Grocery Outlet talk emerges; GenTek nets interest; Skype readies allocations; Boise stays firm

By Sara Rosenberg

New York, Oct. 16 - Price talk surfaced on Friday on Grocery Outlet Inc.'s proposed credit facility that is being done along with an equity investment by Berkshire Partners LLC.

Also in the primary, GenTek Inc.'s credit facility is heard to be attracting investor attention at the recently announced guidance and Skype Technologies (Springboard Finance LLC) is near giving out allocations and freeing its credit facility up for trading, with the expectation being that the event will occur within the next couple of days.

In other news, Boise Inc.'s term loan held steady in trading following news that the company will be repaying some bank debt with proceeds from a notes offering and RSC Holdings Inc. completed the tender offer for its second-lien term loan.

Grocery Outlet price talk

Grocery Outlet is talking its $165 million credit facility at Libor plus 575 basis points with a 2.75% Libor floor, a market source told Prospect News on Friday.

The deal is comprised of a $20 million revolver and a $145 million term loan.

Societe Generale and Bank of Scotland are the lead banks on the facility.

Grocery Outlet is a Berkeley, Calif.-based value grocery retailer.

GenTek coming along

Syndication on GenTek's $330 million senior secured credit facility is heard to be "going well" at the pricing guidance that was just announced on Wednesday after ratings from both Standard & Poor's and Moody's Investors Service emerged, according to a market source.

The facility consists of a $30 million four-year revolver and a $300 million five-year term loan B.

Official price talk on the term loan B is Libor plus 475 bps with a 2.5% Libor floor - in line with what was outlined in a commitment letter filed with the Securities and Exchange Commission before ratings were announced - and an original issue discount in the 97 to 98 area.

There is no clarity yet on where the original issue discount on the term loan will fall out, the source remarked.

Pricing on the revolver, according to the credit facility commitment letter, is expected to be Libor plus 450 bps with a 75 bps undrawn fee and a 2.5% Libor floor.

GenTek being bought

Proceeds from GenTek's credit facility will be used to help fund American Securities LLC's acquisition of the company for $38 per share.

Goldman Sachs is the lead arranger and bookrunner on the credit facility, KeyBank is the syndication agent and GE Capital is the administrative agent.

Financial covenants under the facility include a minimum interest coverage and a maximum total leverage ratio.

The company's corporate rating is B1/B+ and the credit facility rating is Ba3/BB-.

GenTek is a Parsippany, N.J.-based provider of specialty inorganic chemical products and valve actuation systems and components for automotive and heavy duty/commercial engines.

Skype allocating soon

Also on the new deal front, chatter is that Skype will likely allocate and free its credit facility up for trading during the week of Oct. 19, according to a market source.

The $630 million facility (B1/B) consists of a $600 million five-year term loan and a $30 million four-year revolver.

Pricing on the term loan is Libor plus 750 bps with a 2% Libor floor and an original issue discount of 96.

During syndication, term loan pricing was flexed up from initial talk of Libor plus 600 bps and the original issue discount widened from 97.

JPMorgan, Barclays and RBC Capital Markets are the lead banks on the deal that will be used to help finance the purchase of a 65% stake in the company from eBay Inc. by an investor group led by Silver Lake and including Index Ventures, Andreessen Horowitz and the Canada Pension Plan Investment Board.

Skype is a Luxembourg-based software that enables individuals and businesses to make free video and voice calls, send instant messages and share files with other Skype users.

Sinclair finalizes size

Sinclair Television Group Inc. set the size of its six-year term loan B (Ba3) at $330 million, whereas before it was being described as an up to $400 million deal, according to a market source.

The decision on the term loan B size came as the company priced $500 million of senior secured notes, as opposed to $430 million as was initially expected.

Sinclair sold the upsized notes offering to fund cash tenders for its 3% senior convertible notes due 2027 and 4.875% senior convertible notes due 2018.

Pricing on the term loan B ended up in line with talk at Libor plus 450 bps with a 2% Libor floor and an original issue discount of 98.

JPMorgan is the lead bank on the deal that will be used to repay the existing $78.8 million tranche A term loan due in December 2011, the $216.6 million tranche A-1 term loan due in December 2012, and some or all revolver borrowings.

Sinclair extending revolver

In addition to the new term loan B, Sinclair is trying to extend its revolving credit facility to 2013 from June 30, 2011.

The company said in an 8-K filed with the SEC that it expects the amended revolver size to be somewhere between $125 million and $175 million and, under the proposed terms, lenders with at least $75 million in commitments are expected to extend their revolver commitments.

Proceeds from the revolver will be used to repay some existing revolver debt and for general corporate purposes.

Furthermore, Sinclair is looking to amend its credit facility to allow for the issuance of senior secured second-lien notes and permit one or more incremental term loans.

The amendment would also provide for revised financial covenants, including an interest coverage ratio, a first-lien secured debt ratio and a total debt ratio.

Sinclair Television is a wholly owned subsidiary of Sinclair Broadcast Group Inc., a Hunt Valley, Md.-based television broadcasting company.

Boise steady with paydown

Over in the secondary market, Boise's first-lien term loan was pretty much unaffected by the company's announcement that it will be repaying some bank debt since the loan was already, and continued to be on Friday, bid at the par level at which it would be taken out, according to a trader.

The offer on the term loan remained in line with prior levels at 1011/2, the trader added.

Early in the day, the company revealed plans to sell $300 million of senior unsecured notes and use proceeds to repay a portion of its term loan debt and to repurchase unsecured subordinated promissory notes.

The company recently received consents from lenders to amend its credit facility to allow for the issuance of up to $300 million of new unsecured debt and permit the buyback of second-lien term loans at a price of 113.

The amendment also requires that $75 million of the first-lien term loan be repaid at par.

In addition, the amendment modifies financial covenants, revises mandatory first-lien prepayment requirements with respect to consolidated excess cash flow for the 2009 fiscal year, and contains authorizations related to the replacement of the administrative agent and collateral agent under the second-lien loan.

Boise is a Boise, Idaho-based manufacturer of packaging and paper products.

RSC wraps tender

RSC Holdings closed its tender offer, buying back $70 million of its second-lien term loan at a price of 91, as was originally proposed, according to a market source.

Deutsche Bank led the tender.

In late August, the company amended the second-lien term loan to allow for a total of $300 million prepayments at a discount for one year through Dutch auctions.

The amendment required that the Dutch auctions could only take place if the available commitments under the company's senior secured asset-based loan equals or exceeds $300 million after giving effect to the prepayment.

Also, the amendment outlined that funds for the prepayment could come from internally generated cash, drawings under the asset-based loan or equity proceeds.

RSC is a Scottsdale, Ariz.-based company involved in the rental of various construction and industrial equipment.

Harrah's funds

In other news, Harrah's Operating Co. Inc. funded its $1 billion incremental term loan B-4 (Caa1/B-) due October 2016 on Thursday, according to an 8-K filed with the SEC on Friday.

The term loan is priced at Libor plus 750 bps with a 2% Libor floor and was sold at an original issue discount of 971/2.

The deal is non-callable for two years, then at 105 in year three, 103 in year four and par thereafter.

During syndication, the loan was upsized from $750 million and the original issue discount finalized at the midpoint of initial talk that was in the 97 to 98 context.

Bank of America and Citigroup acted as the joint lead arrangers and joint bookrunners on the deal, and JPMorgan, Credit Suisse and Deutsche Bank were also bookrunners.

Proceeds are being used to refinance existing debt and to provide additional liquidity. Also, a portion of the net proceeds will be used to fund note tender offers.

Harrah's is a Las Vegas-based provider of branded casino entertainment.

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