Kinetic, Spectrum, Endurance break; Chesapeake revises OID; Renaissance, Confie firm terms

By Sara Rosenberg

New York, Nov. 6 - Kinetic Concepts Inc.'s credit facility freed up for trading on Tuesday, with the U.S. term loan debt quoted above par, and Spectrum Brands Holdings Inc. and Endurance International Group (EIG Investors Corp.) emerged in the secondary as well.

Moving to the primary, Chesapeake Energy Corp. widened the discount on its term loan, Renaissance Learning Inc. set the spread on its term loan B at the tight end of guidance, and Confie Seguros finalized the original issue discount on its first-lien term loan at the wide side of talk.

Also, FleetPride Inc. (FPC Holdings Inc.) released price talk on its first- and second-lien term loans now that ratings from both Moody's Investors Service and Standard & Poor's have been announced, and Sterling Infosystems Inc. disclosed guidance with launch.

Furthermore, Phoenix Services LLC (Metal Services LLC), Osmose Holdings Inc., Equinox Holdings Inc. and Fibertech Networks announced new deals, Town Sports International Holdings Inc. revealed add-on and amendment plans, and Ardent Health Services revealed timing and structure on its facility.

Kinetic hits secondary

Kinetic Concepts' credit facility broke for trading on Wednesday morning, with the $1,618,000,000 term loan C-1 due May 4, 2018 quoted at par ¼ bid, par 5/8 offered and the $323 million term loan C-2 due Nov. 4, 2016 quoted at par 1/8 bid, according to a trader.

The term loan C-1 is priced at Libor plus 425 basis points, after firming recently at the wide end of the Libor plus 400 bps to 425 bps talk, and the term loan C-2 is priced at Libor plus 375 bps, after firming at the tight end of the Libor plus 375 bps to 400 bps guidance.

The company is also getting a €248 million term loan C-1 due May 4, 2018 that is priced at Euribor plus 450 bps. The spread came at the high end of the Euribor plus 425 bps to 450 bps talk.

All of the term loans include a 1.25% floor and 101 soft call protection for one year, and were sold at par.

Kinetic lead banks

Kinetic Concepts' $2.5 billion senior secured credit facility, which also includes a $200 million revolver due Nov. 4, 2016, is being led by Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets LLC and UBS Securities LLC.

Proceeds are being used to reprice the company's existing senior credit facility.

When completed last year, the U.S. 61/2-year term loan B was sized at $1.63 billion and priced at Libor plus 575 bps with a 1.25% Libor floor, the euro 61/2-year term loan B was sized at €250 million and priced at Euribor plus 575 bps with a 1.25% floor and the five-year term loan C was sized at $325 million and priced at Libor plus 525 bps with a 1.25% Libor floor.

Kinetic Concepts is a San Antonio-based medical technology company.

Spectrum frees up

Spectrum Brands' term loan B broke too, with levels on the $700 million U.S. tranche quoted at par bid, 101 offered, according to a market source.

Pricing on the U.S. loan is Libor plus 325 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.

The company is also getting a C$100 million term loan B that is priced at BA plus 375 bps with a 1.25% floor, and sold at a discount of 99. This debt has 101 soft call protection for one year as well.

During syndication, pricing on the U.S. tranche was reduced from talk of Libor plus 350 bps to 375 bps and pricing on the Canadian tranche firmed at wide end of the BA plus 350 to 375 bps guidance.

The full spread and floor on the $800 million of senior secured term loans (Ba3/B/BB-) is payable starting on the earlier of the closing date and Dec. 1.

Spectrum funding acquisition

Proceeds from Spectrum Brands' credit facility, along with $1.09 billion of senior unsecured bonds, will finance the $1.4 billion purchase of the hardware and home improvement group of Stanley Black & Decker Inc. and some assets of Tong Lung Metal Industry Co. Ltd. from Stanley.

Deutsche Bank Securities Inc. and Barclays are the lead banks on the credit facility.

Closing on the hardware and home improvement group acquisition is expected in the first quarter of 2013, and the Tong Lung transaction is expected to close in the second quarter of fiscal 2013.

Spectrum Brands is a Madison, Wis.-based consumer products company.

Endurance starts trading

Another deal to break was Endurance International, with its $800 million seven-year first-lien term loan (B1/B) quoted at 99¾ bid, par ¼ offered, and its $315 million 71/2-year second-lien term loan (Caa1/CCC+) quoted at 99½ bid, par ½ offered, according to a market source.

First-lien term loan pricing is Libor plus 500 bps and second-lien pricing is Libor plus 900 bps. Both tranches have a 1.25% floor and were sold at 99. There is 101 soft call protection for one year on the first-lien and call protection of 103 in year one, 102 in year two and 101 in year three on the second-lien.

During syndication, a senior secured net leverage test was added to the deal that had originally been covenant-light, a cash cap for net leverage calculations of $50 million was added, the step-downs on the excess cash flow sweep were trimmed to 25% at 3.5 times and 0% at 3.0 times, the 18 month sunset on MFN for incrementals was removed, the incremental term loan freebie basket was reduced to $100 million from $150 million, and the leverage test on first-lien incremental was cut to 3.75 times from 4 times.

Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc. and Goldman Sachs & Co. are leading the deal that will be used to refinance existing debt and fund a dividend.

Endurance is a Burlington, Mass.-based provider of web hosting and online services.

PepperMill bid above OID

Peppermill Casinos Inc.'s $250 million term loan B was seen quoted in the secondary market on Tuesday at 97 bid, in line with where it freed up for trading on Monday, according to a market source.

Pricing on the B loan is Libor plus 600 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 96. There is call protection of 103 in year one, 102 in year two and 101 in year three.

During syndication, the term loan B was downsized from $275 million, pricing was increased from talk of Libor plus 450 bps to 475 bps, the discount was changed from 99 and the call protection was sweetened from just 101 soft call for one year.

The company's $600 million credit facility also includes a $200 million term loan A that was upsized from $175 million and a $150 million revolver, both priced at Libor plus 375 bps.

Wells Fargo Securities LLC is leading the deal that is being used to refinance existing debt.

Peppermill Casinos is a Reno, Nev.-based casino operator with multiple properties.

Chesapeake tweaks OID

Switching to the primary, Chesapeake Energy modified the original issue discount on its $2 billion unsecured five-year covenant-light term loan (Ba3) to 98 from the 99 area, but left pricing at Libor plus 450 bps with a 1.25% Libor floor, according to a market source.

As before, the loan is non-callable for one year, then at 102 in year two and 101 in year three.

Bank of America Merrill Lynch, Goldman Sachs & Co. and Jefferies Finance LLC are leading the deal that will be used to repay an existing term loan and revolver borrowings.

Chesapeake Energy is an Oklahoma City-based producer of natural gas and oil and natural gas liquids and is a driller of new wells.

Renaissance sets coupon

Renaissance Learning firmed pricing on its $230 million six-year term loan B at Libor plus 450 bps, the low end of the Libor plus 450 bps to 475 bps talk, and left the 1.25% Libor floor, original issue discount of 99 and 101 soft call protection for one year intact, according to a market source.

Furthermore, the term loan B saw the addition of a step-down to Libor plus 425 bps when leverage falls below 3.0 times, the source remarked.

The company's $250 million credit facility (B2/B+), which is expected to allocate this week, also includes a $20 million revolver.

RBC Capital Markets LLC and BMO Capital Markets Corp. are leading the deal that will be used to refinance existing debt.

In connection with the refinancing, the company's existing first-lien term loan will be repaid at par and its existing second-lien term loan will be repaid at 103.

Renaissance Learning is a Wisconsin Rapids, Wis.-based provider of technology-based school improvement and student assessment programs for K-12 schools.

Confie finalizes discount

Confie Seguros set the original issue discount on its $252 million first-lien term loan (B2/B-) at 981/2, the high end of the 98½ to 99 talk, while keeping pricing at Libor plus 525 bps with a 1.25% Libor floor, a market source said. The 101 soft call protection for one year was unchanged.

Meanwhile, the company's $110 million second-lien term loan (Caa2/CCC) firmed at talk at Libor plus 900 bps with a 1.25% Libor floor and an original issue discount of 98, and includes call protection of 103 in year one, 102 in year two and 101 in year three.

Also part of the company's $437 million credit facility is a $75 million revolver (B2/B-).

RBC Capital Markets and GE Capital Markets are leading the transaction that will be used to help fund the purcahse of the company by ABRY Partners from Genstar Capital.

Confie Seguros, a New York-based provider of personal insurance, expects to allocate its credit facility this week, the source added.

FleetPride discloses talk

In more primary news, FleetPride came out with price talk on its term loans in connection with the release by Standard & Poor's of ratings on the debt, according to a market source. Ratings from Moody's Investors Service had been announced late last week.

The $425 million seven-year covenant-light first-lien term loan (B1/B) is being talked at Libor plus 375 bps with a 1.25% Libor floor and an original issue discount of 99, the source said.

As for the $200 million 71/2-year covenant-light second-lien term loan (Caa1/CCC+), it is being talked at Libor plus 775 bps to 800 bps with a 1.25% Libor floor, an original issue discount of 98½ and call protection of 103 in year one, 102 in year two and 101 in year three, the source added.

Also included in the $775 million credit facility is a $150 million ABL revolver.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, RBC Capital Markets, Barclays and UBS Securities LLC are leading the deal that launched with a call on Oct. 31.

Proceeds will help fund TPG Capital's purchase of the company from Investcorp, which is expected to close this quarter, subject to receipt of applicable regulatory approvals.

FleetPride is a The Woodlands, Texas-based retailer of heavy-duty truck and trailer parts.

Sterling releases guidance

Sterling Infosystems held a call on Tuesday to launch its $179.2 million credit facility, and price talk came out at Libor plus 450 bps with a 1.25% Libor floor and an original issue discount of 993/4, according to a market source.

The facility consists of a $20 million revolver due Feb. 1, 2017 and a $159.2 million term loan due Feb. 1, 2018 that has 101 soft call protection for one year.

GE Capital Markets and RBS Citizens are leading the deal that will be used to reprice/refinance an existing revolver and term loan from Libor plus 575 bps with a 1.5% Libor floor.

Leverage is 3.2 times senior and total.

Sterling Infosystems is a New York-based background screening company.

Phoenix readies deal

Phoenix Services joined the forward calendar, setting a bank meeting for 3 p.m. ET in New York on Wednesday to launch a $305 million credit facility, according to a market source.

The facility consists of a $30 million four-year revolver and a $275 million 41/2-year first-lien term loan that has 101 repricing protection for one year, the source said. Price talk is not yet available.

Credit Suisse Securities (USA) LLC and Morgan Stanley Senior Funding Inc. are leading the transaction that will be used to refinance existing debt.

Phoenix Services is a Kennett Square, Pa.-based provider of steel mill services and a processor of slag and co-products from steel mills and foundries.

Osmose plans recap

Osmose Holdings scheduled a call for 11 a.m. ET on Wednesday to launch a $400 million credit facility that will be used to refinance existing debt, and fund a dividend and an acquisition, according to a market source.

The facility consists of a $45 million five-year revolver, and a $315 million six-year first-lien covenant-light term loan and $40 million delayed-draw for three months term loan both talked at Libor plus 550 bps with a 1.25% Libor floor, an original issue discount that is still to be determined and 101 soft call protection for one year, the source said.

Credit Suisse Securities (USA) LLC is the lead bank on the deal.

Osmose is a Buffalo, N.Y.-based provider of wood preservation technology as well as utility and railroad asset management.

Equinox sets launch

Equinox Holdings is planning a bank meeting for 1:30 p.m. ET on Wednesday to launch an $800 million credit facility, according to a market source.

The facility consists of a $100 million five-year revolver, a $500 million seven-year first-lien term loan and a $200 million 71/2-year second-lien term loan, the source remarked.

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., Goldman Sachs & Co. and Citigroup Global Markets Inc. are leading the deal that will be used to refinance existing debt.

Equinox is a New York-based exercise and fitness company.

Fibertech joins calendar

Fibertech Networks scheduled a bank meeting for Thursday afternoon to launch a $430 million credit facility that is comprised of a $50 million revolver and a $380 million covenant-light term loan B, according to a market source.

TD Securities (USA) LLC is the bookrunner and lead arranger on the deal, and M&T Securities Inc. and UBS Securities LLC are co-arrangers.

Proceeds will be used to refinance existing debt and fund a dividend.

Fibertech is a Rochester, N.Y.-based provider of fiber optic bandwidth services.

Town Sports add-on

Town Sports will host a call at 11 a.m. ET on Wednesday to launch a $75 million add-on term loan and an amendment to its existing senior secured credit facility, according to a market source.

Deutsche Bank Securities Inc. is leading the deal that is expected to close later this month.

Proceeds from the add-on will be used, along with cash on hand, to pay a roughly $92 million, or about $3.75 per share, special one-time cash dividend to stockholders.

Meanwhile, the amendment would modify the restricted payments covenant to allow for the dividend, waive any required excess cash flow prepayment for the period ending Dec. 31, 2012 and permit adjustments to the calculation of consolidated EBITDA.

Commitments and consents will be due on Nov. 14, the source remarked.

Town Sports is a New York-based owner and operator of fitness clubs.

Ardent details surface

Ardent Health scheduled a bank meeting for Thursday to launch its previously announced $1.02 billion senior secured credit facility, which is now known to include a $120 million five-year revolver, a $725 million 51/2-year first-lien term loan and a $175 million six-year second-lien term loan, sources said.

The first-lien term loan has 101 soft call protection for one year, and the second-lien term loan has call protection of 103 in year one, 102 in year two and 101 in year three, sources added.

Bank of America Merrill Lynch, Barclays, GE Capital Markets and Nomura are leading the deal that will be used to refinance Ardent's existing senior secured credit facility and its portion of the acquisition of Baptist St. Anthony's Health System (BSA), based in Amarillo, Texas.

Ardent and Baptist Community Services formed a new joint venture to acquire BSA, with Ardent owning 80% of the joint venture and Baptist owning 20%.

Ardent, a Nashville, Tenn.-based owner and operator of hospitals, a member health plan, multi-specialty physician groups and retail pharmacies, expects the acquisition to close in January 2013.

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