Dana adds Libor floor; PCI Gaming, Augusta tweak deals; LCDX, cash bounce around

By Sara Rosenberg

New York, Jan. 31 - Dana Corp. made another modification to its credit facility, this time adding a Libor floor to the term loan B.

Also, PCI Gaming Authority made some changes to its credit facility, including reducing the overall size of the deal, increasing pricing across the board and widening the original issue discount on the funded term loan B.

And, Augusta Sportswear Group increased pricing and original issue discounts on its first-lien debt, and carved a last-out tranche out of its first-lien term loan.

In the secondary, LCDX 9 and the cash market rode a rollercoaster as levels dropped off considerably in the morning and then bounced back up.

Dana announced on Thursday morning that it added a 3% Libor floor for two years to its $1.35 billion seven-year term loan B (Ba3/BB), which was a feature that accounts had been showing interest in receiving, according to a market source.

And, immediately following this addition, positive momentum was seen on the term loan B as the book started building, the source said.

The deal was scheduled to close on Thursday and, therefore, lenders were asked to get their commitments in by the end of the day.

The addition of the Libor floor came on the heels of changes to the term loan Bs pricing and original issue discount.

On Wednesday, pricing on the B loan was flexed up to Libor plus 375 basis points from original talk at launch of Libor plus 350 bps and the original issue discount was raised to 92 from the initially proposed 97 area.

In addition, hard call protection of 102 in year one and 101 in year two was added to the term loan B. The only time the call premiums don't apply is when it relates to cash flow sweep.

Dana's $2 billion exit financing credit facility also includes a $650 million five-year asset-based revolver (Ba3/BB+) that is priced at Libor plus 200 bps, with a commitment fee of 37.5 bps.

Upfront fees on the asset-based revolver are 25 bps for $25 million, 50 bps for $50 million and 75 bps for $75 million.

Syndication on the revolver has gone well, making changes to this tranche unnecessary.

Citigroup, Lehman Brothers and Barclays are the lead banks on the deal that is being used to repay the company's debtor-in-possession credit facility, to make other payments required upon its exit from bankruptcy and to provide liquidity to fund working capital and other general corporate purposes.

Dana is a Toledo, Ohio-based supplier of components, modules and systems to vehicle manufacturers and related aftermarkets.

PCI Gaming reworks structure

PCI Gaming modified its credit facility, upsizing the delayed-draw term loan A, downsizing the funded term loan B, flexing pricing higher and increasing the original issue discount on the B loan, according to a market source.

The five-year delayed-draw term loan A is now sized at $95 million, up from $50 million, and pricing was raised to Libor plus 600 bps from Libor plus 475 bps, the source said. As initially proposed, the tranche is delayed draw for 12 months and has a 75 bps undrawn fee.

Meanwhile, the six-year funded term loan B is now sized at $65 million, down from $135 million, pricing was raised to Libor plus 600 bps from Libor plus 475 bps, and the original issue discount was changed to 98 from 99, the source continued.

Through these changes, the overall size of the senior secured deal (B1/BB-) was reduced to $160 million from $185 million. Those lost funds will be compensated for through a decrease to capital expenditures and an increase in the use of cash on hand, the source explained.

Prior to the deal's launch, it was said that the delayed-draw term loan A was already circled with banks, and a handful of new banks were looking at it as well.

Now, with the modifications, the entire credit facility is fully syndicated and the books are now closed, the source added.

Allocations are expected to go out next week.

Merrill Lynch and CIT are the lead banks on the deal that will be used to help fund the development and construction of the Wind Creek Atmore Casino and Hotel.

PCI Gaming is an Atmore, Ala.-based casino operator.

Augusta revises structure

Augusta Sportswear also made changes to its credit facility, raising pricing and discounts on its first-lien bank debt, downsizing the first-lien term loan and adding a last-out term loan tranche to the capital structure, according to a market source.

The $50 million revolver and the $147.5 million first-lien term loan, downsized from $172 million, are now both priced at Libor plus 425 bps with an original issue discount of 98, the source said. At launch, the two tranches were talked at Libor plus 375 bps to 400 bps, at a discount of 99.

Furthermore, a $25 million last-out term loan was added to the deal. Price talk on this tranche is Libor plus 650 bps with an original issue discount that it still to be determined, the source continued.

The company's $303 million credit facility also includes an $80.5 million second-lien term loan that is still being talked at 13%, of which 2% is PIK.

Commitments from lenders are due on Friday.

There had previously been speculation by market sources that Augusta's first-lien bank debt may end up at the high end of guidance, or possibly even wider of that, and the original issue discount may need to be beefed up a bit, being that investors were worried about leverage and the financial sponsor.

According to these sources, Quad-C Management, Inc. irritated some middle market guys when they had Heartland Automotive Holdings, Inc. file for Chapter 11 on Jan. 7, and Quad-C has another non-performing portfolio company that investors are not so happy about.

GE Capital is the lead bank on the deal, which will be used to help fund Quad-C's buyout of the company from Linsalata Capital Partners.

Augusta is an Augusta, Ga., designer, manufacturer and distributor of athletic-oriented apparel, team uniforms, sportswear and related accessories.

LCDX, cash seesaw

Switching to secondary happenings, LCDX 9 and cash started off the day much lower and then rallied in the afternoon, according to traders.

The index was as low as 92.70 bid, 92.80 offered, got as high as 93.25 bid, 93.35 offered, and then settled in around 93 bid, 93.30 offered, traders said. On Wednesday, the index went out around 93.30 bid, 93.50 offered.

Cash was the same story, as things went from being considerably down to either slightly down, unchanged or even up, depending on the name.

For example, Texas Competitive Electric Holdings Co. LLC (TXU), a Dallas-based energy company, saw its term loan B-2 trade as low as the 90 bid, 91 offered context, but then it bounced back up to 91½ bid, 92½ offered to end the day pretty much unchanged, one trader said.

PanAmSat, which has been renamed Intelsat Corp., a satellite company, saw its term loan B get as low as 86 bid, 87 offered, but then it rallied to 88½ bid, 89½ offered to end the day up from Wednesday's levels of 87¾ bid, 88¼ offered, the trader continued.

And, Georgia-Pacific Corp., an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals, saw its term loan B get as low as 90½ bid, 91½ offered, but then it bounced back up to 91½ bid, 92½ offered to end the day slightly lower from Wednesday's levels of 92 bid, 93 offered.

"Nothing credit specific. [It was] uncertainty with the market. Guys looking to get out, like hedge funds, pushes it down to a level where you see real money guys step in," the trader explained.

Stocks, meanwhile, were stronger on the day, with Nasdaq up 40.86 points, or 1.74%, Dow Jones Industrial Average up 207.53 points, or 1.67%, S&P 500 up 22.74 points, or 1.68%, and NYSE up 131.71 points, or 1.46%.

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