Dex, SuperMedia better with amendment news; NXP, Patheon, North American Breweries free up

By Sara Rosenberg

New York, Dec. 6 - Bank debt at Dex One Corp.'s subsidiaries Dex West, Dex East and R.H. Donnelley Inc., and SuperMedia Inc.'s term loan headed higher in trading on Thursday as news came out that an agreement has been reached on a revised set of amendments to the companies' credit agreements as part of their proposed merger.

In more loan happenings, NXP Semiconductors NV, Patheon Inc. and North American Breweries Holdings LLC (CCR American Breweries Inc.) came out with updates on their deals and they broke for trading.

Also, Alliance Laundry Systems LLC moved some funds between its first- and second-lien term loans and cut pricing and discounts, and RedPrairie (RP Crown Parent LLC) increased coupons and widened discounts on both its first- and second-lien term loans.

Additionally, Focus Brands Inc. removed plans for an original issue discount on its add-on first-lien term loan, and Alliant Insurance Services Inc. (Alliant Holdings I) upsized its term loan B and tightened the spread and discount.

Furthermore, USI Insurance Services set talk and ION Media Networks Inc. (Media Holdco LP) and Grede Holdings LLC disclosed original issue discount talk on their loans with launch, MGM Resorts International announced refinancing plans, and Landmark Aviation disclosed that it will be seeking add-ons to its first-and second-lien term loans.

Dex, SuperMedia rise

Dex One's subsidiaries Dex West, Dex East and R.H. Donnelley, and SuperMedia saw their bank debt levels strengthen in trading on Thursday with talk of progress on the merger of the companies, according to a trader.

Dex West's term loan was quoted at 70½ bid, 72½ offered, up from 68½ bid, 70 offered, Dex East's term loan was quoted at 67¾ bid, 68¾ offered, up from 65½ bid, 67½ offered, R.H. Donnelley's term loan was quoted at 66½ bid, 67½ offered, up from 64½ bid, 66 offered, and SuperMedia's term loan was quoted at 69½ bid, 71½ offered, up from 66 bid, 67 offered, the trader said.

The progress on the merger front is that the companies have reached an agreement with a steering committee representing senior lenders of both companies on a revised set of amendments to their credit agreements.

Dex, SuperMedia amendments

As a result of the credit facility amendments, the maturity dates of the Dex West, Dex East, R.H. Donnelley senior secured debt would be extended by 26 months to Dec. 31, 2016 and the SuperMedia laon would be extended by one year to Dec. 31, 2016.

In addition, the amendment would provide for tighter financial covenants, which include a leverage ratio and an interest coverage ratio.

The revised amendment would significantly reduce restricted payment and acquisition baskets as well, and restrict open market repurchases of subordinated notes during the credit agreement period.

Dex, SuperMedia pricing

Also under the amendment, Dex West loan pricing would be Libor plus 500 basis points with a 3% floor, as opposed to the original amendment proposal that called for pricing of Libor plus 425 bps, stepping up to Libor plus 450 bps in 2015, with a 3% Libor floor. Current pricing is Libor plus 400 bps with a 3% floor.

Dex East pricing would be Libor plus 300 bps with a 3% floor, whereas under the initial proposal it would have been Libor plus 250 bps, with a step-up to Libor plus 300 bps in 2015, with a 3% Libor floor. Current pricing is Libor plus 250 bps with no floor.

R.H. Donnelley pricing would be Libor plus 675 bps with a 3% floor, compared to the prior proposal of pricing of Libor plus 625 bps with a step-up to Libor plus 650 bps in 2015, with a 3% Libor floor. Current pricing is Libor plus 600 bps with a 3% floor.

And, SuperMedia loan pricing would be Libor plus 860 bps with a 3% Libor floor, versus the prior proposal for pricing remaining at Libor plus 800 bps with a 3% floor.

Dex, SuperMedia seek approvals

The Dex and SuperMedia credit facilities amendments require 100% approval from the senior lenders, and the companies are working with the steering committee to obtain the requisite approval from the remaining senior lenders.

As previously reported, if the companies obtain sufficient, but not unanimous, support from the remaining lenders, either or both companies may seek to finalize credit agreement amendments and complete the merger through a pre-packaged bankruptcy.

Under the merger proposal, Dex One and SuperMedia shareholders will exchange their shares for shares in a new company, Dex Media. Dex One shareholders will get 0.2 share for each Dex One share they own, and SuperMedia shareholders will get 0.4386 share for each SuperMedia share they own.

The merger is expected to be completed in the first half of 2013.

Dex One is a Cary, N.C.-based marketing services provider. SuperMedia is a Dallas-based directory publisher.

NXP changes OID, frees up

In other news, NXP Semiconductors revised the original issue discount on its $500 million incremental senior secured term loan C (B2/B+) due January 2020 to 99½ from 99 as the deal has been met with strong demand, according to a market source.

Pricing on the loan is still Libor plus 350 bps with a 1.25% Libor floor, and the debt continues to be non-callable for one year, then have 101 hard call protection in year two.

Recommitments were due at noon ET on Thursday, and then the loan made its way into the secondary market in the afternoon with levels quoted at 99 7/8 bid, the source added.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch and Goldman Sachs & Co are the bookrunners and lead arrangers on the deal. Barclays is the administrative agent.

Proceeds will fund a tender for up to $500 million of the company's 9¾% senior secured notes due 2018, and, as of Nov. 20, investors had tendered $678.02 million, or 73.5%, of the notes. The tender offer expires on Dec. 10.

NXP is an Eindhoven, Netherlands-based maker of semiconductors.

Patheon starts trading

Patheon's six-year term loan B hit the secondary market on Thursday too, after being upsized to $575 million from $565 million, and trading levels were quoted at 98½ bid, 99½ offered, according to sources.

Pricing on the term loan B is Libor plus 600 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 97. There is 101 soft call protection for one year.

During syndication, pricing was increased from talk of Libor plus 550 bps to 575 bps, the discount widened from 98½ and the maturity was shortened from seven years.

Also, the term loan B saw the addition of a 5.5 times net first-lien leverage ratio with a step-down to 4.25 times, incorporating a 35% covenant cushion, compared to originally being covenant-light, the incremental facility was changed to $105 million plus additional amounts subject to 3.75 times first-lien leverage, from $140 million plus additional amounts subject to 4 times first-lien leverage, and the MFN pricing protection was revised to 50 bps for the life of the facility from 50 bps for 18 months.

Patheon getting revolver

Patheon's now $660 million senior secured credit facility (B3/B+) also includes an $85 million revolver that is governed by the same financial covenant as the term loan.

Morgan Stanley Senior Funding Inc., UBS Securities LLC, Credit Suisse Securities (USA) LLC and KeyBanc Capital Markets LLC are leading the deal.

Proceeds, along with up to $30 million of equity from JLL Partners Fund V LP, will fund the $255 million acquisition of Banner Pharmacaps from VION NV, to repurchase $280 million of existing senior secured notes, to repay revolver borrowings and for general corporate purposes. And, the funds from the term loan B upsizing will partially fund the wider-than-expected original issue discount.

Closing is expected by year-end, subject to regulatory approvals and other customary conditions.

Patheon is a Durham, N.C.-based provider of contract development and manufacturing services to the pharmaceutical industry. Banner is a High Point, N.C.-based specialty pharmaceutical business dedicated to the research, development and manufacturing of gelatin-based dosage forms.

North American Breweries breaks

North American Breweries' credit facility also started trading after changes were made, with the $175 million six-year term loan (B2/B+) quoted at 98¾ bid, 99¼ offered, according to a market source.

Pricing on the term loan is Libor plus 625 bps with a 1.25% Libor floor and an original issue discount of 98, revised from initial talk of Libor plus 575 bps to 600 bps with a 1.25% floor and a discount of 99, another source said. The loan still has 101 soft call protection for one year.

Also, amortization was changed to 1% per year from 5% per year, and the excess cash flow sweep was modified to 75% from 50% when total leverage is above 3.5 times, the source continued. The sweep is 50% when total leverage is below 3.5 times, but, in fiscal year 2013, it is 75% regardless of leverage.

The company's $190 million credit facility also includes a $15 million ABL revolver.

Morgan Stanley Senior Funding Inc. is leading the deal that will fund the acquisition of the company by Cerveceria Costa Rica SA for $388 million in cash from KPS Capital Partners LP.

Closing is expected this quarter, subject to customary conditions.

North American Breweries is a Rochester, N.Y.-based beer company. Cerveceria Costa Rica is a brewery in San Jose, Costa Rica.

Alliance Laundry restructures

In more news, Alliance Laundry upsized its six-year covenant-light first-lien term loan (B2/B) to $375 million from $360 million, trimmed pricing to Libor plus 425 bps from Libor plus 450 bps, added a step-down to Libor plus 400 bps at 4¾ times leverage, and tightened the original issue discount to 99½ from 99, according to a market source. The 1.25% Libor floor and 101 soft call protection for one year were unchanged.

Furthermore, the company downsized its seven-year covenant-light second-lien term loan (Caa2/CCC+) to $110 million from $125 million, reduced pricing to Libor plus 825 bps from Libor plus 850 bps, and moved the discount to 99 from talk of 98 to 981/2, the source said. This tranche still has a 1.25% floor and call protection of 103 in year one, 102 in year two and 101 in year three.

The company's $560 million credit facility also provides for a $75 million five-year revolver (B2/B).

Alliance Laundry dividend

Proceeds from Alliance Laundry's credit facility will be used to refinance existing debt and fund a dividend.

Bank of America Merrill Lynch, BMO Capital Markets Corp., Morgan Stanley Senior Funding Inc., Scotia Capital (USA) Inc. and Fifth Third Securities Inc. are the lead banks on the deal.

Alliance Laundry is a Ripon, Mass.-based designer, manufacturer and marketer of commercial laundry equipment used in laundromats, multi-housing laundries and on-premise laundries.

RedPrairie tweaks deal

RedPrairie flexed pricing on its $1.45 billion six-year first-lien covenant-light term loan (B1/B+) to Libor plus 550 bps from Libor plus 475 bps and changed the original issue discount to 98 from 99, while leaving the 1.25% Libor floor and 101 repricing protection for one year intact, according to a market source.

Also, pricing on the $650 million seven-year second-lien covenant-light term loan (Caa1/CCC+) was moved to Libor plus 1,000 bps from Libor plus 900 bps, the original issue discount widened to 97 from 98 and call protection was changed to non-callable for two years, then at 103 in year three and 101 in year four, from call protection of 103 in year one, 102 in year two and 101 in year three, the source said. The 1.25% Libor floor was unchanged.

The company's $2.2 billion senior secured credit facility also includes a $100 million five-year revolver (B1/B+).

RedPrairie lead banks

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Goldman Sachs & Co., RBC Capital Markets and Morgan Stanley Senior Funding Inc. are the lead arrangers on the RedPrairie's credit facility, and are seeking commitments by Tuesday.

Proceeds, along with up to $342 million of equity from New Mountain Capital, will be used to fund the purchase of JDA Software for $45 per share. The transaction has a total enterprise value of about $1.9 billion.

Closing is expected by year-end, subject to at least 79% of JDA's shares being tendered and clearance from antitrust regulatory authorities.

RedPrairie is an Alpharetta, Ga.-based provider of supply chain software services. JDA is a Scottsdale, Ariz.-based provider of supply chain management, merchandising and pricing solutions.

Focus Brands changes offer

Focus Brands modified the offer price on its $91 million add-on first-lien term loan to par from 991/2, according to market source. Pricing on the first-lien add-on and on the existing loan is Libor plus 500 bps with a 1.25% Libor floor.

In connection with the add-on, the 101 soft call protection on the existing first-lien term loan is being extended by six months to August 2013, and this call premium will apply to the add-on as well.

The company is also getting a $50 million add-on second-lien term loan that is priced at Libor plus 900 bps with a 1.25% Libor floor and is being offered at an original issue discount of 991/2. The spread and floor match the existing loan, and the call protection will match as well at 103 through February 2013, 102 for the following year and 101 for the year after that.

Focus funding dividend

Proceeds from Focus Brands $141 million of add-on term loans that are being led by Credit Suisse Securities (USA) LLC will be used to pay a dividend.

First-lien leverage is 4.5 times and total leverage is 6.5 times.

With the transaction, the company is asking for an amendment to its existing credit facility to allow for the dividend and revise covenants, and is offering lenders a 10 bps amendment fee.

Focus Brands is an Atlanta-based franchisor and operator of ice cream stores, bakeries, restaurants and cafes.

Alliant ups loan

Alliant Insurance Services increased its seven-year term loan B to $705 million from $680 million as its bond offering was decreased to $450 million from $475 million. It also removed the MFN sunset term from the loan, according to a market source.

Additionally, pricing on the term loan was cut to Libor plus 375 bps from talk of Libor plus 400 bps to 425 bps and the original issue discount was revised to 99½ from 99, the source continued. There is still a 1.25% Libor floor and101 soft call protection for one year.

The now $805 million credit facility (B1/B-) also includes a $100 million five-year revolver.

Commitments were due on Thursday.

J.P. Morgan Securities LLC, UBS Securities LLC, Bank of America Merrill Lynch, Morgan Stanley Funding Inc. and RBC Capital Markets LLC are leading the deal that will fund the buyout of the company by Kohlberg Kravis Roberts & Co. LP from Blackstone.

Closing is expected this quarter, subject to certain conditions.

Alliant is a Newport Beach, Calif.-based specialty insurance brokerage firm.

USI talk emerges

In more primary happenings, USI Insurance Services launched with a bank meeting on Thursday, and its $1.025 billion seven-year covenant-light term loan B is being shopped with talk of Libor plus 400 bps to 425 bps with a 1.25% Libor floor and an original issue discount of 99, according to a market source. There is 101 soft call protection for one year.

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., Citigroup Global Markets Inc., Goldman Sachs & Co., RBC Capital Markets LLC and UBS Securities LLC are leading the $1.175 billion credit facility (B1), which also includes a $150 million five-year revolver

Proceeds, along with more than $600 million in notes, will be used to fund Onex Corp.'s buyout of the company from GS Capital Partners VI Fund LP for about $2.3 billion.

Closing is expected by year-end, subject to customary conditions and regulatory approvals.

USI is a Briarcliff Manor, N.Y.-based insurance broker.

ION Media OID

ION Media held a call in the morning to launch its $255 million 51/2-year term loan B (BB-), which was presented to lenders with an original issue discount of 981/2, according to a market source.

Price talk on the loan had come out prior to the call at Libor plus 550 bps to 575 bps with a 1.25% Libor floor. The debt has 101 soft call protection for one year.

J.P. Morgan Securities LLC is leading the deal that will be used to fund an equity repurchase of minority investors.

ION is a television broadcast network.

Grede add-on

Grede Holdings LLC launched during the session a $100 million add-on term loan that is being talked at an original issue discount of 99, according to sources.

Pricing on the loan is Libor plus 550 bps with a 1.5% Libor floor, in line with existing term loan pricing.

GE Capital Markets is leading the deal that will be used to fund a dividend.

Grede is a Southfield, Mich.-based iron casting supplier.

MGM readies launch

MGM Resorts scheduled a bank meeting for Friday to launch a new $4 billion senior secured credit facility (Ba2/BB), according to a market source.

The facility consists of a $1.25 billion five-year revolver, a $1.25 billion five-year term loan A and a $1.5 billion seven-year term loan B, the source said.

Deutsche Bank Securities Inc. and Bank of America Merrill Lynch are the joint physical books on the deal and joint lead arrangers with Barclays and J.P. Morgan Securities LLC.

Proceeds, along with $1 billion of new senior notes and cash on hand, will be used to refinance existing notes and credit facility debt.

MGM Resorts is a Las Vegas-based hospitality company, operating a portfolio of destination resort brands.

Landmark plans add-ons

Landmark Aviation set a conference call for 1 p.m. ET on Friday to launch a $60 million add-on first-lien term loan due October 2019 and a $30 million add-on second-lien term loan due October 2020, according to a market source.

The debt will be fungible with the existing first-and second-lien term loans, so pricing and call protection terms will be the same.

The first-lien term loan is priced at Libor plus 450 bps with a 1.25% Libor floor and has 101 soft call protection through October 2013, and the second-lien term loan is priced at Libor plus 825 bps with a 1.25% Libor floor. and has hard call protection of 102 through October 2013 and 101 through October 2014. Original issue discounts on the add-on loans are not yet available.

Morgan Stanley & Co. LLC, RBC Capital Markets and Barclays are leading the deal that will fund the acquisition of a single site FBO.

Landmark is a Tempe, Ariz., provider of aftermarket services to the business aviation industry.

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