Hanesbrands moves around on refi news; TASC reveals timing, tranching; RehabCare tweaks deal

By Sara Rosenberg

New York, Nov. 17 - Hanesbrands Inc.'s term loan B and second-lien term loan headed closer to par as a refinancing was announced and details on the company's proposed credit facility, including size, structure and price talk, emerged during Tuesday's market hours.

In other news, TASC Inc. firmed up timing and tranching on its buyout financing credit facility, RehabCare Group Inc. downsized its term loan B, Fairway Market LLC and Hayes Lemmerz International Inc. are readying launches for their new credit facilities, and Landry's Restaurants Inc. wrapped its amendment and extension transaction in line with original terms.

Hanesbrands goes to par

Hanesbrands' term loan B and second-lien term loan were affected by the company's plans to refinance the debt with levels moving to around par, according to a trader.

Specifically, the term loan B was quoted at 99½ bid, par offered, down a quarter of a point on the day, and the second-lien term loan was quoted at 99 bid, par offered, up one and three quarter points on the day, the trader said.

On Tuesday morning, Hanesbrands revealed that it plans to refinance existing debt, including repaying all or some of its existing senior secured credit facility and its second-lien credit facility.

The company said that the purpose of the refinancing is to increase financial and operating flexibility.

Hanesbrands plans new loan

To help fund the refinancing, Hanesbrands is coming to market with a new $1.15 billion senior secured credit facility led by JPMorgan, Bank of America, HSBC and Barclays, according to a market soruce.

The facility, which will launch with a bank meeting on Thursday, consists of a $750 million term loan and a $400 million revolver.

Price talk on the term loan is Libor plus 350 basis points with a 2% Libor floor and an original issue discount in the 99 area, and price talk on the revolver is Libor plus 450 bps with no Libor floor, the source said.

Other funds for the refinancing are expected to come from a roughly $500 million bond offering.

Hanesbrands is a Winston Salem, N.C.-based marketer of everyday apparel essentials.

TASC sets launch

TASC nailed down timing for the launch of its proposed $690 million senior secured credit facility as a bank meeting has been scheduled for Friday morning in New York, a market source told Prospect News.

Previously, timing on the deal was fluid but it was known that the targeted timeframe was for the latter part of this week.

In addition, tranching on the deal was announced as a $100 million revolver, a $200 million term loan A and a $390 million term loan B, the source said.

Prior to now, it was thought that the deal would be comprised of a $100 million revolver and $580 million of term loan A and term loan B debt for a total deal size of $680 million.

There will be a Libor floor on the tranches, but the specifics on that are still to be determined, as is price talk.

Barclays Capital, Deutsche Bank Securities and RBC Capital Markets are the lead banks on the deal, with Barclays the left lead. In addition, CPPIB Credit Investments Inc. has provided commitments towards the facility as an investor.

TASC also getting mezzanine debt

Along with the credit facility, TASC is also obtaining roughly $300 million of senior subordinated notes (mezzanine debt) that has already been pre-placed. KKR Capital Markets arranged the mezzanine financing and Highbridge Mezzanine Partners is the lead investor.

Proceeds from the credit facility and the mezzanine financing will be used to help fund the purchase of the company by an investor group led by General Atlantic LLC and Kohlberg Kravis Roberts & Co.

The investor group is buying TASC from Northrop Grumman Corp. in a transaction valued at $1.65 billion.

Closing on the transaction is expected to take place in the fourth quarter, subject to customary approvals.

TASC is a Chantilly, Va.-based provider of advanced systems engineering and technical assistance to the defense, intelligence, federal, state and local markets.

RehabCare trims term loan

RehabCare reduced the size of its term loan B as the equity financing for its $570 million acquisition of Triumph HealthCare was increased, according to a market source.

The term loan B is now sized at $450 million, down from $500 million, the source said.

Price talk on the term loan B was left unchanged at Libor plus 400 bps with a 2% Libor floor and an original issue discount of 98.

RehabCare's now $575 million senior secured credit facility (Ba3/BB) still includes a $125 million revolver talked at Libor plus 400 bps that is expected to be substantially unfunded at the close of the transaction.

Bank of America, RBC and BNP Paribas are the lead banks on the deal.

Allocations are expected to go out later this week.

RehabCare ups equity

Late Monday, RehabCare announced that the underwriters of its common stock offering exercised in full their option to purchase an additional 810,000 shares of common stock at the public offering price of $24 per share.

Including the 5.4 million shares of common stock that the company priced last week, the equity offering is now raising about $149 million in proceeds.

The closing of the offering, including the over-allotment option, is expected to take place on Nov. 18.

Closing on the acquisition of Triumph HealthCare is expected to take place on Dec. 1, pending customary closing conditions, including regulatory approvals.

RehabCare is a St. Louis-based provider of physical rehabilitation services. Triumph HealthCare is a Houston-based developer and operator of long-term acute care hospitals.

Fairway Market launching new deal

Fairway Market emerged with plans for a new $115 million credit facility that is scheduled to launch with a bank meeting on Thursday, according to a market source.

The facility consists of a $15 million 41/2-year revolver and a $100 million five-year term loan, the source said.

Credit Suisse and Jefferies are the lead banks on the deal that will be used to refinance existing debt and for expansion capital.

Fairway Market is a supermarket chain.

Hayes plans exit deal

Hayes Lemmerz is launching to investors on Wednesday a $150 million term loan that will be used for exit financing, according to a market source.

Deutsche Bank is the lead bank on the deal that is talked at Libor plus 800 bps with a 2% Libor floor. The original issue discount is still to be determined.

Under the company's plan of reorganization, which was confirmed by the court earlier this month, total consolidated pre-petition funded debt of roughly $720 million is expected to be reduced to about $240 million upon emergence.

The company expects to emerge from bankruptcy no later than December.

Hayes Lemmerz is a Northville, Mich.-based maker of automotive and commercial highway wheels.

Landry's finalizes amend, extend

In more loan happenings, Landry's got the required consents to complete the amendment of its credit facility, under which maturities on the revolver and term loan are being extended to November 2013 from May 2011, according to a market source.

Pricing on the extended term loan and revolver debt is Libor plus 600 bps with a 2% Libor floor.

In addition, the amendment increased the revolver size to $75 million from $50 million, and covenants and baskets are being revised to provide more flexibility.

Lenders are being paid a 150 bps amendment fee.

Wells Fargo and Jefferies are the lead banks on the deal.

Landry's being bought

The refinancing (amend and extend) of Landry's credit facility is a condition of the company's pending buyout by Tilman J. Fertitta, chairman, chief executive officer and president of Landry's, for $14.75 per share in cash.

Funding for the buyout will come from $406.5 million, upsized from $390 million, of 11 5/8% senior secured notes that priced on Tuesday at 98.427 to yield 12%.

Closing on the proposed acquisition is expected to take place in the first half of 2010, subject to stockholder approval and regulatory approvals.

However, on Friday, Pershing Square Capital Management LP, a holder of around 9.9% of Landry's shares said in an SC 13D filed with the Securities and Exchange Commission that it plans to oppose the buyout by Fertitta.

Landry's is a Houston-based restaurant company.

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