Calpine, Blue Coat break; Roundy’s gains, Neiman weakens in trading; Avago, Veritas revised

By Sara Rosenberg

New York, Nov. 12 – Calpine Corp. set the original issue discount on its term loan B-6 at the tight end of talk and then surfaced in the secondary market on Thursday, and Blue Coat Systems Inc.’s add-on term loan freed to trade as well.

Additionally, Roundy’s Inc.’s term loan rallied in trading on the heels of news that the company is being acquired by The Kroger Co. and Neiman Marcus Group LLC’s term loan came under pressure.

In more happenings, Avago Technologies Cayman Finance Ltd. upsized its U.S. term loan B while firming the spread at the wide end of talk and adding a new euro term B, and Veritas Technologies Corp. reduced the size of its U.S. term loan B, added a tranche that underwriters will hold and widened spread talk and original issue discount on its U.S. and euro term debt.

Furthermore, Michigan Power LP LLC, West Corp., Allison Transmission Inc. and Oasis Outsourcing launched their deals to investors, and Azelis Group is getting ready to bring new loans to market.

Calpine firms OID, trades

Calpine finalized the original issue discount on its $550 million seven-year senior secured covenant-light term loan B-6 (Ba3) at 99, the tight end of the 98.5 to 99 talk, according to a market source.

As before, the loan is priced at Libor plus 300 basis points with a 1% Libor floor and has 101 soft call protection for six months.

Following pricing firming up, the loan freed up for trading on Thursday and levels were seen at 99¼ bid, 99½ offered, a trader said.

Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are leading the deal that will fund the $500 million acquisition of Granite Ridge Energy Center, a 745MW combined-cycle gas-fired power plant located in Londonderry, N.H., from Granite Ridge Holdings LLC, and for general corporate purposes.

Closing is in mid-December, subject to customary conditions and regulatory approvals.

Calpine is a Houston-based generator of electricity from natural gas and geothermal resources.

Blue Coat tops OID

Blue Coat Systems’ fungible $225 million add-on first-lien term loan (B-) began trading too, with levels quoted at 98 bid, 98½ offered, a trader remarked.

Pricing on the add-on loan is Libor plus 350 basis points with a 1% Libor floor, in line with existing first-lien term loan pricing, and it was sold at an original issue discount of 97.75. With this transaction, the 101 soft call protection for six months is being reset on all of the first-lien term loan debt.

Jefferies Finance LLC is leading the loan that will be used to fund an acquisition.

Blue Coat is a Sunnyvale, Calif.-based web security company.

Roundy’s skyrockets

Also in trading, Roundy’s term loan jumped to 99 bid, par offered from 80 bid, 82 offered on the back of Wednesday’s announcement that the company is being bought by Kroger for $3.60 per share in cash, according to a trader.

Kroger revealed in a news release plans to finance the transaction with debt and refinance Roundy’s existing debt of $646 million based on market conditions.

Kroger’s net debt to EBITDA ratio will be in the 2 to 2.2 times range upon closing of the merger, and the company said in the release that it is committed to maintaining its current investment grade credit rating.

Closing is expected by year-end, subject to the tender of a majority of the outstanding shares of Roundy’s common stock in a tender offer, regulatory approvals and other customary conditions.

Roundy’s is a Milwaukee-based operator of grocery stores and pharmacies. Kroger is a Cincinnati-based retailer.

Neiman softens

Neiman Marcus’ term loan fell to 95¼ bid, 96 offered from 97¾ bid, 98½ offered, a trader said, citing a number of factors for the movement, including generic problems in the retail sector, downward movement in the company’s bonds and competitor Macy’s Inc. release of revised full-year guidance.

Macy’s said on Thursday that it now expects earnings per diluted share for the full-year 2015 in the range of $4.20 to $4.30, excluding asset impairment charges associated primarily with previously announced store closings, versus prior guidance in the range of $4.70 to $4.80.

Neiman Marcus is a Dallas-based luxury retailer.

BWIC surfaces

A roughly $180 million Bid Wanted In Competition was announced on Thursday, and market players are being asked to get bids in by 11 a.m. ET on Tuesday, a trader said.

Some of the debt in BWIC is CT Technologies’ first-lien term loan, Global Healthcare Exchange’s first-lien term loan, Jackson Hewitt Inc.’s first-lien term loan, Serena Software’s first-lien term loan and Wall Street Systems’ first-lien term loan.

The portfolio includes debt from 25 issuers, the trader added.

Avago changes emerge

Back in the primary market, Avago Technologies increased its seven-year covenant-light term loan B (Ba1/BBB/BBB) to $9.75 billion from $7.5 billion, added a new €500 million term loan B to the capital structure and set pricing on both tranches at Libor/Euribor plus 350 bps with a step-down to Libor/Euribor plus 325 bps at 1.75 times net total leverage, a 0.75% floor and an original issue discount of 99, according to a market source.

At launch, the U.S. term loan B was talked at Libor plus 325 bps to 350 bps, and there was no step-down.

The term loan B debt still has 101 soft call protection for six months.

Allocations on the U.S. term loan B are expected on Friday, while commitments for the euro term loan B are due at noon GMT on Tuesday, with allocations thereafter, the source said.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Barclays, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are leading the deal.

Avago buying Broadcom

Proceeds from Avago’s term loan B debt will be used to help fund the acquisition of Broadcom Corp. for $17 billion and to refinance existing debt.

The company already syndicated in August via left lead Credit Suisse a $500 million five-year revolver (Ba1) and a $4.25 billion five-year term loan A (Ba1) for the Broadcom transaction.

Pricing on the term loan A, which was upsized during syndication from $3.25 billion, is Libor plus 150 bps to 200 bps, subject to a ratings-based grid.

Closing is expected in the first quarter of 2016, subject to regulatory approvals in various jurisdictions and the approval of Avago’s and Broadcom’s shareholders. The combined company will adopt the name Broadcom Ltd.

Avago is a designer, developer and supplier of analog semiconductor devices with headquarters in Singapore and San Jose, Calif. Broadcom is an Irvine, Calif.-based provider of semiconductor solutions for wired and wireless communications.

Veritas restructures

Veritas Technologies trimmed its seven-year covenant-light U.S. term loan B to $1.5 billion from $2.45 billion and added a separate $700 million senior secured term loan B that will be held by the underwriters, according to a market source.

Also, price talk on the U.S. term loan B, as well as on a €760 million seven-year covenant-light term loan B, was lifted to Libor/Euribor plus 500 bps from talk of Libor/Euribor plus 450 bps to 475 bps, and the original issue discount on the debt was modified to 95 from talk of 98 to 99, the source said.

As before, the term loans have a 1% floor.

The company’s credit facility also includes a $300 million five-year revolver, of which $50 million is expected to be drawn.

Commitments are due at noon ET on Friday, revised from 5 p.m. ET on Thursday, and allocations are targeted for early in the week of Nov. 16, the source continued.

Veritas lead banks

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., UBS AG, Jefferies Finance LLC, Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Goldman Sachs Bank USA are leading Veritas’ credit facility.

Proceeds from the credit facility, $750 million of senior secured notes, $1,775,000,000 of unsecured notes and $2.65 billion in sponsor equity will be used to fund the $8 billion buyout of the company by the Carlyle Group from Symantec Corp.

In connection with the U.S. term loan B downsizing, the senior secured notes were upsized from $500 million, the source added.

Secured leverage is 4.4 times, and total leverage is 6.6 times.

Closing is expected around year-end, subject to regulatory approvals and other conditions.

Veritas is a Mountain View, Calif.-based provider of storage and server management software solutions.

Michigan Power guidance

Michigan Power held its bank meeting on Thursday, and talk on its $216 million seven-year term loan B emerged at Libor plus 375 bps to 400 bps with a 1% Libor floor, an original issue discount of 99 and 101 call protection for one year, according to a market source.

The company’s $263 million credit facility (Ba2) also includes a $47 million revolver.

Commitments are due on Nov. 24, the source said.

BNP Paribas Securities Corp. is leading the deal that will be used to help fund the acquisition of Michigan Power by Rockland Capital LLC from ArcLight Capital Partners LLC.

Michigan Power is the owner of a cogeneration facility located in Ludington, Mich.

West reveals talk

West held its call in the morning, launching its $250 million six-year term loan B-11 (BB) with price talk of Libor plus 300 basis points to 325 bps with a 0.75% Libor floor and an original issue discount of 99.5, a market source said.

Commitments are due on Nov. 19, the source added.

Deutsche Bank Securities Inc. and Wells Fargo Securities LLC are leading the deal that will be used to refinance an existing term loan B-9.

West is an Omaha-based technology-driven communication services provider.

Allison seeks add-on

Allison Transmission launched during the session a fungible $189 million add-on senior secured covenant-light term loan B-3 due Aug. 23, 2019 with talk of Libor plus 250 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, a market source remarked.

Proceeds will be used to refinance term loan B-2 loans due 2017.

Furthermore, the company is seeking an amendment from existing term loan B-3 lenders only to eliminate the term loan B-3 pricing grid step-up to Libor plus 275 bps when total senior secured leverage is above 3.5 times, the source continued, adding that a 12.5 bps amendment fee is on offer.

Existing term loan B-3 lenders that do not consent to the amendment will be replaced.

Citigroup Global Markets Inc. is leading the transaction that is expected to close on Nov. 30.

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

Allison Transmission is an Indianapolis-based automatic transmission company and supplier of hybrid-propulsion systems.

Oasis holds call

Oasis Outsourcing hosted a lender call on Thursday to launch a fungible $80 million add-on first-lien term loan talked at Libor plus 475 bps with a 1% Libor floor and an original issue discount 99, according to a market source.

The spread and floor on the add-on matches existing first-lien term loan pricing.

Commitments are due on Nov. 19, the source said.

RBC Capital Markets LLC is leading the deal that will be used to fund two acquisitions in the Professional Employer Organization space.

Oasis is a West Palm Beach, Fla.-based provider of outsourced human resource, employee benefits, payroll and risk management services.

Azelis on deck

Azelis (Azelis Finance SA and Azelis US Holding Inc.) set a bank meeting in New York on Friday and a bank meeting in London on Monday to launch $675 million in new term loan debt, comprised of a $460 million seven-year first-lien term loan and a $215 million (€190 million equivalent) eight-year second-lien term loan, a market source said.

Barclays, Morgan Stanley Senior Funding Inc. and ING are leading the deal, with Barclays left lead on the first-lien loan and Morgan Stanley left lead on the second-lien loan.

Proceeds will be used to fund the acquisition of KODA Distribution Group, refinance Azelis’ existing debt and add cash on the balance sheet.

Closing is expected by year-end, subject to regulatory clearances.

Azelis is an Antwerp, Belgium-based pure-play specialty chemical distributor. KODA is a Stamford, Conn.-based specialty chemical company.

PolyOne closes

In other news, PolyOne Corp. completed its $550 million seven-year senior secured covenant-light term B (Ba1/BB+), a news release said.

The term loan is priced at Libor plus 300 bps with a 0.75% Libor floor, and it was sold at an original issue discount of 99.5. The tranche has 101 soft call protection for six months.

During syndication, pricing was reduced from talk of Libor plus 325 bps to 350 bps and the Libor floor was trimmed from 1%.

Citigroup Global Markets Inc., Wells Fargo Securities LLC, Goldman Sachs Bank USA, HSBC Securities (USA) Inc. and Morgan Stanley Senior Funding Inc. led the loan that was used to refinance $317 million of senior unsecured notes due 2020 and other outstanding debt.

PolyOne is an Avon Lake, Ohio-based provider of specialized polymer materials, services and solutions.

© 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.