Dave & Buster's, Wyle break; Harland Clarke rises; Valitas, Revlon, Delphi, Targus tweak deals

By Sara Rosenberg

New York, May 12 - Dave & Buster's Inc. and Wyle Services Corp. hit the secondary market on Thursday, and Harland Clarke Holdings Corp.'s term loan was stronger on news of an amend and extend.

Over in the primary, Houghton Mifflin Harcourt Publishers Inc. pulled its incremental term loan and credit facility maturity extension from market, but is still seeking an amendment to allow for a notes offering.

Also, Valitas Health Services Inc. and Revlon Consumer Products Corp. trimmed the Libor floor on their deals, and Valitas cut the original issue discount price, too. Delphi Corp. reworked tranche sizes, and Targus Group International Inc. and Cellular One lifted spread and sweetened call protection on their term loans.

Additionally, Asurion, infoGROUP Inc., JBS USA, API Technologies Corp. and CHG Healthcare Services came out with price talk as their new deals were presented to lenders during the session,

Furthermore, BakerCorp revealed the spread and discount guidance on its in market term loan, and SRAM International Corp. disclosed that it is getting ready to bring a new deal to market.

Dave & Buster's frees up

Dave & Buster's saw its $148.5 million covenant-light term loan B break for trading on Thursday, with levels quoted at par ¼ bid, 101 offered, according to a trader.

Pricing on the B loan firmed in line with initial talk at Libor plus 400 basis points with a 1.5% Libor floor, and it was sold at par. There is soft call protection of 102 in year one and 101 in year two.

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

Dave & Buster's is a Dallas-based operator of entertainment and dining complexes.

Wyle tops par

Wyle Services' $283 million term loan B (B1/BB) also made its way into the secondary market, with levels quoted at par ¼ bid, 101 offered, according to a market source.

Pricing on the B loan, which is based on corporate ratings of B3/B+, is Libor plus 425 bps with a step-down to Libor plus 350 bps at corporate ratings of B2/B. There is a 1.5% floor and 101 soft call protection for one year, and the loan was sold at a discount price of 993/4.

During syndication, pricing was lowered by 25 bps across the grid.

The term loan B is part of an amendment, extension and repricing transaction, under which the maturity of the debt will be pushed out by one year to 2017.

Pricing on the B loan is coming down from the current rate of Libor plus 575 bps with a 2% Libor floor based on a rating and leverage grid.

Wyle revising covenants

In addition to the repricing and extension, Wyle is amending its term loan to remove the total leverage and interest coverage covenants and to restructure the senior secured covenant to 4½ times for the life of the loan.

Additionally, the accordion feature would be governed by an incurrence covenant of 4 times, whereas before it was tied to the interest coverage test, and there would be a 6 times incurrence test on total debt, as opposed to being limited by the leverage covenant.

Barclays Capital Inc. is the lead bank on the deal.

Wyle is an El Segundo, Calif.-based provider of high-tech systems engineering, testing and information technology services.

Harland Clarke trades up

Harland Clarke's term loan headed higher in trading after the company announced that it has scheduled a lender meeting for Friday to launch an amendment and extension of the debt, according to a trader.

The term loan was quoted at 94½ bid, 95½ offered, up from 93¾ bid, 94¾ offered, the trader said.

As of March 31, there was roughly $1.7 billion drawn under the term loan that is set to expire on June 30, 2014 and is priced at Libor plus 250 bps.

Credit Suisse Securities (USA) LLC is leading the amendment and extension.

Harland Clarke is a San Antonio, Texas-based provider of best-in-class integrated payment, marketing and security services and retail products.

Houghton cancels loan plans

Houghton Mifflin Harcourt Publishers decided to withdraw its $250 million incremental term loan (Caa1/NA/B) from market, as well as the proposal to extend the maturity on its existing term loan and roll over funded revolver borrowings into extended term loans, according to a market source.

The incremental term loan and extended term loan, both due May 2017, were talked at Libor plus 525 bps with a 1.25% Libor floor, compared to pricing of Libor plus 575 bps on the existing term loan that matures in June 2014.

The offer price on the incremental loan was 99, and proceeds would have been used to pay down existing term loan debt.

Houghton still amending

Although a large chunk of its proposal was pulled, Houghton Mifflin is still asking lenders to amend the credit facility to permit the sale of senior secured bonds, the source remarked.

Plans for the notes have changed as well though, with the company now offering $300 million of bonds, down from $1.35 billion.

Proceeds from the notes will be used for general corporate purposes, including the repayment of borrowings under the company's accounts receivable securitization facility. Prior to the downsizing, the notes were also going to be used to repay some term loan debt.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Wells Fargo Securities are the lead banks on the deal.

Houghton Mifflin is a Boston-based educational publisher in the K-12 market.

Valitas reworks deal

Valitas Health Services lowered the Libor floor on its $360 million senior secured credit facility (Ba3/B) to 1.25% from 1.5%, and, on the term loan, the original issue discount tightened to 99½ from 99 and 101 soft call protection for one year was added, according to a market source.

The $285 million six-year term loan and $75 million five-year revolver are still priced at Libor plus 450 bps, but the term loan now includes a step-down to Libor plus 425 bps at 3.75 times leverage, the source said.

Barclays Capital Inc. and Bank of America Merrill Lynch are the lead banks on the deal and are asking for recommitments by noon ET on Friday.

Valitas to buy America Service

Proceeds from Valitas' credit facility, along with $100 million of mezzanine debt that has been committed by GSO Capital Partners LP, will be used to help fund the acquisition of America Service Group Inc. for $26.00 per share in cash, or about $250 million.

Closing is expected in the second quarter, subject to the approval of America Service Group's stockholders and other customary conditions, including the satisfaction of governmental and regulatory approval requirements.

St. Louis-based Valitas and Brentwood, Tenn.-based America Service Group are providers of health care services to the incarcerated population. The corporate headquarters for the combined company will be in Brentwood, Tenn.

Revlon trims floor

Revlon reduced the Libor floor on its $800 million 61/2-year term loan (Ba3) to 1.25% from 1.5%, while leaving pricing at Libor plus 350 bps with an original issue discount of 991/2, according to a market source. There is still 101 soft call protection for one year.

Recommitments are due at the close of business on Friday.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC and Natixis are the lead banks on the deal that will be used to refinance the company's $792 million term loan due March 2015 obtained in 2010 at pricing of Libor plus 400 bps with a 2% Libor floor and an original issue discount of 981/4.

First-lien debt to adjusted EBITDA is 2.9 times. Total debt to adjusted EBITDA is 4.6 times.

Revlon is a New York-based cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirant/deodorant and beauty care products company.

Delphi shifts tranche sizes

Delphi Corp. revised tranching on its $2.4 billion credit facility (Baa3), downsizing the six-year term loan B to $950 million from $1.15 billion and upsizing the five-year revolver to $1.192 billion from $1 billion and the five-year term loan A to $258 million from $200 million, according to a market source.

The company had previously said that it was considering upsizing its revolver to somewhere between $1.02 billion and $1.1 billion and its term loan A to up to $275 million.

Pricing on the revolver and the term loan A is Libor plus 275 bps, the source said, while price talk on the term loan B is Libor plus 250 bps to 275 bps with a 1% Libor floor, an original issue discount of 99¾ and 101 soft call protection for six months. Sources have been hearing that the spread on the B loan is firming at Libor plus 250 bps.

At launch, the term loan B had been talked at Libor plus 300 bps to 325 bps with a 1.25% Libor floor and an original issue discount of 991/2.

Delphi recapitalizing

Proceeds Delphi's credit facility will be used to help fund $4.4 billion of stock repurchases representing the stakes of General Motors Corp. and the Pension Benefit Guaranty Corp. in Delphi and pay down existing term loan B debt.

Other funds for the transaction will come from $1 billion of senior notes that were downsized from $1.1 billion.

J.P. Morgan Securities LLC is the lead bank on the credit facility.

Delphi is a Troy, Mich.-based automotive electronics manufacturer.

Targus revises loan

Targus raised pricing on its $185 million five-year term loan (B2/B) to Libor plus 950 bps from preliminarily talk of Libor plus 800 bps to 850 bps, and the loan is now non-callable for one year, then at 102 in year two and 101 in year three, compared to initial talk of call protection of 103 in year one, 102 in year two and 101 in year three, according to a market source.

The 1.5% Libor floor and original issue discount of 98 were left unchanged.

With the changes, the loan is oversubscribed, the source remarked. Books are closed and allocations are expected to go out early next week.

The Anaheim, Calif.-based maker of mobile accessories' $245 million credit facility also includes a $60 million ABL revolver that has been pre-committed.

Goldman Sachs & Co. and Bank of America Merrill Lynch are the lead banks on the deal that will be used to refinance existing first-lien revolving credit facility and term loan debt.

Cellular One flexes up

Cellular One lifted pricing on its $175 million six-year term loan B to Libor plus 700 bps from Libor plus 500 bps and added hard call protection of 102 in year one and 101 in year two, in place of the previously proposed 101 soft call protection for one year, according to a market source.

As before, the term loan provides for a 1.5% Libor floor and is being offered at an original issue discount of 99.

The Wayne, Pa.-based provider of wireless phone services' $180 million senior secured credit facility (B2/B) also includes a $5 million five-year revolver.

Recommitments are due over the next few days to allow for some stragglers to get involved.

Barclays Capital Inc. is the lead bank on the deal that will be used to refinance existing debt, redeem preferred equity and fund a dividend.

Senior secured leverage is 3.4 times and net total leverage to 3.2 times.

Asurion releases talk

Asurion held a lender call on Thursday morning to launch its proposed credit facility, and in connection with the event, price talk on the first- and second-lien term loans was announced, according to a market source.

The $2.48 billion seven-year first-lien term loan B is being talked at Libor plus 400 bps with a 1.5% Libor floor, an original issue discount of 99 to 99½ and 101 soft call protection for one year, the source said.

And, the $990 million eight-year second-lien term loan is being talked at Libor plus 750 bps to 775 bps with a 1.5% Libor floor and an original issue discount of 99 to 991/2, the source continued. This tranche is non-callable for one year, then at 103 in year two and 101 in year three.

The company's $3.57 billion credit facility also includes a $100 million five-year revolver.

Asurion lead banks

Bank of America Merrill Lynch, Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. Inc., Goldman Sachs & Co. and Deutsche Bank Securities Inc. are the lead banks on Asurion's credit facility that will be used to refinance existing debt.

The company had attempted a larger scale refinancing earlier this year - comprised of a $120 million five-year revolver, a $3.5 billion seven-year first-lien term loan and a $1.02 billion eight-year second-lien term loan - but it was pulled in March due to market conditions.

Talk on withdrawn first-lien term loan had been Libor plus 375 bps to 400 bps with a 1.5% Libor floor, an original issue discount of 99 to 99½ and 101 soft call protection for one year, and talk on the second-lien loan had been Libor plus 775 bps with a 1.5% Libor floor, an original issue discount of 99 to 99½ and it was non-callable for one year, then at 103 in year two and 101 in year three.

Asurion is a Nashville-based provider of technology protection services.

infoGROUP pricing

infoGROUP was another company to kick off syndication on a proposed credit facility on Thursday, with its $410 million seven-year term loan B talked at Libor plus 375 bps with a 1.25% Libor floor and an original issue discount of 99 to 991/2, according to a market source.

The company's $460 million credit facility (B1) also includes a $50 million five-year revolver.

Bank of America Merrill Lynch is the lead bank on the deal that will be used to refinance existing debt and fund a dividend.

infoGROUP is an Omaha, Neb.-based provider of data-driven and interactive resources for targeted sales, marketing and research services.

JBS launches loan

Continuing on the topic of price talk, JBS USA launched its $400 million seven-year term loan B on Thursday in the Libor plus 325 bps area with a 1.25% Libor floor, an original issue discount of 99½ and 101 soft call protection for six months, according to a market source.

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

The company also plans on getting $1 billion of senior notes to repay debt.

JBS is a Greeley, Colo.-based animal protein processor.

API sets talk

API Technologies launched its $220 million senior credit facility (B2/BB-) on Thursday with price talk Libor plus 450 bps to 475 bps with a 1.25% Libor floor and an original issue discount of 99 to 991/2, according to a market source.

The facility consists of a $20 million three-year revolver that has a 50 bps unused fee and a $200 million seven-year term loan B that includes 101 soft call protection for one year.

Morgan Stanley & Co. Inc. is the lead bank on the deal and is asking for commitments by May 26.

Proceeds, along with $102.6 million in equity and cash, will be used to fund the acquisition of Spectrum Control Inc. for $20 per share. The total purchase price is about $270 million.

API leverage multiples

API's pro forma leverage is 3.4 times including identified cost reductions, EBITDA to interest expense is 5.2 times and debt to capitalization is 45.3%, according to an 8-K filed with the Securities and Exchange Commission.

The acquisition is expected to close during the week of May 30, shortly after Spectrum holds a special shareholder meeting on May 27 to seek approval for the transaction. Closing is also subject to approval pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

API is a Ronkonkoma, N.Y.-based provider of secure communications, electronic components and subsystems and contract manufacturing services to the defense and aerospace industries. Spectrum is a Fairview, Pa.-based designer and manufacturer of high performance, custom services for the defense, aerospace, industrial and medical industries.

CHG discloses guidance

CHG Healthcare Services launched its $217 million first-lien term loan with a call on Thursday morning, at which time lenders were told that the debt is being talked at Libor plus 400 bps with a 1.5% Libor floor, an original issue discount of 99 7/8 and 101 soft call protection for one year, according to a market source.

Barclays Capital Inc., Bank of America Merrill Lynch and Goldman Sachs & Co. are the lead banks on the deal that will be used to reprice/refinance an existing first-lien term loan.

The existing loan was completed in late 2010 at pricing of Libor plus 550 bps with a step-down to Libor plus 525 bps when leverage is less than 4.0 times. There is a 1.75% Libor floor, and the debt was sold at an original issue discount of 98. Investors will be paid out at 101 due to soft call protection.

CHG Healthcare Services is a Salt Lake City-based health care staffing provider.

BakerCorp spread surfaces

BakerCorp came out with official spread and original issue discount guidance on its $390 million seven-year covenant-light term loan B on Thursday, after already launching with a bank meeting this past Tuesday, according to a market source.

The B loan is talked at Libor plus 375 bps and is being offered at a discount of 991/2, the source said. As was previously reported, there is a 1.25% Libor floor and 101 soft call protection for one year.

Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc. are leading the $435 million deal (Ba3/B), which also includes a $45 million revolver, and are asking for commitments by Wednesday.

Proceeds will be used to help fund the buyout of the company by Permira funds for $960 million in a transaction that is expected to close by July, subject to customary regulatory approvals.

BakerCorp is a Seal Beach, Calif.-based provider of equipment rental services for liquid and solid containment applications.

SRAM coming to market

SRAM International has set up a bank meeting for Monday to launch a proposed $840 million credit facility that is being led by J.P. Morgan Securities LLC, according to sources.

The facility consists of a $50 million five-year revolver, a $575 million seven-year first-lien term loan and a $215 million 71/2-year second-lien term loan, sources said, adding that price talk is not yet available.

Proceeds will be used to repay all of the company's existing bank debt and acquire all of the 3.64 million class A units of SRAM Holdings LLC held by Trilantic and its co-investors.

Following completion of the credit facility, the company plans on doing an initial public offering of class A common stock, and using proceeds from that offering to repay some of the new bank debt.

SRAM is a Chicago-based designer, manufacturer and marketer of bicycle components.

Chrysler holds Q&A call

In other news, underwriters on Chrysler Group LLC's $5 billion senior secured credit facility (Ba2/B+) held a call on Thursday afternoon to cover some common questions from investors, according to a market source.

The facility consists of a $1.5 billion five-year revolver and a $3.5 billion six-year term loan, which is talked at Libor plus 400 bps to 425 bps with a 1.25% Libor floor, an original issue discount of 99 to 99½ and 101 soft call protection for one year.

Morgan Stanley & Co. Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. and Bank of America Merrill Lynch are leading the deal for the Auburn Hills, Mich.-based producer of vehicles, with Morgan Stanley the left lead on the term loan and Citi the left lead on the revolver.

Proceeds, along with $2.5 billion in secured notes and $1.3 billion from an investment by Fiat, will be used to repay all of the company's loans provided by the U.S. Department of the Treasury and the Canadian federal and Ontario governments.

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