Altegrity rises with numbers; CPI delays launch because of weather; Booz Allen floats talk

By Sara Rosenberg

New York, Jan. 12 - Altegrity Inc.'s old and new term loans were bid higher in trading on Wednesday on the back of the company's release of earnings results.

Over in the primary market, CPI International Inc. decided to push off its bank meeting by one day as a result of a snowstorm that hit New York, and Booz Allen Hamilton Holding Corp. began circulating price talk on its term loan B ahead of its launch.

Altegrity gains ground

Altegrity's term loans were stronger as investors reacted to the company's fourth-quarter and full-year numbers that were announced privately to lenders on Tuesday, according to a trader.

The old term loan was quoted at 97½ bid, up from 96½ bid, 98 offered, and the new term loan was quoted at 101¾ bid, up from 101½ bid, 102½ offered, the trader said.

Altegrity is a Falls Church, Va., provider of screening and security services, and risk consulting.

CPI moves meeting

CPI International revised timing on its proposed $180 million senior secured credit facility, moving the bank meeting to 10:30 a.m. ET on Thursday at the St. Regis Hotel in New York from Wednesday at 2 p.m. ET at the W Hotel in New York, according to a market source.

The facility consists of a $150 million six-year term loan and a $30 million five-year revolver, with price talk not yet available.

The size of the term loan is minimally different from what the company has outlined in filings with the Securities and Exchange Commission. Those filings had the term loan at $148 million.

UBS Investment Bank is the lead bank on the deal, and KKR Capital Markets LLC signed on as syndication agent.

CPI being acquired

Proceeds from CPI's credit facility will be used to help fund the buyout of the company by Veritas Capital for $19.50 per share in cash. The transaction is valued at roughly $525 million.

Other funds for the acquisition will come from $215 million of senior notes that are backed by a commitment for a $215 million senior unsecured bridge loan and from $220 million of equity.

Closing is subject to stockholder approval, which will be sought at a stockholder meeting on Feb. 10, and a number of customary regulatory and other conditions. The transaction is not subject to any financing conditions.

CPI is a Palo Alto, Calif.-based provider of microwave, radio frequency, power and control services for critical defense, communications, medical, scientific and other applications.

Booz Allen guidance emerges

Booz Allen started floating price talk of Libor plus 300 basis points to 325 bps with a 1% Libor floor and an original issue discount of 99½ on its $750 million term loan B as it prepares for its upcoming Thursday morning launch, according to a market source.

In addition, the B loan will include 101 soft call protection for one year, the source remarked.

The company's planned $1.05 billion of new debt (Ba2/BBB-) also includes a $300 million term loan A, for which price talk of Libor plus 250 bps surfaced, the source added.

Although these are the planned tranche sizes, the company will have the ability during syndication to shift funds between the two term loans based on demand.

Booz Allen lead banks

Bank of America, Credit Suisse, Barclays, Morgan Stanley, Goldman Sachs and Sumitomo are the lead banks on Booz Allen's term loans, with Bank of America the left lead.

Proceeds, along with cash on hand, will be used to refinance $1.021 billion of bank debt and $222 million of mezzanine debt.

Following completion of the transaction, the company expects to have less total debt outstanding at lower interest rates.

The company expects to keep its existing revolving credit facility in place but will be amending the tranche.

Booz Allen Hamilton is a McLean, Va.-based provider of management and technology consulting services to the U.S. government in the defense, intelligence and civil markets.

Intelsat closes

In other news, Intelsat Jackson Holdings SA, a subsidiary of Intelsat SA, a Luxembourg-based provider of fixed satellite services, closed on its $3.75 billion credit facility (B1), comprised of a $500 million revolver and a $3.25 billion term loan, according to a news release.

Pricing on the term loan is Libor plus 375 bps with a 1.5% Libor floor, and it was sold at a discount of 991/2. There is 101 soft call protection for one year.

During syndication, the term loan was upsized first from $2.35 billion as plans for a $500 million bond offering were eliminated and then from $2.85 billion so that the company could have incremental liquidity. Also, pricing firmed at the low end of the Libor plus 375 bps to 400 bps talk, and the original issue discount tightened from 99.

Bank of America, Credit Suisse, JPMorgan, Barclays, Deutsche Bank, Morgan Stanley and UBS acted as bookrunners on the deal that was used to refinance existing debt.

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