Infor Global first-lien term loan breaks wrapped around mid-par; three deals slated for Tuesday launch

By Sara Rosenberg

New York, April 18 - Infor Global Solutions allocated its $550 million credit facility on Monday, with the first-lien term loan freeing up for trading around the mid-par context.

Meanwhile, in the primary, three companies surfaced as scheduled to hold bank meetings on Tuesday so as to launch new credit facilities into syndication, including Kerr-McGee Corp., VCA Antech Inc. and Navarre Corp.

Infor Global's $300 million first-lien term loan (B2/B) was quoted at par 3/8 bid, par 5/8 offered pretty steadily throughout its first day of trading, according to a trader.

The tranche is priced with an interest rate of Libor plus 325 basis points. Opening price talk on the term loan at launch in March was Libor plus 275 basis points, but pricing was flexed higher during syndication.

Infor Global's credit facility also contains a $200 million second-lien term loan (Caa2/CCC+) and a $50 million revolver (B2/B).

The second-lien term loan is priced with an interest rate of Libor plus 725 basis points, was originally issued at 97 and contains call protection of 103 in year one, 102 in year two and 101 in year three. Opening price talk on the term loan at launch in March was Libor plus 525 to 550 basis points but pricing was flexed higher during syndication.

The revolver is priced with an interest rate of Libor plus 300 basis points. This too was flexed up during syndication from opening price talk of Libor plus 275 basis points.

Lehman Brothers is the lead bank on the deal, and Wells Fargo Foothill is syndication agent.

Proceeds from the credit facility will be used to help finance the acquisition of Mapics Inc. and refinance existing senior and subordinated debt.

Furthermore, Infor has received a commitment from Golden Gate Capital and Summit Partners, its existing sponsors, for equity capital to help finance the transaction as well.

Under the terms of the acquisition agreement, Infor will pay $12.75 per share in cash to Mapics shareholders. Mapics currently has about 27.2 million shares outstanding on a fully diluted basis.

Infor is an Alpharetta, Ga., provider of vertical specific, enterprise-wide business solutions to the manufacturing and distribution industries. Mapics is an Alpharetta, Ga., global solutions provider focused exclusively on manufacturing.

New deals line up

Tuesday is shaping up to be somewhat of a busy day for the primary loan market with three deals adding up to $6.65 billion in new bank debt lining up bank meetings - Kerr-McGee, VCA and Navarre.

Kerr-McGee, by far the largest deal slated for Tuesday, is a $5 billion senior secured credit facility consisting of a $2 billion senior secured six-year term loan B, a $2 billion senior secured two-year term loan X and a $1 billion senior secured five-year revolver.

JPMorgan and Lehman Brothers are the lead banks on the deal that will be used to refinance debt, finance a $4 billion modified Dutch auction self tender offer for shares of the company's common stock that was announced last Thursday and for general corporate purposes.

As a result of the company's self tender offer and financing needs, all three agencies downgraded Kerr-McGee's secured debt ratings - Moody's Investors Service to Ba3, Standard & Poor's to BB+ and Fitch Ratings to BB.

Kerr-McGee is an Oklahoma City-based energy and inorganic chemical company.

VCA pulls up in second place in terms of size, with the company slated to launch a $500 million credit facility consisting of a $75 million revolver talked at Libor plus 150 basis points and a $425 million term loan talked at Libor plus 150 basis points.

Goldman Sachs and Wells Fargo are the lead banks on the deal that will be used to refinance existing bank and bond debt.

VCA Antech is a Los Angeles-based provider of pet health care services.

Lastly, Navarre is scheduled to launch its $165 million senior secured credit facility Tuesday consisting of a $140 million six-year term loan B talked at Libor plus 325 basis points and a $25 million five-year revolver talked at Libor plus 325 basis points.

General Electric Capital Corp. is the lead bank on the deal that will be used to fund the approximately $100.5 million cash portion for the acquisition of FUNimation and for working capital and general corporate needs.

Navarre is a New Hope, Minn., publisher and distributor of home entertainment and multimedia software products.

Northwest closes

Northwest Airlines Corp. closed on its new term $147.75 million term loan C due Nov. 23, 2010 with an interest rate of Libor plus 625 basis points.

The tranche contains call protection of 103 through Nov. 23, 2005, 102 through Nov. 23, 2006, 101 through Nov. 23, 2007 and par thereafter.

Originally, the term loan C was launched with pricing of Libor plus 525 basis points but was flexed higher by 100 basis points because investors felt it was underpriced compared to the company's existing term loan B.

Proceeds from the term loan C were used to refinance the $147.75 million amortization payment due Nov. 23 on the existing term loan A and term loan B. The company did have the cash to make the amortization payment but wanted to conserve it because of uncertainties related to fuel prices and lower revenue from lower ticket prices.

Amortization is 1% per year beginning on Nov. 23, 2006, with a bullet payment at maturity.

JPMorgan and Citigroup acted as the lead banks on the Eagan, Minn.-based airline company's deal.

In connection with the closing of this financing, Northwest received consent from its lenders to waive its fixed charge coverage covenant until the second quarter of 2006.

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