Neiman up with earnings; ResCap shutting early; AlixPartners, Applied Systems revise deals

By Sara Rosenberg

New York, May 29 - Neiman Marcus Inc.'s term loan headed higher in trading on Tuesday as the company released fiscal third-quarter results that showed a year-over-year improvement in earnings, revenues and EBITDA.

Moving to the primary, Residential Capital LLC (ResCap) accelerated the commitment deadline on its debtor-in-possession financing facility due to strong oversubscription, and AlixPartners LLP split its first-lien term loan B into two tranches and updated price talk.

Also, Applied Systems Inc. tightened the original issue discount on its well-received tack-on term loan, Sheridan Production Partners pulled its term loan B from market, and Cheniere Energy Partners LP came out with pricing guidance on its term loans as the debt was presented to lenders during the session.

Neiman trades higher

Neiman Marcus' term loan moved up in trading on Tuesday to 98¾ bid, 99½ offered from 98¼ bid, 99¼ offered following the company's third-quarter fiscal year 2012 earnings announcement, according to a trader.

For the quarter, the company reported net earnings of $62.6 million, versus $46.2 million in the prior year, an increase of 35%.

Total revenues for the quarter were $1.06 billion, compared to $983.8 million in the third quarter of fiscal year 2011.

And, EBITDA for the quarter was $191.2 million, up 13% from $169.9 million in the previous year.

Neiman Marcus is a Dallas-based chain of department stores.

ResCap revises deadline

Over on the new deal front, Residential Capital moved up the commitment deadline on its $1.45 billion 18-month DIP financing facility to 5 p.m. ET on Wednesday from Thursday since the deal is well oversubscribed, a market source told Prospect News.

The facility consists of a $200 million revolver talked at Libor plus 400 basis points, a $1.05 billion first-out term loan A-1 talked at Libor plus 400 bps to 425 bps with a 1.25% Libor floor and an original issue discount of 99, and a $200 million last-out term loan A-2 talked at Libor plus 600 bps with a 1.25% floor and a discount of 98.

There have not yet been any updates to pricing, but investors are expecting that the term loan A-1 spread will come at the minimum at the tight end of current talk, the source said.

Barclays Capital Inc. is the lead bank on the deal.

ResCap being sold

Proceeds from Residential Capital's DIP loan will be used to provide liquidity while the company undergoes its Chapter 11 process that is expected to result in the sale of substantially all of its assets for about $4 billion of proceeds.

Specifically, the company agreed to sell its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial Inc.

The restructuring plan is expected to be approved by the fourth quarter.

Residential Capital is a New York-based mortgage originator and servicer.

AlixPartners restructures

AlixPartners made a new round of changes to its credit facility, this time cutting its $600 million seven-year first-lien term loan B (Ba3/B+) into a $75 million five-year B-1 loan talked at Libor plus 425 bps with a 1.25% Libor floor and a discount of 99, and a $525 million seven-year B-2 loan talked at Libor plus 525 bps with a 1.25% floor and a discount of 981/2, sources said.

Previously, the term loan B was talked at Libor plus 475 bps to 500 bps after flexing last week from Libor plus 425 bps, and the discount had been guided at 99.

All of the term loan B debt has 101 soft call protection for one year, a feature that had been around since launch.

Amortization on the B-1 tranche is $5 million in year one, $15 million in years two, three and four, and $25 million in year five, while B-2 amortization is 1% per year, with the balance due at maturity.

AlixPartners tweaks accordion

With the latest structural revisions, AlixPartners modified the first-lien term loan accordion to $150 million, subject to 4.0 times net first-lien leverage, from recent plans of $75 million plus $150 million subject to the leverage test, and initial plans of $100 million plus $200 million subject to the leverage requirement.

The deal has a 75% excess cash flow sweep with step downs, which had been changed last week from 50%.

Commitments are due at 3 p.m. ET on Wednesday.

Proceeds will be used to help fund the buyout of the company by CVC Capital Partners from Hellman & Friedman in a transaction that is expected to close this summer.

AlixPartners second-lien

In addition to the first-lien term loan debt, AlixPartners will be getting a $220 million 71/2-year second-lien term loan (B3/B-) and a $75 million five-year revolver (Ba3/B+) for buyout financing.

The second-lien term loan is expected to be priced about 400 bps higher than the term loan B-2 with a 1.25% Libor floor and an original issue discount that is still to be determined, sources remarked. There is call protection of 103 in year one, 102 in year two and 101 in year three.

At launch, the second-lien loan had been talked at Libor plus 800 bps and the discount was outlined at 98.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Goldman Sachs & Co., Jefferies & Co. and UBS Securities LLC are the lead banks on the $895 million credit facility.

AlixPartners is a performance improvement, corporate turnaround and financial advisory services firm.

Applied Systems cuts OID

Also on the topic of changes, Applied Systems moved the original issue discount on its $85 million add-on first-lien term loan due March 2016 to 99 from 98, according to a market source. Pricing is Libor plus 400 bps with a 1.5% Libor floor.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to fund an acquisition.

Allocations on the add-on are anticipated to be given out on Wednesday, the source added.

The company needed to amend its existing credit facility to allow for the add-on and the acquisition, and lender approval for the amendment was obtained last week.

Applied Systems is a University Park, Ill.-based provider of agency and brokerage management software.

Sheridan postpones deal

Sheridan Production Partners opted to pull its $800 million term loan B (B1) from market because of poor primary conditions, according to a market source.

The loan, which would have refinanced existing debt, had been talked at Libor plus 400 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, BMO Capital Markets Corp., RBS Securities Inc., UBS Securities LLC and Wells Fargo Securities LLC were leading the deal.

Sheridan Production Partners is a Houston-based oil and gas production company.

Cheniere talk emerges

In more primary happenings, Cheniere Energy Partners held a bank meeting on Tuesday afternoon to kick off syndication on its $2 billion of senior secured term loans, and shortly before the event took place, price talk on the debt was announced, according to a market source.

The $750 million 61/2-year term loan at Cheniere Partners is being talked at Libor plus 550 bps, and the $1.25 billion seven-year term loan at Sabine Pass Liquefaction LLC is being talked at Libor plus 425 bps, the source said.

Both term loans have a 1.25% Libor floor, an original issue discount of 95 and are non-callable for two years, then at 102 in year three and 101 in year four, the source continued.

Prior to launch, it was thought that the Sabine Pass term loan would be sized at $1.3 billion.

Cheniere lead banks

Credit Suisse Securities (USA) LLC, SG Americas Securities LLC, Bank of Tokyo-Mitsubishi UFJ, Credit Agricole Securities (USA) Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc. and RBC Capital Markets LLC are leading Cheniere Energy's term loans.

Commitments are due on June 15, the source remarked.

Proceeds from the Cheniere Partners loan will be used to fund the acquisition of the Creole Trail Pipeline, to pay for pipeline improvement and modification costs and for other general business purposes, and the Sabine Pass loan will be used to fund the costs of developing, constructing and placing into service the first two liquefaction trains of the Sabine Pass LNG liquefaction project.

Cheniere, a Houston-based energy company, expects to close on the loans by the end of this quarter in conjunction with the closing of an equity financing and the purchase of the Creole Trail Pipeline.

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