Rite Aid term loans rise; Aspen Dental firms timing; First Reserve Crestwood well-met

By Sara Rosenberg

New York, Sept. 2 - Rite Aid Corp.'s term loans headed higher during Thursday's very quiet trading session despite news that monthly sales showed a slight decrease from the prior year as the market in general felt a little better.

In addition, Skilled Healthcare Group Inc.'s term loan held steady following the company's announcement that its court case has once again been delayed.

Over in the primary market, Aspen Dental nailed down timing on the launch of its credit facility with the scheduling of a bank meeting for around mid-month.

Also, First Reserve Crestwood Holdings LLC's proposed credit facility is oversubscribed after a club-type syndication took place, and the expectation is that allocations will go out next week.

Rite Aid gains ground

Rite Aid's term loans were better in light activity even though the company reported a year-over-year decline in August sales results, according to a trader.

The Camp Hill, Pa.-based drugstore chain's tranche 2 term loan was quoted at 89½ bid, 90½ offered, up from 89¼ bid, 90¼ offered, and the tranche 3 term loan was quoted at 97½ bid, 98½ offered, up from 97¼ bid, 98¼ offered, the trader said.

"Up with general market, up on illiquidity. Nothing really trading," the trader added.

For the month of August, Rite Aid reported a 1% decline in same-store sales when compared to the prior-year period. Front-end same store sales decreased 0.9% from late year, and pharmacy same store sales declined 1%.

Also, total drugstore sales for the month decreased 2.2% to $2.343 billion from $2.395 billion in the previous year.

Skilled Healthcare holds firm

Skilled Healthcare's term loan was quoted at 94¼ bid, 95¼ offered, unchanged from Wednesday's closing levels after news emerged that the company's court case has been postponed one additional day to Sept. 3, according to a trader.

The trader remarked that early Wednesday afternoon, the term loan was quoted at 93½ bid, 94½ offered, but then it popped up late day for no apparent reason. Word of the delay is the case didn't come out until Wednesday night.

As was previously reported, in 2006, parties alleged that certain of the company's California-based facilities were understaffed and misrepresented the quality of care provided in their facilities.

Then in July, a jury ruled that the company should pay $613 million in statutory damages and $58 million in restitutionary damages to the plaintiffs, and before the punitive damages phase of the trial went on, the parties reached an agreement to enter into mediation to settle the lawsuit.

The Foothill Ranch, Calif.-based health care services company later filed for mistrial or new trial on grounds of juror misconduct, but that motion was denied.

Aspen Dental timing

Moving to the primary, Aspen Dental zeroed in on timing for its proposed $230 million credit facility as a bank meeting has been set for Sept. 13, whereas before, all that was known was that the deal would be post-Labor Day business, according to a market source.

The facility consists of a $35 million revolver and a $195 million term loan, with price talk not yet available, the source said.

UBS is the lead bank on the deal that will be used to help fund the buyout of the company by Leonard Green & Partners LP.

Total leverage will be around 4.0 times.

Aspen Dental is a provider of denture and dental care services.

First Reserve Crestwood sees interest

First Reserve Crestwood Holdings' proposed $530 million credit facility saw strong demand from investors since marketing began to a select group in mid-August, resulting in oversubscription of the transaction, according to a market source.

The facility consists of a $180 million holdco term loan (Caa1) that is being talked at Libor plus 850 basis points with a 2% Libor floor and an original issue discount of 98 and a $350 million opco revolver that is being talked at Libor plus 275 bps, the source said.

There was no official bank meeting for the deal.

Allocations are currently targeted to go out sometime next week, the source added.

First Reserve lead banks

Bank of America, BNP Paribas and RBC are the lead banks on First Reserve Crestwood Holdings' credit facility, with Bank of America the left lead on the term loan and BNP the left lead on the revolver.

Proceeds will be used to help fund the acquisition of Quicksilver Resources Inc.'s interests in Quicksilver Gas Services, a midstream master limited partnership that provides natural gas gathering and processing services, for $701 million in cash at closing and up to $72 million in future earn-out payments.

Closing is expected in October, subject to customary conditions, including expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

First Reserve Crestwood Holdings is a portfolio company of First Reserve Corp. that was formed for the purpose of this acquisition.

© 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.