 bid, par 3/8 offered, according to a trader.

The term loan B is priced at Libor plus 200 bps.

Maxim Crane Works' $390 million credit facility also includes a $50 million five-year revolver priced at Libor plus 200 bps.

Bank of America is the lead bank on the deal.

Proceeds will be used to help fund a Dutch auction tender offer for up to 2.5 million shares of the company's common stock, and share equivalents, for no greater than $51.00 and no less than $45.75 per share.

The tender offer will expire on June 29.

Maxim Crane is a Bridgeville, Pa., crane rental company.

LCDX weaker

LCDX continued to head lower on Monday after spending most of last week doing the same, according to a trader.

The index went out at 98.25 bid, 98.35 offered, down from Friday's levels of 98.5 bid, 98.6 offered, the trader said.

Concentra, Viant close

Concentra Inc. completed its spinoff of Viant Holdings Inc., under which Concentra contributed its network services business to Viant in exchange for additional shares of Viant common stock, $185 million of Viant notes and about $260 million in cash, according to a news release.

In connection with the spinoff, Concentra got a new $560 million credit facility consisting of a $330 million seven-year first-lien term loan B (B1) priced at Libor plus 225 bps, a $75 million six-year revolver (B1) priced at Libor plus 225 bps and a $155 million eight-year second-lien PIK toggle term loan (Caa1) priced at Libor plus 550 bps.

During syndication, pricing on the first-lien term loan B was reverse flexed from original talk of Libor plus 250 bps.

Pricing on the second-lien term loan will step up by 75 bps if PIK is elected.

Call protection on the second-lien loan is non-callable for one year, then at 102 in year two and 101 in year three.

Proceeds were used to refinance existing debt and to pay a cash dividend to Concentra's stockholders of about $350 million.

Meanwhile, Viant got a new $325 million (B) credit facility consisting of a $275 million seven-year term loan B and a $50 million six-year revolver, with both tranches priced at Libor plus 225 bps.

During syndication, pricing on the term loan B was reverse flexed from original talk of Libor plus 250 bps.

Proceeds were used to fund the spinoff.

Citigroup, UBS, Bank of America and JPMorgan acted as the lead banks on both credit facilities, with Citi the left lead.

Both credit facilities are covenant-light, with the revolvers having a total leverage covenant when they're drawn or letters of credit are issued.

Concentra is a Dallas-based provider of occupational health-care services and specialized cost management services. Viant is a Naperville, Ill., health-care payment and cost management services company.

© 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.