Amscan, Central Parking, Neff tweak deals; Hawaiian Telcom, Educate set talk; Transeastern gains

By Sara Rosenberg

New York, May 18 - Amscan Holdings Inc. made some changes to its credit facility on Friday, including moving some funds between its ABL revolver and term loan B and lowering term loan B pricing while adding soft call protection.

Central Parking Corp. also revised its deal, increasing its revolver size, reducing pricing on all tranches, adding a step down to the first-lien institutional bank debt and eliminating a year of call protection on the second-lien loan.

Neff Corp. tweaked its credit facility, upsizing the second-lien term loan in response to a bond downsizing and lowering pricing on the second-lien tranche.

Also in the primary, Hawaiian Telcom Communications, Inc. and Educate Inc. released price talk on their credit facilities as both deals were launched with bank meetings on Friday, and Oreck Corp. finalized pricing on its first- and second-lien term loans, added original issue discounts and set call premiums.

Switching over to the secondary market, Traneastern's term loan continued to gain ground on Friday on the heels of Technical Olympic USA Inc.'s recent financing news.

Amscan came out with a round of modifications to its "significantly oversubscribed" credit facility that involved upsizing its ABL revolver and downsizing, reducing pricing and adding soft call protection to its term loan B, according to a market source.

With the changes, the five-year ABL revolver (Ba3/BB-) is now sized at $200 million, up from $150 million, and the funded amount at close under this revolver is increasing by $50 million as well, the source said.

"[They] are making this change due to the borrowing base coming in higher than originally expected," the source explained.

Pricing on the ABL revolver was left at Libor plus 125 basis points with a 25 bps commitment fee, in line with initial talk.

As for the six-year term loan B (B1/B), that is now sized at $375 million, down from $425 million, pricing was reverse flexed to Libor plus 225 bps from original talk at launch of Libor plus 250 bps and 101 soft call protection for one year was added to the tranche, the source remarked.

Recommitments from lenders on the term loan B are due at noon ET on Monday.

Credit Suisse, Bank of America and Lehman Brothers are the lead banks on the $575 million deal.

Proceeds will be used to refinance existing debt. The refinancing is expected to lower the company's overall cost of debt and improve its financial flexibility.

Amscan is an Elmsford, N.Y., designer, manufacturer and distributor of party goods.

Central Parking upsizes, cuts spreads

Central Parking was another deal to come out with changes on Friday as it upsized its revolver, reverse flexed pricing on everything, added a step down to the first-lien institutional debt and tweaked call premiums on the second-lien, according to a market source.

The six-year revolver (Ba2/B) is now sized at $80 million, up from $75 million, and pricing on the paper was reduced to Libor plus 225 bps from original talk at launch of Libor plus 250 bps, the source said.

Meanwhile, the $235 million seven-year first-lien term loan (Ba2/B) - which was upsized from $225 million earlier on in the syndication process - and the $55 million seven-year synthetic letter-of-credit facility (Ba2/B) both saw pricing flex down to Libor plus 225 bps from original talk of Libor plus 250 bps, and a step down was added under which the spread can drop to Libor plus 200 bps when a B1 corporate credit rating is achieved, the source continued.

Lastly, pricing on the $50 million 71/2-year second-lien term loan (B2/CCC+) was reduced to Libor plus 450 bps from original guidance of Libor plus 550 bps to 600 bps, and call premiums on the loan were changed to 101 in year one and par thereafter from 102 in year one, 101 in year two and par thereafter, the source remarked.

Recommitments from lenders were due at 5 p.m. ET on Friday, and allocations are expected to go out early next week.

Goldman Sachs is the lead bank on the now $420 million (up from an original size of $405 million) senior secured credit facility.

Proceeds will be used to help fund the leveraged buyout of Central Parking for $22.53 per share in cash by KCPC Holdings, Inc., a company formed by Kohlberg & Co., LLC, Lubert-Adler, LP, and Chrysalis Capital Partners, LP, for this transaction.

Other leveraged buyout financing will come from first mortgage and mezzanine financing from Greenwich Capital Financial Products, Inc. and Goldman Sachs Mortgage Co.

The $10 million of additional first-lien term loan funds that are being raised through the recent upsizing will be used to reduce the cash portion being used for the leveraged buyout.

Since the company's EBITDA for the last 12 months ended March was up, the additional debt is basically leverage neutral, the source added.

Central Parking is a Nashville, Tenn., provider of parking and transportation-related services.

Neff ups term size, cuts pricing

Due to strong demand, Neff reworked its 71/2-year covenant-light second-lien term loan (B3/B-), increasing the size by $20 million and reverse flexing pricing, according to a market source.

The second-lien term loan is now sized at $290 million, up from $270 million, and pricing was reduced to Libor plus 350 bps from original talk at launch of Libor plus 450 bps, the source said.

The upsizing of the second-lien term loan is a result of the company's decision to downsize its bond offering to $230 million from $250 million.

Before the deal came to market, the term loan was expected to carry a size of $250 million, but it was increased by $20 million the night before the bank meeting took place because of investor demand.

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

Neff's now $640 million (up from a launch size of $620 million) credit facility also includes a $350 million six-year ABL revolver priced at Libor plus 150 bps.

Bank of America, CIBC, General Electric Capital Corp. and UBS are the lead banks on the deal, with Bank of America the left lead.

Proceeds will be used to help fund Lightyear Capital LLC's acquisition of the company from Odyssey Investment Partners.

In addition to helping fund the buyout, the new debt will be used to repay the company's existing debt, including its 11¼% second-priority senior secured notes due 2012, its 13% senior subordinated notes due 2013 and its ABL credit facility

Neff is a Miami-based construction equipment rental company.

Hawaiian Telcom price talk

In more primary news, Hawaiian Telcom held a bank meeting on Friday to kick off syndication on its proposed $1.06 billion credit facility, and in connection with the launch, price talk on the transaction was announced, according to a market source.

The company's $860 million new seven-year term loan C (Ba3/B-) was presented to lenders with opening talk of Libor plus 225 bps, with a step up to Libor plus 250 bps at more than 6.0 times leverage and a step down to Libor plus 200 bps at less than 4.75 times leverage, the source said.

In addition, the $200 million amended revolver (Ba3) is also being talked at Libor plus 225 bps, in line with existing revolver pricing, the source remarked.

Lehman and JPMorgan are the lead banks on the deal, with Lehman the left lead.

Proceeds from the term loan C will be used to replace the company's existing term loan A and term loan B.

Earlier this month, Hawaiian Telcom announced the sale of its directory publishing business to Local Insight Media for $435 million. Under the existing credit facility, the company is required to get the consent of a majority of the lenders to permit the sale of the business.

This recapitalization deal is being done in connection with the sale to optimize the company's capital structure and to allow for the transaction.

Hawaiian Telcom is a Honolulu, Hawaii-based telecommunications provider.

Educate spread guidance

Also on the price talk front, Educate launched its $170 million six-year first-lien term loan (Ba2/B) and $15 million five-year revolver (Ba2/B) at Libor plus 300 bps and its $105 million seven-year second-lien term loan (B3/CCC+) at Libor plus 600 bps, according to a market source.

By comparison, according to various filings with the Securities and Exchange Commission, the revolver and the first-lien term loan were said to be expected at Libor plus 275 bps, and the second-lien term loan was said to be expected at Libor plus 550 bps.

The revolver has a 50 bps commitment fee.

The second-lien loan will carry call premiums of 102 in year one and 101 in year two.

JPMorgan is the lead bank on the $290 million deal, which will be used to help fund the buyout of the company by chairman and chief executive officer Christopher Hoehn-Saric, president and chief operating officer Peter Cohen and certain other members of management and affiliates of Sterling Capital Partners and Citigroup Private Equity for $8.00 per share in cash.

The total value of the transaction, including assumed debt, is about $535 million.

The transaction is expected to close in June, subject to approval by the company's stockholders, as well as other customary closing conditions, including the receipt of regulatory approvals.

Educate is a Baltimore, based pre-K through 12 education company.

Oreck sets spreads

Oreck firmed up pricing on its first- and second-lien term loans, added original issue discounts to the two tranches and finalized call protection provisions, according to a market source.

The $130 million first-lien term loan (B1/B-) is now priced at Libor plus 325 bps, the tight end of revised guidance that was in the Libor plus 325 bps to 350 bps area, and up from original talk at launch of Libor plus 275 bps, the source said.

In addition, the first-lien term loan now carries call protection of 102 in year one and 101 in year two and was sold to investors with an original issue discount of 981/2, the source continued.

As for the $50 million second-lien term loan (Caa1/CCC), pricing firmed up at Libor plus 700 bps, in line with revised talk but up from original talk at launch of Libor plus 550 bps.

Furthermore, the second-lien term loan is now non-callable for two years and then callable at 105 in year three and 103 in year four and was sold to investors with an original issue discount of 99, the source added.

Oreck's $200 million credit facility also includes a $20 million revolver (B1/B-).

Allocations on the deal are expected to go out during the week of May 21.

Goldman Sachs is the lead bank on the New Orleans-based vacuum maker's deal, which will be used to refinance existing debt.

Lear guidance surfaces

Price talk on Lear Corp.'s recently launched credit facility emerged, with the $1 billion five-year revolver talked at Libor plus 200 bps to 225 bps and the $2.6 billion seven-year term loan B talked at Libor plus 225 bps to 250 bps, according to a market source.

The revolver has a 50 bps commitment fee.

Bank of America is the lead arranger and bookrunner on the $3.6 billion senior secured deal (B2/B) that was launched with a bank meeting on Thursday.

Proceeds will be used to help fund American Real Estate Partners, LP's acquisition of Lear for $5.3 billion, including the assumption of debt. Lear shareholders will receive $36.00 per share in cash.

Lear is a Southfield, Mich.-based supplier of automotive seating, electronics and electrical distribution systems. American Real Estate Partners is a New York-based diversified holding company engaged in a variety of businesses and an affiliate of Carl C. Icahn.

Transeastern trades up

Moving to the secondary, Transeastern, a joint venture between Technical Olympic and Falcone Group, saw its term loan continue to trade stronger during Friday's session, still in reaction to Technical Olympic's recently announced financing commitment, according to a trader.

The Transeastern term loan ended the day at 97 bid, 98 offered, up from 96¼ bid, 97¾ offered on Thursday, the trader said. On Wednesday, the paper was being quoted at 95 bid, 96 offered.

The rally began Thursday after Technical Olympic said that it received a $500 million term loan financing commitment that would be used to pay off Transeastern's $400 million of senior debt if a settlement is reached with Transeastern's lenders.

As part of settlement discussions, Technical Olympic has proposed a structure in which either Transeastern or the successor to some or all of its assets would become Technical Olympic's wholly or majority owned subsidiary.

The debt commitment is comprised of a $250 million first-lien term loan and a $250 million second-lien term loan that would be led by Citigroup.

As a condition to the term loans, Technical Olympic's existing revolving credit facility would be amended and restated to reduce the size to $700 million from $800 million, to incorporate the terms and conditions of the first-lien term loan and to allow for the new bank debt.

Technical Olympic has until May 28 to execute the commitment letter for it to become effective and will only execute the letter if satisfactory settlements with the Transeastern creditors have been reached.

If the commitment is executed, the company will have until July 31 to execute definitive documentation.

Technical Olympic is a Hollywood, Fla., designer, builder and marketer of single-family residences, town homes and condominiums.

BearingPoint closes

BearingPoint Inc. closed on its new $400 million five-year senior secured credit facility on Friday, according to an 8-K filed with the Securities and Exchange Commission.

The facility consists of a $250 million term loan and a $150 million synthetic letter-of-credit facility, with both tranches priced at Libor plus 400 bps.

UBS acted as the lead bank on the deal.

Proceeds from the term loan are being used for general corporate purposes, and the synthetic letter-of-credit facility is being used to replace existing and provide capacity for additional letters of credit.

BearingPoint is a McLean, Va.-based management consulting, systems integration and managed services firm.

Paul A. Harris contributed to this article.

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