Mediacom tweaks deal, breaks; PVH may downsize; Del Taco revises; Scotsman cuts spread

By Sara Rosenberg

New York, April 23 - Mediacom increased the size of its new term loan debt, finalized the original issue discount at the low end of talk while adding soft call protection, and then proceeded to free the deal up for trading.

In other news, chatter is that Phillips-Van Heusen Corp. will be coming out with a downsizing to its term loan B and adding more cash to its balance sheet now that its bond and equity offerings were upsized.

Also, Del Taco LLC launched its credit facility to investors on Friday with slightly different tranching than what was originally expected, Scotsman Industries Inc. reduced pricing and the Libor floor on its oversubscribed term loan, and NextMedia Operating Inc. and U.S. Renal Care Inc. began circulating price talk on their proposed deals as they are getting ready for their upcoming launch.

Mediacom ups size

Mediacom Broadband LLC increased the size of its term loan F to $600 million from $550 million, while Mediacom LLC's term loan E size was left unchanged at $250, according to a market source.

Both the term loan F and the term loan E are priced at Libor plus 300 basis points with a 1.5% Libor floor, which is in line with initial talk.

And, both term loans were sold to investors at an original issue discount of 991/2, the tight end of the 99 to 99½ guidance that was provided at launch, the source said.

In connection with the upsizing and the firming up of the discount, 101 soft call protection for one year was added to both term loans, the source continued.

Mediacom breaks

Once the structure on Mediacom's credit facility (Ba3/BB-) firmed up, the lead banks were able to give out allocations and free the deal up for trading.

The Mediacom Broadband term loan and the Mediacom LLC term loan were both quoted at 99 7/8 bid, par 3/8 offered on the break and then they edged up to par bid, par ½ offered, traders told Prospect News.

JPMorgan and Bank of America are the lead banks on the deal, with JPMorgan the left lead on Mediacom LLC and Bank of America the left lead on Mediacom Broadband.

Mediacom extending revolver

In addition to the new term loan, Mediacom LLC is also getting a $200 million revolver due in 2014 that is basically just an extension of its existing revolver due in 2011.

Pricing on the extended revolver is based on a leverage grid.

Proceeds from the new term loans will be used to refinance existing debt and for general corporate purposes. As a result of the upsizing, more existing revolver borrowings will be paid down, the source added.

Mediacom LLC and Mediacom Broadband are wholly owned subsidiaries of Mediacom Communications Corp., a Middletown, N.Y.-based developer of cable systems to provide entertainment, information and telecommunications services.

Phillips-Van Heusen mulls reduction

Phillips-Van Heusen is rumored to be planning to downsize its $1.5 billion six-year term loan B as a result of upsizings to both its bond and common stock offering. The amount of the B loan reduction, however, is still to be determined, according to a market source.

The 7 3/8% senior notes due 2020 ended up sized at $600 million, up from a most recent size of $525 million, and the company sold $332.5 million of common equity comprised of 5 million shares at a price of $66.50 per share, up from a most recently planned size of $275 million.

When word of the transactions first hit the market, it was thought that the bonds would be sized at $600 million and the common stock offering would be $200 million. However, prior to launching, the bond size was reduced by $75 million and the planned equity deal was increased by the equivalent amount.

In addition to taking out some term loan B debt, the extra proceeds from the bond and stock upsizings will be used to add more cash to the company's balance sheet, the source added.

Phillips-Van Heusen B loan pricing

Phillips-Van Heusen's heavily oversubscribed term loan B is priced at Libor plus 300 bps on the U.S. piece and Euribor plus 325 bps on the euro piece, with a 1.75% Libor floor and an original issue discount of 99½ on the entire tranche.

On Thursday, pricing on the U.S. term loan B was lowered from initial talk of Libor plus 325 bps to 350 bps, pricing on the euro term loan B was lowered from talk of Euribor plus 350 bps to 375 bps, and the original issue discount on both pieces was tightened from 99.

The original target was for the term loan B to be two-thirds dollar and one-third euro. The actual breakdown, however, has yet to firm up.

Commitments towards the term loan B are due on Monday at 5 p.m. ET, after being accelerated from Wednesday.

Phillips-Van Heusen pro rata details

Phillips-Van Heusen's $2.45 billion senior secured credit facility (Ba2/BBB) also includes a $450 million five-year revolver and a $500 million five-year term loan A, with both tranches talked at Libor plus 300 bps on the U.S. pieces and at Euribor plus 325 bps on the foreign pieces.

The term loan A has a 1.75% Libor floor, while the revolver has no floor, and upfront fees on the two tranches are 100 bps on allocation for a $40 million commitment and 50 bps on allocation for a $20 million commitment.

The revolver is a multi-currency deal and the term loan A is expected to be 50% dollars and 50% euro.

A senior managing agent round for the revolver and term loan A commenced in March, and that process, which wrapped up around the time of the retail launch, resulted in 10 banks signing on to agent roles.

Commitments towards the pro rata loans are due on Wednesday.

Phillips-Van Heusen buying Hilfiger

Proceeds from Phillips-Van Heusen's credit facility, bonds and stock will be used to help fund the acquisition of Tommy Hilfiger BV from Apax Partners LP for €2.2 billion, or about $3 billion, plus the assumption of €100 million in liabilities, and to refinance Phillips-Van Heusen's $300 million of existing senior unsecured notes due in 2011 and 2013.

The consideration to be paid to Apax includes €1.924 billion in cash and €276 million in Phillips-Van Heusen common stock.

Barclays Capital and Deutsche Bank are the global debt coordinators and bookrunners on the credit facility, with Barclays the left lead. Other bookrunners include Bank of America, Credit Suisse and RBC Capital Markets.

New York-based Phillips-Van Heusen and Tommy Hilfiger are apparel companies.

Del Taco reworks structure

Del Taco held its bank meeting on Friday morning to kick off syndication on its proposed credit facility, and at the launch, lenders were presented with a slightly different structure than the one that was being circulated previously, according to an informed source.

The facility was launched as a $35 million revolver and a $160 million term loan, whereas before, it was expected that the revolver would be $40 million and the term loan would be $150 million, the source said.

"Really just taking some borrowings out of the [revolver] and into the term loan," the source added.

Del Taco price talk

Unchanged is the price talk on Del Taco's term loan, which is Libor plus 450 bps with a 2% Libor floor and an original issue discount of 98 to 99, based on an expected mid-single B rating.

Wells Fargo is the left lead bank on the now $195 million, up from $190 million, credit facility, and GE Capital signed on as a co-lead.

The Lake Forest, Calif.-based operator and franchiser of restaurants will use proceeds to refinance existing debt.

Scotsman modifies pricing

Scotsman Industries came out with changes to its $115 million term loan, including lowering pricing, adding a step-down and cutting the Libor floor, as a result of strong demand, according to a market source.

The term loan is now priced at Libor plus 425 bps, down from Libor plus 450 bps, and the spread can step down to Libor plus 400 bps when total net leverage is less than 2.50 times, the source said.

In addition, the Libor floor was lowered to 1.5% from 1.75%, the source continued, while the original issue discount was left at 99.

Recommitments were due no later than 5 p.m. ET on Friday.

GE Capital and UBS are the lead arrangers on the $145 million deal, which also includes a $30 million revolver.

The Vernon Hills, Ill.-based manufacturer of commercial ice machines and related products will use the credit facility to refinance existing debt and fund a dividend.

NextMedia floats talk

Pricing guidance on NextMedia's proposed $135 million six-year term loan (B3/B+) started making its way around the market as the deal is gearing up to launch with a bank meeting on Wednesday, according to a market source.

The term loan is being talked at Libor plus 700 bps with a 2% Libor floor and an original issue discount of 98, the source said.

In addition, the company is getting a $10 million first-out revolver (Ba3) that is not being syndicated.

Credit Suisse and Bank of America are the lead banks on the deal that will be used to help settle existing claims in connection with the company's emergence from Chapter 11.

NextMedia is a Greenwood Village, Colo.-based radio station operator.

U.S. Renal guidance surfaces

U.S. Renal Care started circulating price talk of Libor plus 450 bps to 475 bps with a 1.75% Libor floor on its proposed $155 million credit facility ahead of its Wednesday launch, according to a market source.

RBC is the lead bank on the deal that consists of a $30 million five-year revolver and a $125 million six-year term loan.

The original issue discount on the term loan is still to be determined, the source said.

Financial covenants include a maximum total leverage ratio, a minimum interest coverage ratio and a minimum fixed-charge coverage ratio.

U.S. Renal getting mezzanine debt

In addition to the credit facility, U.S. Renal is obtaining $47.5 million of mezzanine debt priced at 14%, of which 12% is cash and 2% is PIK, according to an SC TO-T filed recently with the Securities and Exchange Commission.

Proceeds from the new debt will be used to help fund the acquisition of Dialysis Corp. of America Inc. in a transaction valued at about $112 million.

Under the terms of the agreement, U.S. Renal Care will commence a tender offer for all of the outstanding common shares of Dialysis Corp. of America for $11.25 per share in cash, followed by a merger to acquire all remaining outstanding shares at the same cash price paid in the tender offer.

The transaction is expected to close in May.

U.S. Renal Care is a Plano, Texas-based provider of outpatient dialysis services. Dialysis Corp. of America is a Linthicum, Md.-based provider of outpatient kidney dialysis centers.

Willbros still working

The commitment deadline for Willbros Group Inc.'s credit facility hit on Friday, and while that timing was not expected to be officially changed, the syndication process is anticipated to go into the week of April 26 in order to allow for a few stragglers to get involved, according to a market source.

The $475 million senior credit facility (B2/BB-) consists of a $300 million four-year term loan B and a $175 million three-year revolver.

Price talk on the term loan B is Libor plus 450 bps to 500 bps with a 2% Libor floor and an original issue discount of 98 to 981/2. Pricing can step down by 50 bps after an interim period, so if it firms at Libor plus 450 bps, the step-down will be to Libor plus 400 bps, and if it firms at Libor plus 500 bps, the step-down will be to Libor plus 450 bps.

Meanwhile, the revolver is being talked at Libor plus 425 bps, with a step-down to Libor plus 375 bps after an interim period. Upfront fees on the revolver range from 112.5 bps to 137.5 bps, based on commitment size.

Willbros buying InfastruX

Proceeds from Willbros' credit facility will be used to help fund the acquisition of InfrastruX Group Inc. for cash of $360 million and 7.9 million of new Willbros shares.

Pro forma for the transaction, Willbros' estimated total debt to EBITDA in 2010 is 2.6 times and estimated net debt to EBITDA is 1.7 times.

Crédit Agricole Corporate and Investment Bank (formerly Calyon) and UBS Securities are the joint bookrunners on the term loan B, and Crédit Agricole is the bookrunner on the revolver. Scotia Bank and Natixis joined on to the credit facility at the agent tier.

Willbros is a Houston-based independent contractor for the oil, gas, power, refining and petrochemical industries. InfrastruX is a Seattle, Wash.-based provider of electric power and natural gas transmission and distribution infrastructure 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.