Revel Entertainment seesaws with lender call; P.F. Chang's, Acosta, Engility rework deals

By Sara Rosenberg

New York, June 21 - Revel Entertainment Group LLC's term loan B was volatile in trading on Thursday, with levels dropping by a couple of points before a lender update call began. The debt then regained some of the lost ground by the afternoon.

Switching to the new deal front, P.F. Chang's China Bistro Inc. (Wok Acquisition Corp.) upsized its term loan B as its bond offering was downsized, and Acosta Sales & Marketing reduced the spread on its incremental term loan C.

Additionally, Engility Corp. lifted its credit facility size and pulled its bond offering, and Kenan Advantage Group revealed the original issue discount on its deal with launch.

Revel bounces around

Revel Entertainment's term loan B was softer in the secondary market on Thursday, but a portion of the debt's morning losses did manage to be erased following a lender update call, according to a trader.

By late day, the gaming and entertainment company's term loan B was quoted at 85 bid, 86 offered, down from 87¾ bid, 88¾ offered on Wednesday, the trader said. In the morning, shortly before the update call began, the debt was seen as low as 82 bid, 84 offered. Then the loan popped as high as 86½ bid, 87 offered in the early afternoon, but came under a little bit more pressure before the day ended, the trader added.

As previously reported, the business update meeting was for both existing and prospective lenders to discuss the company's operational performance and answer questions. The call started at noon ET.

Plans for the call were announced last week, shortly after the New Jersey Division of Gaming Enforcement disclosed Revel's revenue for the month of May to be $13.93 million and year-to-date revenue to be $27.56 million - results that investors found to be disappointing.

BWIC surfaces

A roughly $38.2 million Bid Wanted in Competition (BWIC) was announced on Thursday, and investors are being asked to place their bids by 10 a.m. ET on Tuesday, according to a trader.

The portfolio consists of about $38 million of cash loans and about $250,000 of reorganization equity.

Some of the loans being offered include Clear Channel Communications Inc.'s term loan B, Dollar General Corp.'s term loan C, Huish Detergents Inc.'s term loan B and second-lien term loan, Orbitz Worldwide Inc.'s term loan, and Sabre Inc.'s extended, non-extended and new term loans.

And, some of the equity being offered is from Cougard Investissement, Natural Products Group Inc. and Koosharem LLC, the trader added.

P.F. Chang's lifts size

Over in the primary, P.F. Chang's increased its seven-year term loan B to $305 million from $280 million, while leaving talk unchanged at Libor plus 500 basis points to 550 bps with a 1.25% Libor floor and an original issue discount of 99 - for an all-in yield in the range of 6½% to 7%, a market source said.

The company's $380 million senior secured credit facility (Ba3/B+), up from $355 million, also includes a $75 million five-year revolver that was increased at launch from an initially expected amount of $70 million.

Wells Fargo Securities LLC, Deutsche Bank Securities Inc. and Barclays Capital Inc. are leading the deal that will be used to help fund the acquisition of the company by Centerbridge Partners LP for $51.50 per share in cash, in a transaction valued at roughly $1.1 billion.

Centerbridge is tendering for P.F. Chang's shares, and at least 83% of the shares must be tendered in the offer. Originally, the tender was set to expire on June 12, but it has been extended a few times, most recently to June 28, in connection with the syndication of the debt financing.

P.F. Chang's selling notes

In addition to the credit facility, P.F. Chang's plans on issuing $275 million of senior notes and using up to $580 million of equity for its buyout.

The notes were downsized from $300 million as the term loan B was upsized, and price talk on the bonds emerged at 10¼% to 10½%. Pricing is expected to take place on Friday afternoon, the source remarked.

Backing the bonds is a commitment for a bridge loan that is priced at Libor plus 825 bps if ratings are B3/B- and Libor plus 850 bps if ratings are lower than B3/B-. There is a 50 bps step-up after three months and every three months thereafter until it hits a specified cap, as well as a 1.25% Libor floor.

P.F. Chang's is a Scottsdale, Ariz.-based owner and operator of two restaurant concepts in the Asian niche.

Acosta trims coupon

Another company to come out with changes was Acosta Sales & Marketing, as pricing on its $300 million incremental term loan C (B+) was lowered to Libor plus 425 basis points from Libor plus 450 bps due to strong oversubscription, according to a market source.

As before, the loan has a 1.5% Libor floor, an original issue discount of 98½ and 101 soft call protection for one year.

Lead banks, Goldman Sachs & Co., Barclays Capital Inc. and Bank of America Merrill Lynch, were still seeking commitments by 5 p.m. ET on Thursday.

Proceeds will help fund the acquisition of Mosaic Sales Solutions, a sales and merchandising, experiential marketing and interactive firm with U.S. headquarters in Dallas, with closing on the transaction targeted for next month.

Acosta amending loan

With the term loan C, Acosta is asking lenders to amend its existing credit facility to allow for the new debt.

Additionally, pricing on the existing term loan B will be revised to Libor plus 425 bps from Libor plus 325 bps so that it matches the spread on the new term loan C, the source remarked.

In exchange for consents, lenders are being offered a 25 bps fee.

Acosta is a Jacksonville, Fla.-based full-service sales and marketing agency in the consumer packaged goods industry.

Engility ups loan

Engility increased its senior secured credit facility (Ba1/BB+) to $385 million from $300 million, by lifting its term loan A to $335 million from $200 million and trimming its revolver to $50 million from $100 million, according to a market source.

Furthermore, the company pulled its $250 million senior notes offering, the source said.

Bank of America Merrill Lynch and Barclays Capital Inc. are the lead banks on the deal that will be used to fund a dividend to L-3 Communications Holdings Inc., from which Engility is being spun off.

Engility is a Billerica, Mass.-based provider of systems engineering and technical assistance, explosive ordnance disposal/counter-IED technical support, acquisition support and NextGen services.

Kenan sets OID

Also in the primary, Kenan Advantage held a call on Thursday morning to launch its credit facility, and with the event, original issue discount talk on the term loan debt emerged at 99, according to a market source.

The deal includes a $450 million term loan B and a $150 million delayed-draw term loan, as well as a $100 million revolver. Pricing on the term B and delayed-draw term loan is Libor plus 325 bps with a 1.25% Libor floor.

Through this transaction, the company is basically upsizing its existing credit facility that consists of a $100 million revolver, a $370 million term loan B priced at Libor plus 325 bps with a 1.25% Libor floor and a $125 million delayed-draw term loan priced at Libor plus 325 bps with a 1.25% Libor floor.

With this new deal, the term loan will retain its existing tenor and the delayed-draw term loan will be renewed for an 18-month duration and retain its use or lose provision.

KeyBanc Capital Markets is leading the $700 million credit facility for the North Canton, Ohio-based logistics and liquid bulk transportation services provider.

MegaPath closes

In other news, MegaPath Corp. completed its $165 million credit facility that consists of a $15 million five-year revolver and a $150 million 51/2-year term loan priced at Libor plus 625 bps with a 1.25% Libor floor, according to a market source.

The term loan was sold at an original issue discount of 981/2.

During syndication, the revolver was downsized from $25 million and the maturity of the term loan was shortened from six years.

Societe Generale led the deal that was used to refinance existing bank debt.

MegaPath is a provider of managed data, voice and security services.

© 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.