Zayo breaks; Global Tel shutting early; National Healing, Document Technologies reworked

By Sara Rosenberg

New York, Nov. 22 - Zayo Group LLC's term loan B allocated and freed up for trading on Tuesday after successfully syndicating to a select group of investors, and levels on the debt were seen above the original issue discount price.

Over in the primary, Global Tel*Link Corp. moved up the commitment deadline on its credit facility as the deal has seen a strong reception from investors, and chatter is that some issuer-friendly changes may be made next week.

Also on the topic of updates, National Healing Corp. sweetened the pricing and original issue discounts on its first- and second-lien term loans, Document Technologies Inc. upsized and trimmed pricing on its deal, and NPC International Inc. nailed down timing on the launch of its credit facility.

Zayo trades atop OID

Zayo Group's $315 million five-year senior secured term loan B (B2/B) hit the secondary market on Tuesday, with levels quoted at 99 bid, 99½ offered, according to a trader.

Pricing on the loan is Libor plus 550 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 97. There is 101 soft call protection for one year.

During syndication, the term loan B was upsized from $295 million due to oversubscription and pricing came in tighter than was expected. Initial guidance was in the 8% area.

RBC Capital Markets LLC, Barclays Capital Inc. and SunTrust Robinson Humphrey Inc. are the lead arrangers on the deal that was shown to a select group of investors. A formal bank meeting was never held.

Zayo buying 360networks

Proceeds from Zayo Group's term loan, along with a short-term unsecured bridge loan, will be used to fund the $345 million acquisition of 360networks Holdings (USA) Inc.

The company then plans to repay the bridge loan with cash on hand and revolving credit facility borrowings.

Pro forma leverage is anticipated to be around 3.6 times.

Zayo is a Louisville, Colo.-based provider of telecom and internet infrastructure services, including bandwidth infrastructure and network neutral colocation. 360networks is a Seattle-based provider of fiber network and telecom services.

Global Tel revises deadline

Moving to the primary, Global Tel*Link accelerated the commitment deadline on its credit facility (B2) to Wednesday from Dec. 2 being that the transaction is already "well oversubscribed," a market source told Prospect News.

The source went on to say that while no changes are being made to the deal just yet, it is possible that some might emerge during the week of Dec. 28.

The $655 million deal consists of a $50 million five-year revolver and a $605 million six-year term loan, both talked at Libor plus 600 bps with a 1.5% Libor floor. The term loan is being offered at an original issue discount of 97 and includes 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC, UBS Securities LLC, GE Capital Markets and Nomura are the lead banks on the deal that will be used to help fund the company's buyout by American Securities from Veritas Capital and GS Direct.

Global Tel*Link is a Mobile, Ala.-based correctional communications technology company.

National Healing pricing

National Healing made a number of revisions to its term loans in the morning, including increasing coupons and widening original issue discounts, and asked lenders to get their recommitments in by 4 p.m. ET on Tuesday, according to a market source.

With the changes, the $250 million six-year first-lien term loan (B1/B+) is priced at Libor plus 675 bps with a 1.5% Libor floor and an original issue discount of 95, versus initial talk of Libor plus 600 bps with a 1.5% floor and a discount of 97, the source said. The tranche still has 101 soft call protection for one year.

Meanwhile, the $75 million seven-year second-lien term loan (Caa1/CCC+) is priced at Libor plus 1,000 bps with a 1.5% Libor floor and an original issue discount of 94, compared to initial talk of Libor plus 950 bps with a 1.5% floor and a discount of 97, the source remarked. This debt remained non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

National Healing covenants

In addition to the pricing adjustments, National Healing added a fixed-charge coverage covenant and a tighter leverage covenant that will be measured off EBITDA without a de novo adjustment, the source continued.

Furthermore, amortization on the first-lien term loan was boosted and the excess cash flow sweep was increased to 75%.

The company's $355 million senior secured credit facility also includes a $30 million five-year revolver (B1/B+).

Jefferies & Co., RBC Capital Markets LLC and BMO Capital Markets Corp. are the lead banks on the deal.

National Healing merging

Proceeds from National Healing's credit facility will be used to help fund its merger with Diversified Clinical Services (Wound Care Holdings).

Metalmark Capital, National Healing's sponsor, is buying Diversified Clinical Services from the Jordan Co.

Completion of the transaction is subject to customary closing conditions, including regulatory approval.

Leverage through the first lien will be 3.5 times, and total leverage will be 4.5 times.

Boca Raton, Fla.-based National Healing and Jacksonville, Fla.-based Diversified Clinical Services are providers of wound care services to hospitals.

Document tweaks deal

Document Technologies also revised its credit facility, increasing the term loan to $120 million from $115 million and lowering pricing on the entire five-year senior secured credit facility, which is now sized at $145 million, up from $140 million, according to a market source.

Pricing on the term loan, as well as on a $25 million revolver, was lowered to Libor plus 500 bps from Libor plus 550 bps and the original issue discount was moved to 99 from 98 1/2, the source said. The 1.5% Libor floor was left unchanged.

GE Capital Markets and Golub Capital are leading the deal that will be used to help fund the buyout of the company by Harvest Partners from Quad-C Management Inc.

Document Technologies is an Atlanta-based end-to-end provider of litigation support and document management services.

NPC firms timing

In more primary happenings, NPC International zeroed in on timing for its $450 million senior credit facility with the setting of a bank meeting for 12:30 p.m. ET on Nov. 29, according to a market source. Previously, it was said that the transaction would launch shortly after the Thanksgiving holiday, with the possibility that it could come as early as next week.

Also, now that timing has been determined, it was disclosed that Rabobank and Regions Bank have signed on to the credit facility as documentation agents. As before, the leads on the deal are Barclays Capital Inc. and Goldman Sachs & Co.

The deal consists of a $75 million revolver and a $375 million term loan. Price talk is not yet out.

Proceeds, along with mezzanine debt, will be used to fund the buyout of the Overland Park, Kan.-based Pizza Hut franchisee by Olympus Partners and refinance all of the company's outstanding debt.

Closing is expected by Dec. 28, subject to regulatory approvals and customary conditions.

Preferred Sands nets interest

Preferred Sands LLC's $430 million five-year credit facility has some good initial momentum since launching mid-last week, with investors showing interest in the transaction ahead of the Dec. 2 commitment deadline, according to a market source.

The facility consists of a $30 million revolver and $175 million term A, both talked at Libor plus 450 bps with an offer price of 99, and a $225 million term B talked at Libor plus 500 bps to 525 bps with a 1.5% Libor floor, an original issue discount of 98 to 98½ and 101 soft call protection for one year.

Barclays Capital Inc. and KeyBanc Capital Markets LLC are the joint bookrunners on the deal and lead arrangers with J.P. Morgan Securities LLC.

Proceeds will be used to refinance existing debt, make a small acquisition and buy out some minority investors.

Preferred Sands, a Radnor, Pa.-based provider of silica sand products, will have pro forma leverage for this year of 4.3 times and on a run-rate basis 2.7 times.

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