Hargray Communications, Custom Ecology hit secondary; Armacell, Valeant revise deals

By Sara Rosenberg

New York, June 25 - Hargray Communications' credit facility freed up for trading during Tuesday's market hours, and Custom Ecology Inc. hit the secondary market as well.

Moving to the primary, Armacell reworked its credit facility, downsizing the U.S. first-lien term loan and upsizing the euro first-lien term loan, lifting pricing and widening original issue discounts on all first- and second-lien term debt, and sweetening call protection on the second-lien debt.

Also, Valeant Pharmaceuticals International Inc. raised the coupon on its term loan B and revised the original issue discount on the tranche, as well as on a term loan A piece.

Hargray breaks

Hargray Communications' credit facility made its way into the secondary market on Tuesday, with the $305 million term loan B quoted at 99½ bid, par offered, according to a trader.

Pricing on the B loan is Libor plus 375 basis points with a 1% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, pricing on the loan was lifted from Libor plus 350 bps and the call protection was extended from six months.

The company's $330 million credit facility (B2/B+) also includes a $25 million revolver.

RBC Capital Markets and Credit Suisse Securities (USA) LLC are leading the deal that is being used to refinance existing debt and fund a modest dividend to shareholders.

Hargray is a provider of triple-play data, video and voice services for southeastern South Carolina and northeastern Georgia.

Custom Ecology tops OID

Custom Ecology's credit facility also began trading, with the $120 million six-year term loan seen at 99¼ bid, according to a market source.

Pricing on the term loan is Libor plus 550 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

Recently, pricing on the term loan was flexed up from Libor plus 500 bps.

The company's new $130 million credit facility (B3/B-) also includes a $10 million five-year revolver.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that is being used to refinance existing debt.

Leverage is 3.6 times.

Custom Ecology is a Walker, La.-based industrial and hazardous waste transporter.

BWIC announced

In more secondary happenings, a roughly $212 million Bid-Wanted-In-Competition surfaced on Tuesday and market participants were given a deadline of 10 a.m. ET on Wednesday to place their bids, according to a trader.

Some of the larger pieces of debt on offer include Charter Communications Inc.'s term loan, Hub International Ltd.'s extended term loan, Infor US Inc.'s term loan B-2, J. Crew Group Inc.'s term loan B-1, Lightower Fiber LLC's term loan, LPL Finanacial Holdings Inc.'s term loan, MGM Resorts International's term loan B, Pinnacle Foods Finance LLC's term loan, PVH Corp.'s term loan B, Sheridan Holdings Inc.'s first-lien term loan and Zayo Group LLC's term loan.

There are about 35 issuers in the portfolio, the trader added.

Second BWIC emerges

Another BWIC came out in the morning, with this one sized at around $148 million and bids due at 11 a.m. ET on Wednesday, a trader remarked.

The larger pieces of debt in the portfolio include Biomet Inc.'s extended dollar term loan, Boyd Gaming's term loan, Community Health Systems Inc.'s extended term loan, Flextronics International Ltd.'s term loan A, iStar Financial Inc.'s term loan and Valeant Pharmaceuticals' term loan, the trader continued.

There are roughly 19 issuers in the BWIC.

Armacell restructures

Over in the primary, Armacell reduced its U.S. seven-year first-lien covenant-light term loan (B2/B) to $185 million from $210 million, raised pricing to Libor plus 450 basis points from talk of Libor plus 350 bps to 375 bps and revised the discount price to 98½ from 991/2, according to a market source.

On the flip side, the euro seven-year first-lien covenant-light term loan (B2/B) was increased to €120 million from €100 million, pricing was changed to Euribor plus 475 bps from talk of Euribor plus 375 bps to 400 bps and the discount widened to 98½ from 991/2, the source said.

Furthermore, pricing on the $85 million 71/2-year second-lien covenant-light term loan (Caa2/CCC+) was increased to Libor plus 850 bps from talk of Libor plus 725 bps to 750 bps, the original issue discount was sweetened to 97 from 99 and the debt is now non-callable for one year, then at 102 in year two and 101 in year three, as opposed to having call protection of 102 in year one and 101 in year two.

As before, all of the term loans have a 1% floor, and the first-lien debt has 101 repricing protection for one year.

Armacell reworks terms

In addition to the size changes and pricing adjustments, Armacell increased the excess cash flow sweep to 75% from 50%, with step-downs to 50% at 4½ times total net leverage, 25% at 4 times net leverage and 0% at 3½ times net leverage, the source continued.

Also, the 18-month MFN sunset was eliminated and the incurrence ratio for unlimited first-lien incremental facilities was reduced to 3½ times first-lien net leverage from 4 times.

Recommitments for the credit facility, which provides for a $65 million revolver as well, are due at noon ET on Wednesday, the source added.

Credit Suisse Securities (USA) LLC, BNP Paribas Securities Corp. and HSBC Securities (USA) Inc. are leading the deal that will be used to help fund the buyout of the company by Charterhouse Capital Partners.

Armacell is a manufacturer of engineered foams.

Valeant tweaks deal

Valeant Pharmaceuticals lifted the spread on its $3.55 billion seven-year term loan B to Libor plus 375 bps from talk of Libor plus 325 bps to 350 bps and widened the original issue discount to 98½ from 991/2, according to a market source.

As before, the term loan B has a 0.75% Libor floor, 101 soft call protection for six months and a ticking fee of half the spread starting after 30 days and the full spread after 60 days.

Meanwhile, the company's $500 million term loan A due April 2016 saw its discount price move to 98½ from talk of 99 to 991/2, while pricing was kept at Libor plus 225 bps, the source said.

Recommitments for the $4.05 billion deal (Ba1/BB) are due at the end of the day on Wednesday and allocations are expected to go out on Thursday.

Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Barclays, RBC Capital Markets and Morgan Stanley Senior Funding Inc. are leading the transaction.

Valeant buying Bausch

Proceeds from Valeant's term loans, $3,225,000,000 of senior unsecured notes and $2 billion of new equity will be used to fund the $8.7 billion acquisition of Bausch + Lomb Holdings Inc.

Of the total purchase price, about $4.5 billion will go to an investor group led by Warburg Pincus and about $4.2 billion will be used to repay Bausch + Lomb's outstanding debt.

Closing is expected in the third quarter, subject to customary conditions and regulatory approvals.

In connection with this transaction, Valeant plans to amend its existing revolving credit facility to increase the size to $1 billion from $450 million and extend the maturity to April 20, 2018 from April 20, 2016.

Valeant is a Laval, Quebec-based specialty pharmaceutical company. Bausch + Lomb is a Rochester, N.Y.-based maker of contact lenses, ophthalmic surgical devices and instruments and ophthalmic pharmaceuticals.

Websense closes

In other news, the buyout of Websense Inc. by Vista Equity Partners for $24.75 per share has been completed, according to a news release.

For the transaction, Websense got a new $615 million senior secured credit facility consisting of a $40 million five-year revolver (Ba3/B+), a $350 million seven-year covenant-light first-lien term loan (Ba3/B+) and a $225 million 71/2-year covenant-light second-lien term loan (Caa1/CCC+).

Pricing on the first-lien term loan is Libor plus 350 bps with a step-down to Libor plus 325 bps when first-lien net leverage is less than 3.25 times. There is a 1% Libor floor and 101 soft call protection to one year, and the debt was sold at an original issue discount of 993/4.

The second-lien term loan is priced at Libor plus 725 bps with a 1% Libor floor and was sold at a discount of 991/2. The tranche has hard call protection of 102 in year one and 101 in year two.

Websense lead banks

J.P. Morgan Securities LLC, RBC Capital Markets and Guggenheim Partners led Websense's new credit facility.

During syndication, pricing on the first-lien loan firmed at the low end of the Libor plus 350 bps to 375 bps talk, the discount was changed from 99½ and the soft call was extended from six months. Also, the second-lien loan pricing was reverse flexed from Libor plus 750 bps and the discount was tightened from 99.

Websense is a San Diego-based provider of web security, e-mail security, mobile security and data loss prevention.

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