Atrium breaks; Realogy, Revlon better with numbers; Hillman, RCN Metro Fiber set talk

By Sara Rosenberg

New York, April 29 - Atrium Cos. Inc.'s term loan allocated and freed up for trading on Thursday, with levels quoted above its original issue discount price, and Realogy Corp. and Revlon Inc. were stronger after the release of earnings.

Over in the primary market, Hillman Group Inc. came out with price talk on its proposed credit facility as the transaction was presented to investors in the afternoon, and RCN Metro Fiber revealed price talk on its new deal ahead of its upcoming bank meeting.

Also on the new deal front, DS Waters of America Inc. pulled its credit facility, and Reynolds Group Holdings Ltd. made some changes to its term loan, including increasing the size and lowering the original issue discount price.

Atrium frees up

Atrium's $185 million six-year term loan (B3) hit the secondary market on Thursday, with levels quoted at 99¼ bid, no offers, according to a trader.

Pricing on the term loan is Libor plus 500 basis points with a 2% Libor floor, and it was sold at an original issue discount of 981/2.

Security on the loan is a first-priority lien on all non-ABL assets.

UBS is the lead bank on the deal that will be used to refinance existing debt in connection with the company's exit from Chapter 11.

Atrium is a Dallas-based vinyl and aluminum window company.

Realogy rises on earnings

Realogy's strip of bank debt was higher in trading following the company's first-quarter earnings announcement that showed a smaller net loss, better revenues and higher EBITDA from last year, according to a trader.

The strip was quoted at 90¾ bid, 91¾ offered, up from 90½ bid, 91 offered, the trader said.

For the first quarter, Realogy, a Parsippany, N.J.-based provider of real estate and relocation services, reported a net loss of $197 million, compared to a net loss of $259 million in the previous year.

Net revenues for the quarter were $819 million, up 18% from $697 million in the first quarter of 2009.

And, EBITDA for the period was $11 million, an improvement of $73 million year over year due to revenue gains, cost reductions and productivity gains.

As of March 31, the company's senior secured leverage ratio was 4.51 to 1, which is below the 5.0 to 1 maximum ratio required by the credit facility. There were no borrowings drawn on the revolver and $175 million of readily available cash.

Revlon gains ground

Another company to come out with numbers on Thursday was Revlon, and its term loan was better with the news, according to traders.

The term loan was quoted by one trader at 99½ bid, par offered, up from 99 1/8 bid, 99 3/8 offered, and by a second trader at 99 5/8 bid, 99 7/8 offered, up from 99 3/8 bid, 99¾ offered.

For the first quarter, Revlon had net income of $2.2 million, or $0.04 per diluted share, compared to $12.7 million, or $0.25 per diluted share, in the prior year.

Net sales for the quarter were $305.5 million, compared to $303.3 million last year.

And, adjusted EBITDA for the quarter was $61.1 million, compared to $49.1 million in the first quarter of 2009.

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

Hillman talk emerges

Switching to the primary, Hillman Group held a bank meeting on Thursday with a 2:30 p.m. ET start time at the Palace Hotel in New York to kick off syndication on its proposed $320 million senior secured credit facility, and in connection with the launch, price talk was announced, according to a market source.

Both the $30 million five-year revolver and the $290 million six-year term loan B were launched with talk of Libor plus 375 bps with a 1.75% Libor floor, the source said.

The term loan is being offered at an original issue discount of 99 and the revolver is being offered at 98, the source continued.

Also, the revolver has a 75 bps undrawn fee.

Barclays Capital, Morgan Stanley and GE Capital are the bookrunners on the deal and are asking for commitments by May 11.

Expected ratings for the credit facility are Ba2/BB- and corporate ratings are expected at B2/B.

Hillman being acquired

Proceeds from Hillman's credit facility, along with $150 million of senior unsecured notes and equity, will be used to fund the buyout of the company by Oak Hill Capital Partners from Code Hennessy & Simmons, Ontario Teachers' Pension Plan and certain members of company management for about $815 million.

The company will refinance its subordinated debt issuance and its existing amended senior credit facility in connection with the buyout.

Pro forma leverage is 3.2 times net senior secured, 5.0 times net opco and 6.2 times net total.

Completion of the buyout is expected in the second quarter, subject to regulatory approvals and customary conditions.

Hillman is a Cincinnati-based distributor of fasteners, key duplication systems, engraved tags and related hardware items.

RCN Metro Fiber floats talk

RCN Metro Fiber began circulating price talk on its proposed $240 million six-year term loan as the deal is getting ready to launch with a bank meeting in New York on Friday, according to a market source.

The term loan is being guided at talked at Libor plus 450 bps with a 2% Libor floor and an original issue discount of 981/2, the source said.

SunTrust, GE Capital and Société Générale are the bookrunners on the $265 million deal, which also includes a $25 million five-year revolver.

Expected ratings on the facility are mid single-Bs.

RCN readies Cable deal

RCN will also be approaching the market with a $620 million credit facility that is being done for its RCN Cable business by SunTrust, GE and Société Générale as well, with that deal set to launch on May 7.

The Cable facility consists of a $40 million five-year revolver and a $580 million six-year term loan, with price talk still to be determined, and expected ratings are high single-Bs

Proceeds from the credit facilities, along with equity, will be used to help fund the buyout of RCN Corp. by ABRY Partners in a transaction valued at $1.2 billion, including the assumption of debt. RCN stockholders will be receiving $15 per share.

Closing on the buyout is expected in the second half of this year, subject to receipt of stockholder approval, which will be sought at a special meeting on May 19, regulatory approvals and satisfaction of other customary conditions. The transaction is not subject to any financing condition.

RCN is a Herndon, Va.-based broadband services provider.

DS Waters cancels deal

DS Waters of America opted to remove its $400 million credit facility (Ba2) from market since its concurrent proposed $475 million senior secured notes offering became too expensive, according to sources.

The notes were being talk in the 9¾% to 10% area.

The credit facility consisted of a $100 million revolver and a $300 million term loan, with both tranches priced at Libor plus 350 bps. The term loan, which had been increased from $275 million also included a 1.5% Libor floor and an original issue discount of 99.

JPMorgan was the lead bank on the credit facility that was going to be used with the bonds to refinance existing debt.

DS Waters is an Atlanta-based home and office water delivery company.

Reynolds Group tweaks deal

Reynolds Group revised its term loan (B1), increasing the size to $800 million from $750 million and tightening the original issue discount to 99¾ from 991/2, according to a market source.

Left unchanged was pricing on the term loan, which is Libor plus 425 bps with a 1.5% Libor floor.

Credit Suisse is the lead bank on the deal that will be used, along with $1 billion of 8½% senior notes, to fund the acquisitions of the Evergreen Packaging group of companies and the Whakatane Mill from Carter Holt Harvey Ltd.

The Evergreen Packaging group of companies manufacture fresh carton packaging systems for beverage products, primarily for the juice and milk end markets, and the Whakatane Mill is a paper mill located in New Zealand.

Reynolds Group, an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products, expects to complete the acquisitions in May.

TPC Group closes

In other news, TPC Group Inc. closed on its amended and extended $175 million revolving credit facility, according to an 8-K filed with the SEC on Thursday.

The facility, which replaces a $140 million revolver due in June 2011, matures in March 2013.

In addition, the company said that it decided not to go ahead with its term loan amendment and extension. Under the amendment, the company was going to extend $175 million of its $280 million term loan B to Jan. 2, 2016 from June 2013.

Pricing on the extended term loan B was going to be Libor plus 350 bps, compared to Libor plus 250 bps currently, and was going to be a 1.5% Libor floor. And, pricing on the non-extended term loan B was going to go to Libor plus 300 bps from Libor plus 250 bps, with no Libor floor.

TPC is a Houston-based chemicals processor and service provider.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.