Neiman softens on research report; Ascena still gaining; Michigan Power updates pricing

By Sara Rosenberg

New York, Dec. 3 – Neiman Marcus Group LLC’s term loan fell in the secondary market on Thursday with chatter of a negative research report, and Ascena Retail Group Inc.’s term loan continued to grind higher, still spurred on by the posting of favorable earnings results earlier in the week.

Switching to the primary market, Michigan Power LP LLC firmed pricing on its term loan at the tight end of guidance, and Sunoco LP joined this week’s new issue calendar.

Neiman trades lower

Neiman Marcus’ term loan weakened in trading on Thursday as a research report on the company “that wasn’t so great” was heard to have been released, according to market sources.

The term loan was quoted at 91 bid, 92 offered, down from 92½ bid, 93½ offered, sources said.

Neiman Marcus is a Dallas-based luxury retailer.

Ascena rises

Ascena Retail’s term loan gained to 91 bid, 92 offered from 89½ bid, 90½ offered on Wednesday as market players continued to react to fiscal first quarter numbers that came out the other day, a trader said. On Tuesday, the loan was quoted at 88½ bid, 89½ offered.

As previously reported, for the quarter, the company reported net sales of about $1.67 billion, compared to around $1.19 billion for the first quarter of last year.

Net loss for the quarter was $18.1 million, or $0.10 per diluted share, compared to net income of $53.5 million, or $0.32 per diluted share in the prior year, but the decrease was primarily due to the effect of purchase accounting adjustments and transaction costs related to the acquisition of ANN Inc. Adjusted net income for the first quarter was $71.2 million, or $0.36 per diluted share, versus adjusted net income of $63.9 million, or $0.33 per diluted share, last year.

Ascena is a Mahwah, N.J.-based specialty retailer of clothing, shoes and accessories.

Michigan Power sets spread

Moving to the primary market, Michigan Power firmed pricing on its $216 million seven-year term loan B at Libor plus 375 basis points, the low end of the Libor plus 375 bps to 400 bps talk and left the 1% Libor floor, original issue discount of 99 and 101 call protection for one year unchanged, according to a market source.

The company’s $263 million credit facility (Ba2/BB+) also includes a $47 million revolver.

BNP Paribas Securities Corp. is leading the deal that will be used to help fund the acquisition of Michigan Power by Rockland Capital LLC from ArcLight Capital Partners LLC.

Michigan Power is the owner of a cogeneration facility located in Ludington, Mich.

Sunoco on deck

Sunoco set a lender call for noon ET on Friday to launch a $2,035,000,000 term loan A (BB) due Oct. 1, 2019 talked at Libor plus 250 bps with leverage based step-downs and no Libor floor, according to a market source.

Commitments are due on Dec. 18, the source said.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, BBVA Compass and TD Bank are leading the loan that will be used to help fund the acquisition of Energy Transfer Partners LP’s remaining wholesale fuel and retail assets.

Sunoco is a Houston-based limited partnership engaged in fee-based wholesale distribution of motor fuels, the retail sale of motor fuels and the operation of convenience stores.

Swissport allocates

In other news, Swissport Group allocated its €660 million six-year covenant-lite term loan B that is priced at Euribor plus 525 bps with a 1% floor and was sold at an original issue discount of 98.5. The debt has 101 soft call protection for six months.

Initially, the company launched a CHF 1,145,000,000 six-year covenant-lite term loan B, split between a euro and a U.S. dollar tranche and talked at Libor/Euribor plus 500 bps to 525 bps with a 1% floor, a discount of 98.5 to 99 and 101 soft call protection for six months.

However, during syndication, the U.S. tranche was eliminated, bonds were added to the capital structure, the euro term loan sized firmed up, the loan spread was set at the high end of guidance, and the discount finalized at the wide side of talk.

Swissport being acquired

Proceeds from Swissport’s term loan, €690 million of bonds, split between a €400 million senior secured tranche and a €290 million senior unsecured tranche, and equity will be used to fund the acquisition of the company by HNA Group Co. Ltd. from PAI Partners SAS for CHF 2.73 billion and to refinance existing debt.

Barclays and J.P. Morgan Securities LLC are leading the term loan, with Barclays left lead. JPMorgan had been left lead on the U.S. term loan B.

Closing is expected by year-end, subject to customary regulatory and anti-trust approvals.

Swissport is a Zurich-based provider of ground and cargo handling services to the aviation industry.

Ascensus closes

The buyout of Ascensus Inc. (JCF Ascensus Holdings Inc.) by Genstar Capital and Aquiline Capital Partners from J.C. Flowers & Co. has been completed, a news release said.

To help fund the transaction, Ascensus got $425 million in seven-year first-lien term loan debt, which includes a $25 million delayed-draw term loan.

Pricing on the term loan is Libor plus 450 bps with a 1% Libor floor, and it was sold at an original issue discount of 94, after widening during syndication from 98.5. The debt has 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Macquarie Capital (USA) Inc. and RBC Capital Markets LLC led the deal.

Ascensus is a Dresher, Pa.-based service provider of retirement and college savings plans.

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