Goodman mulls changes; Harrah's rumored to be pulled; Linn oversubscribed; Nasdaq upsizes

By Sara Rosenberg

New York, Jan. 28 - Goodman Global Inc. is contemplating modifications to the pricing and/or original issue discount offered on its term loan so as to attract enough investors to fill out the book, and rumor has it that Harrah's Operating Co. Inc.'s term loan B-2 has been pulled from syndication and underwriters may end up seeking to individually sell down their exposures in the secondary.

In other news, Linn Energy LLC's second-lien term loan saw more than enough orders to get the deal done and is now preparing to give out allocations, and Nasdaq Stock Market Inc. upsized its term loan A as the deal was met with strong investor demand.

Goodman Global is currently considering making changes to its $800 million term loan B (Ba3/BB) to entice lenders to commit to the deal, according to a market source.

The term loan B was launched with price talk of Libor plus 375 basis points and an original issue discount of 981/2.

However, accounts have been informed that revisions could be made to the spread and/or to the original issue discount, the source said.

Basically, the banks are doing price discovery on the deal, trying to figure out at what levels lenders would be interested in placing orders, the source continued.

The term loan B does have about $200 million in commitments that have been in place since syndication first began.

Meanwhile, Goodman's $300 million ABL revolver that is talked at Libor plus 200 bps "is just about filled out at this point," the source added.

Commitments on the $1.1 billion senior secured credit facility are currently scheduled to be due on Tuesday.

Barclays Capital, Calyon and GE Capital are the lead banks on the deal, with Barclays the left lead on the term loan B and GE the left lead on the revolver.

Proceeds will be used to help fund the buyout of the company by Hellman & Friedman LLC for $25.60 in cash per share. The transaction is valued at $2.65 billion.

Other financing will come from $500 million of senior subordinated financing from vehicles managed by GSO Capital Partners and Farallon Capital Management, LLC, according to filings with the Securities and Exchange Commission.

On a gross basis, senior leverage is 3.4 times and total leverage is 5.2 times.

Goodman Global is a Houston-based manufacturer of residential and light commercial heating, ventilation and air-conditioning equipment.

Harrah's heard to be pulled

Market talk on Monday was that Harrah's stopped syndication on its leveraged buyout financing deal and that each underwriter is on its own to sell down pieces of the funded debt in the secondary, if they so choose, according to a market source.

Bank of America and Deutsche Bank were acting as the joint lead arrangers on the credit facility, and Bank of America, Citigroup, Credit Suisse, Deutsche, JPMorgan and Merrill Lynch were the joint bookrunners.

The $9.25 billion senior secured credit facility (Ba2/BB) consists of a $2 billion six-year revolver, a $2.25 billion seven-year term loan B-1, a $3 billion seven-year term loan B-2 and a $2 billion seven-year term loan B-3, with all tranches priced at Libor plus 300 bps.

The term loan B-1 is callable at par, the B-2 has soft call protection of 103 in year one, 102 in year two and 101 in year three, and the B-3 is non-callable for three years.

Of all the term loan debt, only the B-2 was being syndicated and it was being offered with an original issue discount of 961/2.

Proceeds were used to help fund the buyout of the company by Texas Pacific Group and Apollo Management, LP for $90.00 per share, the completion of which was announced on Monday.

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

Linn overfills

Linn Energy's $400 million 18-month second-lien term loan was met with strong enough market demand to allow the tranche to get done at initial terms and is now hoping to finalize allocations on Tuesday, according to a market source.

The second-lien loan is approximated to be "50% oversubscribed" now that Friday's commitment deadline has passed, the source said.

Pricing on the second-lien loan is set at Libor plus 500 bps and the paper was offered to investors with a 50 bps upfront fee.

In addition, Linn is getting a $100 million add-on to its revolving credit facility with pricing of Libor plus 150 bps.

BNP Paribas and RBC are the joint lead arrangers and bookrunners on the deal.

Proceeds will be used to help fund the company's acquisition of certain oil and gas properties located primarily in the Mid-Continent from Lamamco Drilling Co. for a contract price of $552 million, subject to purchase price adjustments.

Debt to capitalization will be around 45% and debt to EBITDA will be around 3.0 to 3.5 times.

Linn Energy is a Houston-based independent oil and gas company.

Nasdaq ups A loan

Nasdaq decided to raise the size of its term loan A to $1.7 billion from $1.5 billion being that the tranche was pretty well oversubscribed, according to a market source.

In connection with this move, the company, downsized its bond offering to $425 million from $625 million, the source said.

Pricing on the term loan A was left unchanged at Libor plus 200 bps, the source said.

Nasdaq's $1.775 billion, up from $1.575 billion, senior secured credit facility (Ba1/BBB-) also includes a $75 million revolver that is priced at Libor plus 200 bps as well.

Bank of America and JPMorgan are the lead banks on the deal that will be used to help fund the acquisitions of OMX AB, the Philadelphia Stock Exchange and the Boston Stock Exchange.

Nasdaq is a New York-based provider of securities listing, trading and information products and services.

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