Encompass, Cequel, Roundy's, Vantage break; Momentive dips; PennantPark, Local TV reworked

By Sara Rosenberg

New York, Feb. 10 - Encompass Digital Media Inc. revised the original issue discount on its term loan B and then freed up for trading on Friday above its discount price, and Cequel Communications Holdings I LLC, Roundy's Supermarkets Inc. and Vantage Specialty Chemicals began trading as well.

Also in the secondary market, Momentive Specialty Chemicals Inc.'s extended term loan headed lower after the company released preliminary fourth-quarter numbers that show a large expected drop in year-over-year income.

Over in the primary, PennantPark Investment Corp. increased the size of its revolver, Local TV Finance LLC raised the coupon on its extended term loan proposal, and Aramark Corp. nailed down timing and released price talk on its amendment and extension transaction.

Additionally, original issue discount talk surface on Milacron LLC's add-on term loan, which is heard to be pretty much circled well ahead of its upcoming commitment deadline.

Encompass hits secondary

Encompass Digital Media's $250 million 51/2-year term loan B broke for trading on Friday after the original issue discount was tightened to 98 from 97, according to a source, who said the debt was quoted in the secondary at 98½ bid, 99½ offered on the open and then moved up to 99 bid, par offered.

Pricing on the term loan B, as well as on a $30 million five-year revolver, is Libor plus 650 basis points with a 1.5% Libor floor.

Macquarie Capital and BMO Capital Markets Corp. are the joint bookrunners on the $280 million credit facility (B3/B), with Macquarie the lead arranger.

Proceeds, along with just under $250 million of rollover and new equity, will be used to fund the purchase of the company by Court Square Capital Partners from Wasserstein & Co. LP.

Encompass, a Los Angeles-based digital media services provider, will have total and senior leverage of 4.25 times off of run-rate EBITDA at close, which is expected this quarter, subject to regulatory clearances and the transfer of certain FCC licenses.

Cequel tops OID

Cequel Communications' $2.2 billion seven-year term loan B also broke, with levels seen at 99 5/8 bid, 99 7/8 offered at first and then it moved to 99 7/8 bid, par 1/8 offered, according to a trader.

Pricing on the loan is Libor plus 300 bps, after an earlier flex from Libor plus 325 bps, with a 1% Libor floor. The debt was sold at an original issue discount of 99 and includes 101 soft call protection for one year.

The company's $2.7 billion senior secured credit facility (Ba2/BB-) also provides for a $500 million five-year revolver priced at Libor plus 250 bps with no Libor floor.

Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., J.P. Morgan Securities LLC, Bank of America Merrill Lynch and RBC Capital Markets LLC are leading the deal that will be used to refinance existing debt and fund a dividend.

Cequel, a St. Louis-based cable operator, will have secured leverage of 3.1 times and total leverage of 5.6 times.

Roundy's frees up

Another deal to start trading was Roundy's Supermarkets, with its $675 million seven-year term loan B quoted at 99½ bid, par ¼ offered on the open, and then levels tightened to 99¾ bid, par ¼ offered, according to a market source.

Pricing on the Milwaukee, Wis.-based supermarket chain's B loan is Libor plus 450 bps with a 1.25% Libor floor, and it was sold at a discount of 981/2. There is 101 repricing protection for one year.

The deal was so well received that, during syndication, pricing was lowered from Libor plus 500 bps and the original issue discount was revised from 98.

Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are the lead banks on the $800 million senior credit facility (B1/BB-), which also includes a $125 million five-year revolver.

The new facility is being done along with the company's initial public offering of common stock and proceeds from the transactions will be used to repay existing loan borrowings that, as of Oct. 1, included $689 million of first-lien loan debt and $150 million of second-lien debt.

Vantage breaks

Vantage Specialty Chemicals' credit facility freed up too, with the $240 million six-year term loan B quoted at 99 bid, 99½ offered on the break, according to a trader. The debt bounced around a bit in the 98¾ bid, 99½ offered context but then settled back in at 99 bid, 99½ offered, he added.

Pricing on the B loan firmed in line with initial talk at Libor plus 550 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 98.

The company's 300 million credit facility (B2/B) also includes a $60 million five-year revolver priced at Libor plus 525 bps with no Libor floor.

RBC Capital Markets LLC and Fifth Third Securities Inc. are the lead banks on the deal that is being used, along with more than 50% equity, to back the already completed buyout of the company by Jordan Co. from H.I.G. Capital LLC.

Vantage, a Chicago-based specialty chemicals company, has total and senior leverage of around 4.2 times.

Momentive slides on numbers

In more trading happenings, Momentive Specialty Chemicals' extended term loan was seen at 97¾ bid, 98¾ offered, down from 99 bid, par offered, as the company came out with preliminary results for the fourth quarter, according to a trader.

For the quarter, the Columbus, Ohio-based thermoset resins company expects operating income in the range of $14 million to $24 million, down considerably from $161 million in the previous year.

Sales for the quarter are expected to be about $1.2 billion, flat from 2010 fourth quarter sales.

And, segment EBITDA is anticipated in the area of $101 million to $111 million, versus $143 million in the prior year.

"Global macroeconomic volatility and inventory destocking negatively impacted our fourth quarter 2011 results," said Craig O. Morrison, chairman, president and chief executive officer, in a release.

"While we posted strong results in our phenolic specialty resins, North American forest products, formaldehyde and oilfield proppants businesses, weaker demand in Europe and Asia drove softer results across the balance of our portfolio," Morrison added.

PennantPark tweaks size

Moving to the primary, PennantPark Investment raised the size of three-year revolving credit facility (BBB-/BBB-) to $375 million from $325 million, while leaving pricing at Libor plus 275 bps with a 50 bps unused fee, according to a market source.

The upsizing is not much of a surprise given that by late January sources were saying that the company might increase the deal due to oversubscription, and a few days ago the company disclosed that the tranche would be at least $350 million.

SunTrust Robinson Humphrey Inc. and J.P. Morgan Securities LLC are leading the deal.

The revolver has a one-year term out period and will be used to refinance an existing $315 million revolver due in June.

PennantPark is a New York-based investment company that has elected to be treated as a business development company. As of Sept. 30, the company's portfolio totaled around $830 million.

Local TV lifts spread

Local TV Finance raised pricing on its proposed $170 million extended term loan (B1/BB-) to Libor plus 400 bps from Libor plus 375 bps, according to a market source. Non-extended term loan pricing is Libor plus 200 bps.

The debt is being extended by two years to May 2015.

Commitments were due at noon ET on Friday and lenders were offered a 10 bps amendment fee.

Deutsche Bank Securities Inc. and UBS Securities LLC are the lead banks on the deal.

Local TV is a Fort Wright, Ky.-based television station operator.

Aramark schedules call

Aramark has set its conference call for Monday to launch a recently announced amendment and extension proposal to existing lenders, according to a market source, who said that with timing, details on the transaction emerged.

The company is looking to push out the maturity on about $1 billion of its roughly $1.987 billion term loan and synthetic letter-of-credit facility debt to July 2016 from the current expiration date of Jan. 26, 2014, the source remarked.

And, pricing on the extended loan is being offered at Libor plus 325 bps, compared to non-extended pricing of Libor plus 187.5 bps.

J.P. Morgan Securities LLC, Goldman Sachs & Co., Barclays Capital Inc., Bank of America Merrill Lynch and Wells Fargo Securities LLC are the lead banks on the deal.

Aramark is a Philadelphia-based professional services company that provides food, hospitality and facility management services as well as uniform and work apparel.

Milacron fills out

In other news, chatter is that Milacron's $50 million add-on term loan is already pretty much subscribed since launching this past Thursday, and lenders still have until Feb. 17 to place their orders, a market source told Prospect News.

The add-on is priced at Libor plus 600 bps with a 1.5% Libor floor, which matches existing term loan pricing, and is being offered at an original issue discount of 991/2, the source said.

When obtained last year, the existing term loan was sold at a discount of 99.

Bank of America Merrill Lynch is the lead bank on the deal that will be used to fund a dividend.

Milacron is a Cincinnati-based company involved in plastics-processing technologies, metalworking fluids and precision machining.

Generac closes

Generac Power Systems Inc. completed its $725 million senior secured credit facility (Ba3/BB+) that consists of a $150 million five-year revolver, a $325 million five-year term loan A and a $250 million seven-year term loan B, according to an 8-K filed with the Securities and Exchange Commission on Friday.

Pricing on the revolver and term loan A is Libor plus 225 bps, and term loan B pricing is Libor plus 275 bps with a 1% Libor floor. The B loan was sold at an original issue discount of 99½ and has 101 soft call protection for one year.

During syndication, the term A was upsized from $250 million. Also, the term B was downsized from $325 million, pricing was lowered from Libor plus 300 bps and the discount moved from 99.

J.P. Morgan Securities LLC, Goldman Sachs & Co. and Bank of America Merrill Lynch led the deal that was used to refinance existing bank debt and for general corporate purposes.

Generac is a Waukesha, Wis.-based designer and manufacturer of generators and other engine-powered products.

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