Star West, Caesars levels emerge; FairPoint drops; Chrysler, OneLink, BakerCorp tweak deals

By Sara Rosenberg

New York, May 17 - Star West Generation LLC made its way into the secondary market on Tuesday, Caesars Entertainment Operating Co. Inc.'s extended term loan started trading on a when-issued basis, and FairPoint Communications Inc.'s term loan plummeted on disappointing earnings news.

Over in the primary market, Chrysler Group LLC made some changes to its term loan B, including reducing the size, lifting the spread, updating Libor floor guidance, zeroing in on original issue discount and sweetening call protection.

Also, OneLink Communications widened pricing, the Libor floor and original issue discount on its first-lien term loan, BakerCorp added a step-down to its term B, and Fifth Third Processing Solutions LLC finalized pricing on its B-1 loan at the tight end of talk.

Additionally, AES Corp., Mobilitie Investments II LLC, Univita Health and FTD released price talk in connection with the launch of their credit facilities, and FMG Resources Pty Ltd. (Fortescue) and U.S. Silica surfaced with plans for new deals.

Star West hits secondary

Star West Generation's facility broke for trading on Tuesday, with the $650 million seven-year term loan B quoted by sources at 99½ bid, par offered on the open and then it moved up to 99 5/8 bid, par 1/8 offered.

Pricing on the B loan is Libor plus 450 basis points, after flexing up from talk of Libor plus 375 bps to 400 bps during syndication, with a 1.5% Libor floor. The debt was sold at an original issue discount of 99½ and includes call protection of 102 in year one and 101 in year two that was sweetened from just 101 soft call protection for one year at the time of the pricing change.

Barclays Capital Inc., RBC Capital Markets LLC and Citigroup Global Markets Inc. are leading the $750 million senior secured deal (Ba3/B+), which also provides for a $100 million five-year revolver.

Proceeds will be used to help fund Highstar Capital's acquisition of 100% of the equity interests of the Arlington Valley and Griffith power generation plants located in Arizona from LS Power.

Caesars extended loan quoted

Caesars Entertainment's extended term loan began trading on a when-issued basis, with levels quoted at 92¾ bid, 93½ offered, while the non-extended term loan was pretty much unchanged on the day at 93¾ bid, 94 offered, according to a trader.

Under its amendment and extension, the company is pushing out the maturity on B-1, B-2 and B-3 term loans to Jan. 28, 2018 from Jan. 20, 2015, converting up to $816 million of revolver commitments to extended term loans and extending remaining revolver commitments held by consenting to lenders to Jan. 28, 2015 from Jan. 28, 2014.

As of Dec. 31, the company had about $5.8 billion of outstanding term loan B-1, B-2 and B-3 debt, and the revolver had an aggregate principal amount of up to $1.63 billion.

It is not clear yet as to how much of the debt has been extended, the trader remarked.

Caesars extended details

Pricing on Caesars Entertainment's extended term loan is Libor plus 425 bps, while non-extended pricing is Libor plus 300 bps.

And, extended revolver pricing is at Libor plus 350 bps, compared to non-extended pricing of Libor plus 300 bps.

In addition to the maturity extensions, the amendment allows the company to buy back at any time loans from individual lenders at negotiated prices that may be below par.

Bank of America Merrill Lynch is the lead bank on the transaction, which has already received lender approval.

Caesars is a Las Vegas-based casino entertainment company.

FairPoint falls with numbers

FairPoint Communications' term loan nosedived as the company released first-quarter earnings results and disclosed that it will likely fall short of its full-year revenue guidance, according to traders.

Around mid-day, the term loan was quoted by traders at 91¾ bid, 92¾ offered and then by late day it had moved all the way down to 89¾ bid, 90¼ offered. By comparison, on Monday, the debt was quoted at 95¼ bid, 95¾ offered.

For the first quarter, the company reported net income of $562.5 million, or $6.56 per diluted share, compared to a net loss of $86.3 million, or $0.97 per diluted share, in the prior year.

The company said that this year's net income benefited from a one-time pre-tax gain of $911.3 million related to its reorganization, which included $1.351 billion of cancellation of debt income.

Also in the quarter, revenue was $254.8 million, compared to $270.8 million last year, and consolidated EBITDAR was $49.1 million versus $60.8 million in the previous year.

FairPoint may miss guidance

Upon announcing earnings, FairPoint remarked in a news release that its full year 2011 revenue guidance of $1.06 billion to $1.09 billion "is unlikely to be achieved."

New revenue guidance is not being provided, the release said.

Regarding consolidated EBITDAR for the full year, the company believes that it can achieve the low end of guidance of $260 million to $280 million through cost reduction initiatives, many of which are already under way, and revenue growth.

FairPoint is a Charlotte, N.C.-based communications provider of high-speed internet access, local and long-distance phone, television and other broadband services.

Chrysler reworks B loan

Switching to the primary, Chrysler reduced its six-year term loan B to $2.5 billion from $3.5 billion as it increased its senior secured notes offering to $3.5 billion from $2.5 billion and revised price talk as well as call protection, according to a market source.

The term loan B is now talked at Libor plus 475 bps with a 1.25% to 1.5% Libor floor and an original issue discount of 99, compared to initial talk of Libor plus 400 bps to 425 bps with a 1.25% Libor floor and an original issue discount of 99 to 991/2, the source said.

As for call protection, the loan is now non-callable for one year, then at 102 in year two and 101 in year three, versus prior talk of 101 soft call protection for one year, the source continued.

Books close and comments on the credit agreement are due at 10 a.m. ET on Thursday.

Chrysler getting revolver

Chrysler's $4 billion senior secured credit facility (Ba2/B+), down from $5 billion, also provides for a $1.5 billion five-year revolver.

Morgan Stanley & Co. Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. and Bank of America Merrill Lynch are the lead banks on the deal, with Morgan Stanley the left lead on the term loan and Citi the left lead on the revolver.

Proceeds from the credit facility, the notes and $1.3 billion of proceeds from an investment by Fiat will be used to repay all of the company's loans provided by the U.S. Department of the Treasury and the Canadian federal and Ontario governments.

Chrysler is an Auburn Hills, Mich.-based producer of Chrysler, Jeep, Dodge, Ram, Mopar and Fiat vehicles and products.

OneLink ups pricing

OneLink lifted pricing on its $345 million six-year first-lien term loan (B2/B+) to Libor plus 450 bps with a 1.5% Libor floor and a discount of 99, from talk of Libor plus 375 bps to 400 bps with a 1.25% floor and a discount of 991/2, a market source said. There is still 101 soft call protection for one year.

Recommitments are due at noon ET on Wednesday.

The Puerto Rico-based cable company's $520 million facility also includes a $25 million five-year revolver (B2/B+) and a $150 million seven-year second-lien term loan (Caa2/CCC+) that launched with talk of Libor plus 650 bps to 700 bps with a 1.5% floor, a discount of 99, and call premiums of 102 in year one and 101 in year two.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. Inc. are leading the dividend recapitalization deal, with Citi the left lead on the revolver and fist-lien term loan and J.P. the left lead on the second-lien loan.

BakerCorp adds step

BakerCorp added a step-down to Libor plus 350 bps when net senior secured leverage is 2.75 times to its $390 million seven-year covenant-light term loan B, while leaving initial pricing at Libor plus 375 bps, a market source told Prospect News.

As before, the loan has a 1.25% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year.

The company's $435 million credit facility (Ba3/B) also includes a $45 million revolver.

Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc. are the lead banks on the deal that will be used to help fund the buyout of the company by Permira funds for $960 million.

The acquisition is expected to close by July, subject to customary regulatory approvals.

BakerCorp is a Seal Beach, Calif.-based provider of equipment rental services for liquid and solid containment applications.

Fifth Third firms spread

Fifth Third Processing Solutions set pricing on its $1.621 billion first-lien term loan B-1 due November 2016 at Libor plus 325 bps, the low end of the Libor plus 325 bps to 350 bps talk, according to a market source. The loan still has a 1.25% Libor floor, a par offer price and 101 soft call protection for one year.

Additionally, the company is getting a new $150 million first-lien term loan B-2 due November 2017 that is priced at Libor plus 350 bps with a 1.5% Libor floor, a par price and 101 soft call protection for one year. This tranche was already spoken for, and was, therefore, not marketed.

The term loan B-1 has excess cash flow and mandatory debt sweeps. The term loan B-2 does not.

Goldman Sachs & Co., J.P. Morgan Securities LLC and Fifth Third Securities Inc. are the lead banks on the deal.

Fifth Third second-lien

Proceeds from Fifth Third Processing's first-lien term loans will be used to repay an existing $200 million second-lien term loan due November 2017 at a price of 102 and refinance/reprice a roughly $1.575 billion first-lien term loan due November 2016.

The existing first-lien term loan was obtained in 2010 at pricing of Libor plus 400 bps, and the second-lien term loan was done at Libor plus 675 bps. Both have a 1.5% Libor floor and were sold at an original issue discount of 99.

The company attempted a transaction like this earlier in the year, but it was pulled in March. At that time, the plan was to get a $1.775 billion first-lien term loan talked at Libor plus 300 bps to 325 bps with a 1.25% Libor floor, a par offer price and 101 soft call protection for one year.

Fifth Third Processing is a Cincinnati-based provider of payment transaction processing and acceptance services.

AES releases guidance

AES held a call late in the day to kick off syndication on its $1.05 billion seven-year covenant-light term loan B (Ba1), at which time official talk surfaced at Libor plus 325 bps to 350 bps with a 1% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year, according to a market source.

Commitments are due during the week of May 23 and closing is expected to occur during the week of June 6.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Morgan Stanley & Co. Inc. are the lead banks on the deal that will be used to help fund the acquisition of DPL Inc., the parent company of the Dayton Power & Light Co., for $3.5 billion in cash, plus the assumption of $1.2 billion of net debt.

AES selling notes

In addition to the term loan, AES plans on issuing $1 billion of senior unsecured notes for the acquisition, and DPL Inc. will issue $1.25 billion of senior unsecured notes.

This falls in line with what the company had said when it first announced the transaction. At that time, it was disclosed that AES would issue $3.3 billion of new debt for the transaction, comprised of $2.05 billion of unsecured notes and/or a term loan, and the DPL bond offering was outlined as well.

Completion of the acquisition is expected in late 2011 or early 2012, subject to approval by DPL's shareholders and receipt of certain regulatory approvals.

AES is an Arlington, Va.-based generator and distributor of electricity. DPL is a Dayton, Ohio-based power supplier.

Mobilitie terms emerge

Mobilitie Investments also released price talk, as it held a bank meeting in the afternoon to launch its proposed $415 million credit facility (B2/BB-), according to a market source.

The $25 million five-year revolver and $150 million five-year delayed-draw for 24 months term loan, which are being sold as a strip to banks, are both talked at Libor plus 350 bps with no Libor floor, the source said. There is a ticking fee on the delayed-draw term loan that starts at 125 bps, and drops to 75 bps once usage is over 50%.

Meanwhile, the $240 million six-year term loan B is talked at Libor plus 375 bps to 400 bps with a 1.25% to 1.5% Libor floor and an original issue discount of 991/2, the source continued.

TD Securities (USA) LLC and GE Capital Markets are the lead banks on the deal that will be used to refinance existing debt, and the delayed-draw loan is for capital expenditures.

Mobilitie is a Newport Beach, Calif.-based owner and constructor of communication towers.

Univita sets talk

Univita Health launched its $220 million senior secured credit facility (B2) - comprised of a $20 million five-year revolver and a $200 million six-year term loan - on Tuesday with talk of Libor plus 450 bps to 475 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

The term loan includes 101 soft call protection for one year, the source said.

Barclays Capital Inc. and Jefferies & Co. Inc. are the lead banks on the deal and are asking for commitments by June 1.

Proceeds will be used by the Scottsdale, Ariz.-based provider of home-based care to repay existing credit facility and mezzanine debt.

FTD guidance surfaces

Continuing on the topic of price talk, FTD told lenders that its $265 million term loan is being guided at Libor plus 325 bps to 350 bps with a 1.25% Libor floor and an original issue discount of 991/2, according to a market source.

The company's $315 million credit facility, which launched with a bank meeting on Tuesday, also includes a $50 million revolver.

Wells Fargo Securities LLC is the lead bank on the deal that will be used by the Downers Grove, Ill.-based floral company to refinance existing debt.

Pre-Paid launches

Also launching during the session was Pre-Paid Legal Services Inc.'s $430 million senior secured credit facility (B1/B+), and it came out in line with early price talk at Libor plus 450 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 981/2, according to a market source.

The facility consists of a $400 million six-year term loan B and a $30 million five-year revolver.

Originally, it was expected that the term loan B would be sized at $410 million, but the company generated more cash on its balance sheet so it decided to reduce the tranche size by $10 million.

Macquarie Capital, RBC Capital Markets LLC, KeyBanc Capital Markets LLC and Bank of Ireland are the lead banks on the deal.

Pre-Paid being acquired

Proceeds from Pre-Paid Legal Services' credit facility will be used to help fund the buyout of the company by MidOcean Partners for $66.50 per share, or about $650 million.

Other funds for the transaction will come from equity.

Commitments are due on June 1 and closing is targeted for June 30, subject to stockholder and regulatory approvals.

Pre-Paid Legal is an Ada, Okla.-based provider of legal service benefits through a network of independent law firms.

FMG readies loan

FMG Resources has set a bank meeting for noon ET at the Barclay Intercontinental in New York on Monday to launch a $1 billion six-year senior unsecured term loan, according to a market source, who said that price talk is still to be determined.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and RBS Securities Inc. are the joint bookrunners on the deal that will be used for expansion capital expenditures.

Corporate and facility ratings are B1/B, the source added.

FMG Resources is an Australian-based iron ore mining company.

U.S. Silica coming Wednesday

U.S. Silica scheduled a bank meeting for Wednesday to launch a $260 million six-year term loan that is being structured as an amendment and add-on, according to a market source. The amendment is to allow for the upsizing.

BNP Paribas Securities Corp. is the lead bank on the deal that will be used to take out existing mezzanine debt and fund a distribution to holdco.

In May 2010, as part of a dividend recapitalization, the company closed on a $165 million term loan priced at Libor plus 400 bps with a 1.75% Libor floor, and sold at an original issue discount of 991/2.

U.S. Silica is a Berkeley Springs, W.Va.-based producer of ground and unground silica sand, kaolin clay, aplite and related industrial minerals.

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