Hertz up with Dollar Thrifty news, better market; PODS tweaks deal; Emdeon moves deadline

By Sara Rosenberg

New York, Oct. 11 - Hertz Global Holdings Inc.'s term loan was higher during Tuesday's trading hours as news surfaced that Dollar Thrifty Automotive Group Inc. is no longer up for grabs and the secondary in general was stronger.

Over in the primary market, PODS Enterprises Inc. made some changes to its senior secured credit facility to attract more investors, including increasing the spread and widening the original issue discount price.

Also, Emdeon Inc. accelerated the commitment deadline on its credit facility by one day due to overwhelming demand for the deal, and Open Link Financial Inc. released price talk on its new deal in connection with its launch.

Hertz gains ground

Hertz's term loan moved up on Tuesday as Dollar Thrifty revealed that it is no longer up for sale and the overall market felt stronger by around half a point with better buyers, according to traders.

The term loan was quoted by one trader at 95 bid, 96 offered, up from 94½ bid, 95½ offered, and by a second trader at 96 bid, 97 offered, up from 95 bid, 96.

Early in the day, Dollar Thrifty announced that it concluded its process to solicit definitive proposals regarding a potential business combination, and that the process was terminated since no "acceptable offer" was received.

Hertz was bidding to buy the company for $57.60 in cash and 0.8546 of a share per Dollar Thrifty share, and was given until Oct. 10 to submit a best and final offer. Hertz planned on using credit facility borrowings and/or the issuance of debt securities, as well as cash on hand, to fund the acquisition.

Hertz is a Park Ridge, N.J.-based auto and equipment rental company. Dollar Thrifty is Tulsa, Okla.-based renter and leaser of vehicles.

PODS reworks pricing

Switching to primary news, PODS Enterprises revised its $225 million credit facility, lifting pricing to Libor plus 650 basis points from Libor plus 600 bps and moving the original issue discount to 97 from 981/2, according to a market source, who said the 1.5% Libor floor was left intact.

The facility is comprised of a $25 million revolver, a $154 million term loan, and a $46 million delayed-draw for six months term loan that still has a 100 bps unused fee.

GE Capital Markets and Barclays Capital Inc. are the lead banks on the deal, which will be used for acquisition funding and to refinance existing debt.

PODS is a Clearwater, Fla.-based provider of portable on-demand storage and moving products and services.

Emdeon pushes up deadline

Emdeon revised the commitment deadline on its credit facility to noon ET on Thursday from Friday, as talk is that that the company's $1.2 billion seven-year term loan B is already close to two times oversubscribed, according to sources.

Price talk on the term loan B, which launched with a bank meeting on Oct. 6, continues to be Libor plus 550 bps to 575 bps with a 1.25% Libor floor and an original issue discount of 96 to 97, and there is 101 soft call protection for one year.

Covenants under the tranche include a maximum first-lien net leverage ratio and a minimum consolidated cash interest coverage ratio.

Prior to launch, filings with the Securities and Exchange Commission had outlined expected pricing on the term loan B at Libor plus 475 bps with a 1.25% Libor floor and had said it would be a covenant-light deal.

Emdeon getting revolver

Emdeon's $1.325 billion senior secured credit facility (Ba3), which is expected to allocate on Friday, also includes a $125 million five-year revolver.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Barclays Capital Inc. are the joint lead arrangers and bookrunners on the deal, and Goldman Sachs & Co. is a bookrunner too.

Proceeds will be used to help fund the buyout of the company by Blackstone Capital Partners VI LP for $19.00 per share in cash. The transaction is valued at about $3 billion.

Closing and funding expected to occur during the week of Oct. 31. The buyout is subject to customary conditions, including approval by Emdeon's stockholders, which will be sought at a Nov. 1 meeting, and clearance under the Hart-Scott-Rodino Act.

Following completion of the transaction, Hellman & Friedman will maintain a significant minority equity interest in the company.

Emdeon readies bonds

In addition to the credit facility, Emdeon is approaching the high-yield market with a $375 million eight-year senior notes offering, for which a roadshow will take place from Wednesday through Oct. 18 and $375 million of notes privately placed with affiliates of Goldman Sachs.

As a result of the decision to privately place a portion of the notes, the company reduced the size of its bridge loan commitment to $375 million.

Pricing on the bridge loan is Libor plus 850 bps for the first 60 days. Thereafter, interest will be payable at a rate equal to the senior cap. There is a 1.25% Libor floor.

Other funds for the buyout will come from $870 million of equity and the rollover of about $330 million of equity.

Emdeon is a Nashville-based provider of revenue and payment cycle management services, connecting payers, providers and patients in the U.S. health care system.

Open Link talk emerges

In more primary happenings, Open Link Financial held a bank meeting on Tuesday morning to kick off syndication on its proposed $375 million credit facility (B+), and in connection with the launch, price talk was disclosed, according to a market source.

Both the $50 million revolver and the $325 million first-lien term loan are being talked at Libor plus 650 bps with a 1.5% Libor floor and an original issue discount of 96 to 97, and the term loan includes 101 soft call protection for one year, the source said.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to help fund the buyout of the company by Hellman & Friedman from the Carlyle Group, and is seeking commitments by Oct. 25.

Closing on the transaction is expected in the fourth quarter, subject to standard conditions, with first-lien leverage expected to be 4.0 times based on adjusted pro forma Sept. 30 EBITDA.

Open Link is a Uniondale, N.Y.-based provider of cross-asset trading, risk management and operations processing software services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.