AutoTrader.com breaks; Sun tweaks loan; Deltek, Endo, Omnova, Fibertech, Viking ready deals

By Sara Rosenberg

New York, Oct. 12 - AutoTrader.com allocated and freed up for trading its incremental term loan during Tuesday's session, with levels quoted right around its original issue discount price.

Moving to the primary, Sun Healthcare Group Inc. came out with a number of changes to its term loan, including flexing pricing higher, increasing the original issue discount and modifying the amortization schedule.

Also, Deltek Inc. began circulating price talk on its proposed deal ahead of the upcoming launch, and Endo Pharmaceuticals Holdings Inc., Omnova Solutions Inc., Fibertech Networks and Viking Acquisition Inc. announced timing on their transactions.

AutoTrader.com frees up

AutoTrader.com's $100 million incremental term loan (BB+) hit the secondary market on Tuesday, with levels quoted at 99½ bid, par offered, according to a market source.

Meanwhile, the existing term loan B was quoted by the source at par ½ bid, 101 offered and by another source at par bid, 101 offered.

Pricing on the incremental term loan firmed in line with initial talk at Libor plus 450 basis points with no Libor floor, and it was sold at an original issue discount of 991/2.

Wells Fargo and Goldman Sachs are the lead banks on the deal that will be used to fund the acquisition of vAuto, an Oak Brook, Ill.-based provider of advanced software tools for used vehicle management, pricing and inventory optimization.

Total leverage is 2.9 times.

AutoTrader.com is an Atlanta-based automotive marketplace and consumer information website.

Sun Healthcare reworks loan

Switching to the primary, Sun Healthcare revised pricing, the original discount and amortization on its $225 million term loan and is now giving lenders until the end of the day Wednesday to commit, as opposed to shutting the books on Tuesday, according to sources.

Pricing on the term loan is now Libor plus 575 bps, up from Libor plus 475 bps, and the original issue discount is now 97, up from 981/2, sources said. The 1.75% Libor floor was left unchanged.

As for amortization on the term loan, that is now set at $10 million per year.

Of the total term loan amount, $75 million will cash collateralize letters of credit.

Credit Suisse, JPMorgan and RBC are the lead banks on the $285 million credit facility (Ba2/B+), which also includes a $60 million revolver.

Sun Healthcare refinancing

Proceeds from Sun Healthcare's new debt will be used to help repay its 9 1/8% senior subordinated notes and outstanding term loans and for general corporate purposes.

The deal is in connection with the company's separation into two publicly traded companies.

The first company will be new Sun, a provider of nursing, rehabilitative and related specialty health care services, and manager of rehabilitation therapy, medical staffing services and hospice businesses.

The second company will be Sabra Health Care REIT Inc., an owner of substantially all of Sun's currently owned real property portfolio intended to operate as a real estate investment trust.

The separation will be done through a distribution to Sun stockholders of the common stock of the new Sun Healthcare Group and is expected to be completed in the fourth quarter, subject to regulatory, stockholder, final board and other approvals.

Deltek reveals talk

Deltek released price talk on its proposed $220 million secured credit facility (BB) as the deal is gearing up to launch with a bank meeting on Wednesday, according to a market source.

Both the $190 million six-year term loan and the $30 million five-year revolver are being talked at Libor plus 425 bps with a 1.75% Libor floor, the source said.

And, the term loan is being offered at an original issue discount of 981/2, the source continued.

Credit Suisse and RBC are the lead banks on the deal that will be used to refinance an existing credit facility which, as of June 30, consisted of $151.9 million in term loans and a $22.5 million revolver, and for general corporate purposes.

Deltek is a Herndon, Va.-based provider of enterprise applications software designed specifically for project-focused businesses and professional services firms.

Endo timing surfaces

Endo Pharmaceuticals, a Ford, Pa.-based specialty health care services company, has scheduled a bank meeting for Wednesday to launch its proposed credit facility that is being led by JPMorgan and RBC, according to a market source.

Proceeds will be used to help fund the acquisition of Qualitest Pharmaceuticals, a Huntsville, Ala.-based generics company, from Apax Partners for $1.2 billion in cash.

Originally, the company said that it would get a new $400 million term loan, draw on its existing $300 million revolver and use $500 million in cash from its balance sheet to fund the transaction.

However, the source said that the facility launching on Wednesday will include a new revolver in addition to a new term loan.

Specific details on sizes and price talk have not been released, the source added.

Closing on the transaction is expected late in the fourth quarter of 2010 or early in the first quarter of 2011, subject to regulatory approval.

Omnova readies term loan

Omnova Solutions emerged with a $200 million term loan that is set to launch with a bank meeting on Thursday, according to a market source.

Deutsche Bank and JPMorgan are the lead banks on the deal that will be used, along with $250 million of senior notes, to fund the acquisition of Eliokem International SAS and repay an existing term loan.

Omnova is a Fairlawn, Ohio-based provider of emulsion polymers, specialty chemicals, and decorative and functional surfaces for commercial, industrial and residential end uses.

Fibertech sets launch

Fibertech Networks came out with timing and structure on its proposed credit facility that will help fund its buyout by Court Square Capital Partners from Nautic Partners and Ridgemont Equity Partners.

The $260 million credit facility (B2/B), consisting of a $25 million revolver and a $235 million term loan, will launch with a bank meeting on Wednesday, a market source said.

TD Securities is the lead bank on the deal of rhte Rochester, N.Y.-based provider of fiber optic bandwidth services.

Other funding for the transaction will come from equity contributed by investment funds managed by Court Square, as well as investments by the senior management of Fibertech.

Closing is expected later this year, subject to customary conditions, including all required regulatory approvals.

Viking Acquisition coming soon

Viking Acquisition, the entity formed to complete Avista Capital Partners acquisition of Clorox Co.'s Global Auto Care business for roughly $780 million, will be holding a bank meeting on Thursday to launch the credit facility that will help fund the buyout, according to a market source.

The facility, led by JPMorgan, will include a $300 million term loan, the source said.

Other financing from the transaction will come from equity.

Closing on the acquisition is expected by year-end, subject to regulatory and other customary approvals and conditions.

The Global Auto Care business is a manufacturer, marketer and distributor of automotive aftermarket appearance and performance auto-care products.

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