Douglas Dynamics frees up; Hubbard Broadcasting, Redflex talk surfaces; USI withdraws loan

By Sara Rosenberg

New York, March 24 - Douglas Dynamics Inc.'s credit facility made its way into the secondary market on Thursday, with the term loan quoted above the original issue discount price at which it was sold during syndication.

Moving to the primary market, Hubbard Broadcasting Inc. and Redflex Holdings Ltd. released price talk on their credit facilities in connection with their morning bank meetings, and USI Holdings Corp. decided to pull its repricing/refinancing deal.

Douglas Dynamics breaks

Douglas Dynamics' credit facility began trading on Thursday, with the $125 million seven-year covenant-light term loan B (B1/BB) quoted at 99½ bid, par ¼ offered on the open and then it moved to par bid, according to a trader.

Pricing on the term loan B firmed in line with initial talk at Libor plus 425 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 99.

The company's $195 million credit facility also provides for a $70 million asset-based revolver priced at Libor plus 225 bps.

J.P. Morgan Securities LLC is the lead bank on the deal that is being used to refinance existing debt.

Douglas Dynamics is a Milwaukee-based designer, manufacturer and seller of snow and ice control equipment for light trucks.

Hubbard sets talk

Switching to the primary, Hubbard Broadcasting held a bank meeting on Thursday at 10:30 a.m. ET at the Le Parker Meridien in New York to kick off syndication on its proposed $405 million credit facility, at which time pricing guidance was disclosed, according to a market source.

The $10 million five-year revolver and $255 million six-year first-lien term loan are being talked at Libor plus 400 bps to 425 bps with a 1.5% Libor floor, with the revolver offered at 99 and the term loan offered at 991/2, the source said.

As for the $140 million seven-year second-lien term loan, that is being guided at Libor plus 750 bps to 775 bps with a 1.75% Libor floor and an original issue discount of 981/2, the source continued. The tranche includes call protection of 103 in year one, 102 in year two and 101 in year three.

Hubbard buying stations

Proceeds form Hubbard Broadcasting's credit facility will be used to help fund the purchase of 17 radio stations from Bonneville International Corp. in a transaction that is valued at about $505 million.

The acquisition, which was first announced in January, is expected to be completed upon FCC approval and other customary conditions.

Morgan Stanley & Co. Inc. and Goldman Sachs & Co. are the lead banks on the credit facility.

Hubbard Broadcasting is a St. Paul, Minn.-based television and radio broadcasting company.

Redflex talk emerges

Redflex also held a bank meeting at 10:30 a.m. ET on Thursday to launch its proposed $215 million credit facility to investors, and shortly before the event, price talk started making its way around the market, according to a market source.

The facility, which is comprised of a $20 million revolver, a $175 million term loan B and a $20 million delayed-draw term loan, is being talked at Libor plus 475 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 981/2, the source said. There is no call protection being offered on the term loan debt.

Corporate ratings are B2/B and ratings on the credit facility are Ba3/B, the source added.

Macquarie Capital (USA) Inc. is the lead bank on the deal.

Redflex getting second-lien

In addition to the first-lien credit facility, Redflex is getting a $75 million second-lien term loan that has already been placed.

Proceeds from the new first- and second-lien debt will be used to help fund the buyout of the company by the Carlyle Group and Macquarie Group Ltd. for $2.74 (A$2.70) per share, or about $304 million. The delayed-draw loan will be available for capital expenditures.

Closing on the acquisition is expected in June, subject to shareholder and regulatory approval.

Leverage through the first-lien debt is 3.5 times and total leverage is 5.0 times, the source remarked, adding that LTM EBITDA is $50.2 million.

Redflex is a South Melbourne, Australia-based manufacturer and operator of highway safety equipment, including digital speed and red-light cameras.

USI shelves deal

In other news, USI Holdings pulled its $100 million term loan as a result of market conditions, according to a market source.

Price talk on the loan had been Libor plus 400 bps with a 1.5% Libor floor and a par offer price.

Goldman Sachs & Co. was the lead bank on the deal that would have been used to refinance a $100 million term loan obtained in 2009 at pricing of Libor plus 500 bps with a 2% Libor floor. The loan was sold at an original issue discount of 95 and was used to pay down revolver borrowings and for general corporate purposes.

USI is a Briarcliff Manor, N.Y.-based distributor of property and casualty insurance and employee benefits products.

Reynolds may launch shortly

Chatter is that Reynolds and Reynolds Co. is eyeing Monday or Tuesday of next week to launch its proposed $950 million term loan B, according to a market source. Earlier talk had been that it would be next week, but potential dates were not available.

As was previously reported, the loan was initially set to launch on March 21, but it was postponed due to market conditions.

The company is in market with a $600 million term loan A, which launched to lenders with a bank meeting on March 3, and talk is that syndication of this tranche has gone very well with the deal already filled out.

Price talk on the term loan A is Libor plus 250 bps with no Libor floor, while price talk on the term loan B has not yet been announced.

Reynolds repaying debt

Proceeds from Reynolds and Reynolds $1.55 billion of new term loan borrowings (Ba2/BB+) will be used to refinance existing debt.

In 2010, the company obtained a $1.82 billion seven-year term loan as part of a refinancing transaction that is priced at Libor plus 350 bps with a step-down to Libor plus 325 bps at 3.0 times net total leverage and a 1.75% Libor floor. The loan was sold at an original issue discount of 99¼ and includes 101 soft call protection for one year.

Deutsche Bank Securities Inc. is the lead bank on the new deal.

Reynolds and Reynolds is a Dayton, Ohio-based dealer services company.

Pinnacle Security closes

Pinnacle Security closed on its $275 million credit facility that includes a $125 million accordion feature, according to a news release.

The facility was launched as a $130 million term loan and a $145 million revolver, with price talk on the term loan being Libor plus 650 bps with a 1.5% Libor floor and an original issue discount of 99.

Final structure and pricing on the deal were not available by press time.

Bank of America Merrill Lynch acted as the lead arranger and bookrunner on the deal that was used to refinance existing debt and will be available for growth capital.

Pinnacle Security is an Orem, Utah-based provider of residential and commercial security systems.

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