Avago allocates, trades higher; Rocket Software talks loans; LanguageLine sets bank meeting

By Paul A. Harris

Portland, Ore., April 16 - The bank loan market remained well bid on Wednesday, according to market sources.

The LCDX20 index of bank loan credit default swaps finished the session at 103 15/16 bid, 104 7/16 offered, up 1/16 on the day.

A pattern of deals pricing at tightened talk and grinding higher in the secondary market continues, a portfolio manager said.

The Men's Wearhouse Inc. Libor plus 350 bps seven-year covenant-light term loan B (Ba2/B+), which priced Tuesday at 99 in a $1.1 billion deal and traded to 99 5/8% bid, par offered later Tuesday, was 99¾ bid, 100¼ offered at Wednesday's close, the source said.

The Avago Technologies Ltd. Libor plus 300 bps seven-year term loan B (Ba1/BBB-/BBB-) priced on Wednesday at 99.5 and traded to par bid, par ½ offered.

The economic backdrop for leveraged loans remains benign, the portfolio manager said.

However, it is conceivable, based on reports of negative daily cash flows in recent days, that a string of weekly inflows that has been undisrupted for more than 90 weeks could come to an end on Thursday, when new weekly numbers are posted, the source added.

In the primary market, Rocket Software Inc. set pricing for its $725 million of term loans.

And LanguageLine Solutions and Language Line LLC plan to participate in a bank meeting on Monday to discuss $785 million of credit facilities.

Avago prices, trades higher

Avago Technologies priced its $4.6 billion Libor plus 300 basis points seven-year term loan B (Ba1/BBB-/BBB-) at 99.5 on Wednesday, according to a market source.

The deal traded to par bid, par ½ offered.

The Libor spread came on top of spread talk that was tightened from 325 bps.

Additionally, the original issue discount on the term loan was tightened to 99½ from 99 and the 101 soft call protection was extended to one year from six months, the source said.

Furthermore, the term loan saw the addition of a ticking fee of half the spread starting on June 1 and the full spread starting on July 1.

Also added to the loan was a 24-month MFN sunset provision and LuxCo as a co-borrower.

The term loan B still has a 0.75% Libor floor.

The company's $5.1 billion credit facility (Ba1/BBB-/BBB-) also provides for a $500 million Libor plus 250 bps five-year revolver.

Deutsche Bank Securities Inc., Barclays, Bank of America Merrill Lynch and Citigroup Global Markets Inc. are the bookrunners on the deal.

Proceeds will be used to help fund the acquisition of LSI Corp. for $11.15 per share in an all-cash transaction valued at $6.6 billion.

Other funds for the transaction are expected come from $1 billion of cash and a $1 billion investment by Silver Lake Partners in the form of 2% unsecured notes convertible at $48.04 per share or preferred stock.

Closing is expected in the first half of this year, subject to regulatory approvals in various jurisdictions, LSI stockholder approval and customary conditions.

Avago is a Singapore-based designer, developer and supplier of analog semiconductor devices. LSI is a San Jose, Calif.-based designer of semiconductors and software that accelerate storage and networking in datacenters, mobile networks and client computing.

Rocket sets pricing

Rocket Software set pricing for its $725 million of term loans on Wednesday, according to a market source.

A $550 million first-lien covenant-light term loan is talked with a 375 basis points spread to Libor at 99.5 with a 1% floor.

A $175 million second-lien covenant-light term loan is talked at a 725 bps spread to Libor at 99 with a 1% floor.

Jefferies Finance LLC is the lead on the deal.

Proceeds will be used to refinance existing and fund a dividend.

Rocket Software is a Waltham, Mass.-based software development firm.

LanguageLine bank meeting

LanguageLine Solutions and Language Line LLC's planned deal includes a $515 million seven-year first-lien term loan with a 101 six-month soft call, a $220 million 7.5-year second-lien term loan with hard calls at 102 and 101, and a $50 million revolver.

Credit Suisse Securities (USA) LLC is the lead.

The Monterey, Calif.-based provider of language interpretation and translation services plans to use the proceeds to refinance debt and fund a dividend.

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