MetroPCS down with earnings; Ineos, Schrader revise deals; Affinity Gaming sets talk

By Sara Rosenberg

New York, April 26 - MetroPCS Communications Inc.'s term loans softened in trading on Thursday as the company released disappointing first-quarter numbers, which revealed a sharp decline in income.

Over in the primary, Ineos Group Holdings SA basically doubled the size of its covenant-light term loan debt as its bond offering was downsized, and tranche sizes and pricing were finalized.

Also, Schrader came out with a number of changes to its oversubscribed credit facility, increasing the size of the first-lien term loan and raising pricing and original issue discount on both the first- and second-lien term loans due to the decision to remove maintenance covenants.

Furthermore, Affinity Gaming LLC disclosed price talk on its term loan as the debt was presented to lenders during market hours.

MetroPCS slides

MetroPCS' term loan headed lower in the secondary market on Thursday following the company's earnings announcement that showed a 63% decline in net income, according to a trader.

The term loan B-2 was quoted at 99¼ bid, par offered, down half a point, and the term loan B-3 was quoted at 99 bid, 99¾ offered, down a quarter of a point on the news, the trader said. At one point the B-2 loan had dropped as low as 98¾ bid, 99½ offered, and the B-3 had been as low as 98½ bid, 99¼ offered before rebounding slightly over the course of the day.

For the first quarter, the company reported net income of $21 million, or $0.06 per share, compared to net income of $56 million, or $0.15 per share, in the prior year.

Revenues for the quarter were $1.28 billion, a 7% increase from $1.2 billion last year.

And, adjusted EBITDA was $262 million, down 8% from $285 million in the 2011 quarter.

MetroPCS is a Dallas-based provider of no annual contract, unlimited, flat-rate wireless communications service.

Ineos restructures

Moving to the primary, Ineos Group nailed down final details on its covenant-light senior secured term loan (B1/B+) after upsizing the entire transaction to around $3.025 billion from $1.5 billion with the downsizing of its 7½% bond offering to $775 million from around $2.2 billion, according to sources.

The term loan consists of a $375 million three-year U.S. tranche, which is up from a previous amount of up to $300 million, a $2 billion six-year U.S. tranche and a €500 million six-year euro tranche. The six-year debt was initially expected to total around $1.2 billion. Also, it was originally thought that there would be a euro three-year piece too.

Pricing on the three-year loan is Libor plus 425 bps, down from talk of Libor plus 450 bps to 475 bps, pricing on the U.S. six-year loan is Libor plus 525 bps, the tight end of the Libor plus 525 bps to 550 bps talk, and pricing on the six-year euro piece is Euribor plus 550 bps, versus talk of Euribor plus 550 bps to 575 bps, sources remarked.

Ineos OIDs

The original issue discount on Ineos' three-year tranche firmed at 99, in line with earlier talk, while the discount on all of the six-year debt came at 981/2, the tight end of the 98 to 98½ guidance, sources said.

All tranches have a 1.25% floor and soft call protection of 102 in year one and 101 in year two.

At launch, it was said that the six-year loan was guided in the low 7% context all in, with the floor at 1.25% and the coupon and discount not yet determined, and the three-year loan was guided around 100 basis points inside of the six-year loan, including the 1.25% floor, so roughly in the low-6% area on an all-in basis. Specific price talk hadn't come out until Wednesday.

Sources were expecting the term loan to get upsized, but all the details that were available previously was that the increase would be at least $500 million.

Ineos readies allocations

Now that terms are finalized, it is expected that allocations on Ineos' term loan will go out on Friday morning, sources added.

Barclays Capital Inc. and J.P. Morgan Securities LLC are joint global coordinators and joint bookrunners on the deal, and Goldman Sachs & Co. and UBS Securities LLC are mandated lead arrangers and joint bookrunners.

Proceeds from the term loan and bonds will be used by the Lyndhurst, England-based chemical company to refinance senior secured revolver, term loan C and term loan D debt.

Schrader reworks deal

Also coming out with changes was Schrader, as it revised the size, pricing and original issue discount on its credit facility and made the term loans covenant-light, meaning that the interest coverage and leverage ratios were removed from the first-lien tranche and the leverage ratio was eliminated from the second-lien tranche, a market source said.

Under the changes, the first-lien term loan (B1/B) is sized at $235 million and priced at Libor plus 500 bps with a 1.25% Libor floor and a discount of 98, versus an initial size of $230 million and talk of Libor plus 450 bps to 475 bps with a 1.25% floor and a discount of 981/2, the source said. The 101 soft call protection for one year was left unchanged.

As for the $100 million second-lien term loan (Caa1/B-), it is now priced at Libor plus 925 bps with a 1.25% Libor floor and a discount of 971/2, compared to earlier guidance of Libor plus 850 bps to 900 bps with a 1.25% floor and a discount of 98, the source continued. There is still hard call protection of 103 in year one, 102 in year two and 101 in year three.

Schrader getting revolver

In addition to the term loans, Schrader's $370 million credit facility, up from $365 million, also provides for a $35 million revolver (B1/B).

Recommitments were due at the end of the day on Thursday, with the plan being to allocate on Friday, the source remarked.

Barclays Capital Inc., Goldman Sachs & Co. and Citigroup Global Markets Inc. are leading the deal that will be used, along with equity, to fund the purchase of the company by Madison Dearborn Partners LLC from Tomkins for $505 million in cash plus a small minority equity interest.

The upsizing to the first-lien term loan was done to cover the larger original issue discount prices.

Closing is expected in the second quarter, and total leverage is around 4.4 times.

Schrader is a manufacturer of tire pressure monitoring systems, valve products and tire hardware and related accessories for both original equipment manufacturers and aftermarket customers.

Affinity talk surfaces

In more primary happenings, Affinity Gaming launched its credit facility on Thursday, and with the event, talk on the $200 million seven-year term loan was announced at Libor plus 450 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

The Las Vegas-based gaming company's $235 million credit facility (BB) also includes a $35 million five-year super-priority revolver.

Commitments are due on May 3, the source said.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Jefferies & Co. and Macquarie Capital are the lead banks on the deal that will be used, along with $200 million of notes, to refinance existing debt.

Attachmate sets deadline

Attachmate Group also held a bank meeting, at which time lenders were told that commitments towards the $1.54 billion credit facility are due on May 8, according to a market source.

As already reported, the facility consists of a $40 million revolver (BB-), a $1.1 billion six-year first-lien term loan (BB-) talked at Libor plus 525 bps with a 1.5% Libor floor and an original issue discount of 99 and a $400 million seven-year second-lien term loan talked at Libor plus 900 bps with a 1.5% floor and a discount of 98.

There is 101 repricing protection for one year on the first-lien term loan, and the second-lien loan is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

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

Attachmate is a Seattle-based provider of access and integration software for legacy systems.

Communications Corp. launch

Communications Corp. of America launched its $197.5 million credit facility on Thursday as expected, with the $157.5 million seven-year first-lien term loan B coming at previously outlined talk of Libor plus 650 bps with a 1.25% Libor floor, an original issue discount in the 98½ area and 101 soft call protection for one year, a source said.

The facility also includes a $5 million five-year revolver and a $35 million 10-year second-lien term loan.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to refinance existing debt.

Communications Corp. of America is a Lafayette, La.-based television broadcasting company focused on operating local stations in small and medium-sized markets.

AutoTrader allocates

AutoTrader.com allocated its $400 million of incremental pro rata debt (Ba3/BB+) that wrapped in line with initial talk at Libor plus 225 bps, according to a market source.

The debt is comprised of a $200 million incremental term loan A due 2017 and a $200 million incremental revolver due 2015.

Pricing on the new debt is in line with existing pro rata pricing.

Wells Fargo Securities LLC, SunTrust Robinson Humphrey Inc., J.P. Morgan Securities LLC, Goldman Sachs & Co. and Fifth Third Securities Inc. are the lead banks on the deal that will be used to fund a $400 million dividend.

AutoTrader.com is an Atlanta-based automotive marketplace and consumer information website.

Constellation well met

Constellation Brands Inc.'s $1.65 billion senior credit facility saw more than $2 billion in orders by its Wednesday commitment deadline, and the expectation is that the deal will close at original terms, according to a market source.

The Victor, N.Y.-based wine company's facility consists of an $850 million five-year revolver and a $550 million five-year term loan, both priced at Libor plus 175 bps, and a $250 million seven-year term loan priced at Libor plus 200 bps. There is no Libor floor on any of the tranches.

The seven-year term loan was done essentially through a private placement.

Upfront fees on all tranches were 35 bps for commitments of $75 million or more, 30 bps for commitments of $50 million, 25 bps for commitments of $35 million and 20 bps for commitments of less than $35 million.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Rabo Securities USA Inc. and Barclays Capital Inc. are leading the deal that will be used to refinance an existing senior credit facility.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.