EnergySolutions down with downgrade; LANDesk breaks; EquiPower firms coupons, lifts size

By Sara Rosenberg

New York, June 15 - EnergySolutions Inc.'s term loan retreated in trading during Friday's market hours as the company's ratings were downgraded by Standard & Poor's, and LANDesk Software's freed up above its original issue discount price.

Over in the primary market, EquiPower Resources Holdings nailed down pricing on its credit facility within initial guidance - with the first-lien debt coming at the wide end and the second-lien debt coming at the tight end - and the revolver was upsized as a result of strong demand.

Also, Consolidated Container Co. surfaced with plans for a new credit facility to back its leveraged buyout, and Formula One's credit facility has been pulled as the company's proposed initial public offering is being postponed.

EnergySolutions slides

EnergySolutions' term loan dropped in the secondary market to 93½ bid, 95½ offered from 94½ bid, 96½ offered on Friday in reaction to a two notch rating downgrade by Standard & Poor's, according to a trader.

Specifically, the corporate credit rating was lowered to B from BB-, the senior secured credit facility rating was cut to BB- from BB+, and the senior unsecured notes rating was reduced to B from BB-. The outlook is negative.

"The downgrade reflects weakening credit metrics and the added uncertainty stemming from the unexpected change in management since the company's strategic and financial priorities are now less clear," said Standard & Poor's credit analyst James Siahaan.

The ratings action comes on the back of the company's announcement on June 12 that it replaced its chief executive officer and chief financial officer and lowered its annual adjusted EBITDA guidance by $20 million.

EnergySolutions is a Salt Lake City-based provider of nuclear services.

LANDesk frees up

Also in trading, LANDesk Software's broke, with the $205 million term loan quoted at 99 bid, 99½ offered, according to a market source.

Pricing on the loan is Libor plus 575 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 98. There is 101 soft call protection for one year.

Recently, pricing on the loan had been increased from Libor plus 525 bps, the discount was revised from 99 and amortization was enhanced to 5% per year from 1% per year.

The company's $220 million credit facility (B2) also includes a $15 million revolver.

Wells Fargo Securities LLC is leading the deal that will be used for acquisition funding.

LANDesk is a Salt Lake City-based provider of systems lifecycle management and endpoint security, as well as IT service management products for desktops, servers and mobile devices.

EquiPower sets spreads

Moving to the new deal front, EquiPower Resources firmed pricing on its first-and second-lien credit facility and upsized the revolver to $100 million from $90 million, a source said, adding that the plan is to allocate the transaction on Tuesday.

The revolver (Ba3/BB) and $685 million first-lien term loan (Ba3/BB) are priced at Libor plus 500 bps, the high side of the Libor plus 475 bps to 500 bps talk, the source remarked. The revolver has no floor, and the term loan has a 1.5% Libor floor, an original issue discount of 98½ and 101 soft call protection for one year.

Meanwhile, the company's $200 million second-lien term loan (B2/BB) finalzied at Libor plus 850 bps, the low end of the Libor plus 850 bps to 875 bps talk, the source continued. This tranche has a 1.5% Libor floor, an original issue discount of 98 and hard call protection of 103 in year one, 102 in year two and 101 in year three.

EquiPower lead banks

Barclays Capital Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. and Morgan Stanley Senior Funding Inc. are the lead banks on EquiPower's now $985 million credit facility, up from $975 million.

Proceeds will be used by the company to refinance existing debt, to pay deferred costs associated with hedge restructuring, to fund a debt service reserve and to pay a small dividend.

EquiPower is a Hartford, Conn.-based competitive power generation company that is owned by Energy Capital Partners LLC.

Consolidated Container emerges

Consolidated Container set a bank meeting for Monday to launch a proposed $495 million credit facility that will help fund its acquisition by Bain Capital Partners LLC from Vestar Capital Partners, according to a market source.

The facility consists of a $125 million ABL revolver and a $370 million seven-year term loan B, the source said.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., RBC Capital Markets LLC and Credit Suisse Securities (USA) LLC are leading the deal.

In addition to the credit facility, the company anticipates approaching the high-yield market in early July with a $250 million senior unsecured notes offering, another source said. Citigroup is the left lead on the bonds.

Consolidated Container, an Atlanta-based developer and manufacturer of rigid plastic packaging, expects its buyout to be completed in the third quarter.

Formula One withdrawn

Formula One's $1.8 billion credit facility, which had actually already freed up for trading in late May, was pulled from market since the initial public offering that the deal was contingent upon has been pushed off, a market source said.

The facility consisted of a $50 million five-year revolver, a $450 million five-year term loan A and a $1.3 billion six-year term loan B.

Pricing on the B loan was going to be Libor plus 350 bps with a 1% Libor floor, and it had been sold at an original issue discount of 98. There was 101 soft call protection for one year and a ticking fee of 100 bps per annum that would have been in effect until the company completed its IPO, or the credit agreement commitment termination date as reached.

During syndication, pricing on the term B had firmed on the wide side of unofficial guidance of Libor plus 325 bps to 350 bps with a 1% Libor floor and a discount of 99, and the ticking fee was added.

Formula One existing debt

Proceeds from Formula One's credit facility would have been used to refinance existing debt, including a credit facility that was completed in April as a $1,383,000,000 term loan B priced at Libor plus 450 bps with a 1.25% Libor floor that was sold at an original issue discount of 99, an $817.5 million term loan C priced at Libor plus 500 bps with a 1.25% Libor floor and a $70 million revolver.

Goldman Sachs & Co., RBS Securities Inc., Morgan Stanley Senior Funding Inc. and UBS Securities LLC were leading the new deal.

Formula One is the organizer of the Formula One World Championship (F1) and owner of the commercial rights to F1 motorsports racing.

Ascena closes

In other news, Ascena Retail Group Inc. wrapped up its acquisition of Charming Shoppes Inc. for $7.35 per share, or about $900 million, according to a news release.

To help fund the transaction, the company got a $300 million six-year term loan B (Ba2/BB+) priced at Libor plus 375 bps with step-downs to Libor plus 350 bps at 0.75 times total leverage and Libor plus 325 bps at 0.5 times total leverage, effective upon delivery of the company's fiscal quarter end January 2013 financials. There is a 1% Libor floor as well as 101 soft call protection for one year, and the debt was sold at an original issue discount of 99.

During syndication, the spread on the loan firmed at the tight side of the Libor plus 375 bps to 400 bps talk and the leverage-based pricing grid was added.

J.P. Morgan Securities LLC and Bank of America Merrill Lynch led the deal.

Ascena is a Suffern, N.Y.-based specialty retailer of apparel for women and tween girls. Charming Shoppes is a Bensalem, Pa.-based retailer specializing in women's plus-size apparel.

Wastequip completes recap

Wastequip LLC completed its recapitalization, which eliminated over $550 million of debt and resulted in the company being majority owned by Centerbridge Partners LP.

For the transaction, Wastequip got a new $190 million senior secured credit facility comprised of a $40 million revolver (Ba2/BB-) and a $150 million term loan B (B3/BB-).

Pricing on the B loan is Libor plus 675 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 971/2. There is call protection of 103 in year one and 101 in year two.

While in syndication, the term B was flexed up from guidance of Libor plus 600 bps to 625 bps, the floor increased from 1.25%, the discount firmed in the middle of revised talk of 97 to 98 and wide of the initial 98 talk and the call protection was sweetened from just 101 soft call for one year.

Goldman Sachs & Co. led the deal for the Charlotte, N.C.-based manufacturer of waste handling equipment and recycling equipment.

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