El Pollo modifies size, pricing; Smart Modular, Crown, Nobel, Primedia guidance surfaces

By Sara Rosenberg

New York, June 23 - El Pollo Loco came out with a round of changes to its credit facility on Thursday, including increasing the size as its notes offering was downsized, widening the spread and original issue discount talk and sweetening call premiums.

Also, Smart Modular Technologies Inc., Crown Media Holdings Inc. and Nobel Learning Communities Inc. released price talk as their transactions were launched to investors during the session. Guidance on Primedia Inc.'s in-market deal emerged, and Quad/Graphics Inc. announced new deal plans.

El Pollo reworks deal

Moving to the primary, El Pollo Loco upsized its six-year first-lien term loan (B) to $170 million from $160 million and modified the spread, discount and call premiums, while leaving the 1.5% Libor floor unchanged, according to a market source, who said that commitments are due at 5 p.m. ET on Monday.

Specifically, the term loan is now priced at Libor plus 775 basis points, up from talk of Libor plus 600 bps to 650 bps, and is being offered at an original issue discount of 97, up from 98, the source said.

Also, the loan is now non-callable for one year, then at 105 in year two, 102 in year three and 101 in year four, compared to initial talk of non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

The company's $182.5 million senior secured credit facility, up from $172.5 million, still includes a $12.5 million five-year revolver (B+). Pricing on this tranche is now set at Libor plus 775 bps with no Libor floor and an original issue discount of 98.

El Pollo trims notes

With the term loan upsizing, Ell Pollo Loco reduced its 61/2-year second-lien senior secured notes offering to $105 million from $110 million, the source remarked.

Price talk on the notes is 12.5% cash plus 4.5% PIK, and they are being offered at a price of 97, the source added.

And, the notes are non-callable for two years, then at 104 in year three and 102 in year four, whereas before, they were non-callable for two years, then at 103 in year three and 101½ in year four

Jefferies & Co. is the leading the financing that will be used by the Costa Mesa, Calif.-based restaurant operator to refinance existing debt.

Smart Modular talk emerges

Smart Modular Technologies held a bank meeting at 9:30 a.m. ET at the W Hotel in New York on Thursday to kick off syndication on its proposed credit facility, and in connection with the event, price talk on the term loan was announced, according to sources.

The $300 million seven-year covenant-light first-lien term loan (B2/B+) is being talked at the Libor plus 650 bps area with a 1.25% Libor floor, an original issue discount of 98 to 98½ and call protection of 102 in year one and 101 in year two, sources said.

By comparison, previous filings with the Securities and Exchange Commission had the term loan pricing expected at Libor plus 450 bps with a 1.25% Libor floor and an original issue discount of 991/2.

The company's $350 million senior secured credit facility also provides for a $50 million five-year first-lien first-out revolver (B1).

Smart Modular being acquired

Proceeds from Smart Modular Technologies' credit facility will be used to help fund the buyout of the company by Silver Lake Partners and Silver Lake Sumeru for $9.25 per share in cash. The transaction is valued at about $645 million.

J.P. Morgan Securities LLC and UBS Securities LLC are the lead arrangers and bookrunners on the deal and are asking for commitments by July 8.

Other funds for the acquisition will come from up to $381 million of equity.

Closing is expected in the third quarter, subject to receipt of shareholder and regulatory approval.

Smart Modular is a Newark, Calif.-based manufacturer of memory modules and solid state storage products.

Crown Media sets guidance

Crown Media launched its $210 million seven-year term loan B on Thursday with talk in the Libor plus 400 bps area with a 1.25% Libor floor, an original issue discount of OID 99 to 99½ and 101 soft call protection for one year, according to a market source.

The company's $240 million credit facility (Ba2/BB-) also includes a $30 million five-year revolver.

J.P. Morgan Securities LLC is the lead bank on the deal and is seeking commitments by July 6.

Proceeds will be used to refinance existing intercompany debt and preferred stock.

Crown Media is a Studio City, Calif.-based owner and operator of pay television channels, including the Hallmark Channel and Hallmark Movie Channel.

Nobel reveals pricing

Also holding a bank meeting on Thursday was Nobel Learning Communities, and its $91 million senior secured credit facility, consisting of a $71 million term loan and a $20 million revolver, was launched with talk of Libor plus 450 bps, on a grid, and no Libor floor, according to a source.

Bank of Montreal and Citizens Bank of Pennsylvania are leading the deal that will be used, along with roughly $78.5 million of equity, to fund the buyout of the company by Leeds Equity Partners for $11.75 per share in cash. The transaction is valued at $149 million, including consideration paid to holders of outstanding options and warrants.

Closing is expected within the next few months, subject to regulatory approval, licensing approval from certain governmental agencies and stockholder approval.

Nobel Learning is a West Chester, Pa.-based operator of private preschools, elementary schools, middle schools and K-12 online distance learning.

Primedia discloses talk

Investors were told on Thursday that Primedia's $315 million credit facility (B) - comprised of a $40 million five-year revolver that will be undrawn at close and a $275 million seven-year term loan B - is being talked at Libor plus 500 bps, according to a market source.

The term loan B has a 1.5% Libor floor and is being offered at an original issue discount of 98½ to 99, while the revolver has no floor, the source said.

Commitments are due on June 30.

The deal had been launched with a bank meeting this past Tuesday, but price talk had been labeled as to determined until now. One source previously guessed that the leads were trying to figure out where lenders were interested in the transaction before going out with guidance.

Primedia lead banks

Bank of America Merrill Lynch, Barclays Capital Inc., UBS Securities LLC and RBC Capital Markets LLC are the lead banks on Primedia's credit facility.

Proceeds, along with equity, will be used to fund the buyout of the company by TPG Capital for $7.10 per share in cash, representing a transaction enterprise value of about $525 million.

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

Stockholders with roughly 58% of Primedia's common stock have executed a written consent approving the deal. Therefore, no additional stockholder action is required.

Primedia is a Norcross, Ga.-based provider of internet, mobile and print guides to help people find apartments, houses for rent or new homes for sale.

Quad/Graphics readies deal

In more primary happenings, Quad/Graphics has set a bank meeting for Tuesday at 10:30 a.m. ET at the Metropolitan Club in New York to launch a proposed $1.5 billion credit facility, according to a market source.

The facility consists of an $800 million five-year revolver, a $400 million five-year term loan A and a $300 million seven-year term loan B, the source said.

J.P. Morgan Securities LLC is the left lead bank on the deal that will be used to refinance an existing senior secured credit facility.

Quad/Graphics is a Sussex, Wis.-based provider of print and related services.

Rite Aid firm with numbers

Meanwhile, over in the secondary market, Rite Aid Corp.'s term loans held steady after the Camp Hill, Pa.-based drugstore chain released first-quarter earnings that showed a year-over-year improvement, according to traders.

One trader was quoting the tranche 2 term loan at 95 bid, 96 offered, and a second trader was quoting it at 95¼ bid, 95¾ offered, with both saying it was unchanged on the day.

The traders also called the tranche 5 term loan flat on the day, with the first guy quoting it at 98 bid, 99 offered and the second source quoting it at 98¼ bid, 98¾ offered.

For the first quarter ended May 28, Rite Aid reported a net loss of $63.1 million, or $0.07 per diluted share, compared to a net loss of $73.7 million, or $0.09 per diluted share, last year. Revenues were $6.4 billion, flat compared to the $6.4 billion in the prior year, and adjusted EBITDA was $262.9 million, or 4.1% of revenues, compared to $249.8 million, or 3.9% of revenues, in the previous year.

Van Heusen holds steady

Phillips-Van Heusen Corp.'s term loan were firm at par bid, par ½ offered, according to a trader, as the company updated its earnings per share guidance due to continued strong performance in its Calvin Klein and Tommy Hilfiger businesses.

On a GAAP basis, the company now expects earnings per share for the second quarter to be at least $0.81, which would equal or exceed the high end of its previously announced guidance of $0.79 to $0.81. In the prior year's second quarter, the company had a loss per share of $1.07.

And, for the full-year, the company now expects earnings per share to be towards the high end of its previously announced guidance of $4.08 to $4.28.

Phillips-Van Heusen is a New York-based apparel company.

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