Dollar General sets talk; Zuffa tweaks deal; Kronos, TransFirst, Hub, Dollar Thrifty break

By Sara Rosenberg

New York, June 12 - Dollar General Corp. came out with price talk on its credit facility as the deal was launched with a bank meeting during Tuesday's market hours, and Bicent Power's credit facility, which also launched during the session, has been attracting some commitments at unofficial price talk levels.

In other primary happenings, Zuffa LLC upsized its term loan B while increasing pricing and Allen Systems Group Inc. finalized spreads on its credit facility at the high end of revised talk.

Meanwhile, over in the secondary market, Kronos Inc., TransFirst, Hub International Ltd. and Dollar Thrifty Automotive Group Inc. all saw their credit facilities free up for trading.

Dollar General held a bank meeting early on in the session on Tuesday to kick off syndication on its proposed $3.43 billion senior secured credit facility, and in connection with the launch, price talk on the transaction was announced, according to a market source.

The $2.43 billion seven-year term loan B (B3/B+) was presented to lenders with talk of Libor plus 250 to 275 basis points and the $1 billion six-year asset-based revolver was presented with talk of Libor plus 150 bps, the source said.

The revolver, which is expected to have $302 million drawn at close, has a 37.5 bps undrawn fee.

Originally, the term loan B was expected to be sized at $2.5 billion, but it was reduced by $70 million prior to the launch.

Goldman Sachs, Citigroup, Lehman Brothers and Wachovia are the joint lead arrangers and joint bookrunners on the credit facility. CIT Corp. is the administrative agent for the asset-based revolver.

Proceeds will be used to help fund the buyout of Dollar General by Kohlberg Kravis Roberts & Co. LP for $22.00 in cash per share.

Other buyout financing will come from a $1.9 billion high-yield bond offering, comprised of $625 million of cash pay senior unsecured notes, $725 million of PIK toggle senior unsecured notes and $550 million of senior subordinated notes, and from $2.775 billion in equity.

About $68 million of Dollar General's existing debt will be retained following the buyout.

Leverage will be 7.4 times adjusted LTM first-quarter 2007 EBITDAR.

Commitments on the credit facility are due on June 26, with closing and funding targeted for July 6, the source added.

Dollar General is a Goodlettsville, Tenn., discount retailer.

Bicent met with lender interest

Also launching to investors on Tuesday was Bicent Power's $610 million senior secured credit facility, and the deal netted some orders from investors at unofficial pricing guidance, according to a market source.

Accounts are talking the $30 million revolver, the $120 million letter-of-credit facility and the $330 million first-lien term loan at Libor plus 200 bps and the $130 million second-lien term loan at Libor plus 400 bps, the source said.

However, official price talk on the deal has not yet been announced because the company is waiting on ratings, the source added.

Barclays Capital and Goldman Sachs are the lead banks on the deal, with Barclays the left lead on the first-lien and Goldman the left lead on the second-lien.

Proceeds will be used to help fund the acquisition of the domestic independent power production and power development business units of MDU Resources Group, Inc. by Paul Prager and Natural Gas Partners.

The MDU businesses being acquired in the $636 million transaction include Centennial Power, Inc. and Colorado Energy Management, LLC.

Zuffa upsizes, flexes

In more primary news, Zuffa made some changes to its term loan B including increasing the size and bumping up pricing, according to a market source.

The term loan B is now sized at $325 million, up from $275 million, and pricing was flexed up to Libor plus 200 bps from original talk at launch of Libor plus 175 bps, the source said.

The company's now $350 million (up from $300 million) credit facility (Ba3/BB) also includes a $25 million revolver.

Deutsche Bank is the lead bank on the deal, which will be used for a dividend recapitalization.

Zuffa is the Las Vegas-based limited liability company that owns the Ultimate Fighting Championship brand.

Allen Systems sets pricing

Allen Systems firmed up pricing on both tranches under its $340 million credit facility at Libor plus 325 bps, the wide end of revised guidance, according to a market source.

Tranching on the deal is comprised of a $75 million revolver and a $265 million term loan.

Originally, both the revolver and the term loan were launched with price talk of Libor plus 225 bps to 250 bps; however, once credit facility ratings of B1/B were announced, the price talk was modified upward to Libor plus 300 bps to 325 bps, the source explained.

BMO Capital is the lead bank on the deal.

Proceeds will be used to help fund the acquisition of Mobius Management Systems, Inc., a Rye, N.Y.-based provider of integrated services for enterprise archiving and records management, for $10.05 per share in cash.

Allen Systems is a Naples, Fla.-based enterprise software provider.

Kronos frees to trade

Moving to the secondary, Kronos' credit facility broke for trading on Tuesday, with the $700 million seven-year first-lien term loan (Ba3/B) quoted at par bid, par 1/8 offered, according to a trader.

The first-lien term loan is priced at Libor plus 225 bps.

During syndication, the first-lien term loan was upsized from $665 million.

Kronos' $1.115 billion senior secured credit facility also includes a $60 million six-year revolver (Ba3/B) priced at Libor plus 225 bps, with a 50 bps commitment fee, and a $355 million eight-year second-lien term loan (Caa1/CCC+) priced at Libor plus 575 bps.

During syndication, the second-lien term loan was downsized from $390 million and pricing was flexed up from initial talk of Libor plus 550 bps.

Wachovia, Credit Suisse and JPMorgan acted as the lead banks on the deal.

Proceeds were used to fund the buyout of Kronos by Hellman & Friedman and JMI Equity for $55.00 in cash per share of common stock. The completion of this transaction was announced on Monday.

Kronos is a Chelmsford, Mass., provider of human capital management services.

TransFirst breaks

TransFirst's credit facility freed up for trading as well, with its $310 million first-lien term loan (B2/B) quoted at par ¼ bid, par ½ offered and its $135 million second-lien PIK toggle term loan (Caa2/CCC+) quoted at par 5/8 bid, par 7/8 offered, according to a buyside source.

The first-lien term loan is priced at Libor plus 275 bps and the second-lien PIK toggle term loan is priced at Libor plus 600 bps cash pay, bumping up by 75 bps if PIK is elected, with call protection of 102 in year one and 101 in year two.

TransFirst's $495 million credit facility also includes a $50 million revolver (B2/B) that is priced at Libor plus 275 bps.

Merrill Lynch and Deutsche Bank are the lead banks on the deal, with Merrill the left lead.

Proceeds will be used to help fund Welsh, Carson, Anderson & Stowe's acquisition of the company from GTCR for $683 million.

TransFirst is a Dallas-based provider of transaction processing services and payment-enabling technologies.

Hub sees upper par levels

Hub International was yet another deal to begin trading on Tuesday, with its strip of funded and delayed-draw term loan debt quoted at par ½ bid, par ¾ offered, according to a fund manager.

The $625 million seven-year funded term loan and the $140 million seven-year final maturity delayed-draw term loan are both priced at Libor plus 250 bps.

During syndication, the funded term loan was upsized from $535 million as the company downsized its bond offering to $700 million from $790 million, and pricing on the funded and delayed-draw loans was reverse flexed from original talk of Libor plus 275 bps.

Hub's $865 million senior secured credit facility (B2/B) also includes a $100 million six-year revolver.

Morgan Stanley and Merrill Lynch are joint bookrunners and joint lead arrangers on the deal, with Morgan Stanley the administrative agent and Merrill Lynch the syndication agent.

Proceeds from the credit facility, along with bond proceeds, will be used to help fund the buyout of Hub by Apax Partners and Morgan Stanley Principal Investments for $41.50 per share in cash and to refinance certain existing debt, including $75 million of 6.43% senior notes due April 4, 2016, $7.5 million of 5.71% senior notes due April 4, 2011 and $55 million of 6.16% senior notes due June 15, 2013.

The delayed-draw term loan will be available to, among other things, finance permitted acquisitions and for general corporate purposes.

Hub is a Chicago-based insurance broker.

Dollar Thrifty trades atop par

Also hitting the secondary was Dollar Thrifty Automotive's credit facility, with its $250 million term loan B quoted at par ½ bid, par 7/8 offered, according to traders.

The term loan B is priced at Libor plus 200 bps with a step down to Libor plus 175 bps upon the company achieving certain ratings.

During syndication, pricing on the term loan B was reverse flexed from original talk at launch of Libor plus 225 bps with the addition of the step.

Dollar Thrifty's $600 million credit facility (B1/BB-) also includes a $350 million revolver that is priced at Libor plus 200 bps, in line with original talk.

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

Proceeds from the revolver will be used to refinance the company's existing $300 million revolver, and proceeds from the term loan B will be used to repay asset-backed vehicle debt.

Dollar Thrifty is a Tulsa, Okla., vehicle rental company.

LCDX lower

In other trading news, LCDX was softer on the day as financial markets in general seemed to be struggling, according to a trader.

The index ended the session at 100.25 bid, 100.30 offered, down from opening levels of 100.45 bid, 100.49 offered, the trader said.

"It's weaker because equities are lower. Treasuries are lower. Market sentiment in general," the trader added.

Conseco closes

Conseco Inc. closed on its $200 million term loan add-on, according to a news release.

The add-on is priced at Libor plus 200 bps, in line with existing term loan pricing.

Bank of America and JPMorgan acted as the joint lead arrangers and bookrunners on the deal.

Proceeds from the add-on will be used for general corporate purposes, including the repurchase of common stock, and the strengthening of the capital of its insurance subsidiaries.

Conseco is a Carmel, Ind., insurance company.

Citadel closes

Citadel Broadcasting Corp. completed its merger with ABC Radio, as it was spun off from the Walt Disney Co., according to a news release.

To help fund the transaction, Citadel got a new $2.65 billion senior secured credit facility (Ba3/B+) consisting of a $600 million six-year term loan A priced at Libor plus 150 bps, a $1.85 billion seven-year term loan B priced at Libor plus 162.5 bps, with a step up to Libor plus 175 bps at more than 7.25 times leverage and a step down to Libor plus 150 bps at less than 5.5 times leverage, and a $200 million six-year revolver priced at Libor plus 150 bps.

During syndication, the pricing on the term loan B was lowered from original talk of Libor plus 175 bps with the addition of the pricing grid.

JPMorgan and Bank of America acted as the lead banks on the deal.

Proceeds were used to refinance existing Citadel debt, to pay to pre-merger Citadel stockholders an aggregate special distribution in an estimated amount equal to about $277 million and to refinance an initial term loan at ABC Radio.

Citadel is a Las Vegas-based radio broadcasting company.

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