Harrah's rises on CMBS amendment; Charter gains; N.E.W. floats OID; Fresenius tweaks deal

By Sara Rosenberg

New York, March 8 - Harrah's Operating Co. Inc. saw its term loan B debt move higher in trading on Monday after the company announced that it has reached an agreement to amend its commercial mortgage-back securities.

In more trading news, Charter Communications Operating LLC saw its old term loan strengthen as word hit that the company will be launching an amend and extend transaction, and DirecTV Holdings LLC's term loan C softened on paydown news.

Moving to new deal happenings, N.E.W. Customer Service Cos. Inc. began circulating guidance on the original issue discounts for its secured and unsecured term loans as the tranches are getting ready for their upcoming launch.

Also, Fresenius SE came out with a change to the Libor floor on its proposed term loan C, and Quad/Graphics Inc. revealed timing on the launch of its proposed credit facility while RedPrairie Holding Inc. is readying a launch for its buyout loan.

Harrah's up with amendment

Harrah's Operating's term loans gained some ground in the secondary market as its parent company, Harrah's Entertainment Inc., revealed that it received unanimous consent from its commercial mortgage back securities lenders to amend the terms of $5.5 billion in loans, according to traders.

The term loan B-2 was quoted by one trader at 84¼ bid, 84¾ offered, up from 82 bid, 82¾ offered, and the term loan B-4 was quoted by that trader at 102½ bid, 103½ offered, up from 101 bid, 101¾ offered.

Meanwhile, a second trader had the term loan B-1 quoted at 84 1/8 bid, 84 5/8 offered, up from 82¾ bid, 83¼ offered, the term loan B-2 quoted at 84 3/8 bid, 84 7/8 offered, up from 83 bid, 83½ offered and the term loan B-3 quoted at 83 5/8 bid, 84 1/8 offered, up from 82¼ bid, 82¾ offered.

Harrah's amendment details

Under the amendment, Harrah's is extending the CMBS loan maturity date to 2015 and is getting permission to purchase CMBS loans at a discount in the future.

The amendment, which will improve the company's balance sheet by reducing debt by more than $4 billion and improve liquidity and maturity profile, will become effective upon execution of definitive documentation.

As part of the amendment, the company has agreed to purchase about $124 million face value of CMBS loans for $37 million.

Harrah's began purchasing discounted CMBS loans in the fourth quarter of 2009 and purchased roughly $950 million of face value loans for approximately $237 million.

In connection with the amendment, the borrowers under the CMBS loans have agreed to pay the selling lenders an additional $48 million for the loans previously sold.

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

Charter better on amend and extend

Charter's old term loan was higher on Monday following the company's announcement that it will seek an amendment to its credit facility that will extend a portion of the debt, according to traders.

The old term loan was quoted by one trader at 95¾ bid, 96¼ offered, up from 94½ bid, 94 7/8 offered, and by a second trader at 95¾ bid, 96 1/8 offered, up from 94 5/8 bid, 95 offered.

Under the amendment proposal, Charter is looking to extend about $2 billion of existing term loan maturities by 2½ years to September 2016, and about $1 billion of revolver commitments by two years to March 2015.

Also, the amendment would provide for additional lending commitments under the extended revolver.

Charter extended loan pricing

Pricing on Charter's extended term loan will be Libor plus 325 basis points, up from current pricing of Libor plus 200 bps, sources told Prospect News.

Lenders are being offered a 10 bps amendment fee.

Bank of America, Citigroup, Credit Suisse, Deutsche Bank, GE Capital, JPMorgan and UBS Securities are the joint lead arrangers and bookrunners on the deal that will launch with a lender call on Tuesday.

Closing on the amendment is expected to take place in the middle of March.

Charter is a St. Louis-based broadband communications company and cable operator.

DirecTV dips with paydown

DirecTV's term loan C weakened in trading as the company said that it may repay some or all of the debt using proceeds from a senior unsecured notes offering, according to a trader.

Proceeds from the notes may also be used to fund a share repurchase plan and for other general corporate purposes.

Following the news, the company's term loan C was quoted at par bid, par ¼ offered, down from par ½ bid, par ¾ offered, the trader said.

DirecTV is an El Segundo, Calif.-based provider of digital television entertainment.

N.E.W. Customer OID surfaces

Over in the primary market, original issue discount talk on N.E.W. Customer Service's proposed term loans starting floating around the market ahead of the Tuesday bank meeting that will officially kick off syndication on the credit facility, according to a market source.

The $700 million six-year first-lien term loan is being talked with an original issue discount of 99, the source said. As was previously reported, the spread on this tranche is being guided at Libor plus 425 basis points with a 1.75% Libor floor.

And, the $400 million seven-year unsecured term loan is being talked with an original issue discount of 981/2, the source continued. Spread talk on this tranche is Libor plus 725 bps with a 2% Libor floor.

Call protection on the unsecured loan is non-callable for two years, then at 103 in year three and 101 in year four.

N.E.W. Customer getting revolver

In addition to the two term loans, N.E.W. Customer Service will also be getting a $20 million five-year revolver, the market source remarked.

Bank of America, Barclays and Deutsche Bank are the lead banks on the $1.12 billion credit facility.

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

N.E.W. Customer Service is a Sterling, Va.-based provider of extended service plans and product protection programs for consumer products.

Fresenius cuts Libor floor

Fresenius SE lowered the Libor floor on its term loan C, which is comprised of approximately $996 million and roughly €165 million, to 1.5% from 1.75%, according to a market source.

As before, pricing on the term loan C is Libor plus 300 bps and it is still being sold at par.

Also, the 101 soft call protection for one year was left unchanged.

Deutsche Bank is the lead bank on the deal.

Fresenius refinancing debt

Proceeds from Fresenius' term loan C will be used to refinance the existing term loan B that is priced at Libor plus 350 bps with a 3.25% Libor floor.

The new term loan C will mature in September 2014, the same maturity as the existing term loan B.

All existing term loan lenders are getting 100 bps, which is the existing call protection and consenting lenders to the amendment that was launched in conjunction with the term loan C are getting a 25 bps fee.

Fresenius is a Bad Homburg, Germany-based provider of products and services for individuals undergoing dialysis.

Quad/Graphics sets launch

Quad Graphics has scheduled a bank meeting for Wednesday to launch its proposed $1.2 billion credit facility (Ba2) that consists of a $400 million four-year cash-flow revolver and an $800 million six-year term loan B, according to a market source.

JPMorgan has committed $1.05 billion of the deal and U.S. Bank committed $150 million.

Proceeds will be used to help fund to fund cash distributions in connection with the acquisition of World Color Press Inc., refinance Quad/Graphics' existing revolving credit facility, refinance World Color's existing debt, and fund repayment of certain other World Color obligations.

Closing on the acquisition is expected in the summer, subject to shareholder and regulatory approvals. There is no financing condition.

Quad/Graphics is a Sussex, Wis.-based printer of catalogs, magazines and other commercial products. World Color is a Montreal-based provider of print, digital and related services to retailers, catalogers, publishers, branded-goods companies and other businesses.

RedPrairie readies launch

RedPrairie is getting ready to launch its proposed $270 million credit facility with a bank meeting on Tuesday, according to a market source.

Tranching on the deal is comprised of a $30 million revolver and a $240 million term loan, the source said.

Credit Suisse and RBC are the lead banks on the deal that will be used to help fund the buyout of the company by New Mountain Capital LLC.

RedPrairie is a Waukesha, Wis.-based productivity services provider.

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