Paetec sets OID; Hudson Group, RadNet talk emerges; Radiation Therapy postponed; LCDX, cash inch up

By Sara Rosenberg

New York, Jan. 24 - Paetec Holding Corp. finalized the original issue discount on its term loan B add-on at a wider level than the original guidance, Hudson Group came out with price talk on its credit facility as the deal was launched with a bank meeting on Thursday afternoon, and price talk on RadNet Inc.'s in-market second-lien term loan add-on surfaced.

In other news, Radiation Therapy Services, Inc.'s credit facility launch was canceled and the deal is now targeted to hit the primary next month.

Moving to the secondary, LCDX 9 and the cash market in general were a bit stronger on Thursday with equities.

Paetec firmed up the original issue discount on its $100 million first-lien term loan B add-on (B-) at a higher number than was originally hoped at launch, according to a market source.

The term loan B add-on was sold to investors at a discount of 941/2, compared to initial guidance of 96 to 961/2, the source said.

Pricing on the add-on is Libor plus 250 basis points, in line with existing term loan B pricing.

Merrill Lynch and Deutsche Bank are the joint bookrunners on the deal. Merrill is the left lead, while Deutsche is the administrative agent. CIT is the documentation agent.

The add-on is being done in connection with the acquisition of McLeodUSA Inc. Proceeds from will be used to repay outstanding McLeodUSA debt and a tender premium.

Paetec is a Fairport, N.Y., communications provider.

Hudson Group guidance surfaces

Hudson Group held a bank meeting on Thursday afternoon to kick off syndication on its $295 million first-lien credit facility, and in connection with the launch, price talk was announced, according to a market source.

Both the $60 million revolver and the $235 million first-lien term loan were presented to lenders with talk of Libor plus 400 bps at an original issue discount of 99, the source said.

CIT Group is the lead bank on the deal.

The company is also getting a $125 million second-lien term loan that is being led by hedge fund Magnetar and is already spoken for.

Proceeds will be used to help fund Advent International's buyout of the company.

Hudson Group is an East Rutherford, N.J.-based travel retail specialist that operates more than 550 newsstands, bookstores, cafes and specialty retail shops in 69 airports and transportation terminals.

RadNet price talk

RadNet came out with price talk on its $60 million second-lien term loan add-on now that the deal has been launched to investors through a conference call that was held on Wednesday, according to a market source.

The add-on is being guided at Libor plus 775 bps with an original issue discount of 991/2, the source said.

And, in connection with this transaction, pricing on the company's existing second-lien term loan will be increased to Libor plus 775 bps from current pricing of Libor plus 750 bps.

GE Capital is the lead bank on the deal that will be used for acquisitions and other strategic initiatives.

RadNet is a Los Angeles-based provider of diagnostic imaging services through a network of fully owned and operated outpatient imaging centers.

Radiation Therapy delayed

Radiation Therapy pushed off the launch of its proposed $440 million senior secured credit facility as a result of market instability, according to a market source.

The deal that was scheduled to be presented to lenders at a bank meeting on Thursday morning is now looking at the early February timeframe to come to market, the source said.

The credit facility consists of a $60 million five-year revolver, a $340 million six-year term loan and a $40 million six-year delayed-draw term loan.

Wachovia is the lead bank on the deal that will be used to help fund the buyout of the company by Vestar Capital Partners for $32.50 per share plus assumed debt in a deal valued at $1.1 billion.

The transaction is expected to close in the first quarter of 2008 and is subject to shareholder approval.

Radiation Therapy is a Fort Myers, Fla., operator of radiation therapy centers.

LCDX, cash stronger

Switching to trading news, LCDX 9 and the cash market in general felt better during Thursday's market session, along with stocks, according to a trader.

The index was quoted at 94.40 bid, 94.50 offered, up from Wednesday's levels of 94.05 bid, 94.30 offered, the trader said.

"It was in the 94.20 to 94.50 range all day, up marginally. It might have gotten ahead of itself yesterday, so guys are hesitant to push it much higher," the trader remarked.

On Wednesday, the index traded as low as 93 before rallying into the low 94s. Tuesday's closing levels had been 93.40 bid, 93.60 offered.

Meanwhile, the cash market was a little stronger with things generically up about half a point, the trader continued.

"Finally saw some guys coming in looking for some offers. Volume is still light [and there's] some hesitancy, but things feel up," the trader added.

As for equities, Nasdaq went out up 44.51 points, or 1.92%, Dow Jones Industrial Average went out up 108.44 points, or 0.88%, S&P 500 went out up 13.47 points, or 1.01%, and NYSE went out up 136.57 points, or 1.55%.

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