Oriental Trading flexes, Van Wagner firms structure; BNY, Ohmstede, Arrowhead, New Century set talk

By Sara Rosenberg

New York, July 19 - Oriental Trading Co. revised spread guidance higher on its in-market credit facility and Van Wagner finalized details on its new deal, including setting pricing at the high end of guidance, tweaking delayed-draw fees and adding soft call protection.

Also in the primary, BNY ConvergEx Group LLC, Ohmstede Ltd. and Arrowhead General Insurance Agency Inc. came out with price talk on their credit facilities as all of these deals were launched with bank meetings during Wednesday's session, and New Century Transportation Inc. price talk started floating around ahead of the deal's scheduled Thursday launch.

As for secondary happenings, a lot of attention was focused on a portfolio auction that went off during market hours, and the general trading tone got a bit of a pop as the stock and bond markets both improved on the day.

Oriental Trading elevated price talk on its $640 million credit facility, with some investors not surprised by the move primarily due to the ratings that the deal has received.

The $50 million revolver (B3/B) and $410 million first-lien term loan B (B3/B) are now being talked at Libor plus 275 to 300 basis points, up from original talk at launch in the area of Libor plus 200 to 250 basis points, according to a fund manager.

Meanwhile, the $180 million second-lien term loan (Caa1/CCC+) is now being talked at Libor plus 575 to 600 basis points, up from original guidance at launch in the area of Libor plus 500 to 550 basis points.

"The B3 rating from Moody's really hurts because CLO investors are less likely to have any interest in the deal. If CLO's don't have interest in the deal, it probably won't trade well in the secondary market," the fund manager explained.

"I personally think they'll need to increase pricing to at least 325 to get anybody interested. They'll need to add a lot of bells and whistles such as call protection, big cash flow sweep, bigger than standard amortization schedule, etc., on top of juicier spread to get people really interested in the deal," the fund manager concluded.

JPMorgan and Wachovia are the lead banks on the credit facility.

Proceeds from the new loan, along with proceeds from some holding company pay-in-kind paper that will be placed by Wachovia, will be used to help fund The Carlyle Group's leveraged buyout of Oriental Trading from Brentwood Associates.

Oriental Trading is an Omaha, Neb., direct marketer of party and school supplies.

Van Wagner sets structure

Van Wagner has firmed up the final structure on its $200 million covenant-light credit facility allowing the syndicate to give out allocations on Wednesday with the expectation being that the deal will free for trading on Thursday, according to a market source.

Under the completed structure, pricing on the $25 million revolver, $50 million delayed-draw term loan and $125 million term loan B firmed up at Libor plus 300 basis points, the high end of original guidance of Libor plus 250 to 300 basis points, the source said.

In addition, the ticking fee on the delayed-draw term loan was changed to 100 basis points for the first 12 months and 125 basis points for months 12 through 18. Originally, the ticking fee was set at 50 basis points for the entire 18 months, the source explained.

Lastly, 101 soft call protection for one year was added to the term loan B and the delayed-draw term loan, the source said.

The transaction is oversubscribed with 22 investors participating.

Since it will take a little time for allocations to go out and documents and approvals to be signed, the facility isn't anticipated to hit the secondary until Thursday; however, it is expected that the term loan B will be quoted at par bid, par ½ offered on the break, the source added.

General Electric Capital Corp. is the lead bank on the deal that will be used to refinance existing debt.

Van Wagner is an outdoor advertising company.

BNY ConvergEx pricing

BNY ConvergEx set opening price talk levels on its proposed $675 million credit facility as the transaction was launched into syndication, with the $75 million revolver (B1/B+) and $420 million term loan B (B1/B+) talked at Libor plus 275 basis points, and the $180 million second-lien term loan (B3/B-) talked at Libor plus 650 basis points, according to a market source.

The second-lien term loan carries call protection of 102 in year one and 101 in year two, the source said.

Merrill Lynch and Goldman Sachs are the lead banks on the deal, with Merrill the left lead. Morgan Stanley and Bank of New York are co-managers.

In addition the company will be getting $100 million of mezzanine debt that is underwritten by Merrill and Goldman.

Leverage through the first lien will be 3.7x, leverage through the second lien will be 5.3x and leverage through the mezzanine will be 6.2x.

Proceeds from the credit facility, along with the mezzanine financing, will be used to help fund the creation of BNY ConvergEx Group by GTCR Golder Rauner, LLC, The Bank of New York Co. Inc. and Eze Castle Software.

BNY ConvergEx will be an agency brokerage and technology company offering a complete spectrum of pre-trade, trade and post-trade solutions for traditional money managers, hedge funds, broker-dealers, corporations and plan sponsors.

The new company is expected to be established by the end of September, pending regulatory approval.

Ohmstede price talk

Ohmstede also released price talk on its proposed $195 million credit facility as the deal was presented to lenders through a Wednesday morning bank meeting, according to a market source.

Both the $30 million revolver (B2/B-) and the $100 million first-lien term loan (B2/B-) were launched with opening price talk of Libor plus 300 basis points, and the $65 million second-lien term loan (Caa1/CCC) was launched with opening price talk of Libor plus 675 basis points, the source said.

The second-lien term loan contains call protection of 102 in year one and 101 in year two, the source added.

Morgan Stanley and Credit Suisse are the lead banks on the deal, with Morgan Stanley the left lead.

Proceeds from the credit facility will be used to help fund First Reserve Corp.'s leveraged buyout of Ohmstede from Tanglewood Investments Inc.

Ohmstede is a Beaumont, Texas, company that manufactures and maintains heat exchangers.

Arrowhead spreads

Continuing on the price talk front, Arrowhead General Insurance announced spread guidance on its $185 million credit facility, with the $15 million revolver (B) and $125 million first-lien term loan (B) talked at Libor plus 275 basis points and the $45 million second-lien term loan (CCC+) talked at Libor plus 650 to 700 basis points, according to a buyside source.

Wachovia is the lead bank on the deal, which was also launched with a bank meeting on Wednesday.

Proceeds will be used to help fund Spectrum Equity's leveraged buyout of the company.

Arrowhead is a San Diego-based seller of commercial and personal property/casualty insurance products.

New Century floats talk

New Century Transportation price talk started to make its way around the marketplace as the $115 million deal is gearing up for its Thursday launch into syndication, according to a market source.

Both the $20 million revolver and the $95 million term loan B are expected to contain opening spreads set at Libor plus 325 basis points, the source said.

Wachovia is the lead bank on the deal that will be used to refinance acquisition debt.

New Century is a Westhampton, N.J., provider of hybrid truckload and less-than-truckload services.

BHM tweaks deal

BHM Technologies LLC made some changes to its $335 million credit facility, including moving some funds from the second-lien term loan into the first-lien term loan, adding original issue discounts to the term loans and increasing pricing on all tranches, according to a market source.

Under the changes, the seven-year first-lien term loan B is now sized at $235 million, up from an original size of $220 million, pricing was increased to Libor plus 300 basis points from original talk at launch of Libor plus 250 basis points and the paper is now being issued at a discount of 981/4, the source said.

On the flip side, the 71/2-year second-lien term loan is now sized at $65 million, down from an original size of $80 million, pricing was increased to Libor plus 675 basis points from original talk at launch of Libor plus 575 basis points and the paper is now being issued at a discount of 973/4, the source continued. Call protection on this second-lien loan was left unchanged at 102 in year one and 101 in year two.

Lastly, pricing on the $35 million six-year revolver (size unchanged) was flexed up to Libor plus 300 basis points from original talk at launch of Libor plus 250 basis points, the source added.

Recommitments from lenders were due on Wednesday.

Lehman is the lead bank on the deal.

Proceeds from the new credit facility will be used to help fund First Atlantic Capital's leveraged buyout of the auto supplier.

Laidlaw oversubscribed

Laidlaw International Inc.'s $500 million term loan B (Ba2) is said to be oversubscribed at pricing of Libor plus 175 basis points, according to a market source.

Proceeds from the term loan B will be used to repurchase $500 million of common stock, with about $400 million of stock expected to be purchased in a modified Dutch auction tender offer and about $100 million of stock expected to be purchased through open-market transactions.

With the new debt, leverage will be about 1.7x EBITDA.

Laidlaw is a Naperville, Ill., provider of transportation services.

Portfolio auction nabs attention

Switching to trading, many secondary players were focused on an auction for a $136 million par name portfolio that bids were due on during market hours, according to traders.

The winning bid was speculated to come from a large European bank at north of par, one trader added.

Market tone improves

In general, the secondary market felt better by about an eighth of a point on Wednesday after Federal Reserve chairman Ben Bernanke's speech cleared the way for stronger levels in both the high-yield and the equity markets, according to a trader.

As shown by the markets' reactions, Bernanke's testimony before Congress seemed to imply that interest rate hikes may be coming close to an end.

Some names that saw an improvement in bank loan levels include Fresenius Medical Care AG, Affiliated Computer Services Inc. and Georgia-Pacific Corp.

Fresenius' term loan B closed the day quoted at 99¼ bid, 99½ offered, up from previous levels of 99 bid, 99¼ offered, the trader said. The company is a Bad Homburg, Germany-based dialysis products and services provider.

Affiliated Computer's term loan B closed the day quoted at par 1/8 bid, par 3/8 offered, up from previous levels of par bid, par ¼ offered, the trader continued. The company is a Dallas-based provider of business process and information technology outsourcing solutions to commercial and government clients.

And, Georgia-Pacific's term loan B closed the day quoted at 99 7/8 bid, par 1/8 offered, up from previous levels of 99¾ bid, par offered, the trader added. The company is an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals.

Toys 'R' Us closes

Toys 'R' Us Inc. closed on its new $1.004 billion senior secured credit facility (B1/B/CCC+) consisting of a $804 million six-year senior secured term loan and a $200 million two-year asset-sale bridge loan, according to an 8-K filed with the Securities and Exchange Commission Wednesday.

The six-year loan is priced at Libor plus 425 basis points, is non-callable for one year, then at 102 in year two and par thereafter, and was issued at an original issue discount of 991/2. During syndication, pricing on the term loan was flexed up from Libor plus 375 basis points, the call protection was sweetened and the original issue discount was added.

The asset-sale loan is priced at Libor plus 300 basis points with a step up to Libor plus 350 basis points after three months and to Libor plus 400 basis points after another three months. During syndication, pricing on this tranche was revised from talk of Libor plus 375 basis points.

In addition, during syndication, a $200 million accordion feature was removed from the credit agreement and some covenants under the asset-sale bridge loan were revised.

Bank of America, Deutsche Bank and Citigroup acted as the lead banks on the deal, with Bank of America the left lead.

Proceeds from the credit facility were used to refinance the Wayne, N.J., specialty toy retailer's existing U.S. bridge loan.

American Medical closes

American Medical Systems Holdings, Inc. closed on its $460 million senior secured credit facility (Ba3/BB-), according to a company news release. CIT Capital Securities LLC acted as the lead bank on the deal.

The facility consists of a $50 million six-year revolver and a $410 million six-year term loan.

Proceeds are being used to help fund the acquisition of Laserscope at a purchase price of $31.00 net per share.

American Medical is a Minnetonka, Minn., supplier of medical devices and procedures focused on pelvic disorders in men and women.

Pliant closes

Pliant Corp. closed on its new $200 million senior secured revolving credit facility in connection with its emergence from Chapter 11, according to a company news release.

Merrill Lynch Commercial Finance Corp. acted as the lead bank on the revolver, which replaces the company's existing pre-petition revolver and debtor-in-possession credit facilities.

The revolver carries an interest rate of Libor plus 275 to 300 basis points, based on utilization.

Pliant is a Schaumburg, Ill., producer of film and flexible packaging products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.