MGM Resorts rises; CCGI, DaVita tweak deals; Ascend pulls loan; Global Tel sets launch, talk

By Sara Rosenberg

New York, Oct. 13 - MGM Resorts International's extended and non-extended term loans gained some ground in trading on Wednesday on the back of news of a common stock offering and the release of expected quarterly numbers.

Over in the primary market, CCGI Holding modified the size and pricing on its credit facility, and DaVita Inc. lowered pricing on its entire deal and added a pricing step-down as well as call protection on its B loan, which also saw its discount price lowered.

Also, Ascend Performance Materials LLC removed its dividend recapitalization deal from market, and Global Tel*Link Corp. firmed up timing on the launch of its credit facility and set guidance.

Additionally, Endo Pharmaceuticals Holdings Inc. and Fibertech Networks released price talk on their credit facilities as the deals were presented to lenders during the session, and Focus Brands Inc. is getting ready to bring its new loan to market.

MGM Resorts trades up

MGM Resorts' bank debt was stronger after the company priced a common stock offering and announced preliminary earnings results, according to traders.

The extended term loan was quoted by one trader at 91¾ bid, 92¼ offered, up from 90¼ bid, 91¼ offered, and by a second trader at 92 bid, 92½ offered, up from 90 bid, 90½ offered.

And, the non-extended term loan was quoted by the first trader at 99 1/8 bid, 99 5/8 offered, up from 98 bid, 99 offered, and by the second trader at 99 bid, 99½ offered, up from 98¼ bid, 98¾ offered.

On Wednesday, MGM Resorts priced 40.9 million shares of its common stock at $12.65 per share, and it plans to use proceeds for general corporate purposes, including the repayment of debt. If proceeds from the sale are in excess of $500 million, the company is required to repay senior credit facility debt with 50% of that excess.

The stock sale is expected to close on Monday.

MGM releases early numbers

In more MGM Resorts news, the company revealed preliminary expectations of third-quarter financial results late Tuesday, including projections of a diluted loss per share of $0.72, compared to a loss of $1.70 per share in the prior year third quarter.

Net revenues for the third quarter are expected to be $1.56 billion, and the operating loss for the quarter is expected to be around $206 million.

Additionally, the company said that it received an offer for its 50% economic interest in the Borgata Hotel Casino & Spa based. The offer is being submitted to Boyd Gaming Corp., which owns the other 50% interest. Based on Borgata's September debt balances, the offer equates to slightly in excess of $250 million for MGM Resort's interest.

MGM Resorts is a Las Vegas-based owner and operator of casino resorts.

Harrah's strengthens

Harrah's Entertainment Inc.'s bank debt was better as well on Wednesday as the secondary market in general had a positive tone, according to a trader.

The term loan B-2 was quoted at 89 bid, 89½ offered, up from 88 3/8 bid, 88 7/8 offered, the trader said.

Harrah's is a Las Vegas-based provider of branded casino entertainment.

CCGI reworks loan

Switching to the primary, CCGI Holding came out with a number of changes to its credit facility, including increasing pricing and Libor floor, downsizing the term loan and adding call protection to the term loan, according to a market source.

The $150 million six-year term loan, down from $250 million, and the $25 million five-year revolver are now priced at Libor plus 1,000 basis points with a 2% Libor floor, up from guidance of Libor plus 750 bps to 775 bps with a 1.75% Libor floor, the source said.

Also, the term loan now has call protection of 103 in year one and 101 in years two and three, the source continued.

As before, both the term loan and the revolver are being sold at an original issue discount of 98.

CCGI fills out

Following the revisions, CCGI Holding's credit facility was fully syndicated, the market source remarked.

Jefferies and UBS are the lead banks on the deal that was rated at B3/B- prior to the changes.

CCGI is a San Jose, Calif.-based provider of IT broadband and telecommunications services to small- and medium-sized businesses.

The company was formed through the recent merger of Covad Communications Group, MegaPath and Speakeasy.

The companies' existing debt was left outstanding in connection with the merger, so this new deal is being done to refinance that existing debt.

DaVita revises terms

Another company to release revisions on Wednesday was DaVita, as pricing was flexed lower on everything and the term loan B saw its original issue discount reduced and 101 soft all protection for one year added, according to a market source.

The $1.75 billion six-year term loan B is now priced at Libor plus 300 bps with a step-down to Libor plus 275 bps if corporate ratings are upgraded to Ba2/BB. It also has a 1.5% Libor floor and an original issue discount of 991/2, the source said. By comparison, initial talk had been Libor plus 350 bps with a 1.5% Libor floor and a discount of 99.

Furthermore, pricing on the company's $250 million five-year revolver and $1 billion five-year term loan A was reduced to Libor plus 275 bps from Libor plus 300 bps, the source continued.

Recommitments are due from lenders at 5 p.m. ET on Thursday.

DaVita refinancing debt

Proceeds from DaVita's credit facility, along with $1.55 billion of notes that were upsized from $1.45 billion, will be used to refinance $1.8 billion of outstanding bank debt, $700 million of 6 5/8% senior notes due 2013 and $850 million of senior subordinated notes due 2015.

Also, proceeds will be used for general corporate purposes and other opportunities, including potential acquisitions, share repurchases and other growth investments.

JPMorgan, Bank of America, Credit Suisse, Barclays, Goldman Sachs and Wells Fargo are the joint lead arrangers and bookrunners on the $3 billion secured credit facility (Ba2/BB/BB).

DaVita is a Denver-based provider of dialysis services.

Ascend cancels plans

Ascend Performance Materials pulled its $1.075 billion credit facility from market due to an underwhelming response from investors, according to market sources.

The facility was to consist of a $275 million ABL revolver and an $800 million six-year term loan B (B).

Price talk on the term loan B had been Libor plus 800 bps with a 2% Libor floor and an original issue discount of 97. The tranche was non-callable for one year, then at 102 in year two and 101 in year three.

Morgan Stanley and Bank of America were acting as the leads on the term loan, and Wells Fargo was leading the revolver.

Ascend Performance Materials, a Houston-based producer of nylon chemicals, was going to use proceeds from the facility to refinance existing debt and fund a dividend.

Global Tel*Link timing

Global Tel*Link nailed down timing on the launch of its $595 million credit facility with the scheduling of a bank meeting for Thursday, according to a market source. Previously the deal was simply described as October business.

The facility consists of a $20 million revolver (B1/B), a $370 million term loan B (B1/B), a $45 million deposit letter of credit facility (B1/B) and a $160 million second-lien term loan (Caa1/CCC+).

Credit Suisse, UBS and Goldman Sachs are the lead banks on the deal and have already given some investors an early look at the transaction.

Proceeds will be used to refinance existing debt and to fund a dividend payment.

Global Tel discloses talk

With the firming up of timing, Global Tel*Link also announced price talk on its credit facility, the source continued.

The revolver, term loan B and letter of credit facility are talked at Libor plus 550 bps, and the second-lien term loan is talked at Libor plus 1,125 bps.

All tranches have a 1.75% Libor floor and are being offered at an original issue discount of 98.

Also, the second-lien term loan is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

Global Tel*Link is a Mobile, Ala.-based correctional communications technology company.

Endo talk, structure revealed

Endo Pharmaceuticals held a bank meeting on Wednesday to kick off syndication on its proposed credit facility, and in connection with the event, price talk and structure was announced on the deal, according to a market source.

The $700 million facility consists of a $500 million revolver and a $200 million term loan, with both tranches talked at Libor plus 250 bps with no Libor floor and upfront fees based on commitment size, the source said.

Initially, it was expected that the company would get a new $400 million term loan and leave its $300 million revolver in place, but when the bank meeting date emerged, so did talk that the deal would come with a term loan/revolver structure.

It was also originally said that all-in credit facility borrowing costs were anticipated to be under 5%.

Endo lead banks

JPMorgan and RBC are the lead banks on Endo Pharmaceuticals' credit facility, which is only being marketed to banks.

Proceeds will be used to help fund the acquisition of Qualitest Pharmaceuticals, a Huntsville, Ala.-based generics company, from Apax Partners for $1.2 billion in cash.

Other funds for the purchase will come from cash on the balance sheet.

Closing on the transaction is expected late in the fourth quarter of 2010 or early in the first quarter of 2011, subject to regulatory approval.

Endo is a Chadds Ford, Pa.-based specialty health care services company focused on high-value branded products and specialty generics.

Fibertech talk surfaces

Fibertech Networks also held a bank meeting on Wednesday, at which time it too came out with price talk, according to a market source.

The $235 million term loan B is being talked at Libor plus 500 bps to 550 bps with a 1.5% to 1.75% Libor floor and an original issue discount of 981/2, the source said.

TD Securities is the lead bank on the $260 million credit facility (B2/B), which also includes a $25 million revolver.

Proceeds from the facility, along with equity, will be used to fund the buyout of the company by Court Square Capital Partners from Nautic Partners and Ridgemont Equity Partners.

Closing is expected later this year, subject to customary conditions, including regulatory approvals.

Fibertech is a Rochester, N.Y.-based provider of fiber optic bandwidth services.

Focus Brands readies deal

Focus Brands is set to hold a bank meeting at 2 p.m. ET on Monday to launch a proposed $285 million credit facility that is being led by Credit Suisse, according to a market source.

The facility consists of a $10 million revolver and a $275 million term loan, with price talk not yet available, the source said.

Proceeds will be used to refinance existing debt and fund the acquisition of the Auntie Anne's, a Lancaster, Pa.-based hand-rolled soft pretzel chain.

Focus Brands is an Atlanta-based franchisor and operator of ice cream stores, bakeries, restaurants and cafes.

Associated Materials closes

In other news, Hellman & Friedman LLC completed its buyout of Associated Materials LLC from Investcorp and Harvest Partners, according to a news release.

To help fund the transaction, Associated Materials got a new $225 million five-year asset-based revolver led by Deutsche Bank and UBS.

Associated Materials is a Cuyahoga Falls, Ohio-based maker of exterior residential building products.

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