Cengage softens after paydown; Aptalis breaks; Landry's, Goodyear, Key Safety revise deals

By Sara Rosenberg

New York, April 11 - Cengage Learning Acquisitions Inc.'s extended term loan weakened in trading on Wednesday after a planned partial repayment was made and extension fees were received, and the non-extended term loan was softer as well.

Also, Aptalis Pharma Inc. (formerly known as Axcan Holdings Inc.) saw its incremental term loan B-2 free up for trading above its original issue discount price, and Emdeon Inc.'s term loan was steady with repricing news.

Over in the primary, Landry's Inc. made a round of changes to its credit facility, upsizing its term loan B while raising the coupon, downsizing its revolver and removing a term loan A from the capital structure.

In addition, Goodyear Tire & Rubber Co. widened pricing and discount on its second-lien term loan, and Key Safety Systems Inc. revised the original issue discount on its add-on loan.

Furthermore, On Assignment Inc. and Constellation Brands Inc. disclosed pricing guidance on their credit facilities, and MegaPath Corp. revealed original issue discount talk on its term loan, as all of these deals were launched to investors during the session.

And, Osmose Holdings Inc. began floating talk on its upcoming deal, and AutoTrader.com added two bookrunners to its recently launched incremental pro rata loans, and there is chatter that some others may join in that role by the end of this week.

Cengage extended retreats

Cengage's extended term loan B fell in trading on Wednesday as a roughly $485 million pay down was made on the tranche, leaving about $1.3 billion outstanding, and lenders received their 15 bps extension fee, according to a trader. In addition to the extension fee, lenders got a 10 bps amendment fee.

The extended term loan B was quoted at 88½ bid, 89½ offered early on Wednesday and then continued to decline to 87 bid, 88 offered, the trader said. By comparison, on Tuesday, the loan was quoted at 91½ bid, 92½ offered.

Meanwhile, the company's non-extended term loan weakened too, moving to 90¼ bid, 91¼ offered from 91¾ bid, 92¾ offered, the trader added.

Pricing on the extended loan due July 2017 is Libor plus 550 basis points, and non-extended pricing is Libor plus 225 bps on a tranche due in 2014 and Libor plus 375 bps on an incremental tranche due in 2014.

Cengage paydown

To fund the repayment of some of the extended term loan B borrowings, which was a condition of the extension, Cengage sold $725 million of first-lien senior secured notes last week at par to yield 11½%.

The company planned to use the incremental proceeds from the notes to repay existing first-lien debt, but if unable to do so, the funds will be used for general corporate purposes, which may include prepayments of existing senior unsecured notes, senior subordinated notes or holdco notes.

Cengage is a Stamford, Conn.-based provider of teaching, learning and research services for the academic, professional and library markets.

Aptalis starts trading

Aptalis Pharma's $200 million five-year senior secured incremental term loan B-2 (B2/B+) hit the secondary market on Wednesday, with levels quoted at 98 3/8 bid, 98 7/8 offered, according to a trader.

Pricing on the Bridgewater, N.J.-based specialty pharmaceutical company's loan is Libor plus 400 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 98.

The spread and the floor are the same as the existing term loan B that was done in early 2011, but that debt was sold at an original issue discount of 991/2.

Bank of America Merrill Lynch, Barclays Capital Inc. and RBC Capital Markets LLC are the lead banks on the deal that will be used to prepay $195 million of 12¾% senior unsecured notes due 2016.

With the incremental loan, the company is amending its credit facility and lenders are receiving a 50 bps consent fee, which was recently increased from 25 bps.

Emdeon holds steady

Emdeon's term loan was flat at 101¼ bid, 101¾ offered in trading with news of a planned repricing an $60 million add-on term loan, according to a trader.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Barclays Capital Inc. are the lead banks on the deal, and proceeds from the add-on loan would be used for general corporate purposes, including potential acquisitions.

A launch date is not yet available, a source said, but closing is expected to occur this month.

Emdeon is a Nashville-based provider of health care revenue and payment cycle management and clinical information exchange services.

BWIC surfaces

A roughly $243 million Bid Wanted In Competition was announced on Wednesday, and investors are being asked to place their bids by 10:30 a.m. ET on Friday, according to a trader.

Some of the larger pieces of debt offered in the portfolio include Berry Plastics Group Inc.'s term loan C, Charter Communications Operating LLC's term loan C, Community Health Systems Inc.'s extended term loan, First Data Corp.'s 2017 term loan, Harrah's Operating Co. Inc.'s term loan B-6, HCA Inc.'s term loan B-3, Level 3 Communications Inc.'s term loan A, Sabre Holdings Corp.'s term loan, Servicemaster Co.'s loan, Texas Competitive Electric Holdings' non-extended term loan, Univision Communications Inc.'s extended first-lien term loan

All in all, there are about 50 issuers in the portfolio, the trader added.

Landry's restructures

Switching to the primary, Landry's revised its credit facility, lifting the six-year term loan B to $1 billion from $950 million, cutting the five-year revolver to $200 million from $250 million and eliminating a $200 million five-year term loan A, according to a market source.

Also, pricing on the term loan B was flexed to Libor plus 525 bps from Libor plus 475 bps, while the 1.25% Libor floor, original issue discount of 98½ and 101 soft call protection for one year were left unchanged, the source said.

Furthermore, amortization on the B loan was sweetened to 1% in year one and 2½% thereafter, from just 1% per year, and the excess cash flow sweep was changed to 75%, with a step-down to 50% when senior secured leverage is less than 3.0 times, from just 50% previously, the source remarked.

Price talk on the revolver continues to be Libor plus 400 bps.

Landry's notes carve-out

To compensate for the cancellation of the planned term loan A, Landry's increased the carve-out for senior unsecured notes to $400 million from $200 million, with timing on the potential bond deal still to be determined, the source continued.

And, due to the term loan B upsizing, the company will draw $140 million under the revolver, down from a previously planned amount of $190 million, the source added.

Recommitments are due at 5 p.m. ET on Thursday.

Jefferies & Co. is leading the $1.2 billion credit facility that will be used to refinance Landry's $231 million term loan and $100 million revolver, Morton's Restaurant Group Inc.'s $193 million term loan and $15 million revolver, and other debt, including Landry's $655 million of 11.625% senior secured notes due 2015.

Landry's is a Houston-based full-service restaurant, hospitality and entertainment company.

Goodyear tweaks loan

Goodyear Tire & Rubber also updated terms on its up to $1.2 billion senior secured second-lien term loan (Ba1/BB), lifting pricing to Libor plus 375 bps from Libor plus 325 bps and moving original issue discount talk to 98 to 981/2, from just 99, according to a market source.

As before, the loan has a 1% Libor floor and 101 soft call protection for one year.

Recommitments are due by 3 p.m. ET on Thursday, the source said.

J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Goldman Sachs & Co. and Wells Fargo Securities LLC are leading the deal that will be used to refinance an existing second-lien term loan.

Goodyear is an Akron, Ohio-based tire company.

Key Safety sets discount

Key Safety Systems modified the original issue discount on its $75 million add-on term loan B to 95½ from the 96 area, with the spread remaining at Libor plus 225 bps, in line with existing term loan B pricing, according to a market source.

The add-on, like the existing B loan, matures in March 2014.

UBS Securities LLC and Citigroup Global Markets Inc. are leading the deal that will be used to refinance revolver borrowings and provide additional liquidity.

Key Safety Systems is a Sterling Heights, Mich.-based supplier of automotive safety components and systems.

On Assignment guidance

Also in the primary, On Assignment held a bank meeting on Wednesday to kick off syndication on its proposed $540 million senior secured credit facility (Ba3), and with the event price talk came out, according to a market source.

The $50 million revolver is talked at Libor plus 325 bps with no Libor floor and a 75 bps upfront fee, and the $490 million term loan is talked at Libor plus 375 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source said.

Term loan coupon and floor are in line with what the company had disclosed in a recent filing with the Securities and Exchange Commission.

Expected corporate and facility ratings are Ba3/BB-.

Lead banks, Wells Fargo Securities LLC, Bank of America Merrill Lynch and Deutsche Bank Securities Inc., are seeking commitment by April 25, the source added.

On Assignment buying Apex

Proceeds from On Assignment's credit facility will be used to fund the purchase of Apex Systems Inc. for $383 million in cash and newly issued stock valued at $217 million as well as to refinance debt at both companies.

The revolver is expected to be undrawn at close.

Funded debt of the combined company will total about 3.75 times estimated pro forma adjusted EBITDA for the 12 months ended March 31, and closing is targeted for May, subject to approval by On Assignment's shareholders, regulatory approvals and other customary conditions.

On Assignment is a Calabasas, Calif.-based provider of professionals in the technology, health care and life sciences sectors. Apex is a Richmond, Va.-based information technology staffing and services firm.

Constellation talk emerges

Constellation Brands set price talk on its $850 million five-year revolver and $550 million five-year term loan at Libor plus 175 bps, and on its $250 million seven-year term loan at Libor plus 200 bps, as it launched with a morning meeting, a source said.

The revolver was downsized from $900 million as a result of the company gaining additional funds through a bond offering that was done recently at a size of $600 million after being increased from $400 million.

Upfront fees on all tranches are 35 bps for commitments of $75 million or more, 30 bps for commitments of $50 million, 25 bps for commitments of $35 million and 20 bps for commitments of less than $35 million, the source remarked.

There is no Libor floor under the $1.65 billion senior credit facility and the seven-year term loan is basically being done through a private placement.

Constellation lead banks

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Rabo Securities USA Inc. and Barclays Capital Inc. are leading Constellation Brands' credit facility.

Commitments are due on April 25.

Proceeds will be used to refinance an existing senior credit facility, and a portion of the company's' recent bond deal can be used to repay some existing term loan borrowings as well.

Other general corporate purposes that the notes may be used for include acquisitions or common stock share repurchases.

Constellation Brands is a Victor, N.Y.-based wine company.

MegaPath floats OID

MegaPath launched its $150 million six-year term loan as well, at which time original issue discount guidance of 98½ was announced, according to a market source.

Price talk on the term loan and a $25 million five-year revolver had already come out earlier this week at Libor plus 625 bps with a 1.25% Libor floor.

Commitments are due on April 26, the source said.

Societe Generale is the lead bank on the $175 deal that will be used to refinance existing bank debt.

MegaPath, a provider of managed data, voice and security services, will have senior leverage of 2.1 times.

TricorBraun launches

TricorBraun was another company to hold a bank meeting, launching its $480 million term loan B at previously outlined talk of Libor plus 425 bps to 450 bps with a 1.25% Libor floor and an original issue discount of 99, according to a market source.

The company's $555 million credit facility (B1/B) also includes a $75 million revolver.

GE Capital Markets and UBS Securities LLC are the lead banks on the deal that will be used to refinance existing debt and fund a dividend.

TricorBraun is a St. Louis-based designer and deliverer of rigid packaging.

Osmose pricing

Regarding upcoming deals, Osmose Holdings released talk of Libor plus 550 bps with a 1.25% Libor floor, an original issue discount of 98 and 101 soft call protection for one year on its $240 million six-year first-lien term loan that is set to launch with a bank meeting on Thursday afternoon, a source said.

The company's $265 million credit facility (B+) also includes a $25 million five-year revolver.

Credit Suisse Securities (USA) LLC and Macquarie Capital are the lead banks on the deal that will be used, along with $189 million of equity, to fund the buyout of the company by Oaktree Capital.

Total leverage is 3.5 times.

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

AutoTrader adds bookrunners

In more primary happenings, AutoTrader.com has received commitments from SunTrust Robinson Humphrey Inc. and J.P. Morgan Securities LLC for bookrunner roles on its $400 million of incremental pro rata debt (Ba3/BB+), joining left lead bank Wells Fargo Securities LLC, according to a market source.

The debt is comprised of a $200 million incremental term loan A due 2017 and a $200 million incremental revolver due 2015, and is being offered with upfront fees of 35 bps for $30 million orders and 10 bps for $10 million orders, the source said.

Price talk on the new loans is Libor plus 225 bps, in line with existing pro rata pricing.

AutoTrader.com, an Atlanta-based automotive marketplace and consumer information website, held a call on Tuesday to launch the incremental debt that will be used to fund a $400 million dividend.

Charter closes loan

Charter Communications Operating LLC completed on Wednesday its $750 million term loan D due May 15, 2019 that is priced at Libor plus 300 bps with a 1% Libor floor and was sold at an original issue discount of 991/2, according to a news release.

During syndication, the original issue discount tightened from 99.

In addition, the company's $1.9 billion credit facility (Ba1/BB+/BB+) also includes a $1.15 billion five-year revolver that is priced at Libor plus 225 bps.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and UBS Securities LLC led the deal.

Proceeds were used to refinance a term loan B-1 and term loan B-2 and some term loan C borrowings, as well as an existing $1.3 billion revolver.

Charter is a St. Louis-based cable operator and broadband communications company.

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