Compass, Weather Channel, Rovi break; J. Crew, Windsor revise deals; Dunkin' talk emerges

By Sara Rosenberg

New York, Feb. 4 - Compass Diversified Holdings upsized its term loan B and then proceeded to free the deal up for trading, with levels quoted above its original issue discount price, and Weather Channel and Rovi Corp. started trading, too.

In more loan happenings, J. Crew Group Inc. made a number of changes to its term loan, including upsizing the tranche as a proposed notes offering was downsized, lowering pricing and the Libor floor and removing the discount.

Also, Windsor Quality Food Co. reverse flexed its B loan while adding call protection, TransUnion not only lowered pricing on its covenant-light term loan but eliminated plans for an original issue discount as well, and Axcan Holdings Inc. upsized its term loan again.

Additionally, Dunkin' Brands Inc. and Tesoro Corp. released price talk as their deals were presented to lenders, guidance on AVG Technologies' in market term loan surfaced, and Playboy Enterprises Inc. launched its credit facility at expected talk.

Furthermore, Precision Engineered Products LLC and Affinion Group Inc. announced plans to bring new deals to market shortly, and SI Organization revealed plans to do a repricing transaction.

Compass upsizes, trades

Compass Diversified Holdings lifted its six-year last-out term loan B (B1/BB-) to $235 million from $200 million, and then the debt made its way into the secondary market, with levels quoted at par 3/8 bid, par 7/8 offered, according to a market source.

Pricing on the B loan is Libor plus 425 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 99.

Earlier in the syndication process, the spread firmed at the tight end of the Libor plus 425 bps to 475 bps talk, and the discount tightened from 981/2.

The company's now $560 million senior secured credit facility, up from $525 million, still includes a $325 million five-year revolver (Ba1).

Compass revolver details

Pricing on Compass Diversified's revolver is Libor plus 325 bps, subject to a leverage grid that kicks in six months after close, with no Libor floor. The revolver was offered with upfront fees based on commitment size.

TD Securities, BMO and SunTrust are the lead arrangers on the credit facility that is expected to close on Tuesday, with TD the bookrunner.

Proceeds will be used to refinance existing debt and for general corporate purposes.

Compass Diversified is a Westport, Conn.-based investment firm specializing in acquiring controlling stakes in small- to middle-market companies.

Weather Channel breaks

Weather Channel's $1.625 billion six-year term loan B (Ba3/BB-) also freed up, with levels quoted at 101 bid, 101 3/8 offered on the open and then the debt moved up to 101 1/8 bid, 101½ offered, according to a market source.

Pricing on the B loan is Libor plus 325 bps with a 1% Libor floor, and it was issued at par, after flexing from Libor plus 400 bps with a 1.5% floor and an original issue discount of 99½ during syndication. There is 101 soft call protection for one year.

Deutsche Bank is the lead arranger and a joint bookrunner with Credit Suisse, Goldman Sachs and JPMorgan on the deal that will be used to replace the company's existing $1.3 billion term loan B priced at Libor plus 350 bps with a 1.5% Libor floor and to refinance some junior debt as well as for general corporate purposes.

Weather Channel is an Atlanta-based media company devoted to bringing weather news via television, internet and mobile devices.

Rovi frees up

Rovi's term loans also hit the secondary market on Friday, with the $300 million seven-year term loan B quoted at 101 bid, 101 3/8 offered, according to a trader.

Pricing on the term loan B is Libor plus 300 bps with a 1% Libor floor, and it was sold at an original issue discount of 991/2.

During syndication, pricing on the B loan was reduced from talk of Libor plus 325 bps to 350 bps, the Libor floor was cut from 1.5% and the original issue discount came at the low end of the 99 to 99½ guidance.

The company's $750 million deal (Ba1/BB+) also includes a $450 million five-year term loan A, which was upsized from $300 million during syndication. Pricing on this tranche is set at Libor plus 250 bps with no Libor floor.

Rovi plans repurchases

Proceeds from Rovi's credit facility will be used for general corporate purposes, including the repurchase of common stock and outstanding convertible notes.

As of late last year, the company's board had already authorized up to $400 million of stock purchases and up to $200 million of purchases of the convertible notes.

When the plan for the repurchases was first announced in December, the company had said that it was expecting to get a $500 million term loan for the transaction.

Morgan Stanley, JPMorgan and Bank of America are the lead banks on the new bank deal.

Rovi is a Santa Clara, Calif.-based provider of next-generation guidance services, including TotalGuide, discovery, metadata, advertising and networking technologies.

Nielsen softens

Meanwhile, in more trading news, Nielsen Co.'s term loan C headed lower as pricing on the tranche stepped down by 25 bps as a result of the existing pricing grid, according to a trader.

The term loan C was quoted at par 3/8 bid, par 7/8 offered, down from par 5/8 bid, 101 1/8 offered, the trader said.

Nielsen is a New York-based information and media company.

First Data rises

First Data Corp.'s term loans continued their upward momentum on Friday, moving to 96 bid, 96½ offered from 95 3/8 bid, 95 5/8 offered on market technicals, according to a trader.

The loans started seeing a positive push after the company announced fourth-quarter numbers a few days ago that included EBITDA that beat Street estimates at $564 million, up from $530 million in the prior year.

Also, earlier in the Jan. 31 week, there had been a large technical seller that was pushing levels down, but once that seller cleared out, the paper was able to rebound.

For comparison, on Tuesday when the seller was out there, the loans were quoted around 94½ bid, 95 offered, and on Wednesday after the seller was gone and earnings came out, the loans were in the 95 bid, 95¾ offered, context.

First Data is a Greenwood Village, Colo., provider of electronic commerce and payment services.

J. Crew tweaks deal

Back over to the primary, J. Crew upsized its seven-year term loan (B1/B) to $1.2 billion from $1 billion, completely revised pricing on the tranche and provided that there is now 101 soft call protection for six months, a market source told Prospect News.

The term loan is priced at Libor plus 350 bps, with a step-down to Libor plus 325 bps at less than 3.25 times net senior secured leverage, a 1.25% Libor floor and an offer price of par, the source said. By comparison, at launch, the debt was talked at Libor plus 375 bps with a 1.5% Libor floor and a discount of 991/2.

Pricing came in significantly lower than the company originally anticipated. According to filings with the Securities and Exchange Commission, pricing on the term loan was expected at Libor plus 450 bps with a 1.5% Libor floor.

Recommitments towards the revised term loan were due from lenders by 5 p.m. ET on Friday.

J. Crew lead banks

Bank of America and Goldman Sachs are the joint lead arrangers and joint bookrunners on J. Crew's now $1.45 billion senior secured credit facility, up from $1.25 billion, which also includes a $250 million five-year asset-based revolver.

Pricing on the revolver, based on the filings with the SEC, is expected to Libor plus 250 bps.

Proceeds from the facility, along with senior unsecured notes and roughly $1.1 billion of equity, will be used to fund the buyout of the company by TPG Capital and Leonard Green & Partners LP for $43.50 per share in cash, or a total of about $3 billion.

J. Crew downsizes bonds

As a result of the term loan upsizing, J. Crew's expected high-yield bond offering will be reduced by $200 million. The filings with the SEC had the notes expected at $600 million, meaning that they're now likely to come with a size of $400 million.

The notes are backed by a commitment for a $600 million senior unsecured bridge loan priced at Libor plus 800 bps with a 1.5% Libor floor. Pricing on this loan would step-up over time to a specified cap.

Closing on the buyout is expected to occur in the first half of the company's 2011 fiscal year.

A special shareholders' meeting to vote on the acquisition is scheduled for March 1. The company has already been granted early termination of the waiting period under Hart-Scott-Rodino.

J. Crew Group is a New York-based retailer of women's, men's and children's apparel, shoes and accessories.

Windsor reworks spread

Windsor Quality Food lowered pricing on its $250 million term loan B to Libor plus 350 bps from Libor plus 400 bps and added 101 soft call protection for one year, while leaving the 1.5% Libor floor and original issue discount of 99 intact, according to a market source.

The company's $450 million senior secured credit facility (B1/BB-) also includes a $60 million revolver and a $140 million term loan A.

JPMorgan, Bank of America and BMO are the lead banks on the deal that will be used to fund an acquisition and refinance existing debt.

Windsor is a Houston-based frozen prepared foods company.

TransUnion revises pricing

Also reverse flexing pricing was TransUnion with its $950 million seven-year covenant-light senior secured term loan (Ba3) going to Libor plus 325 bps from talk of Libor plus 375 bps to 400 bps, and the loan is now being sold at par, as opposed to at 99, according to a market source.

As before, the term loan includes a 1.5% Libor floor and 101 soft call protection for one year.

Deutsche Bank, Bank of America and JPMorgan are the lead banks on the deal that will be used to refinance an existing term loan that was obtained in June 2010 for the company's buyout by Madison Dearborn Partners LLC.

Pricing on the existing loan is Libor plus 500 bps with a step-down to Libor plus 475 bps when net senior secured leverage is 2.75 times, and there is a 1.75% Libor floor as well as 101 soft call protection for one year. The loan was sold at an original issue discount of 981/2.

TransUnion is a Chicago-based provider of credit and information management.

Axcan ups loan

Axcan said in an 8-K filed with the SEC on Friday that it is now planning a $500 million funded term loan and a $250 million delayed-draw tranche.

Just the other day, the term loan had been upsized to $450 million from an initial size of $225 million after the company decided to eliminate plans for a $225 million secured notes offering.

A delayed-draw term loan had not been part of the financing package until now.

Prior to this latest increase, price talk on the term loan was Libor plus 475 bps with a 1.5% Libor floor and an original issue discount of 991/2, and there was 101 soft call protection for one year.

Axcan buying Eurand

Proceeds from Axcan's funded term loan, equity and cash on hand will be used to fund the acquisition of Eurand NV for $12 per share, or $586.5 million in total on a fully diluted basis, to repay Eurand's debt and to repay Axcan's outstanding term loan.

The company said that the delayed draw term loan would be used to redeem or repurchase Axcan's existing 9.25% senior secured notes due March 1, 2015.

Bank of America, RBC Capital Markets, HSBC Securities and Barclays Capital are the joint lead arrangers and bookrunners on the deal.

Axcan is a Mont-Saint-Hilaire, Quebec-based pharmaceutical company focused on the treatment of gastrointestinal disorders. Eurand is an Amsterdam-based specialty pharmaceutical company.

Kraton shifts funds

Kraton Polymers LLC increased its revolving credit facility to $200 million from $150 million and decreased its term loan A to $150 million from $200 million, according to a market source.

Price talk on the tranches is Libor plus 325 bps with no Libor floor,.

Bank of America, Morgan Stanley, Goldman Sachs, Credit Suisse and Macquarie are leading the $350 million five-year senior secured facility (Ba3/BB+) that will be used, along with $250 million of senior notes upsized from $200 million, to refinance existing senior notes, discount notes and term loan debt due in 2013 and 2014.

Kraton Polymers is a Houston-based producer of styrenic block copolymers for use in industrial and consumer applications.

Dunkin' sets guidance

Dunkin' Brands held a conference call at 11 a.m. ET on Friday to kick off syndication on its proposed $1.25 billion term loan B, at which time price talk was announced, according to a market source.

The term loan B is being guided at Libor plus 300 bps to 325 bps with a 1.25% Libor floor and an offer price of par, the source said.

Proceeds will be used to reprice/refinance an existing $1.25 billion term loan B that is priced at Libor plus 425 bps with a 1.5% Libor floor and was sold at an original issue discount of 99½ when it was obtained late last year to repay securitization debt and pay a dividend. The tranche includes 101 soft call protection for one year.

Barclays, JPMorgan, Bank of America and Goldman Sachs are the lead banks on the deal.

Canton, Mass.-based Dunkin' Brands is the parent company of Dunkin' Donuts, a coffee and baked goods restaurant chain, and Baskin-Robbins, an ice cream specialty store chain.

Tesoro price talk

Tesoro launched a $1.85 billion ABL revolving credit facility on Friday with talk of Libor plus 200 bps, according to a market source.

JPMorgan is the lead bank on the deal that will be used to refinance existing debt.

Tesoro is a San Antonio-based petroleum refiner.

AVG talk surfaces

Pricing guidance on AVG Technologies' $235 million five-year term loan (B1/B+) came out at Libor plus 475 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

The term loan, which will be used to fund a dividend payment, was launched with a bank meeting on Thursday.

JPMorgan is the lead bank on the deal.

AVG is a Chelmsford, Mass.-based security software maker.

Playboy launches

Playboy launched its $180 million credit facility - comprised of a $160 million six-year term loan and a $20 million five-year revolver - with a bank meeting on Friday morning that, according to sources, was well attended.

As was previously reported, the term loan is being talked at Libor plus 650 bps to 700 bps with a 1.75% Libor floor and an original issue discount of 98. It is non-callable for one year, then at 102 in year two and 101 in year three.

Price talk is slightly different from what was outlined in the commitment letter filed with the SEC. The filing had the term loan at Libor plus 650 bps with a 1.75% Libor floor and 101 soft call protection for one year. Revolver pricing had been outlined as ranging from Libor plus 600 bps to 650 bps based on a leverage grid, with a 1.75% floor and a 75 bps unused fee.

Jefferies is the lead bank on the deal and is seeking commitments sometime late in the week of Feb. 7.

Playboy being acquired

Proceeds from Playboy's credit facility will be used to help fund its buyout by Icon Acquisition Holdings LP, a limited partnership controlled by Hugh M. Hefner, for $6.15 per share.

Other funds for the transaction will come from equity committed by Rizvi Traverse Management LLC.

Closing is expected to take place before or shortly after the end of the first quarter, subject to more than 50% of the shares being tendered. It is not subject to financing.

Playboy is a Chicago-based media and lifestyle company.

Precision readies launch

Precision Engineered Products has set a bank meeting for 2 p.m. ET on Tuesday at the W New York to launch a proposed $190 million credit facility, according to a market source.

The facility consists of a $30 million five-year revolver and a $160 million six-year term loan B, the source said, adding that price talk is not yet available.

KeyBanc Capital Markets is the lead arranger, bookrunner and administrative agent on the deal that will be used to fund the buyout of the company by the Jordan Co. and Nautic Partners.

Senior and total leverage at close will be around 3.3 times.

Precision Engineered Products is an Attleboro, Mass.-based manufacturer of highly engineered precision metal and plastic components, materials and surface finishing technologies for use in medical, energy control & distribution and other demanding technical applications.

Affinion doing add-on

Affinion has scheduled a conference call for Monday to launch a $250 million incremental term loan (Ba3) that will carry the same pricing as the existing deal of Libor plus 350 bps with a 1.5% Libor floor, according to a market source.

Bank of America and Deutsche Bank are the lead arrangers on the deal that will be used for working capital and other corporate purposes, to fund future strategic initiatives and to pay a dividend to parent company, Affinion Group Holdings Inc.

Holdings will then use the payment to fund a $134.5 million dividend to shareholders, to redeem its preferred equity, for general corporate purposes, for near term interest payments and for other purposes.

Following the news, the company's existing term loan B dropped to par ½ bid, 101 offered from par ¾ bid, 101 1/8 offered, a trader remarked.

Affinion is a Norwalk, Conn.-based provider of marketing services and loyalty programs.

SI Organization plans repricing

SI Organization is set to hold call on Monday at 12:30 p.m. to launch a repricing of its $300 million term loan that was obtained late last year at pricing of Libor plus 400 basis points with a 1.75% Libor floor, according to a market source.

The existing loan includes 101 soft call protection for one year.

JPMorgan is the lead bank on the deal.

SI Organization is a Valley Forge, Pa.-based provider of mission-critical systems engineering and integration services and modeling, simulation, analysis and risk mitigation services to the U.S. intelligence community.

Booz Allen closes

In other news, Booz Allen Hamilton Holding Corp. closed on its $1 billion of new bank debt (Ba2/BBB-), consisting of a $500 million 61/2-year term loan B and a $500 million five-year term loan A, according to a news release.

Pricing on the term loan B is Libor plus 300 bps with a step-down to Libor plus 275 bps when total net leverage is 1.75 times or less. The debt has a 1% Libor floor and includes 101 soft call protection for one year. It was sold at par.

During syndication, the term loan B was downsized from $700 million, pricing firmed at the low end of the Libor plus 300 bps to 325 bps talk, the step-down was added, and the original issue discount of 99½ was eliminated.

Pricing on the term loan A, which had been upsized from $350 million, is Libor plus 250 bps with no Libor floor.

Booz Allen amends revolver

Booz Allen amended its revolving credit facility due July 31, 2014, increasing the size to $275 million from $250 million.

Pricing on the revolver is also Libor plus 250 bps with no Libor floor.

Bank of America, Credit Suisse, Barclays, Morgan Stanley, Goldman Sachs and Sumitomo acted as the lead banks on the deal that was used to refinance $1.0215 billion of bank debt and $222.1 million of mezzanine debt. To compensate for the reduction in funded term loan debt to $1 billion from $1.05 billion, the company used more of its cash on hand for the refinancing.

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.

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