First Data nabs huge audience, attracts some orders; UniTek retranches; LCDX inches higher

By Sara Rosenberg

New York, Sept. 17 - First Data Corp.'s retail launch on Monday saw a massive turnout as curiosity drew investors to the bank meeting, and talk is that some commitments have already made their way into the books.

Also in the primary, UniTek USA made some changes to its credit facility, including shifting funds from its second-lien term loan into its first-lien term loan.

Meanwhile, over in the secondary market, LCDX was a touch better on Monday, and the cash market in general felt good, although activity was somewhat light since everybody's focus was on First Data.

First Data's retail bank meeting on Monday was incredibly well attended as almost everyone is curious about how this deal will fare, according to a buyside source.

"There were north of 400 to 500 people in the room alone," the buyside source said. "It makes sense. We didn't plan to participate [in the credit facility] but we sent someone there anyway just in case it looks to be something extraordinarily opportunistic.

"But, it looks like it's going to get done without any major concession by the banks. From what I've heard they have some orders in already," the buyside source added.

"The room had 400 seats and those were all filled. People were standing all around. I don't know how many guys were on the phone," a second source remarked.

First Data's $15 billion credit facility (Ba3/BB-/BB) consists of a $2 billion six-year revolver, a $5 billion seven-year term loan B-1, a $5 billion seven-year term loan B-2 and a $3 billion seven-year term loan B-3.

All three term loan tranches and the revolver are being talked at Libor plus 275 basis points.

The revolver has a 50 bps commitment fee.

Currently, only the term loan B-2 is being syndicated, with the plan being that the term loan B-1 and term loan B-3 will be syndicated, or sold down, at a later time. However, if a ton of orders come in for the term loan B-2, the banks will consider selling the other term loan tranches now, a market source explained.

The term loan B-2 includes a euro-denominated sub-tranche that is expected to be sized at $1 billion, but the final size will depend on demand, the source continued.

The term loan B-2 is being offered to investors with an original issue discount of 96.

Call protection on the term loan B-2 is 103 in year one, 102 in year two and 101 in year three. The term loan B-1 is prepayable at par and the term loan B-3 is non-callable for 3.25 years.

The credit facility contains a maximum senior secured net debt-to-EBITDA ratio of 7.25 times that is first tested (quarterly) on Dec. 31, 2008, decreasing by 0.25 times each year after that to 6.00 times at Dec. 31, 2013.

Originally, First Data's credit facility was going to be covenant-light and carry a size of $16 billion, broken down into a $2 billion revolver and one $14 billion term loan B tranche.

And, when the deal was launched to senior managing agent banks in late May, price talk on the revolver and term loan B was set at Libor plus 225 bps to 250 bps.

However, as a result of market instability, the leverage covenant was added, the credit facility was restructured and the price talk was revised.

Credit Suisse, Citigroup, Deutsche Bank, Goldman Sachs, HSBC, Lehman Brothers and Merrill Lynch are the lead banks on the deal.

Proceeds will be used to help fund Kohlberg Kravis Roberts & Co.'s buyout of the company for $34 in cash per share. The total value of the transaction is about $29 billion.

All required domestic and international regulatory approvals have already been obtained for the buyout.

First Data is a Greenwood Village, Colo., provider of electronic commerce and payment services for businesses.

UniTek shifts funds

UniTek revised its credit facility structure by moving some funds out of its second-lien term loan and into its first-lien term loan, according to a market source.

The first-lien term loan is now sized at $70 million, up from $55 million, and the second-lien term loan is now sized at $25 million, down from $40 million, the source said.

The first-lien term loan is priced at Libor plus 425 bps.

The $115 million credit facility also include a $20 million revolver.

RBC Capital is the lead bank on the deal, which is expected to close by the end of the month.

Proceeds will be used to help fund the acquisition of the company by HM Capital.

UniTek is a Blue Bell, Pa.-based provider of project management and support services to the telecom, satellite and government services industries.

LCDX trades up

Moving to the secondary market, LCDX was slightly higher during a Monday trading session that was overshadowed by the First Data launch, and the cash market had a positive tone to it as well, according to traders.

The index ended the day at 96.00 bid, 96.20 offered, up from Friday's closing levels of around 95.90 bid, 96.00 offered, traders said.

Equities, on the other hand, were actually a touch lower, with Nasdaq down 20.52 points, or 0.79%, Dow Jones Industrial Average down 39.10 points, or 0.29%, S&P 500 down 7.60 points, or 0.51%, and NYSE down 65.90 points, or 0.68%.

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