Isle of Capri, Airvana, HHI, First Data break; Federal-Mogul rises; Grocery Outlet flexes

By Sara Rosenberg

New York, March 18 - Isle of Capri Casinos Inc., Airvana Corp. and HHI Group Holdings LLC all saw their term loans hit the secondary market on Friday at levels above their issue prices, and First Data Corp.'s extended term loan started trading in the gray market.

Meanwhile, Federal-Mogul Corp.'s strip of term loan B and term loan C jumped up by a few points as the company announced that it is evaluating strategic alternatives.

In a primary market that has been overrun with pulled deals and volatility, Grocery Outlet Inc. was able to reduce the spread on its in market credit facility, while leaving all other terms of the deal unchanged.

Also on the new deal side, Redflex Holdings Ltd. revealed plans to come to market soon with a buyout financing deal, and syndication of Presidio Inc.'s credit facility is going to go on for a few days past the previously set - and now passed - Friday commitment deadline due to market conditions, and Laureate Education Inc. pulled its refinancing plans.

Isle of Capri frees up

Isle of Capri's $500 million six-year term loan B allocated and made its way into the secondary market on Friday, with levels quoted at par 3/8 bid, par 7/8 offered, according to a market source.

Pricing on the well oversubscribed term loan B cleared in line with initial talk at Libor plus 350 basis points with a 1.25% Libor floor. The tranche was sold at par and includes 101 soft call protection for one year.

The company's $825 million credit facility (Ba3/BB-) also includes a $325 million five-year revolver talked at Libor plus 350 bps. Pricing on this tranche is subject to a grid.

The revolver did not allocate on Friday. Syndication of the tranche is expected to be done early during the week of March 21, the source added.

Isle of Capri lead banks

Wells Fargo, Credit Suisse and Deutsche Bank are the lead banks on Isle of Capri's credit facility that will be used to help refinance the company's existing bank debt.

Other funds for the refinancing are coming from $300 million of senior notes that priced early this month at 99.264 to yield 7 7/8%. Price talk on the offering had been for a yield in the 7¾% area.

The company expects to close on the new facility prior to the end of the fourth quarter of fiscal 2011.

Isle of Capri is a St Louis-based owner and operator of gaming, lodging and entertainment facilities.

Airvana trades atop OID

Airvana's $420 million four-year term loan (B3/B+) was yet another deal to begin trading, with levels quoted at 99¼ bid, 99½ offered on the open and then it moved up to 99½ bid, par offered, according to a market source.

Pricing on the loan is Libor plus 800 bps with a 2% Libor floor, and it was sold at an original issue discount of 98. There is 101 soft call protection for one year.

During syndication, pricing was flexed up from initial talk of Libor plus 700 bps to 725 bps, the Libor floor was increased to 2% from 1.5% and the original issue discount widened to 98 from 99.

Societe Generale and Macquarie are the joint bookrunners on the deal.

Airvana funding div recap

Proceeds from Airvana's new term loan are being used to refinance an existing term loan that was obtained in August 2010 and to fund a dividend payment.

At close last year, the term loan was sized at $360 million and priced at Libor plus 900 bps with a 2% Libor floor. It was sold at an original issue discount of 98 and used for a dividend recapitalization as well.

Total leverage is 1.8 times and EBITDA is around $234 million. At the time of the last transaction, EBITDA was around $165 million.

Airvana is a Chelmsford, Mass.-based provider of mobile broadband network infrastructure products.

HHI starts trading

HHI Group's $325 million term loan B (B2/B+) was quoted at 99 3/8 bid as it hit the secondary market on Friday, with little activity seen in the name, according to a trader.

Pricing on the loan is Libor plus 550 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 991/4, after widening out from initial talk of 99½ so that it would trade better. There is 101 soft call protection for one year.

Bank of America Merrill Lynch, Goldman Sachs and Credit Suisse are the lead banks on the deal that is being used to refinance existing debt and fund a dividend.

In early 2010 as part of a dividend recapitalization, the company got a $200 million term B priced at Libor plus 750 bps with a 3% Libor floor that was sold at a discount of 97, and then later in the year, the company did a $30 million term loan add-on that was also used for a dividend.

HHI is a Royal Oak, Mich.-based manufacturer of forged parts and wheel bearings and a supplier of powdered metal engine and transmission components.

First Data extended breaks

Also freeing up on Friday was First Data's extended term loan, which was quoted at 93 7/8 bid, 94 3/8 offered on the open, moved as low as 93¾ bid and then rebounded to 94 1/8 bid, 94 5/8 offered, according to a trader. The loan is trading on a when-issued basis.

The extended term loan due March 24, 2018 is priced at Libor plus 400 bps, after flexing up recently from initial talk of Libor plus 375 bps.

Meanwhile, the company's non-extended term loan was quoted at 93 7/8 bid, 94 3/8 offered, up from 93½ bid, 94 offered, as the market in general felt a little better, the trader said.

Pricing on the non-extended term loan due September 2014 is Libor plus 275 bps.

First Data amending revolver

First Data is also extending revolving credit facility commitments to Sept. 24, 2016 from September 2013 at pricing of Libor plus 400 bps - after flexing from Libor plus 375 bps - with a 75 bps unused fee.

The revolver maturity would be accelerated to June 24, 2015 if, on that date, the aggregate outstanding principal amount of the company's 9 7/8% senior notes due 2015 and 10.55% senior PIK notes due 2015 exceeds $750 million. The maturity can also be accelerated to Dec. 31, 2015 if, on that date, the company has more than $750 million of its 11¼% senior subordinated notes due 2016 outstanding.

Commitments towards the extended revolver amounted to around $1 billion and commitments towards the extended term loan came out to more than $5 billion, a source remarked. The company has not yet decided how much of those commitments it will accept.

Initially, the company said that it was looking to extend no less than $3 billion of its term loans and all or a portion of its revolver.

First Data needs notes

In order for the amendment and extension to take effect, First Data is required to issue at least $750 million of senior secured notes and use those proceeds to repay term loan borrowings. The company has 90 days from the completion of the amendment to close on the notes offering.

Also, immediately after the effectiveness of the amendment, the company plans to reduce revolver commitments that are subject to the extension in an amount equal to at least 20%.

Credit Suisse, Citigroup, Deutsche Bank and HSBC are the lead banks on the amend and extend deal.

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

Federal-Mogul rallies

Federal-Mogul's strip of term loan B and term loan C debt moved to 97¼ bid, 97¾ offered from 95 bid, 95¾ offered following news that the company is investigating various alternatives to enhance shareholder value, according to a trader.

Additionally, the company revealed that it has retained Lazard to assist in its process.

Federal-Mogul is a Southfield, Mich.-based supplier of powertrain, chassis and safety technologies for the original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the aftermarket.

Grocery Outlet tweaks pricing

Switching to the primary, Berkeley, Calif.-based grocery retailer Grocery Outlet lowered pricing on its $168 million senior secured credit facility to Libor plus 375 bps from Libor plus 400 bps, while leaving the 1.5% Libor floor and original issue discount of 99 intact, according to a market source.

Recommitments towards the deal, which consists of a $25 million revolver and a $143 million term loan, are due at noon ET on Monday.

Societe Generale is the administrative agent and bookrunner on the facility and a joint lead arranger with Bank of Ireland and Union Bank, who are both also co-syndication agents.

Proceeds will be used to refinance an existing credit facility priced at Libor plus 575 bps with a 2.5% Libor floor that was obtained in 2009 in connection with an equity investment by Berkshire Partners LLC. The company's existing mezzanine debt is staying in place.

Following this transaction, leverage will be 2.1 times senior and 2.9 times total.

Redflex readies deal

Redflex is set to hold a bank meeting on Thursday to launch a proposed $215 million credit facility that is being led by Macquarie, according to a market source.

The facility consists of a $20 million revolver, a $175 million term loan B and a $20 million delayed-draw term loan for capital expenditures, the source said, adding that price talk is not yet available.

In addition, the company is getting a $75 million second-lien term loan that has been placed already, the source remarked.

Proceeds will be used to help fund the buyout of the company by the Carlyle Group and Macquarie Group Ltd. for $2.74 per share, or around $304 million.

Closing on the acquisition is expected in June, subject to shareholder and regulatory approval.

Redflex is a South Melbourne, Australia-based manufacturer and operator of highway safety equipment, including digital speed and red-light cameras.

Presidio still working

Presidio's $360 million credit facility (Ba3/B+) is still in the syndication process, even though the Friday commitment deadline has passed. Although the deadline wasn't officially extended, a source explained that "in light market volatility, [it's] going to bleed into next week before wrap up."

Barclays and Morgan Stanley are the joint lead arrangers and bookrunners on the deal, and GE Capital Markets is a bookrunner as well.

Proceeds will be used to help fund American Securities' buyout of Presidio, a Greenbelt, Md.-based provider of advanced technology infrastructure services.

The facility consists of a $35 million revolver, and a $325 million term loan B talked at Libor plus 450 bps with a 1.5% Libor floor, an original issue discount of 99½ and 101 call protection for one year.

The deal had launched with a bank meeting on March 4, but price talk didn't emerge until March 10, after the leads did some price discovery.

Presidio struggled in past

A market source had previously explained that the price discovery process was needed on Presidio because when the company came to market in December with a dividend recapitalization deal led by J.P. Morgan, there was a rough road getting syndication done.

In the end, Presidio ended up with a $200 million term loan B priced at Libor plus 575 bps with a 1.75% Libor floor that was sold at an original issue discount of 971/2. There is 101 soft call protection for one year.

However, it took a bunch of changes to get the deal done. During syndication, the loan had to be reduced from $300 million, and as a result, so was the dividend, Pricing was flexed up from Libor plus 550 bps and, before that, from Libor plus 475 bps, and the discount was increased from 98 and, prior to that, from 981/2.

Laureate cancels refi

Laureate Education pulled its $1.595 billion senior secured credit facility (B1/B) from market that consisted of a $300 million five-year revolver and a $1.295 billion seven-year term loan B, according to an informed source.

Price talk on the term loan B had been Libor plus 325 bps to 350 bps with a 1.25% Libor floor and an original issue discount of 991/2.

Proceeds were going to be used to refinance all of the company's bank debt, including a $280 million term loan priced at Libor plus 500 bps with a 2% Libor floor and a $675 million term loan priced at Libor plus 325 bps.

Citigroup, Barclays, Credit Suisse, Goldman Sachs, J.P. Morgan and KKR Capital Markets were leading the deal.

Laureate is a Baltimore-based provider of higher educational services.

Harron still deciding course

Harron Communications LP's $600 million credit facility is still on unofficial hold, with the expectation being that the fate of the deal will be decided during the week on March 21, a market source told Prospect News.

As was previously reported, the deal was launched with a bank meeting on March 15, but it was then put on unofficial hold while price discovery is done. The company will then have to decide whether it wants to move forward or terminate its opportunistic refinancing plans for now, in the hopes that it could come back later when the volatility calms down.

Specifically, proceeds from the credit facility would be used to refinance an all pro rata bank deal and redeem about $54 million in preferred equity.

SunTrust, Wells Fargo and Credit Agricole are the lead banks on the deal.

Harrron facility details

Harron's credit facility consists of a $100 million revolver due 2016, a $200 million term loan A due 2016 and a $300 million term loan B due 2017.

Original talk on the deal prior to the actual launch had been Libor plus 300 bps on the revolver and term loan A, and Libor plus 325 bps with a 1.25% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year on the term loan B.

However, because of the turbulence in the primary market and ratings on the credit facility coming out lower than expected at B2/B, pricing would have to be increased in order to get investors on board, which is why the company is reassessing its options, a source previously explained.

Harron Communications is a Frazer, Pa.-based provider of digital television, high-speed internet, digital phone and business services.

Jo-Ann closes

Leonard Green & Partners LP completed on Friday its buyout of Jo-Ann Stores Inc., a Hudson, Ohio-based specialty retailer of fabrics and crafts, for $61 per share in cash, for a total price of around $1.6 billion, according to a news release.

To help fund the transaction, Jo-Ann got a new $1.025 billion senior secured facility, consisting of a $375 million ABL revolver and a $650 million covenant-light term loan (B1/B+).

Pricing on the term loan is Libor plus 350 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 99 after widening from initial talk of 991/2.

J.P. Morgan, Bank of America Merrill Lynch and Barclays acted as the lead banks on the deal.

MEG wraps refi

MEG Energy Corp., a Calgary, Alta.-based oil sands development company, completed its $1.5 billion credit facility (Ba3/BBB-) that was used to refinance an existing revolver, term loan B and term loan D and for general corporate purposes.

The facility consists of a $500 million revolver due March 18, 2016 and a $1 billion term loan B due March 18, 2018 priced at Libor plus 300 bps with a 1% Libor floor that was sold at par. The B loan has 101 soft call protection for one year.

By comparison, pricing on the existing $200 million revolver due Jan. 31, 2013 was Libor plus 400 bps with a 75 bps unused fee, pricing on the $41.5 million term B due April 3, 2013 was Libor plus 200 bps and pricing on the $957.9 million term D due April 3, 2016 was Libor plus 400 bps with a 2% Libor floor.

Barclays, Credit Suisse, BMO and Morgan Stanley acted as the joint bookrunners on the deal.

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