Rural/Metro tweaks size and pricing; SteelRiver sets talk; Busch Entertainment going well

By Sara Rosenberg

New York, Nov. 6 - Rural/Metro Corp. came out with a number of changes to its credit facility on Friday, including increasing the term loan size as a result of new bond tender offer and lowering pricing on the entire deal.

Also in the primary, SteelRiver Infrastructure Partners LP released price talk and upfront fees on its credit facility and bridge loan as the deals were launched to investors with a bank meeting early on in the session.

And in more new deal happenings, Busch Entertainment Corp.'s credit facility has been moving along nicely since launching the other week to a select audience, enforcing the expectation that there will be no need for a general syndication process.

Rural/Metro revises facility

Rural/Metro announced some modifications to its refinancing credit facility that included an upsizing of the term loan tranche and a change in pricing and original issue discount, according to a market source.

The term loan is now sized at $180 million, up from $150 million, pricing was reduced to Libor plus 500 basis points from Libor plus 525 bps, and the original issue discount was tightened to 99 from 98, the source said.

Meanwhile, the $40 million revolver was unchanged in terms of size, but it, too, saw a reduction in pricing to Libor plus 500 bps from Libor plus 525, the source remarked.

As before, both tranches carry a 2% Libor floor.

RBC is the lead bank on the credit facility.

Recommitments are due from lenders on Nov. 12. The original commitment deadline for the deal had been Nov. 5.

Rural/Metro refinancing debt

Proceeds from Rural/Metro's now $220 million (Ba3), up from $190 million, credit facility will be used to refinance an existing credit facility that is due in 2011 and help fund a bond tender offer.

The reason for the term loan upsizing on Friday was because the company changed which bonds it is offering to buy back.

Originally, the company was tendering for its roughly $95 million of 12¾% senior discount notes due 2016.

However, on Friday, that tender offer was canceled and instead the company is now tendering for its $125 million of 9 7/8% senior subordinated notes due 2015.

The tender offer will expire on Dec. 7 and is subject to the credit facility being completed and a majority of the notes being tendered.

Rural/Metro is a Scottsdale, Ariz.-based provider of emergency and non-emergency ambulance services and private fire protection services.

SteelRiver price talk

SteelRiver held a bank meeting on Friday to kick off syndication on its credit facility and bridge loan, and in connection with the launch, price talk and upfront fees were revealed, according to a market source.

The $175 million three-year working capital revolver and the $100 million three-year capex revolver were both launched with price talk of Libor plus 400 bps, and are being offered with upfront fees of 100 bps for commitments of $25 million and 75 bps for commitments of $15 million, the source said.

The $100 million 31/2-year holdco term loan was launched with price talk of Libor plus 600 bps and an original issue discount of 981/2.

And, the $470 million one-year secured bridge loan was launched with price talk of Libor plus 400 bps, stepping up to Libor plus 475 bps over time, and is being offered with upfront fees of 50 bps for commitments of $50 million and 25 bps for commitments of less than $50 million, the source continued.

SteelRiver acquiring assets

Proceeds from SteelRiver's $375 million credit facility and bridge loan will be used to fund the acquisition of Dominion Resources Inc.'s Peoples Natural Gas Co. and Hope Gas Inc. natural gas distribution utilities located in Pennsylvania and West Virginia.

The intention is to eventually replace the bridge loan with bonds.

BNP Paribas, Scotia Capital, BayernLB and Union Bank are the lead banks on the deal.

SteelRiver is an investment management firm.

Busch nets interest

Busch Entertainment's $1.125 billion credit facility has been "going well" in terms of syndication ever since launching to a limited group of investors on Oct. 28, according to a market source.

As a result, the source said the continued expectation is that no general launch will be needed for this deal to get done and will, therefore, probably not take place.

The facility consists of a $1 billion term loan talked at Libor plus 350 bps with a 2.25% Libor floor and an original issue discount of 981/2, and a $125 million revolver.

Originally, the term loan was expected to be sized at $950 million and the revolver was expected at $100 million, but they were both increased prior to launching to the select audience.

Busch lead banks

Busch's credit facility is being led by Bank of America Merrill Lynch, Barclays, Deutsche Bank, Goldman Sachs and Mizuho Corporate Bank.

Proceeds will be used to help fund the buyout of the company by the Blackstone Group from Anheuser-Busch InBev for $2.3 billion in cash plus the right to participate in Blackstone's return on its initial investment capped at $400 million.

Other funds for the acquisition will come from equity and $450 million of mezzanine debt provided by Goldman Sachs Mezzanine Partners and funds managed by GSO Capital Partners LP.

As a result of the credit facility upsizing, the equity for the deal was reduced to $975 million.

Closing of the transaction is subject to customary conditions, including regulatory clearance.

Busch Entertainment is an entertainment park operator.

Salton being worked on

Salton Inc.'s $180 million term loan (B3/B) is still in the process of being syndicated as conversations with accounts are ongoing, according to a market source.

The term loan was never launched broadly. Rather, it is being done more on a discussion by discussion kind of basis.

Initial price talk on the term loan was Libor plus 600 bps with a 2.5% Libor floor and an original issue discount of 96, the source said.

The deal was also launched with call protection of 102 in year one and 101 in year two.

Whether these will be the final terms on the deal is still unclear, the source added.

Bank of America is the lead bank on the loan that will be used to refinance an existing term loan.

Salton is a Miramar, Fla.-based marketer and distributor of branded small household appliances.

© 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.