KAR Auction updated, breaks; AMC term B steady with acquisition news; HCA tweaks deal

By Sara Rosenberg

New York, March 4 – KAR Auction Services Inc. finalized the size of its term loan B-3 at the high end of revised guidance, and then the debt began trading during Friday’s market hours with levels quoted above its original issue discount.

In more happenings, AMC Entertainment Holdings Inc.’s term loan B was unfazed by news that the company will be taking on additional debt to fund its acquisition of Carmike Cinemas Inc.

Additionally, HCA Holdings Inc. firmed the spread on its term loan B-6 at the low end of guidance and modified the original issue discount, and Sears Holdings Corp. came out with price talk on its incremental term loan with launch.

KAR sets size

KAR Auction Services firmed its seven-year term loan B-3 at $1.35 billion, the high end of revised talk of $1.15 billion to $1.35 billion and up from a launch size of $1.15 billion, according to a market source.

The term loan B-3 is priced at Libor plus 350 basis points with a 0.75% Libor floor and an original issue discount of 99 and has 101 soft call protection for one year.

Recently, pricing on the term loan B-3 was trimmed from talk of Libor plus 375 bps to 400 bps and the discount was set at the tight end of the 98.5 to 99 guidance.

The company’s $1.65 billion of bank debt (Ba3/BB-) also includes a $300 million five-year revolver.

J.P. Morgan Securities LLC, Barclays, Goldman Sachs Bank USA, Fifth Third Securities Inc. and US Bank are leading the deal.

KAR frees up

With final terms in place, KAR Auction Services’ term loan B-3 made its way into the secondary market on Friday, with levels seen at 99 7/8 bid, 100 3/8 offered and then at 100 1/8 bid, 100 3/8 offered, a trader remarked.

Proceeds from the B-3 loan will be used to refinance a term loan B-1 due March 2017, to term out revolver drawings and for general corporate purposes.

KAR is a Carmel, Ind.-based provider of vehicle auction services and a provider of floorplan financing to independent and franchise used vehicle dealers.

AMC stays firm

Also in trading, AMC Entertainment’s term loan B was quoted at par bid, 100¼ offered, unchanged from prior levels, as investors were unmoved by news of an acquisition and additional debt, a trader said.

The company disclosed in an 8-K filed with the Securities and Exchange Commission that it plans on getting a $325 million incremental senior secured term loan B, issuing $300 million of subordinated notes and using $205 million of combined cash and revolver borrowings to fund its purchase of Carmike Cinemas Inc.

Also, the filing revealed that the actual total term loan B commitment amount is for $560 million so that, if needed, there is $235 million available to backstop a change of control put option in Carmike’s existing notes.

Citigroup Global Markets Inc. is leading the new debt.

Carmike is being bought for $30.00 per share in cash, for total cash consideration of $757 million, and a total enterprise value of $1.1 billion, including the assumption of net debt.

Closing is expected in the fourth quarter, subject to regulatory approvals, approval by Carmike’s shareholders and other customary conditions.

Leawood, Kan.-based AMC and Columbus, Ga.-based Carmike are movie exhibitors.

Armstrong holds steady

Armstrong World Industries Inc.’s $250 million seven-year term loan B was quoted at 99½ bid on Friday morning, in line with where it broke for trading during the prior session, a trader remarked.

Pricing on the term loan B is Libor plus 325 bps with a 0.75% Libor floor, and it was sold at an original issue discount of 99, after firming during syndication at the wide end of the 99 to 99.5 talk.

The company’s $1.05 billion credit facility (B1/BB+) also includes a $200 million revolver and a $600 million term loan A.

Bank of America Merrill Lynch is left lead on the deal that will be used to refinance an existing credit facility in connection with and subject to the completion of the previously announced planned separation of the company’s flooring business, Armstrong Flooring Inc.

Armstrong is a Lancaster, Pa.-based designer and manufacturer of floors and ceiling systems.

HCA modifies loan

Back in the primary, HCA Holdings firmed pricing on its $1.5 billion seven-year term loan B-6 (Ba1/BBB-/BB+) at Libor plus 325 bps, the tight end of the Libor plus 325 bps to 350 bps talk, and changed the original issue discount to 99.75 from 99.5, a market source said.

The term loan B-6 still has no Libor floor and 101 soft call protection for one year.

Earlier in syndication, the term loan B-6 was downsized from $2 billion.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading the loan that will be used with $1.5 billion of senior secured notes to refinance the company’s term loan B-5 due March 2017 and for general corporate purposes.

The other day, the term loan B-6 was downsized from $2 billion when the notes offering was upsized from $1 billion.

HCA is a Nashville-based for-profit operator of health care facilities.

Sears releases talk

Sears held its call on Friday, launching its $750 million incremental senior secured ABL term loan (B) due July 20, 2020 with talk of Libor plus 800 bps with a 1% Libor floor, an original issue discount of 96 to 97 and hard call protection of 102 in year one and 101 in year two, according to a market source.

The loan has no amortization and a springing fixed charge coverage ratio of 1 times.

Commitments are due at 5 p.m. ET on March 16, the source continued.

Bank of America Merrill Lynch and Wells Fargo Securities LLC are leading the loan that will be used to reduce borrowings under the company’s asset-based revolving credit facility.

Closing is subject to obtaining lender commitments, as well as market and other conditions.

The borrowers are Sears Roebuck Acceptance Corp. and Kmart Corp.

Sears is a Hoffman Estates, Ill.-based retailer.

Manitowoc Foodservice closes

In other news, the spin-off of Manitowoc Foodservice Inc. from Manitowoc Co. Inc. has been completed, according to a news release.

To help fund the spin-off, Manitowoc Foodservice got a $975 million term loan B (B+) priced at Libor plus 475 bps with a 1% Libor floor and sold at an original issue discount of 98. The debt has 101 soft call protection for one year.

During syndication, the discount on the term loan B firmed at the wide end of the 98 to 98.5 talk.

J.P. Morgan Securities LLC and Goldman Sachs Bank USA led the deal.

Manitowoc Foodservice is a New Port Richey, Fla.-based commercial foodservice equipment company.

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