Hubbard, Surgery Center break; TXU extended levels surface; PQ rises with paydown news

By Sara Rosenberg

New York, April 12 - Hubbard Broadcasting Inc.'s credit facility made its way into the secondary market on Tuesday, with first- and second-lien term loan levels quoted well above their original issue discount prices.

Also, Surgery Center Holdings Inc.'s new credit facility began trading too, and some guys started quoting Texas Competitive Electric Holdings Co. LLC's (TXU) extended term loan on a when-issued basis.

In other news, PQ Corp.'s term loan was stronger as the company announced plans to repay some bank debt in connection with its spin-off of Potters Industries Inc., and the funds for the paydown will come from a new credit facility that will be obtained by Potters.

Additionally, Nortek Inc. and Ulterra Drilling Technologies revealed that they are getting ready to bring new deals to market as well, PaperWorks Industries came out with official talk as the transaction was launched to lenders during the session, and Triple Point Technology Inc. firmed pricing on its facility at the wide end of talk.

Hubbard frees up

Hubbard Broadcasting's credit facility allocated and broke for trading on Tuesday, with the $270 million six-year first-lien term loan quoted at par ¼ bid, par ¾ offered on the open and then it moved up to 101¼ bid, 102 offered, according to a trader.

Pricing on the first-lien term loan (Ba3/B+) is Libor plus 375 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

During syndication, the loan was upsized from $255 million, pricing was reduced from Libor plus 400 bps to 425 bps and call protection was added.

The St. Paul, Minn.-based television and radio broadcasting company's new first-lien debt also includes a $10 million five-year revolver (Ba3/B+).

Hubbard second-lien levels

As for Hubbard's $140 million seven-year second-lien term loan (Caa1/CCC+), that was quoted at 101 bid, 102 offered on the break and then it moved up to 102½ bid, 103½ offered, the trader remarked.

Pricing on the second-lien loan is Libor plus 725 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99. The tranche includes call protection of 103 in year one, 102 in year two and 101 in year three.

Second-lien pricing had been revised last week from talk of Libor plus 750 bps to 775 bps with a 1.75% floor and a discount of 981/2.

Morgan Stanley & Co. Inc. and Goldman Sachs & Co. are the lead banks on the $420 million credit facility that will be used to help fund the acquisition of 17 radio stations from Bonneville International Corp. in a transaction valued at about $505 million.

The acquisition is expected to be completed upon FCC approval and other customary conditions.

Surgery trades above OID

Surgery Center's credit facility hit the secondary market as well, with the $240 million term loan quoted by one trader at par ½ bid, 101¼ offered and by a second trader at par ¼ bid, 101¼ offered.

Pricing on the term loan as well as on a $20 million revolver is Libor plus 500 bps with a 1.5% Libor floor, and the tranches were sold at an original issue discount of 991/2. The term loan includes 101 soft call protection for one year.

During syndication, the term loan was upsized from $237.5 million and the call protection was added. Also pricing on the entire facility was reduced from Libor plus 525 bps and the discount tightened from 99.

Jefferies Finance LLC is the lead bank on the $260 million senior secured credit facility (Ba3/B+).

Surgery buying NovaMed

Proceeds from Surgery Center's credit facility will be used to help fund the acquisition of NovaMed Inc. for $13.25 per share in cash. The transaction is valued at roughly $214 million, including the assumption or repayment of $105 million of debt.

The acquisition is expected to close in the second quarter, subject to customary conditions, including antitrust and regulatory approvals and stockholder approval.

Surgery Center is a Tampa, Fla.-based acquirer, developer and manager of free-standing ambulatory surgical centers. NovaMed is a Chicago-based operator, developer and acquirer of ambulatory surgery centers.

TXU extended emerges

Texas Competitive's extended term loan began being quoted by some traders on a when issued basis, with one guy putting it at 81 bid, 81½ offered and a second guy putting it at 80¾ bid, 81¾ offered.

Meanwhile, the non-extended term loans were quoted by the first trader at 84 bid, 84½ offered and by the second trader at 84½ bid, 85½ offered versus 84¾ bid, 85¼ offered on Monday.

As was previously reported, the company is looking to extend its first-lien term loan B-1, B-2 and B-3 and deposit letter-of-credit facility by three years to Oct. 10, 2017 and its revolver by three years to Oct. 10, 2016. The extended B-1, B-2 and B-3 debt will be collapsed into one extended term loan tranche.

Pricing on all of the extended debt would be Libor plus 450 bps, compared with non-extended pricing of Libor plus 350 bps, and the undrawn fee on the extended revolver would be 100 bps, up from 50 bps on the non-extended.

TXU deadline passes

Commitments towards Texas Competitive's extended loans were due by noon ET on Tuesday, and the company will pay an upfront extension fee of 350 bps on extended term loans and extended deposit letter-of-credit loans.

As a condition to the extension, the Dallas-based energy company must complete a senior secured notes offering to fund pro rata repayments of certain outstanding loans.

When launching the extension proposal, the company also asked lenders to amend the credit facility to revise the secured debt-to-EBITDA ratio and acknowledge that the intercompany loans to Energy Future Holdings comply with the requirement that these loans be made on an arm's-length basis and that no excess cash flow mandatory repayments were required for fiscal years 2008, 2009 and 2010.

The amendment was approved last week and lenders are being paid a 50 bps amendment fee.

Citigroup Global Markets Inc. is the left lead bank on the transaction.

PQ trades up

PQ's term loan moved higher after the company revealed that it will be paying down some of the debt in connection with the separation of Potters Industries, according to traders.

One trader had the term loan quoted at 97½ bid, 98 offered, up from 97 bid, 97½ offered on Monday. A second trader, meanwhile, had the loan at 97¼ bid, 98 offered, up from morning levels of 96 7/8 bid, 97½ offered.

Following the spin-off, Potters and PQ will operate as separately-managed companies held by common owners The Carlyle Group, Ineos Group and PQ management.

PQ, a Malvern, Pa.-based producer of specialty chemicals and catalysts, expects to close on the transaction in early May.

Potters plans facility

To fund the PQ credit facility paydown, Potters Industries will be getting a new $302.5 million credit facility as part of the spin-off, according to sources.

The facility consists of a $40 million five-year revolver, a $150 million six-year first-lien term loan and a $112.5 million 61/2-year second-lien term loan, sources said.

J.P. Morgan Securities LLC is the lead bank on the deal that is scheduled to launch with a call on Friday.

Potters is a Malvern, Pa.-based producer of engineered glass materials serving the highway safety, polymer additive, metal finishing and other specialty end markets.

Nortek sets launch

Nortek surfaced with plans to hold a bank meeting at 2 p.m. ET on Wednesday to launch a proposed $350 million six-year senior secured term loan (B1/BB-) to investors, according to a market source.

UBS Securities LLC is the lead bank on the deal that will be used, along with $500 million of 8.5% senior notes due 2021, to fund a tender offer for the company's roughly $753 million of 11% senior secured notes due 2013.

The tender offer expires on May 10 and is conditioned on the completion of the term loan and the bond offering.

Also, in connection with the transaction, the company needs to amend its existing $300 million asset-based revolver due in 2015 to allow for the refinancing.

Nortek is a Providence, R.I.-based manufacturer of residential and commercial ventilation, HVAC and home technology convenience and security products.

Ulterra readies deal

Ulterra Drilling Technologies also set a bank meeting for Wednesday, with the launch scheduled for 12:30 p.m. ET at the Palace Hotel in New York, according to a market source.

The company will be presenting lenders with a $105 million five-year credit facility that consists of an undrawn $15 million revolver and a $90 million term loan, the source said.

Price talk on the tranches is not yet available, but it is known that the term loan will provide for 101 soft call protection for one year, the source continued.

Jefferies & Co. is the lead bank on the deal that will be used to refinance existing debt and add cash to the balance sheet for general corporate purposes.

Pro forma net leverage is 2.6 times and interest coverage is nearly 5.0 times.

Ulterra is a Fort Worth, Texas-based oilfield service manufacturer of PDC drill bits and stick-slip reduction tools.

PaperWorks discloses talk

PaperWorks Industries held a bank meeting on Tuesday to kick off syndication on its proposed $250 million credit facility (B2/B+), and in connection with the launch, official price talk was announced, according to a market source.

Both the $40 million revolver and the $210 million term loan are being talked at Libor plus 475 bps to 500 bps with a 1.5% Libor floor, the source said, adding that the term loan is being offered at an original issue discount of 99.

Prior to launch, early guidance on the two tranches was circulating at Libor plus 450 bps with a 1.5% Libor floor based on expected ratings of B2/B.

BMO Capital Markets Corp. is leading the deal that will be used to refinance existing debt.

PaperWorks is a Philadelphia-based integrated coated-recycled board and folding carton company.

Triple Point firms spread

Triple Point Technology set the spread on its $135 million credit facility (B2/B+) at Libor plus 475 bps, the wide end of the Libor plus 450 bps to 475 bps talk, while leaving the 1.5% Libor floor and original issue discount of 99 intact, according to a market source.

The facility consists of a $10 million five-year revolver and a $125 million five-year term loan B that includes 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to refinance existing debt and pay a dividend to shareholders.

Pro forma leverage is 4.0 times.

Triple Point Technology is a Westport, Conn.-based provider of software for end-to-end commodity management.

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