Supervalu, Chrysler up with numbers; Academy Sports, Capsugel, U.S. Security tweak deals

By Sara Rosenberg

New York, July 26 - Supervalu Inc. and Chrysler Group LLC both saw modest improvements in their term loan levels in trading as the companies released quarterly earnings results, and Coach America Holdings Inc.'s first-lien term loan weakened following a ratings downgrade.

Meanwhile, over in the primary, Academy Sports + Outdoors and Capsugel made some changes to their well-oversubscribed term loans, including lowering spreads and tightening original issue discounts, and U.S. Security Associates Inc. upsized its term loan while trimming pricing and Libor floor.

Additionally, Bojangles Restaurants and Fogo De Chão Churrascaria (Holdings) LLC came out with price talk on their term loans as the deals were presented to lenders during the session, and SNL Financial LC revealed guidance ahead of its launch.

Furthermore, unofficial price talk began circulating on Rock Ohio Caesars LLC's upcoming term loan, and Lender Processing Services Inc. disclosed timing on the launch of its recently announced credit facility.

Supervalu edges higher

Supervalu's term loan B-2 and term loan B-3 were a little stronger on the day after the company announced quarterly numbers that beat expectations, according to a trader.

The term loan B-2 was quoted at 98¾ bid, 99 3/8 offered, up from 98 5/8 bid, 99¼ offered, and the term loan B-3 was quoted at 98 3/8 bid, 99 offered, up from 98¼ bid, 98¾ offered, the trader said. The term loan B-1 was unchanged on the day at par bid, par ¼ offered.

For the first quarter of fiscal 2012, Supervalu reported net earnings of $74 million, or $0.35 per diluted share, compared to net earnings of $67 million, or $0.31 per diluted share, in the prior year.

Net sales for the quarter by the Eden Prairie, Minn.-based supermarket operator were $11.1 billion, compared to net sales of $11.5 billion in the first quarter of fiscal 2011.

And, first quarter net cash flows from operating activities were $245 million compared to $337 million in the prior year.

Chrysler gains ground

Chrysler's term loan B was a touch better in trading with the release of earnings results, with one trader quoting it at 97¾ bid, 98¼ offered, up from 97½ bid, 98 offered.

For the second quarter, the company's net loss was $370 million, compared to a net loss of $172 million in the second quarter of 2010.

Net revenues for the quarter were $13.7 billion, up 30% from $10.5 billion in the previous year.

Modified EBITDA for the quarter totaled $1.3 billion in the quarter, a 51% improvement from $855 million last year.

And, cash at June 30, was $10.2 billion, up $300 million from March 31.

Chrysler is an Auburn Hills, Mich.-based producer of Chrysler, Jeep, Dodge, Ram, Mopar and Fiat vehicles and products.

Coach dips with downgrade

Coach America's first-lien term loan dropped to 77½ bid, 79½ offered from 78 bid, 80 offered after the debt was downgraded by Standard & Poor's to B- from B, according to a trader.

The rating agency said the company's recent operating performance has been weaker than expected and earnings and cash flow are expected to remain depressed over the next year given current market conditions.

Additionally, S&P remarked that if operating performance does not improve and if liquidity weakens, especially if covenant compliance becomes an issue, ratings are likely to be lowered.

Coach America is a Dallas-based charter bus operator and a motorcoach services provider.

Academy Sports cuts pricing

Moving to the primary, Academy Sports revised pricing on its $840 million covenant-light term loan (B2/B) to Libor plus 450 basis points from talk of Libor plus 475 bps to 500 bps and moved the original issue discount to 99 from 981/2, as the deal has been very well received, according to a market source.

As before, the term loan provides for a 1.5% Libor floor and 101 soft call protection for one year.

Commitments were due by 2 p.m. ET on Tuesday. Originally, the commitment deadline had been set for July 28, however last week the deadline was accelerated by two days because of the strong investor reception.

Allocations on the term loan are anticipated to go out on Wednesday, the source added.

The company's $1.49 billion credit facility also includes a $650 million asset-based revolver.

Academy being acquired

Proceeds from Academy Sports' credit facility will be used to help fund the buyout of the company by Kohlberg Kravis Roberts & Co.

Other funds for the transaction, will come from $450 million of senior notes that priced on Monday at par to yield 9¼%

Morgan Stanley & Co. Inc., Credit Suisse Securities (USA) LLC, Barclays Capital Inc., Goldman Sachs & Co., Mizuho Securities USA Inc. and KKR Financial are leading the term loan and are all involved in the revolver too, but J.P. Morgan Securities LLC is the left lead on that asset-based tranche.

Academy Sports is a Katy, Texas-based chain of sporting goods and outdoor stores.

Capsugel flexes lower

Also revising spread and discount was Capsugel, as the $920 million seven-year term loan B was strongly oversubscribed, with one source hearing that there was something like $2.5 billion of orders in the book.

Pricing on the term loan B was reduced to Libor plus 400 bps from Libor plus 450 bps and the original issue discount was tightened to 99½ from 99, while the 1.25% Libor floor and 101 soft call protection for one year were left intact, the source said.

The company's $1.07 billion senior secured credit facility (B1) also includes a $150 million five-year revolver.

Recommitments were due end of the day Tuesday.

Capsugel lead banks

UBS Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., Mizuho Securities USA Inc. and KKR Capital Markets are leading Capsugel's credit facility.

Proceeds, along with €325 million of notes that priced on July 20 at par to yield 9 7/8%, will be used to help fund the buyout of the company by Kohlberg Kravis Roberts & Co LP from Pfizer Inc. for $2.375 billion in cash.

Closing on the transaction is expected in the third quarter, subject to customary conditions, including regulatory approval in certain jurisdictions, such as the United States and the European Union.

Capsugel is a Peapack, N.J.-based manufacturer of hard capsules and drug-delivery systems.

U.S. Security reworks deal

U.S. Security increased its six-year funded term loan to $305 million from $285 million, and lowered pricing on its entire credit facility to Libor plus 475 basis points with a 1.25% Libor floor, according to a market source.

Previously, the funded term loan along with a $75 million delayed-draw term loan were talked at Libor plus 500 bps to 525 bps with a 1.5% floor, and the facility's $75 million five-year revolver was talked at Libor plus 500 bps with a 1.5% floor.

As before, the term loans were offered at an original issue discount of 99 and include 101 soft call protection for one year, and the delayed-draw tranche has a 150 bps ticking fee.

U.S. Security frees to trade

After firming up the new structure and pricing, U.S. Security's credit facility broke for trading, with the strip of term loan debt quoted at 99½ bid, par ¼ offered on the open and then moving to 99¾ bid, par ½ offered, according to a trader.

Proceeds from $455 million credit facility (Ba3/B), up from $435 million, will be used to help fund the buyout of the company by Goldman Sachs Private Equity.

The incremental funds raised through the term loan upsizing will be used to add cash to the balance sheet, the source added.

Goldman Sachs & Co., KeyBanc Capital Markets LLC and Wells Fargo Securities LLC are the lead banks on the deal.

U.S. Security Associates is a Roswell, Ga.-based security firm.

Bojangles sets guidance

In more loan happenings, Bojangles Restaurants held a bank meeting on Tuesday to kick off syndication on its proposed credit facility, and with the event, price talk on the $190 million term loan was announced as Libor plus 625 bps with a 1.25% Libor floor and an original issue discount of 99, according to a market source.

The company's $215 million credit facility also includes a $25 million revolver.

Commitments are due on Aug. 8.

Jefferies and Co. and RBC Capital Markets LLC are the lead banks on the deal that will be used, along with equity, to fund the buyout of the company by Advent International.

Bojangles is a Charlotte, N.C.-based owner of quick service restaurants.

Fogo De Chão pricing

Another company to hold a bank meeting and release price talk was Fogo De Chão Churrascaria (Holdings) LLC, according to a market source.

The company's $195 million seven-year term loan B is talked at Libor plus 475 bps to 500 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source said.

J.P. Morgan Securities LLC is the lead bank on the deal $205 million credit facility (B+), which also includes a $10 million five-year revolver.

Proceeds will be used to finance the acquisition of shares from current shareholders.

Fogo De Chão is a Dallas-based steakhouse chain in the U.S. and Brazil.

SNL readies launch

SNL Financial revealed that it will be holding a bank meeting on Wednesday to launch a proposed $205 million credit facility, and, in preparation for the launch, term loan price talk emerged, according to a market source.

The $175 million seven-year covenant-light term loan is guided at Libor plus 600 bps with a 1.25% Libor floor, a discount of 99 and 101 soft call protection for one year, the source said.

The facility also includes a $30 million five-year revolver.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to help fund the buyout of the company by New Mountain Capital LLC.

SNL is a Charlottesville, Va.-based provider of sector-focused information services on the banking, financial services, insurance, real estate, energy, and media & communications industries.

Rock Ohio floats talk

Continuing on the price talk theme, unofficial guidance on Rock Ohio Caesars' proposed $125 million term loan began making its way around the market as the deal is gearing up to launch with a bank meeting on Wednesday, according to a market source.

Early guidance is Libor plus 650 bps with a 1.5% Libor floor and an original issue discount of 98, and the debt is non-callable for two years, then at 102 in year three and 101 in year four, the source said.

Proceeds, along with a $62.5 million 12-month delayed-draw term loan, a $62.5 million 18-month delayed-draw term loan and $380 million of second-lien notes, will be used to fund the development of casinos in Cleveland and Cincinnati. The delayed-draw loans are not being syndicated.

Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are leading the deal.

Rock Ohio is a joint venture formed by Rock Gaming LLC and Caesars Entertainment Corp.

Lender Processing iming

Lender Processing Services came out with timing on the launch of its $1.3 billion senior secured credit facility (Baa3/BBB), as a bank meeting has been set for 10 a.m. ET on Thursday in New York, according to a market source.

As was previously reported, the facility consists of a $400 million five-year revolver, a $350 million five-year term loan A and a $550 million seven-year term loan B.

Price talk on the deal is not yet available, the source said, however, company officials said in a conference call on Tuesday that they expect the transaction to result in an increase in the company's average interest rate by 100 bps to 200 bps.

J.P. Morgan Securities LLC is the lead bank on the deal.

Lender Processing repays debt

Proceeds from Lender Processing Services' credit facility will be used to refinance existing debt, including a senior secured credit facility, and for general corporate purposes.

Through the refinancing, the company is aiming to enhance liquidity, extend maturities, and gain flexibility under covenants.

Completion of the transaction is expected in August, subject to market and other customary conditions.

Lender Processing Services is a Jacksonville, Fla.-based provider of integrated technology, services and loan performance data and analytics to the mortgage, consumer lending, capital markets and real estate industries.

Quad/Graphics closes

Quad/Graphics Inc. said in a news release that it completed its $1.5 billion credit facility (Ba2/BBB-), consisting of an $850 million five-year revolver and a $450 million five-year term loan A, both priced at Libor plus 225 bps, and a $200 million seven-year term loan B priced at Libor plus 300 bps with a 1% Libor floor. The B loan was sold at an original issue discount of 99½ and has 101 soft call protection for one year.

The B loan was downsized from $300 million during the syndication process, the Libor floor tightened from 1.25% and the discount came at the low end of the 99 to 99½ guidance. Also, the revolver was upsized from $800 million and the term loan A was upsized from $400 million.

J.P. Morgan Securities LLC led the deal that was used by the Sussex, Wis.-based provider of print and related services to refinance an existing senior secured credit facility.

Chiquita wraps deal

Chiquita Brands International Inc. closed on its $480 million senior secured credit facility, according to a news release.

The facility consists of a $150 million revolver and a $330 million term loan, upsized from $250 million, priced at Libor plus 300 bps. There is no Libor floor.

Rabobank and Wells Fargo Securities LLC were the co-lead arrangers on the deal.

Proceeds, along with cash, were used to refinance about $155 million of existing bank debt and fund a tender offer for some of the company's 8 7/8% senior notes due 2015.

Chiquita is a Cincinnati-based marketer and distributor of fresh and value-added food products.

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