Renaissance breaks; Supervalu gains; BarrierSafe mulls changes; Open Link revises deadline

By Sara Rosenberg

New York, Oct. 19 - Renaissance Learning Inc.'s credit facility made its way into the secondary market early on Wednesday, with both the first- and second-lien term loans quoted above their original issue discount prices, and Supervalu Inc.'s bank debt was better with earnings.

Over in the primary, BarrierSafe Solutions International Inc. is considering some issuer-friendly revisions to its credit facility as the deal has been well received by investors, and Open Link Financial Inc. is shutting its books early.

Also, just one day after launching, SkillSoft Ltd. tightened the discount on its incremental term loan and accelerated the commitment deadline, while, on the flip side, Total Safety had to make some investor oriented changes to attract more interest, including increasing the coupon and widening the original issue discount, and Marshall Retail Group downsized its term loan and raised pricing.

Furthermore, in the primary, RegionalCare Hospital Partners Inc. revealed price talk on its first-lien term loan following the emergence of ratings, and PolyOne Corp. revealed tranching on its credit facility as the deal is expected to come to market shortly.

Renaissance frees up

Renaissance Learning's credit facility hit the secondary market early on in the day, with the $175 million first-lien term loan (B1/BB-) and the $75 million second-lien term loan both quoted at 98 bid in little volume, according to a trader.

Pricing on the first-lien term loan is Libor plus 625 basis points and pricing on the second-lien loan is Libor plus 1,050 bps, with both having a 1.5% Libor floor and sold at an original issue discount of 96.

The first-lien loan has 101 soft call protection for one year and the second-lien is non-callable for one year, then at 103 in year two and 101 in year three.

During syndication, pricing on the first-lien term loan firmed at the wide end of talk of Libor plus 600 bps to 625 bps with a discount of 96 to 97. Second-lien pricing had not been released until now.

Renaissance getting revolver

Renaissance Learning's $270 million credit facility, which was led by RBC Capital Markets LLC and BMO Capital Markets Corp., also includes a $20 million revolver (B1/BB-).

Proceeds, along with $215.8 million of equity, were used to fund the company's buyout by Permira Funds for $15 per share in cash for shares held by co-founders Terrance and Judith Paul, and $16.60 per share in cash for all other shares. The aggregate purchase price is approximately $455 million.

Initially, Permira was offering $14.85 per share in cash, or roughly $440 million, but the price was raised after a competing bid emerged from Plato Learning Inc. for $15.50 per share in cash. As a result of the higher purchase price, Permira increased the equity component of the transaction from $196.7 million.

The buyout was completed on Wednesday.

Renaissance Learning is a Wisconsin Rapids, Wis.-based provider of technology-based school improvement and student assessment programs for K-12 schools.

Supervalu rises with numbers

Supervalu's term loan B-2 and term loan B-3 were stronger in trading following the release of favorable quarterly results that showed a year-over-year improvement in earnings, according to a trader.

The term loan B-2 was quoted at 95¼ bid, 96¼ offered, up from 94¼ bid, 95¼ offered, and the term loan B-3 was quoted at 93½ bid, 94½ offered, up from 93¼ bid, 94¼ offered, the trader said.

For the second quarter of fiscal 2012, Supervalu reported net earnings of $60 million, or $0.28 per diluted share, compared to a net loss of $1.47 billion, or $6.94 per diluted share, in the prior year.

Net sales for the quarter were $8.4 billion versus net sales of $8.7 billion in the fiscal 2011 second quarter.

And, year-to-date net cash flows from operating activities were $580 million compared to $754 million last year.

Supervalu updates guidance

Additionally on Wednesday, Supervalu tightened its full fiscal year 2012 earnings per diluted share estimate to a range of $1.20 to $1.30 from prior guidance of $1.20 to $1.40 per share.

Net sales for the year are now estimated to be about $36.5 billion, compared to guidance of $37 billion previously.

Capital spending is projected to be about $700 million to $725 million, whereas it was previously expected at $700 million to $750 million.

And, debt reduction for the fiscal year is anticipated to be around $525 million to $550 million, compared to prior estimates of $500 million to $550 million.

Supervalu is an Eden Prairie, Minn.-based supermarket operator.

BarrierSafe may tweak deal

Moving to the primary, BarrierSafe Solutions is mulling over making some issuer-friendly modifications to its $150 million five-year credit facility being that the deal is oversubscribed ahead of Thursday's commitment deadline, a market source told Prospect News.

The facility, consisting of a $30 million revolver and a $120 million term loan, is talked at Libor plus 550 bps with a 1.5% Libor floor and an original issue discount of 981/2.

CIT Group and SunTrust Robinson Humphrey Inc. are leading the deal that will be used, along with $46 million of mezzanine debt being provided by Morgan Stanley, to fund the buyout of the company by Odyssey Investment Partners LLC from Linden LLC.

Leverage is 3.4 times on a senior secured basis, and total leverage is 4.75 times.

BarrierSafe is a Lake Forest, Ill.-based designer, developer and distributor of disposable gloves and a variety of food safety products.

Open Link moves deadline

Open Link Financial changed the commitment deadline on its $375 million credit facility (Ba3/B+) to noon ET on Thursday from Oct. 25, according to a market source.

The facility, which consists of a $50 million revolver and a $325 million first-lien term loan, is talked at Libor plus 650 bps with a 1.5% Libor floor and an original issue discount of 96 to 97, and the term loan has 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC are the joint lead arrangers on the deal that will be used to help fund the buyout of the company by Hellman & Friedman from the Carlyle Group.

First-lien leverage is expected to be 4.0 times based on adjusted pro forma Sept. 30 EBITDA, and closing on the transaction will occur in the fourth quarter, subject to standard conditions.

Open Link is a Uniondale, N.Y.-based provider of cross-asset trading, risk management and operations processing software services.

SkillSoft revises loan

SkillSoft announced in the morning that the original issue discount on its $90 million incremental senior secured term loan (Ba3/BB-) was changed to 97½ from talk of 96 to 97, and the commitment deadline was moved to noon ET on Wednesday from Oct. 25, according to a market source.

The loan had just been launched to lenders with a call this past Tuesday, and by late day, there was already chatter that the books might close early as there was strong interest and not a lot of money to raise.

Pricing on the new loan, which is expected to break for trading on Thursday, is Libor plus 475 bps with a 1.75% Libor floor, in line with current term loan pricing. But, the existing term loan was sold at a discount of 99 when it was obtained back in May.

Morgan Stanley Senior Funding, Inc. and Barclays Capital Inc. are leading the deal that will be used to help fund the acquisition of the Element K business from NIIT Ltd. for $110 million in cash.

SkillSoft is a Nashua, N.H., provider of on-demand e-learning and performance support services.

Total Safety ups pricing

Total Safety also made changes to its credit facility, but in this case, pricing on the $235 million term loan due 2018 had to be sweetened to Libor plus 625 bps from Libor plus 575 bps and the discount was moved to 96 from 97, according to a market source.

The loan still has a 1.25% Libor floor and soft call protection of 102 in year one and 101 in year two.

Other modifications made to the credit facility include increasing the excess cash flow sweep to 75% from 50% and moving most-favored-nation language to 25 bps from 50 bps, the source remarked.

As before, commitments are due on Thursday.

Total Safety lead banks

Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC are the lead banks on Total Safety's credit facility.

The $275 million deal (B2/B-) also provides for a $40 million five-year revolver.

Proceeds will be used to help fund the buyout of the company by Warburg Pincus from DLJ Merchant Banking Partners.

Closing is expected in the fourth quarter, and leverage through the first-lien is 4.3 times, while total leverage is 4.4 times.

Total Safety is a Houston-based outsourced provider of integrated safety and compliance solutions and the products necessary to support them.

Marshall reworks facility

Marshall Retail Group downsized its term loan to $85.5 million from $90 million and increased pricing on the tranche, as well as on a $10 million revolver to Libor plus 650 bps from Libor plus 600 bps, according to a market source.

The 1.5% Libor floor and original issue discount of 98½ on the facility was left unchanged.

Golub Capital acted as the sole bookrunner and administrative agent on the now $95.5 million deal, down from $100 million, and proceeds were used to refinance existing debt and fund a dividend.

Closing last 12 months leverage is 3.5 times.

Marshall Retail is a Las Vegas-based specialty retailer in the casino resort marketplace.

RegionalCare sets talk

In other new deal happenings, RegionalCare Hospital Partners disclosed price talk on its $295 million seven-year first-lien term loan B now that ratings of B2/B have surfaced on the tranche, according to a market source.

The loan is being talked at Libor plus 625 bps to 650 bps with a 1.5% Libor floor and an original issue discount of 96 to 97, and includes 101 soft call protection for one year, the source remarked.

The company's $460 million senior secured credit facility also includes a $100 million five-year revolver (B2/B), and a $65 million 71/2-year second-lien term loan (CCC+) that is already spoken for by a third party.

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Deutsche Bank Securities Inc. are the lead banks on the deal that launched with a bank meeting on Monday.

RegionalCare leverage

With this transaction, RegionalCare's first-lien leverage is 4.1 times and net first-lien leverage is 3.38 times. Also, total leverage is 5.0 times and net total leverage is 4.3 times.

Proceeds from the new credit facility will be used to help fund the purchase of Essent Healthcare from Vestar Capital Partners and Cressey & Co.

Commitments are due at 5 p.m. ET on Oct. 31.

Closing is expected by the fourth quarter, subject to customary regulatory reviews and approvals.

RegionalCare is a Brentwood, Tenn.-based owner and operator of four non-urban hospitals. Essent is a Nashville-based owner and operator of three non-urban acute care hospitals.

PolyOne readies deal

PolyOne's credit facility is expected to launch with a bank meeting in New York during the week of Oct. 24, and with the launch nearing, details on size and tranching have emerged, according to a market source.

The $600 million credit facility is comprised of a $300 million ABL revolver and a $300 million term loan B (Ba1), the source said.

Previously, it was known that the company was planning an ABL facility and a term loan B, but sizes had been unavailable. However, it was known that the company was looking at getting about $300 million of long-term debt.

Bank of America Merrill Lynch and Wells Fargo Securities LLC are the lead banks on the deal.

PolyOne buying ColorMatrix

Proceeds from PolyOne's credit facility will be used to help fund the acquisition of ColorMatrix Group Inc. for $486 million, subject to a customary working capital adjustment and other closing conditions.

Other financing for the transaction will come from cash on hand.

Closing on the acquisition is expected late this year, and is conditioned on the company receiving regulatory approvals.

PolyOne is an Avon Lake, Ohio-based provider of specialized polymer materials and services. ColorMatrix is a Berea, Ohio-based specialty provider of liquid colorants, additives and fluoropolymers.

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