MGM Studios slides; Aramark adds fee; Aveta sets talk; N.E.W. Customer allocating soon

By Sara Rosenberg

New York, March 18 - Metro-Goldwyn-Mayer Inc. (MGM Studios) saw its term loan edge lower during Thursday's trading hours as rumors were floating around that some expected bidders for the company have dropped out.

In other news, Aramark Corp. is now offering lenders a fee under its credit facility amendment and extension proposal and, with the change, extended the consent deadline.

Over on the new deal front, Aveta Inc. came out with official price talk on its term loan B as the deal was launched early on in the session, and N.E.W. Customer Service Cos. Inc. is getting ready to allocate its credit facility now that changes were made to the unsecured term loan.

Also in the primary, Prime Healthcare Services Inc.'s credit facility is expected to gain some traction on the back of revisions that were made as a result of some ratings issues, and TPC Group LLC announced plans to approach lenders about a new ABL revolving credit facility and an amendment to its existing term loan B that would, among other things, extend some of the debt.

MGM Studios softens

MGM Studios' term loan lost some ground in trading on chatter that Liberty Media Corp. and Elliott Management Corp. have opted not to bid for the company, according to traders.

The term loan was quoted by one trader at 51 bid, 51¾ offered, down from 53 bid, 54 offered, and by a second trader at 50½ bid, 51½ offered.

Bids for the company are due on Friday.

MGM Studios is a Los Angeles-based motion picture, television, home video and theatrical production and distribution company.

Aramark offers fee

Aramark has revised its amendment proposal by adding a 5 basis point fee and is now asking for consents by noon ET on Friday as opposed to at 5 p.m. ET on Thursday, according to an informed source.

Under the amendment, the company is looking to extend its strip of term loan B and synthetic letter-of-credit facility debt by two years to July 2016.

Pricing on the extended debt will be Libor plus 325 bps, up from current pricing of Libor plus 187.5 bps.

JPMorgan and Goldman Sachs are the lead banks on the deal.

Aramark is a Philadelphia-based professional services company that provides food, hospitality, facility management services as well as uniform and work apparel.

Aveta price talk

Moving to the primary market, Aveta held a bank meeting on Thursday in New York at 9:30 a.m. ET to kick off syndication on its proposed credit facility and, in connection with the launch, official talk on the term loan B was announced, according to a market source.

The $300 million five-year term loan B was presented to lenders with talk of Libor plus 575 bps to 600 bps with a 2% Libor floor and an original issue discount of 97, the source said.

By comparison, prior to launch, spread guidance on the term loan B was circulating at just Libor plus 600 bps.

The B loan includes call protection of 102 in year one and 101 in year two.

Aveta lead banks

Bank of America, Citigroup and Jefferies are the lead banks on Aveta's $360 million credit facility, which also includes a $60 million five-year revolver.

Proceeds will be used to refinance existing debt and to fund a dividend payment to shareholders.

Expected corporate ratings are B2/B.

Aveta is a Fort Lee, N.J.-based medical management company caring for 232,000 Medicare beneficiaries and about 300,000 commercial members in Puerto Rico, California, Arizona and Illinois.

N.E.W. Customer readies allocations

N.E.W. Customer Service's is expected to allocate its credit facility on Friday now that the unsecured term loan was reworked and recommits towards the revised deal were due on Thursday, according to a market source.

Under the changes, the seven-year unsecured term loan was downsized to $300 million from $400 million, pricing was lifted to Libor plus 750 bps from Libor plus 725 bps, and the original issue discount firmed at 98, versus initial talk of 98 to 981/2, the source said.

Also, the call protection was modified to non-callable for three years, then at 103 in year four and 101 in year five from non-callable for two years, then at 103 in year three, and 101 in year four, the source said.

As before, the loan includes a 2% Libor floor.

N.E.W. Customer first-lien unchanged

N.E.W. Customer Service's $700 million six-year first-lien term loan was left at original terms with pricing of Libor plus 425 bps, a 1.75% Libor floor and an original issue discount of 99, the source added.

Bank of America, Barclays and Deutsche Bank are the lead banks on the now $1.02 billion, down from $1.12 billion, credit facility that also includes a $20 million five-year revolver.

Proceeds will be used to fund a dividend payment, which was reduced as a result of the unsecured loan downsizing, and to refinance existing debt.

N.E.W. Customer Service is a Sterling, Va.-based provider of extended service plans and product protection programs for consumer products.

Prime hopes changes progress deal

Prime Healthcare Services' $290 million credit facility (B1) is hoped to see some more interest from investors now that a number of changes were made to the deal to reflect market feedback, according to a source.

Under the changes, the $250 million six-year term loan tranche that was talked at Libor plus 400 bps with a 2% Libor floor, and a discount that was still to be determined, was eliminated. Instead the company is getting a $50 million four-year term loan A and a $200 million five-year term loan B.

Pricing on the term loan A is Libor plus 425 bps with a 2% Libor floor and an original issue discount of 981/2, and pricing on the term loan B is Libor plus 525 bps with a 2% Libor floor and an original issue discount of 971/2, the source said.

Additionally, the company's $40 million revolver now matures in four years as opposed to in five years, while pricing was left unchanged at Libor plus 400 bps with a 2% Libor floor.

Prime tweaks covenants

As part of reworking its credit facility, Prime Healthcare also added an excess cash flow sweep to the agreement and placed further limitations on distributions.

RBC is the lead bank on the deal and is asking for recommitments by March 26.

"Moody's rating came [in] lower than expected and [without] getting an S&P rating, [it] had to widen pricing," the source remarked.

He added that there were some soft orders at this pricing, so now that the changes are official, the deal should see a lot of interest.

Proceeds from the credit facility will be used to refinance existing debt, make certain investments and for general corporate purposes.

Prime Healthcare is an Ontario, Calif.-based owner and operator of acute care hospitals.

TPC seeking revolver

TPC said in an 8-K filed with the Securities and Exchange Commission on Thursday that it will hold a lender meeting on March 25 to launch a new $150 million four-year ABL revolver that is expected to carry initial pricing of Libor plus 350 bps.

Pricing on the revolver will be performance grid based and can range from Libor plus 300 bps to 375 bps.

Covenants under the revolver include a springing fixed-charge coverage ratio of 1.10:1 anytime availability is less than the greater of 15% of the total commitments and $15 million.

TPC plans amend/extend

In addition, TPC said that at the March 25 meeting, it will also present a proposed amendment to lenders that would extend $175 million of its $280 million term loan B to Jan. 2, 2016 from June 2013, price the extended debt at Libor plus 350 bps, 100 bps higher than current pricing, and add a 1.5% Libor floor.

The amendment would also revise pricing on the non-extended term loan B to Libor plus 300 bps from Libor plus 250 bps currently, with no Libor floor.

Commitments towards the term loan B extension are due on March 30 and commitments towards the new revolver are due on April 6.

Lenders will be paid a 10 bps fee for consents whether or not they elect to extend their commitments.

TPC amendment to allow for debt

TPC's proposed amendment would also allow the company to get new senior secured debt to refinance its existing senior secured debt and new senior unsecured debt that could be used as restricted payments, loans, investments, or acquisitions, provided that the senior secured leverage-post transaction is less than 2.0 times and total leverage is less than 4.25 times.

Furthermore, the amendment will revise the restricted payment provision to allow for the possibility of a one-time upstream distribution to its parent company, TPC Group Inc., of about $40 million received from a tax refund.

The transactions, which are being led by Deutsche Bank, are expected to close on April 13.

TPC is a Houston-based chemicals processor and service provider, whose primary products are butadiene, butene-1, isobutylene, polyisobutylene and fuel products.

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