Caesars Entertainment gains with extension outcome; Excelitas focuses on tight end of talk

By Sara Rosenberg

New York, Aug. 23 - Caesars Entertainment Operating Co. Inc.'s term loans B-1, B-2 and B-3 were better in trading on Thursday as the company came out with results for its extension offer, and One Call Medical Inc.'s term loan strengthened from its breaking levels late in the prior session.

Over in the primary market, Excelitas Technologies Corp. is anticipated to finalize pricing on its add-on term loan at the tight end of guidance, and its concurrent amendment has already received lender approval.

Caesars gains ground

Caesars Entertainment's non-extended term loans headed higher in the secondary market as the company wrapped up its amendment and extension effort, according to traders.

The B-1, B-2 and B-3 were quoted by one trader at 94 3/8 bid, 94 7/8 offered, up from 94 bid, 94½ offered, and by a second trader at 94 bid, 94½ offered, up on the bid side from 93½ bid, 94½ offered.

Meanwhile, the term loan B-6 was seen by the first trader as flat on the day at 87 5/8 bid, 88 1/8 offered, and by the second trader as stronger at 87¾ bid, 88¾ offered, versus 87½ bid, 88½ offered previously.

The first trader explained that the non-extended term loans were stronger as buyers stepped in on the debt during the session. He explained that the buying interest could be a result of a number of factors, including investors deciding to flip back into it after getting paid down and/or some lenders believing that the company will be refinancing what's left of the B-1, B-2 and B-3 loans.

Caesars extension results

Through the amendment, Caesars received commitments to extend about $958 million of its term loans B-1, B-2 and B-3 by three years to Jan. 28, 2018.

Additionally, commitments came in to extend around $12.2 million of the company's revolver by three years to Jan. 28, 2017 and to convert around $210.3 million of its revolver into term loan B-6 debt due Jan. 28, 2018.

The extended B-1, B-2 and B-3 are also being added to the existing extended term loan B-6 that is priced at Libor plus 525 basis points, compared to the current B-1, B-2 and B-3 pricing of Libor plus 300 bps.

Caesars plans pay down

As part of the transaction, Caesars Entertainment will be repaying 50% of the extending lenders' term loans and/or revolver commitments with proceeds from a $750 million bond offering that recently priced at par to yield 9%.

Following the repayment, the term loan B-6 will total $2.63 billion, the term loans B-1, B-2 and B-3 will total $1,027,000,000, the revolver due Jan. 28, 2014 will total $823.4 million and the revolver due Jan. 28, 2017 will total $31.1 million.

Bank of America Merrill Lynch led the amendment process.

Caesars Entertainment is a Las Vegas-based diversified casino-entertainment company.

One Call trades

One Call Medical's $415 million seven-year covenant-light term loan moved up to 98¾ bid, 99¾ offered, after breaking late in the day on Wednesday at 98½ bid, according to a trader.

Pricing on the term loan is Libor plus 575 bps, after flexing during syndication from talk of Libor plus 500 bps to 525 bps. There is a 1.25% Libor floor, and it was sold at an original issue discount of 98 after widening from 99.

The company's $450 million credit facility (Ba3/B+) also includes a $35 million six-year revolver, which was downsized from $50 million.

Jefferies & Co. and GE Capital Markets led the deal that was used to fund the acquisition of MSC Care Management, a Jacksonville, Fla.-based provider of medical products and services to post-discharge and post-injury workers' compensation claimants.

One Call is a Parsippany, N.J.-based provider of specialty services to insurance payers.

Excelitas add-on pricing

Switching to the primary, Excelitas Technologies is expecting to firm the coupon on its $23 million add-on term loan at Libor plus 400 bps, the low end of the Libor plus 400 bps to 425 bps talk, according to a market source.

The loan due November 2016 has a 1% Libor floor, an original issue discount of 98 and 101 soft call protection for one year, the source said.

UBS Securities LLC is leading the deal that will be used to fund an acquisition.

Secured leverage will be 3.5 times, up from 3.3 times currently. Total leverage will be unchanged at 4.9 times.

Commitments are due at noon ET on Friday, and allocations are expected to go out later that afternoon, the source remarked.

Excelitas seeks amendment

In connection with add-on, Excelitas approached lenders with an amendment to change the spread on its existing term loan due November 2016 to match that of the add-on pricing and to add the 101 soft call protection for one year.

By comparison, current pricing on the existing term loan is Libor plus 375 bps.

Furthermore, the amendment would modify some baskets, the source added.

Lenders are being offered a 10 bps amendment fee, and enough consents have already been obtained for the amendment to pass.

Excelitas is a Waltham, Mass.-based provider of specialty lighting and sensor components, subsystems and integrated products to OEMs for health, environmental and security segments.

Allison closes

Allison Transmission Holdings Inc. completed its $850 million term loan (Ba3/BB-/BB) due 2019 on Thursday, according to an 8-K filed with the Securities and Exchange Commission.

Pricing on the loan is Libor plus 325 bps with a step-down to Libor plus 300 bps when total leverage is less than 3¼ times. There is a 1% Libor floor as well as 101 soft call protection for one year, and it was sold at an original issue discount of 99.

During syndication, the loan was upsized from $500 million and the pricing step-down was added.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and Barclays led the deal that was used to repay some non-extended term loan borrowings.

Allison is an Indianapolis-based automatic transmission company.

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