Windstream, Peninsula Gaming break; Essential Power, FLY Leasing, WaveDivision tweak deals

By Sara Rosenberg

New York, Aug. 3 - Windstream Corp.'s term loan B-3 made its way into the secondary market during Friday's session above its original issue discount price, and Peninsula Gaming LLC began trading as well.

Switching to the primary, Essential Power LLC revised pricing lower on its credit facility and finalized the original issue discount on the institutional tranche at the tight end of guidance as the transaction has been met with strong investor demand.

FLY Leasing Ltd. also reworked its loan, although, in this case, the spread was increased, the original issue discount widened and amortization was added, while WaveDivision Holdings LLC trimmed the coupon on its B loan.

Windstream starts trading

Windstream's new debt freed up for trading on Friday, with the $600 million seven-year term loan B-3 quoted at 99 5/8 bid, par 1/8 offered, according to a trader.

Pricing on the term loan B-3 is Libor plus 300 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.

Earlier in the week, pricing on the loan was reduced from talk of Libor plus 325 bps to 350 bps.

The company's $900 million of new debt (Baa3/BB+) also includes a $300 million five-year term loan A-4 priced at Libor plus 225 bps (subject to a grid) with no Libor floor.

Windstream repaying debt

Proceeds from Windstream's term loans will be used to pay down existing revolver borrowings and for working capital needs.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Barclays, Citigroup Global Markets Inc., CoBank, Goldman Sachs & Co., Morgan Stanley Senior Funding Inc., RBC Capital Markets LLC, RBS Securities Inc., SunTrust Robinson Humphrey Inc., Union Bank of California and Wells Fargo Securities LLC are the lead banks on the deal.

Windstream is a Little Rock, Ark.-based provider of advanced communications and technology services, including managed services and cloud computing.

Peninsula frees up

Peninsula Gaming's credit facility also emerged in the secondary, with the $825 million term loan B (B1/B+/BB) seen at 99 7/8 bid, par 3/8 offered on the break and then it moved up to par ¼ bid, par ¾ offered, according to a trader.

Pricing on the B loan is Libor plus 450 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 99. The loan has a ticking fee of 50 bps that starts after 30 days and is in effect until day 60. The fee then steps up to half the spread from days 61 through 105 and to the full spread thereafter.

The company's $875 million five-year credit facility also provides for a $50 million revolver (Ba2/BB-/BB).

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and UBS Securities LLC are leading the deal.

Peninsula being acquired

Proceeds from Peninsula's credit facility, $350 million of senior notes, cash and a roughly $144 million seller note will be used to help fund the company's buyout by Boyd Gaming Corp. for $1.45 billion and to refinance about $700 million of Peninsula's existing debt.

The six-year PIK seller note will have a coupon of 0% in year one, 6% in year two, 8% in year three and 10% thereafter. It is prepayable at all times.

For its part, Boyd received a commitment for either a $150 million incremental revolver and a term loan due Dec. 17, 2015 or one of the two. The term loan has pricing ranging from Libor plus 250 bps to 350 bps and an unused fee of 25 bps to 50 bps based on leverage.

Peninsula is Dubuque, Iowa-based owner and operator of casinos and off-track betting parlors. Boyd is a Las Vegas-based owner and operator of gaming entertainment properties.

Patriot Coal breaks

Patriot Coal Corp.'s debtor-in-possession financing facility began trading too, with the $375 million super-priority senior secured first-out term loan quoted at 100.875 bid, 101.375 offered.

Pricing on the term loan is Libor plus 775 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 981/2.

The loan was met with strong demand, resulting in a flex earlier from Libor plus 800 bps and a tightening of the discount from 98.

The company's $802 million DIP also includes a $125 million super-priority senior secured revolver that is priced at Libor plus 325 bps with a 75 bps upfront fee and a $302 million second-out roll-up of letters-of-credit loan that is priced at Libor plus 800 bps with a 1.5% floor when fully drawn with a 450 bps fee on unfunded letters of credit.

Patriot Coal maturity

Patriot Coal's DIP will expire after 15 months, but the company does have a three-month extension option. There is a 25 bps fee for the maturity extension that was lowered from 50 bps during syndication.

Citigroup Global Markets Inc., Barclays Capital Inc. and Bank of America Merrill Lynch are leading the deal.

Proceeds will be used to fund operations, working capital needs and general corporate purposes during the company's Chapter 11 reorganization.

Patriot Coal is a St. Louis-based miner, producer and seller of thermal coal primarily to electricity generators.

Essential Power cuts pricing

Over in the primary, Essential Power reverse flexed pricing on its $665 million senior secured credit facility (Ba2/BB) to Libor plus 425 bps from Libor plus 450 bps, according to a market source.

The facility consists of a $565 million seven-year term loan B that has a 1.25% Libor floor and 101 soft call protection for one year, and a $100 million five-year revolver that has no Libor floor.

In addition, with the change in coupon, the original issue discount on the term loan firmed at 981/2, the low end of the 98 to 98½ talk, the source remarked.

Recommitments were due at the end of the day on Friday and allocations are expected to go out in the first half of the July 6 week, the source added.

Essential Power lead banks

Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Union Bank of California and RBC Capital Markets are the lead banks on Essential Power's credit facility.

Proceeds will be used to repay existing bank borrowings and to fund a tender offer for its 10 7/8% senior secured second-lien notes due 2016.

The tender offer is set to expire on Aug. 15.

Essential Power is an Iselin, N.J.-based wholesale power generation and marketing company.

FLY revises deal

Another company to make modifications in the morning was FLY Leasing, as it lifted pricing on its $395 million senior secured term loan (B1/BBB-) to Libor plus 550 bps from Libor plus 500 bps and moved the original issue discount to 96 from guidance of 98 to 99, a source said.

Also, amortization of 5% per annum was added, whereas before, there was no amortization.

The 1.25% Libor floor and 101 soft call protection for one year were left unchanged.

Lead banks, Citigroup Global Markets Inc., BNP Paribas Securities Corp., Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., RBC Capital Markets LLC and Jefferies & Co., were seeking recommitments by 5 p.m. ET on Friday, the source said.

Proceeds will be used to refinance remaining 2012 debt maturities, as well as outstanding debt under a facility that matures in 2013.

FLY is an aircraft lessor with corporate offices in Dublin, Ireland, and San Francisco.

WaveDivision flexes

WaveDivision lowered pricing on its $470 million term loan B to Libor plus 425 bps from talk of Libor plus 450 bps to 500 bps and added a ticking fee of half the spread starting on Sept. 17 and bumping up to the full spread on Nov. 1, according to a market source.

The 1.25% Libor floor, original issue discount of 99 and 101 soft call protection for one year were left unchanged.

Wells Fargo Securities LLC, Deutsche Bank Securities Inc. and RBC Capital Markets LLC are leading the $520 million credit facility (Ba3/BB-), which also includes a $50 million revolver.

Proceeds will be used to help fund the buyout of the Kirkland, Wash.-based owner and operator of broadband cable systems by Oak Hill Capital Partners, GI Partners and management from Sandler Capital Management.

Closing is expected next quarter, subject to regulatory approvals and customary conditions.

Pantry closes

In other news, Pantry Inc. completed its $480 million senior secured credit facility (B1/BB) that consists of a $225 million five-year revolver and a $255 million seven-year term loan B, according to a news release.

Pricing on the revolver is Libor plus 425 bps, and pricing on the B loan is Libor plus 450 bps with a step-down to Libor plus 425 bps at less than 4.0 times leverage. The term B has a 1.25% Libor floor and 101 soft call protection for one year, and was sold at an original issue discount of 99.

During syndication, pricing on the term loan B was reduced from Libor plus 475 bps and the step-down was added.

Wells Fargo Securities LLC and Bank of America Merrill Lynch led the deal that was used with $250 million of senior notes and cash to repay outstanding term loans and senior subordinated notes.

Pantry is a Cary, N.C.-based operator of a chain of convenience stores.

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