RCS Capital falls as Cole Capital acquisition terminated; Media General breaks; Bluestem revised

By Sara Rosenberg

New York, Nov. 3 – RCS Capital Corp.’s first-lien term loan dropped in trading on Monday after news came out that the company canceled its agreement to purchase Cole Capital, and Media General Inc.’s new B-2 loan emerged in the secondary market.

Moving to the primary, Bluestem Brands Inc. widened the spread and original issue discount on its term loan, shortened the maturity and sweetened amortization and the excess cash flow sweep.

Additionally, Lonestar Generation LLC released details on its loan transaction, Endemol set original issue discount talk on its add-on debt, and Total Merchant Services Inc. and Parq Resort & Casino (Parq Ltd. Holdings Partnership) joined this week’s calendar.

RCS retreats

RCS Capital’s first-lien term loan sank in the secondary market on Monday to 96½ bid, 98½ offered from 98¼ bid, 99½ offered following the announcement that the company terminated its plans to acquire Cole Capital Partners LLC and Cole Capital Advisors Inc. from American Realty Capital Properties Inc., according to a trader.

The acquisition of the Phoenix, Ariz.-based private capital business was valued at $700 million, split between $200 million of cash, $300 million of seller debt, and $200 million of class A common stock.

RCS did not give a reason for the termination of the purchase agreement.

In response, American Realty issued a statement claiming that RCS has no basis for the termination and is therefore in breach of the agreement.

“The independent members of the ARCP Board of Directors and ARCP management are evaluating all alternatives under the agreement and with respect to the Cole Capital business, generally,” the American Realty news release added.

RCS is a New York-based full-service investment firm expressly focused on the individual retail investor.

Media General frees up

Also in trading, Media General’s $825 million term loan B-2 due July 2020 broke with levels quoted at 99 3/8 bid, 99 7/8 offered, according to a trader.

Pricing on the term loan B-2 is Libor plus 325 basis points with a 1% Libor floor, and it was sold at an original issue discount of 98¾. There is 101 soft call protection for six months.

Recently, the term loan B-2 was upsized from $325 million, the discount was modified from 98½ and the maximum total net leverage covenant was removed, making the tranche covenant-light.

As a result of the term loan B-2 upsizing and an increase in the company’s bond offering to $400 million from $300 million, plans for a $600 million five-year term loan A that was talked at Libor plus 250 bps with a 50 bps upfront fee were terminated.

The company is getting a $90 million revolver along with the term loan B -2.

RBC Capital Markets LLC, Deutsche Bank Securities Inc., SunTrust Robinson Humphrey Inc., U.S. Bank NA and Capital One are leading the debt.

Media General merging

Proceeds from Media General’s new debt will be used to support its merger with LIN Media LLC.

Under the agreement, shareholders of LIN Media will receive $25.97 in cash or 1.4714 shares of the new holding company, subject to proration. The maximum cash amount that will be paid to the LIN Media shareholders is $763 million. Media General shareholders will receive one share of the new holding company for each share of Media General that they own upon closing.

The new debt will fund the cash payment to LIN Shareholders and refinance certain LIN debt.

Secured leverage is 3.6 times and total leverage is 5 times.

Closing is subject to customary closing conditions, including the approval of the Federal Communications Commission, clearance under the Hart-Scott-Rodino Antitrust Improvements Act and certain third-party consents.

Media General is a Richmond, Va.-based local television broadcasting and digital media company. LIN Media is an Austin, Texas-based local multimedia company.

BWIC emerges

A $41 million cash loan Bid Wanted In Competition surfaced, with bids due at noon ET on Wednesday, according to a trader.

Some of the issuers in the portfolio include Windstream Corp., HCA Inc., National Cinemedia, Regal Cinemas Inc., Burger King Corp., Skilled Healthcare Group Inc. and Sensata Technologies BV.

There are roughly 30 issuers in the portfolio, the source added.

Bluestem reworks deal

Meanwhile, in the primary market, Bluestem raised pricing on its $300 million first-lien term loan (B2/B) to Libor plus 750 bps from Libor plus 650 bps, moved the original issue discount to 96 from 98, shortened the maturity to six years from seven years, increased amortization to 5% per annum from 2.5% per annum and lifted the excess cash flow sweep to 75% from 50%, according to a market source.

As before, the term loan has a 1% Libor floor and 101 soft call protection for one year.

Recommitments are due at 2 p.m. ET on Wednesday, the source continued.

Credit Suisse Securities (USA) LLC and Jefferies Finance LLC are leading the term loan.

In addition, the company expects to get a new $80 million asset-based credit facility led by U.S. Bank.

Bluestem being acquired

Proceeds from Bluestem’s credit facility will be used to help fund its buyout by Capmark Financial Group Inc. for about $565 million in cash, subject to various pre- and post-closing adjustments.

Cash on hand and an equal amount of cash invested in Capmark by affiliates of Centerbridge Partners LP through the exercise of warrants will also be used to fund the buyout.

Closing is expected in the fourth quarter, subject to customary conditions, including compliance with the filing and waiting period requirements under the Hart-Scott-Rodino Act.

Bluestem is an Eden Prairie, Minn.-based online retailer of a broad selection of name brand and private label general merchandise serving low-to-middle income consumers.

Lonestar holds call

Lonestar Generation had its conference call on Monday afternoon, launching a fungible $160 million add-on senior secured covenant-light term loan B due Feb. 20, 2021 with talk of Libor plus 425 bps with a 1% Libor floor, an original issue discount of 98 to 99 and 101 soft call protection for six months, according to a market source.

The owner of Texas gas-fired power stations also launched a repricing of its $512 million senior secured covenant-light term loan B due Feb. 20, 2021 to Libor plus 425 bps with a 1% Libor floor from Libor plus 375 bps with a 1% Libor floor, and the existing debt will get 101 soft call protection for six months as well, the source said.

Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are leading the deal that will be used with equity to acquire Twin Oaks and Walnut Creek and combine them into the Lonestar portfolio.

Amendment consents are due at 5 p.m. ET on Nov. 10 and term loan B lenders are being offered a 12.5 bps amendment fee, the source added. Add-on term loan consents are due at 5 p.m. ET on Nov. 14.

Closing on the amendment and add-on are expected in mid- to late November.

Endemol discloses OIDs

Endemol came out with original issue discount talk of 96 to 97 on the U.S. portion of its $300 million U.S. and euro add-on term loan due Aug. 13, 2021 and discount talk in the 97 area on the euro tranche in connection with its afternoon bank meeting, a market source said.

Pricing on the U.S. tranche is Libor plus 575 bps with a 1% Libor floor, and pricing on the euro tranche is Euribor plus 600 bps with a 1% Euribor floor.

Commitments are due at noon ET on Nov. 13, the source added.

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC and Nomura are leading the deal that will be used to help fund the 50/50 joint venture between 21st Century Fox and Apollo Global Management LLC to combine Endemol, Shine Group and CORE Media to create a multi-platform content provider, although CORE will maintain an independent capital structure.

Closing is expected by year-end.

Endemol is an Amsterdam-based creator, producer and distributor of multiplatform entertainment.

Total Merchant coming soon

Total Merchant Services set a bank meeting for 12:30 p.m. ET on Wednesday to launch a $175 million credit facility, according to a market source.

The facility consists of a $15 million revolver, and a $160 million seven-year first-lien term loan talked with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source said. Spread talk on the term loan is not yet available.

Commitments are due at 5 p.m. ET on Nov. 19.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance existing debt and fund a dividend.

Total Merchant Services is a merchant acquirer for payment processing.

Parq Resort on deck

Parq Resort & Casino, a resort and casino in Vancouver, scheduled a bank meeting for 10 a.m. ET in New York on Thursday to launch $175 million in six-year senior secured term loan debt, a market source remarked.

The debt consists of a $130 million funded term loan, and a $45 million delayed-draw term loan with a ticking fee of half the spread, the source continued.

Commitments are due on Nov. 20, the source added.

Credit Suisse Securities (USA) LLC and Dundee Securities are leading the deal that will be used to fund the construction of the resort and casino.

Platform Specialty closes

In other news, Platform Specialty Products Corp. completed its $130 million add-on first-lien covenant-light term loan B and €205 million first-lien covenant-light term loan B, a news release said.

Pricing on the U.S. loan is Libor plus 300 bps with a 1% Libor floor and it was sold at an original issue discount of 99½. There is 101 soft call protection for six months.

The euro loan is priced at Euribor plus 325 bps with a 1% floor and was issued at 99½. This tranche also has 101 soft call protection for six months.

During syndication, the discount on the U.S. and euro loans firmed at the low end of the 99 to 99½ talk.

Barclays led the deal that was used with cash on hand to fund the acquisition of Chemtura AgroSolutions from Chemtura Corp. for about $1 billion, consisting of $950 million in cash, subject to working capital and other adjustments, plus 2 million shares of Platform’s common stock.

Platform is a Miami-based producer of high-technology specialty chemical products and provider of technical services. Chemtura AgroSolutions is a provider of agrochemicals and seed treatment products.

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