Kodak breaks; Realogy sees good flow; Morton's tweaks deals; Roundy's, Tronox talk emerges

By Sara Rosenberg

New York, Jan. 26 - Eastman Kodak Co.'s debtor-in-possession credit facility freed up for trading on Thursday afternoon, with the oversubscribed term loan quoted well above its original issue discount price.

Also in trading, Realogy Corp.'s extended strip of bank debt was once again active as investors continued to react favorably to the company's recent bond offering news, with levels higher in the morning but mostly unchanged on the day by the afternoon.

Moving to the primary, Morton's Restaurant Group Inc. made some changes to its credit facility, increasing the size of the term loan and revising the original issue discount as a result of strong oversubscription.

In addition, Roundy's Supermarkets Inc. and Tronox Inc. came out with pricing guidance on their credit facilities as the deals were presented to lenders during market hours, and Jarden Corp. firmed timing on the launch of its incremental debt.

Kodak starts trading

Kodak's 18-month debtor-in-possession credit facility emerged in the secondary market on Thursday, with the $700 million term loan quoted at par 1/8 bid, par 5/8 offered on the open and then it moved up to par 3/8 bid, par 7/8 offered, according to a trader.

Pricing on the term loan is Libor plus 750 basis points with a 1% Libor floor, and it was sold at an original issue discount of 98.

During syndication, the discount tightened from guidance at launch of 97 to 971/2. Also, prior to the bank meeting, price talk on the loan had been Libor plus 850 bps with a 1.5% Libor floor and a discount of 97, but due to strong early demand, the loan was launched at more aggressive pricing.

The $950 million DIP also includes a $250 million revolver priced at Libor plus 325 bps.

Citigroup Global Markets Inc. is the lead bank on the deal that will be used to enhance liquidity and working capital.

Kodak, a Rochester, N.Y.-based provider of imaging technology products and services to the photographic and graphic communications markets, expects to exit Chapter 11 in 2013.

Realogy still active

Realogy's extended strip of 2016 bank debt was stronger in the morning in a good amount of trading volume on the back of the company's bond offering pricing, and then levels settled in a bit by the afternoon, according to a trader.

By late morning, $75 million of the strip had traded, leaving levels at 93¾ bid, 94 1/8 offered, the trader said, and by afternoon, the debt was seen at 93½ bid, 93 7/8 offered. By comparison, on the open the debt was quoted at 93¼ bid, 94¼ offered, and late Wednesday it was 93½ bid, 94 offered. Prior to the news, the extended strip was quoted at 90¼ bid, 91¼ offered

Realogy's rally began after it announced on Wednesday morning that it would issue $918 million of notes to pay down $629 million of first-lien term loans due October 2013, all $133 million drawn under the non-extended revolver due April 2013 and $156 million drawn under the extended revolver due April 2016. With the repayment, the revolver size will be reduced by the equivalent amount.

The Parsippany, N.J.-based provider of real estate and relocation services priced the notes late Wednesday with the $593 million senior secured first-lien debt coming at 7 5/8% and the $325 million senior secured half-lien debt coming at 9%.

Morton's reworks loan

Morton's Restaurant revised its credit facility, increasing the five-year term loan to $200 million from $190 million and decreasing the rollover equity for its buyout by the equivalent amount, according to a market source.

In addition, the original issue discount on the term loan was moved to 97½ from 97, while pricing was left unchanged at Libor plus 725 bps with a 1.5% Libor floor, the source said.

The company's now $215 million senior secured credit facility (B2/BB-), up from $205 million, still provides for a $15 million 41/2-year revolver priced at Libor plus 725 bps with a 1.5% Libor floor.

Recommitments were due at 4 p.m. ET on Thursday.

Jefferies & Co. is the lead bank on the deal.

Fertitta buying Morton's

Morton's Restaurant is being purchased by Tilman J. Fertitta's wholly owned company Fertitta Morton's Restaurants Inc. for $6.90 per share in cash through a tender offer that expires on Jan. 31. Upon the successful completion of the tender offer, Fertitta will acquire all remaining shares through a second-step merger.

Closing is expected in early February, subject to the tender of a majority of shares, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

Leverage through the credit facility will be in the low 3.0 times area.

Morton's is a Chicago-based operator of company-owned upscale steakhouses.

Roundy's sets talk

Roundy's Supermarkets held a bank meeting on Thursday afternoon to launch its proposed $800 million senior credit facility, and shortly before the meeting took place, price talk surfaced, according to a market source.

Both the $125 million five-year revolver and the $675 million seven-year term loan B are talked at Libor plus 500 bps with a 1.25% Libor floor, the source remarked.

Additionally, the B loan is being offered at an original issue discount of 98 and has 101 repricing protection for one year, the source continued.

Commitments are due on Feb. 3.

Roundy's readies IPO

Roundy's is getting the new credit facility in connection with an initial public offering of common stock, and proceeds from both transactions will be used to repay all of the outstanding borrowings under the company's existing credit facility.

As of Oct. 1, the company had $689 million outstanding under its first-lien credit facility and $150 million outstanding under its second-lien loan.

Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are the lead banks on the credit facility and are the underwriters on the IPO.

Roundy's is a Milwaukee, Wis.-based supermarket chain.

Tronox releases guidance

Also holding a bank meeting was Tronox, and its $550 million of six-year term loans (Ba2/BBB-) were launched with talk of Libor plus 375 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

The debt, led by Goldman Sachs & Co. and Deutsche Bank Securities Inc., is comprised of a $425 million funded term loan and a $125 million delayed-draw term loan.

Tronox obtained the debt commitment in connection with its proposed acquisition of Exxaro Resources Ltd.'s mineral sands operations and will use the proceeds to refinance its existing senior term loan.

Closing is expected in the first half of this year, subject to the Securities and Exchange Commission registration timeline, Tronox shareholder approval and customary regulatory approvals.

Tronox leverage

Pro forma for the financing, Tronox's total leverage will be 1.1 times on a standalone basis and 0.8x on a pro forma basis.

Commitments towards the term loans are due on Feb. 3 with closing targeted for Feb. 8.

The loans include a maximum net total leverage ratio and a $100 million accordion feature that is subject to 50 bps most favored nation language.

The delayed-draw term loan is available for borrowing for six months.

Tronox is an Oklahoma City-based producer and marketer of titanium dioxide pigment.

Jarden timing emerges

Jarden will hold a conference call on Monday to launch incremental term loan A and term loan B debt to investors that will be done under the existing credit agreement's accordion feature, according to a market source.

Details on size and pricing are not yet available, the source said. The existing term loan A due March 2016 is priced at Libor plus 225 bps, and the existing term loan B due January 2017 is priced at Libor plus 300 bps.

Barclays Capital Inc. is the sole lead arranger on the deal that will be used, along with cash on hand, to fund a modified Dutch auction for up to $500 million of the company's common stock at a price of $30 to $33 per share. The offer expires on Feb. 23, and is subject to completion of the debt financing.

With the new loans, Jarden, a Rye, N.Y.-based consumer products company, will also be launching an amendment to its existing credit facility, but specifics on the amendment are net yet out, the source added.

PennantPark fills out

In other news, PennantPark Investment Corp.'s $325 million three-year revolver is oversubscribed, and the leads are still waiting on a couple of tickets that are expected to come in by next week, according to a market source.

The revolver is talked at Libor plus 275 bps with a 50 bps unused fee, and has a one-year term out period.

SunTrust Robinson Humphrey Inc. and J.P. Morgan Securities LLC are leading the deal.

Proceeds will be used to refinance an existing $315 million revolver, and at close, about 70% plus of the new deal will be funded.

PennantPark is a New York-based investment company that has elected to be treated as a business development company. As of Sept. 30, the company's portfolio totaled around $830 million.

Post oversubscribed

Post Holdings Inc. is another deal that has reached oversubscription levels at initial terms, which is where the deal is expected to finalize, and the plan is to give out allocations sometime next week, a market source told Prospect News.

The $350 million five-year senior secured facility (Baa3/BB) consists of a $175 million undrawn revolver and a $175 million term loan A, both priced at Libor plus 200 bps based on a leverage grid.

Barclays Capital Inc., PNC Capital Markets LLC, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC are leading the deal that will be used, along with $775 million of 10-year senior notes, to fund a distribution to Ralcorp Holdings Inc. in connection with Post's spin-off from Ralcorp.

Post is a St. Louis-based ready-to-eat cereal manufacturer.

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