Texas Competitive rises; Univision softens; Omnova, Global Auto Care, Fifth Third set talk

By Sara Rosenberg

New York, Oct. 14 - Texas Competitive Electric Holdings Company LLC's loans inched their way higher in trading on Thursday following the announcement that the company plans to sell notes to repay debt, and Univision Communications Inc.'s term loan B weakened with news of revisions to the amendment and extension proposal.

Over in the primary market, Omnova Solutions Inc. came out with price talk on its term loan as the deal was presented to lenders during the session, as did Global Auto Care and Fifth Third Processing Solutions LLC.

In addition, Sun Healthcare Group Inc.'s credit facility has reached oversubscription levels as a result of the changes that were made earlier this week, and allocations on the deal are expected to go out shortly.

Texas Competitive strengthens

Texas Competitive's term loans were a little stronger in the secondary market as the company revealed plans for a paydown, according to traders.

One trader had the term loan B-1 and B-2 quoted at 80½ bid, 81 offered, up from 80¼ bid, 80¾ offered, and the term loan B-3 quoted at 80¼ bid, 80¾ offered, up from 80 bid, 80½ offered.

A second trader had the term loan B-1, B-2 and B-3 quoted at 80½ bid, 80¾ offered, compared to 80¼ bid, 80¾ offered on the B-1 and B-2 on Wednesday and 80 bid, 80½ offered on the B-3.

Early Thursday morning, the company announced that it intends to sell $300 million of senior secured second-lien notes, adding that proceeds from the offering will go towards the repayment of term loans and/or the repurchase of existing notes.

The notes that may be repurchased include 10¼% senior notes due 2015, 10¼% senior notes due 2015, series B, and 10½%/11¼% senior toggle notes due 2016.

Texas Competitive expected results

In connection with announcing the new bond offering, Energy Future Competitive Holdings Co., Texas Competitive's parent company, disclosed preliminary results for the quarter ended Sept. 30 in an 8-K filed with the Securities and Exchange Commission.

Energy Future's operating revenues for the quarter are expected to be $2.61 billion, up from $2.43 billion in the prior year.

Net loss for the quarter at Energy Future is anticipated to be $3.73 billion, up from a net loss of $72 million in the comparable 2009 period.

And, adjusted EBITDA for the quarter at Texas Competitive is expected to be $1.15 billion, up from $1.11 billion last year.

Texas Competitive is a Dallas-based energy company.

Univision trades down

Univision's term loan B moved lower to 92 3/8 bid, 92 7/8 offered from 92¾ bid, 93 1/8 offered as changes were made to the company's amendment and extension proposal, according to a trader.

Under the revisions, the extended term loan B pricing would be Libor plus 425 basis points, up from the previously proposed Libor plus 400 bps, and a step-down to Libor plus 400 bps was added when net leverage is 8.5 times. By comparison, current pricing on the term loan is Libor plus 225 bps.

Also, the company would now have to use $1.1 billion of the pending $1.2 billion investment by Grupo Televisa SAB to repay PIK toggle notes, as opposed to that cash going to the sponsors.

And, a springing maturity was added to the extended term loan to up to 45 days before the PIK toggle notes expire if there is more than $250 million of those notes outstanding and the Televisa transaction has not closed.

Univision consents due Monday

Consents and commitments towards Univision's amend and extend transaction are due at noon ET on Monday and closing is targeted for Oct. 22.

As was previously reported, the company is looking to extend $2.5 billion of its term loan due September 2014 by two and a half years to March 2017 and the $750 million revolver due March 2014 by two years to 2016.

Deutsche Bank is leading the proposal and is offering lenders a 5 bps amendment fee.

The amendment and extension continues to be conditioned on the company selling at least $750 million of notes to repay term loan borrowings and majority lender approval.

Univision is a Los Angeles-based Spanish-language media company.

Omnova talk surfaces

Moving to the primary market, Omnova Solutions held a bank meeting on Thursday to launch its proposed $200 million term loan (B+), and in connection with the event, price talk was announced, according to a market source.

The term loan is being talked at Libor plus 450 bps with a 1.75% Libor floor and an original issue discount of 981/2, the source said.

Deutsche Bank and JPMorgan are the lead banks on the deal that will be used to fund the acquisition of Eliokem International SAS and repay an existing term loan.

Other funding for the transaction will come from $250 million of senior notes, and the company plans on extending and increasing its asset-based credit facility to $100 million.

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

Global Auto Care guidance

Global Auto Care also held a bank meeting on Thursday to kick off syndication on its new deal, and it disclosed price talk at the launch, according to a market source.

The $300 million term loan was presented with talk of Libor plus 475 bps with a 1.75% Libor floor and an original issue discount of 981/2, the source said.

The company's $350 million credit facility also includes a $50 million revolver.

JPMorgan, Natixis and RBC Capital are the joint lead arrangers on the deal. Initially, JPMorgan was the only lead, but the other two banks signed on to the deal prior to the launch.

Global Auto being bought

Proceeds from Global Auto Care's credit facility will be used to help fund its acquisition by Viking Acquisition Inc., an entity formed by Avista Capital Partners, from Clorox Co. for about $780 million.

Other financing for the transaction will come from $250 million of notes, which are expected to launch late this month, and equity, the source remarked.

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

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

Fifth Third floats talk

Yet another transaction to launch and see the release of pricing guidance during the session was Fifth Third Processing Solutions' $1.925 billion credit facility, according to a market source.

The $150 million revolver (Ba3/BB-) is being talked at Libor plus 350 bps with a 50 bps unused fee, the source said.

The $1.5 billion six-year first-lien term loan (Ba3/BB-) is being talked at Libor plus 425 bps to 450 bps with a 1.5% Libor floor and an original issue discount of 99.

And, the $275 million seven-year second-lien term loan (B2/B-) is being talked at Libor plus 700 bps to 725 bps with a 1.75% Libor floor and an original issue discount of 98, the source continued. This tranche has soft call protection of 102 in year one and 101 in year two.

Fifth Third funding acquisition

Proceeds from Fifth Third Processing Solutions' credit facility will be used to help fund the acquisition of National Processing Co. and refinance existing debt.

Goldman Sachs, JPMorgan, Credit Suisse, Morgan Stanley and Bank of America are the lead banks on the deal.

The transaction is expected to close in early November, pending satisfaction of customary closing conditions.

Fifth Third Processing is a Cincinnati-based provider of payment transaction processing and acceptance solutions. National Processing is a Louisville, Ky.-based merchant acquirer focused on the small and medium enterprise market.

Sun Healthcare fills out

Also on the new deal front, Sun Healthcare's $285 million credit facility (Ba2/B+) was oversubscribed by the time the commitment deadline hit at the end of the day Wednesday, and the anticipation is that allocations will go out either on Friday or Monday, according to a market source.

Demand for the deal increased after the company made a round of changes to its $225 million term loan on Tuesday, including increasing pricing to Libor plus 575 bps from Libor plus 475 bps, and widening the original issue discount to 97 from 981/2. The 1.75% Libor floor was left unchanged.

Also as part of the revisions, amortization on the term loan was set at $10 million per year.

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

The facility also includes a $60 million revolver.

Sun Healthcare lead banks

Credit Suisse, JPMorgan and RBC are the lead banks on Sun Healthcare's credit facility that 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.

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