Sports Authority, Gateway break; Cengage down with earnings; Dunkin' accelerates deadline

By Sara Rosenberg

New York, Nov. 12 - Sports Authority Inc. and Gateway Casinos & Entertainment freed for trading during Friday's market hours, with both of the companies' term loans quoted above their original issue discount price.

In more trading happenings, Cengage Learning's term loan B headed lower after the company announced quarterly numbers that showed a year-over-year decline in net income, revenues and adjusted EBITDA.

Additionally, Education Management Corp.'s term loan was better as amendment and extension plans were revealed, and Six Flags Entertainment Corp.'s term loans were unchanged to a little weaker on news of a refinancing.

Moving to the primary market, Dunkin' Brands Inc. moved up the commitment deadline on its credit facility by a few days as the deal is already heavily oversubscribed, and Allen Systems Group Inc.'s term loan is heard to be filling out.

Also, Mactec Inc. and AutoTrader.com surfaced with plans for new deals, HarbourVest Partners LLC launched its term loan to investors, and Language Line Services' second-lien loan is essentially dead because of amendment problems.

Sports Authority trades

Sports Authority's $300 million seven-year covenant-light term loan (B3/B-) hit the secondary market on Friday morning, with levels quoted by traders at 97¼ bid, 97¾ offered.

Pricing on the term loan is Libor plus 600 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 97. There is soft call protection of 102 in year one and 101 in year two.

During syndication, pricing was flexed up from talk of Libor plus 525 bps to 550 bps, the discount widened from talk of 98 to 99, and the call protection was increased from just 101 in year one.

Bank of America and JPMorgan are the lead banks on the deal that will be used to refinance existing debt.

Sports Authority is an Englewood, Colo.-based sporting goods retailer.

Gateway Casinos breaks

Gateway Casinos was yet another deal to start trading, with the C$240 million term loan B quoted by one trader at par bid, no offers, and by a second trader at par ¼ bid, 101¼ offered.

Pricing on the term loan B is Libor plus 475 bps with a 1.75% floor, and it was sold at an original issue discount of 99.

By comparison, prior to launch, price talk on the loan had been Libor plus 525 bps to 550 bps with a 1.75% Libor floor and an original issue discount of 981/2.

Jefferies, RBS, Goldman Sachs, JPMorgan and Morgan Stanley are the lead banks on the deal that will be used, along with C$170 million of second-lien notes, to refinance an exit financing term loan.

Gateway getting pro rata

Gateway Casinos' C$390 million credit facility also includes a C$115 million term loan A and a C$35 million revolver, with both tranches priced at BA plus 350 bps with no Libor floor, and sold at an original issue discount of 99.

Initially, the deal was expected to include a C$250 million five-year first-lien term loan B and no term loan A, but at launch it was said that a term loan A might be added as a result of significant early interest from Canadian banks.

Later on, it was disclosed that the term loan B and the term loan A would each carry a size of C$170 million, and after that, the sizes moved to C$200 million on the B and C$150 million on the A, before firming up at their current amounts.

In addition, the notes were originally expected at C$250 but were downsized when the amount of term loans being borrowed was increased.

Gateway Casinos is a Burnaby, B.C.-based casino and entertainment company.

Cengage B loan slides

Cengage's term loan B dropped in trading as the company came out with disappointing fiscal first-quarter results, according to traders.

The term loan B was quoted by one trader at 92 7/8 bid, 93 3/8 offered, down from 93¼ bid, 93¾ offered, and by a second trader at 93 bid, 93½ offered, down from 93¼ bid, 93¾ offered.

For the fiscal first quarter ended Sept. 30, Cengage reported net income of $104.6 million, compared to net income of $130.8 million in the prior year.

Revenues for the quarter were $641.8 million, compared to $693.8 million in the third quarter of 2009.

And, adjusted EBITDA for the quarter was $318.8 million, compared to $356 million last year.

Cengage is a Stamford, Conn.-based provider of teaching, learning and research services for the academic, professional and library markets.

Education Management rises

Education Management's term loan moved up to 96 bid, 96¾ offered from 95¾ bid, 96½ offered as invites went out for a Monday conference call that will be used to launch an amendment and extension of the company's bank debt, according to a market source.

Under the proposal, the company is looking to extend its term loan by three years to June 2016 and its revolver by three years to June 2015, the source said, with pricing on the extended debt not yet available.

Lenders are being offered a 10 bps amendment fee, and commitments/consents are due on Dec. 1.

Barclays, Bank of America, Goldman Sachs and BNP Paribas are leading the deal.

Education Management is a Pittsburgh-based provider of post-secondary education.

Six Flags flat to lower

Six Flags' term loans were unchanged to down a bit as news surfaced that the company will be launching an incremental first-lien term loan to repay its second-lien term loan, according to traders.

The existing first-lien term loan was quoted at par ½ bid, 101 offered, down from par ¾ bid, 101 1/8 offered, according to one trader, while a second trader already had it quoted at par ½ bid, 101 offered during the previous session.

And, the second-lien term loan was quoted by one trader at 102¾ bid, 103½ offered, versus 102¾ bid, 103¾ offered, while another trader was seeing the second-lien term loan at 103 bid, 104 offered previously.

Six Flags launching Monday

Six Flags is scheduled to launch its proposed incremental first-lien term loan with a conference call on Monday afternoon via lead bank JPMorgan.

The Dallas-based regional theme park company's existing credit facility was obtained upon its emergence from Chapter 11 earlier this year.

The facility consists of a $120 million revolver priced at Libor plus 425 bps with a 2% Libor floor, a $770 million first-lien term loan priced at Libor plus 400 bps with a 2% Libor floor, and a $250 million second-lien term loan priced at Libor plus 725 bps with a 2% Libor floor.

The second-lien loan has hard call protection of 103 in year one, 102 in year two and 101 in year three.

Dunkin' Brands shutting early

In more loan happenings, Dunkin' Brands is now asking lenders to get their commitments in toward its credit facility by 5 p.m. ET on Monday, as opposed to on Thursday, with the deal already a "blowout," according to market sources.

The $1.35 billion senior credit facility (B1/B+) consists of a $100 million five-year revolver and a $1.25 billion seven-year term loan B, with both tranches talked at Libor plus 425 bps with a 1.5% Libor floor.

In addition, the term loan B is being offered at an original issue discount of 99 and includes 101 soft call protection for one year.

Barclays, JPMorgan, Bank of America and Goldman Sachs are the joint lead arrangers and joint bookrunners on the deal, with Barclays the left lead.

Dunkin' to fund dividend recap

Proceeds from Dunkin' Brands' credit facility will be used to repay in full its outstanding securitization debt and to pay a cash dividend to stockholders.

Other funds for the dividend recapitalization will come from $625 million of senior notes, and chatter is that the notes will be coming to market early on in the week of Nov. 15.

Following completion of the transactions, senior leverage will be 4.2 times and total leverage will be 6.5 times.

Canton, Mass.-based Dunkin' Brands is the parent company of Dunkin' Donuts, a coffee and baked goods restaurant chain, and Baskin-Robbins, an ice cream specialty store chain.

Allen Systems nets interest

Allen Systems Group's proposed $80 million term loan hasn't completely filled out yet, but investors are showing interest and the deal is expected to get done, a market source told Prospect News on Friday.

Price talk on the term loan, which is only being marketed to existing lenders, is Libor plus 475 bps with a 1.75% Libor floor and an original issue discount of 99, the source said.

Bank of America is the lead bank on the $105 million credit facility (Ba2/BB-), which also includes a $25 million revolver.

Proceeds from the loan, along with $300 million of notes, will be used by the Naples, Fla.-based enterprise software provider to refinance existing debt and to pay a dividend.

Mactec joins calendar

Mactec scheduled a bank meeting for Thursday to launch a proposed $130 million five-year senior credit facility that consists of a $20 million revolver and a $110 million term loan, according to a market source.

Price talk on the facility is Libor plus 425 bps with a 1.5% Libor floor, with the fee to be announced at the launch, the source said.

GE Capital and Bank of America are the lead banks on the deal that will be used to refinance existing debt and to pay a dividend to owners.

Mactec is an Atlanta-based consulting firm providing engineering, environmental and construction services.

AutoTrader readies launch

AutoTrader.com has set a bank meeting for Wednesday to launch a proposed $950 million credit facility that is being led by Wells Fargo, according to a market source.

Other arrangers are expected to be added to the deal, but those commitments hadn't firmed up by Friday morning.

The facility includes a $150 million five-year revolver and a $200 million five-year term loan A, both talked at Libor plus 350 bps.

There is also a $600 million six-year term loan B that is being guided around Libor plus 375 bps to 400 bps with a 1.5% Libor floor and an original issue discount of 99 based on the assumption that all-in pricing will be in the 5½% to 5¾% range, the source said, adding that official talk will come out at the meeting.

AutoTrader buying Kelley

Proceeds from AutoTrader.com's credit facility will be used to fund the acquisition Kelley Blue Book and its sister companies, CDMdata and CDM Dealer Services.

The acquisition was announced on Oct. 26, at which time it was said that details on the transaction are not being disclosed.

Closing is expected by the end of the year.

Last month, the company closed on a $100 million incremental term loan that priced at Libor plus 450 bps with no Libor floor, and was sold at an original issue discount of 991/2. This loan was used to fund the acquisition of vAuto, an Oak Brook, Ill.-based provider of advanced software tools for used vehicle management, pricing and inventory optimization.

AutoTrader.com is an Atlanta-based automotive marketplace and consumer information website. Kelley is an Irvine, Calif.-based provider of new and used vehicle pricing information.

HarbourVest launches

HarbourVest Partners held a bank meeting on Friday to launch its proposed $550 million term loan, according to a market source.

As was previously reported, price talk on the loan is Libor plus 425 bps with a 1.5% Libor floor and an original issue discount of 99.

Credit Suisse is the lead bank on the deal that will be used for a recapitalization.

HarbourVest is a Boston-based investment firm that provides private equity services to institutional clients.

Language Line at square one

Language Line Services' plans to get a new $250 million second-lien term loan (B3/B-) have essentially come to a stop, at least for now, since the amendment to the existing credit facility to allow for the debt failed to pass, according to a market source.

The amendment would have also allowed for a dividend payment and would have revised covenants.

"In practice, [the] deal is pulled, although nothing formal has been announced," the source said, adding that the company can't move forward until an amendment gets done.

Language Line lead banks

Credit Suisse, Bank of America and Morgan Stanley were the lead banks on second-lien loan, and Bank of America is the administrative agent on the existing facility.

The second-lien loan was being talked at Libor plus 900 bps with a 1.75% Libor floor and an original issue discount of 98. There was call protection of 103 in year one, 102 in year two and 101 in year three.

Proceeds were going to be used to repay debt and to fund a dividend.

Language Line is a Monterey, Calif.-based provider of telephone interpreting and language services.

Columbian changes grid

Columbian Chemicals Co. tightened the pricing grid on its $375 million senior secured credit facility (Ba3/BB) due in 2015, according to a market source.

Pricing on the facility will now be Libor plus 350 bps with a 37.5 bps undrawn fee if leverage is less than 1.0 times, Libor plus 375 bps with a 50 bps undrawn fee if leverage is greater than 1.0 times and Libor plus 400 bps with a 62.5 bps undrawn fee if leverage is greater than 3.0 times, the source said.

UBS and JPMorgan are the lead banks on the deal that consists of a $300 million term loan A and a $75 million revolver.

Proceeds will be used by the Marietta, Ga.-based manufacturer of carbon black to refinance existing bank debt.

CB Richard Ellis closes

In other news, CB Richard Ellis Group Inc. completed its $1.35 billion senior secured credit facility (Ba1/BB) consisting of a $700 million 41/2-year revolver, a $350 million five-year term loan A and a $300 million six-year term loan B.

Pricing on the revolver and the term loan A is Libor plus 225 bps, and pricing on the term loan B is Libor plus 325 bps with no Libor floor, and it was sold at an original issue discount of 991/2.

During syndication, pricing on the B loan was lowered from Libor plus 350 bps and the discount was cut from 99.

Credit Suisse, Bank of America and HSBC Securities acted as the lead banks on the deal for the Los Angeles-based commercial real estate services firm that was used to help refinance $1.5 billion of existing bank debt.

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