Intersil, Harvard Drug break; Dollar Thrifty rises; Open Mobile, Telcordia, PVH tweak deals

By Sara Rosenberg

New York, April 26 - Intersil Corp. and Harvard Drug Group LLC freed up for trading during Monday's market hours, with both companies' term loans quoted above the original issue discount prices at which they were sold to investors.

Also in trading, Dollar Thrifty Automotive Group's term loan headed higher following news that the company is being acquired by Hertz Global Holdings Inc., while Hertz's strip of bank debt was stronger to steady.

Over in the primary market, Open Mobile increased pricing guidance on its term loan ,Telcordia Technologies Inc. firmed the spread on its term loan and cut the Libor floor and discount, and Phillips-Van Heusen Corp. reduced the size of its term loan B on the back of the upsizing to its bond offering.

Furthermore, Infogroup Inc. and Hillman Group Inc. came out with timing on the launches of their proposed buyout financing credit facilities.

Intersil frees to trade

Intersil's credit facility allocated and hit the secondary market on Monday, with the $300 million six-year senior secured term loan quoted at par bid, par ¾ offered, according to a market source.

Pricing on the term loan is Libor plus 325 basis points with a 1.5% Libor floor and an original issue discount of 991/2.

During syndication, the term loan was downsized from $390 million, pricing was reduced from the Libor plus 350 bps area, the original issue discount was talked at 99 and then at 99½ to par, and the Libor floor firmed at the tight end of the 1.5% to 1.75% talk.

The loan size was reduced because the company elected to use $90 million of balance sheet cash instead of debt for its acquisition of Techwell Inc. for $18.50 per share. Net of Techwell's cash and equivalents, the transaction values Techwell at about $370 million.

Intersil getting revolver

Intersil's now $375 million, down from $465 million, credit facility (Ba2/BB+) also includes a $75 million 31/2-year revolver priced at Libor plus 300 bps with a 50 bps undrawn fee, a 1.5% Libor floor and an original issue discount of 981/2.

During syndication, pricing on the revolver was reduced from the Libor plus 325 bps area, and the Libor floor also firmed at the low end of the 1.5% to 1.75% talk.

Morgan Stanley and Bank of America are the lead banks on the deal, with Morgan Stanley the left lead.

Closing on the acquisition is expected to occur during Intersil's second quarter, subject to customary regulatory approvals and the satisfaction of other transaction conditions, including the tender of at least 50% of Techwell's outstanding shares.

Intersil is a Milpitas, Calif.-based designer and manufacturer of high-performance analog and mixed-signal semiconductors. Techwell is a San Jose, Calif.-based fabless semiconductor company.

Harvard Drug breaks

Also freeing up for trading was Harvard Drug Group's credit facility, with the strip of term loan and delayed-draw term loan debt quoted by one trader at par bid, par ¼ offered and by a second trader at par 1/8 bid, par ¾ offered.

The $160 million six-year term loan and the $22 million delayed-draw term loan are priced at Libor plus 450 bps with a step down to Libor plus 425 bps when leverage falls below 2.5 times. There is a 2% Libor floor and the paper was sold at an original issue discount of 99.

During syndication, the original issue discount was lowered from 98½ and the pricing step down was added.

Credit Suisse and UBS are the lead banks on the $202 million senior secured deal (B1/B+), which also includes a $20 million revolver.

Proceeds are being used to help fund the already completed buyout of the Livonia, Mich.-based independent pharmaceutical distributor by Court Square Capital from H.I.G. Capital LLC.

Dollar Thrifty trades up

Dollar Thrifty Automotive's term loan gained some ground in trading as the company announced that it had entered into a definitive agreement to be purchased by Hertz, and Hertz's strip of bank debt was flat to better depending on which trader was asked.

The Dollar Thrifty term loan was quoted at 99 bid, par offered, up from 95½ bid, 96½ offered, by one trader who explained that the expectation is that this debt will be taken out since there is change of control language in the credit agreement.

And, a second trader had the Dollar Thrifty term loan quoted at 99¼ bid, up from 95 bid, 97 offered, while a third trader had it at 99 bid, par offered, up from 95 bid, 97 offered.

Meanwhile, Hertz's strip was quoted by the first trader at 99 bid, 99½ offered, unchanged on the day, by the second trader at 99 bid, 99¼ offered, up from 98¼ bid, 98¾ offered, and by the third trader at 98¾ bid, 99½ offered, up from 98 bid, 98¾ offered.

Under the acquisition agreement, Hertz is buying Dollar Thrifty for $41 per share, in a mix of cash and common stock.

Hertz to use existing liquidity

Hertz said on Monday that it plans to fund the cash portion of the Dollar Thrifty purchase price with existing liquidity from the combined company, and it will assume or refinance Dollar Thrifty's existing fleet debt.

The cash portion for Dollar Thrifty, a Tulsa, Okla.-based renter and leaser of vehicles, will be paid in two components - a $200 million special cash dividend representing $6.88 per share, to be paid by Dollar Thrifty immediately prior to the transaction closing, and $25.92 per share to be paid by Hertz at the closing.

The stock portion is at a fixed exchange ratio of 0.6366 per share, based upon a Hertz common stock closing price of $12.88 per share on April 23.

At the closing, Hertz will issue an aggregate of about 18 million shares of its common stock and pay an aggregate of approximately $750 million in cash.

The transaction is subject to customary closing conditions, regulatory approvals, approval by Dollar Thrifty stockholders and payment of the special dividend. The transaction is not conditioned on receipt of financing.

Hertz releases numbers

Also on Monday, Hertz came out with first-quarter results, including that it posted a net loss of $150.4 million, or $0.37 per share, compared to a net loss of $163.5 million, or $0.51 per share, in the prior year.

Total revenues for the quarter were $1.66 billion, up 6.1% from $1.56 billion in the first quarter of 2009.

And, corporate EBITDA for the first quarter was $121.4 million, an increase of 32.1% from $91.9 million in the same period last year.

"We have improved year-over-year operating performance for the third consecutive quarter due in part to strong cost management companywide and almost 10% revenue growth in U.S. car rental, our largest business," said Mark P. Frissora, chairman and chief executive officer, in a news release.

Hertz modifies outlook

"Due to our overall positive outlook, we are revising our full year revenue and earnings guidance, including increased adjusted earnings per share now forecasted in the range of $0.43 to $0.45, up from $0.37 to $0.39," Frissora continued in the release.

The company increased its full year revenue outlook to a range of $7.5 billion to $7.7 billion, up from $7.4 billion to $7.6 billion.

Also, the corporate EBITDA outlook was changed to $1.08 billion to $1.095 billion, up from $1.045 billion to $1.06 billion.

Hertz is a Park Ridge, N.J.-based general use car rental brand.

Open Mobile ups talk

Moving to the primary market, Open Mobile modified guidance on its $160 million six-year term loan to Libor plus 450 bps to 475 bps from Libor plus 400 bps to 425 bps, according to a market source.

In addition, the original issue discount on the term loan is now being talked at 98½ instead of at 98½ to 99, the source said.

The term loan still includes a 2% Libor floor.

Morgan Stanley and SunTrust are the joint bookrunners on the $175 million senior secured deal (B2), which also includes a $15 million four-year revolver.

Proceeds will be used to refinance existing debt.

Open Mobile is a provider of pre-paid wireless service in Puerto Rico. It is owned primarily by MC Venture Partners, Columbia Capital and Leap Wireless.

Telcordia reworks pricing

Telcordia firmed pricing on its $500 million six-year first-lien term loan at the low end of talk and reduced the Libor floor and the original issue discount on the debt, according to a market source.

Pricing on the term loan is Libor plus 500 bps, compared to initial talk of Libor plus 500 bps to 550 bps, with a 1.75% Libor floor, down from 2%, and an original issue discount of 99, down from 98, the source said.

The $580 million senior secured credit facility (B1/B+) also includes an $80 million five-year revolver.

Credit Suisse, JPMorgan and Deutsche Bank are the lead banks on the deal that will be used to help fund a recapitalization.

Telcordia tendering for notes

As part of the recapitalization, Telcordia is tendering for any and all of its $555 million of senior secured floating-rate notes due 2012 and any and all of the $254.68 million of 10% senior subordinated notes due 2013.

Other funding for the tender offer is expected to come from a $350 million notes offering, which was upsized from $300 million, and cash on hand.

The tender offer will expire on May 6.

Telcordia is a Piscataway, N.J.-based developer of fixed, mobile and broadband communications software and services.

Phillips-Van Heusen trims size

Phillips-Van Heusen reduced the size of its six-year term loan B to $1.425 billion from $1.5 billion as a result of the company's 7 3/8% senior notes due 2020, ending up at $600 million, up from a most recent size of $525 million, according to a market source.

Talk of a term loan B downsizing hit as soon as the bonds were upsized on Friday, but the actual amount of the reduction had been undecided since the company's equity deal had also been increased and extra funds are also being used to add cash to the balance sheet.

The company sold $332.5 million of common equity comprised of 5 million shares at a price of $66.50 per share, up from a most recently planned size of $275 million.

When word of the transactions first hit the market, it was thought that the bonds would be sized at $600 million and the common stock offering would be $200 million. However, prior to launching, the bond size was reduced by $75 million and the planned equity deal was increased by the equivalent amount.

Phillips-Van Heusen facility details

Pricing on Phillips-Van Heusen's term loan B is Libor plus 300 bps on the U.S. piece and Euribor plus 325 bps on the euro piece, with a 1.75% Libor floor and an original issue discount of 99½ on the entire tranche.

Last week, pricing on the U.S. term loan B was lowered from initial talk of Libor plus 325 bps to 350 bps, pricing on the euro term loan B was lowered from talk of Euribor plus 350 bps to 375 bps, and the original issue discount on both pieces was tightened from 99.

The company's $2.375 billion, down from $2.45 billion, senior secured credit facility (Ba2/BBB) also includes a $450 million five-year revolver and a $500 million five-year term loan A, with both tranches priced at Libor plus 300 bps on the U.S. pieces and at Euribor plus 325 bps on the foreign pieces.

The term loan A has a 1.75% Libor floor, while the revolver has no floor, and upfront fees on the two tranches are 100 bps on allocation for a $40 million commitment and 50 bps on allocation for a $20 million commitment.

Phillips-Van Heusen lead banks

Barclays Capital and Deutsche Bank are the global debt coordinators and bookrunners on Phillips-Van Heusen's credit facility, with Barclays the left lead. Other bookrunners include Bank of America, Credit Suisse and RBC Capital Markets.

Commitments towards the term loan B were due on Monday at 5 p.m. ET, after being accelerated from Wednesday, but commitments on the pro rata are still due on Wednesday.

Proceeds from the credit facility, bonds and stock will be used to help fund the acquisition of Tommy Hilfiger BV from Apax Partners LP for €2.2 billion, or about $3 billion, plus the assumption of €100 million in liabilities, and to refinance Phillips-Van Heusen's $300 million of existing senior unsecured notes due in 2011 and 2013.

The consideration to be paid to Apax includes €1.924 billion in cash and €276 million in Phillips-Van Heusen common stock.

New York-based Phillips-Van Heusen and Tommy Hilfiger are apparel companies.

Infogroup timing emerges

Infogroup has firmed up timing on the launch of its proposed $365 million senior secured credit facility with the scheduling of a bank meeting for Wednesday morning, according to a market source.

Bank of America is the lead bank on the deal that consists of a $315 million term loan and a $50 million revolver.

Price talk is not yet available and will likely not come out until the bank meeting, the source said.

Proceeds, along with $343.7 million of equity, will be used to fund the buyout of the company by CCMP Capital Advisors LLC for $8.00 in cash per share. The transaction has a total value of about $635 million, including the refinancing of its outstanding debt.

Closing is anticipated in early summer, subject to the approval of Infogroup shareholders, regulatory approvals and customary closing conditions.

Infogroup is an Omaha, Neb.-based provider of data-driven and interactive resources for targeted sales, marketing and research services.

Hillman reveals launch date

Another company to set timing on its credit facility was Hillman Group as it scheduled a bank meeting for Thursday with a 2:30 p.m. ET start time at the St. Regis in New York to launch its proposed $320 million senior secured credit facility, according to a market source.

The facility consists of a $30 million revolver and a $290 million term loan, the source said.

Barclays Capital, Morgan Stanley and GE Capital are the lead banks on the deal that will be used, along with equity and $150 million of senior unsecured notes, to fund the buyout of the company by Oak Hill Capital Partners from Code Hennessy & Simmons, Ontario Teachers' Pension Plan and certain members of company management for about $815 million and refinance existing debt.

The completion of the transaction is expected in the second quarter, subject to regulatory approvals and customary conditions.

Hillman is a Cincinnati-based distributor of SKUs, including fasteners, key duplication systems, engraved tags and related hardware items.

Integra Telecom closes

In other news, Integra Telecom Holdings Inc. closed on its $310 million senior secured credit facility, consisting of a $250 million term loan (B2/CCC+) and a $60 million revolver (Ba2/B+).

Pricing on the term loan is Libor plus 725 bps with a 2% Libor floor, and it was sold at an original issue discount of 98, and the revolver is priced at Libor plus 425 bps with no floor.

During syndication, the term loan was upsized from $210 million and the spread firmed at the tight end of the initial Libor plus 725 bps to 750 bps talk.

JPMorgan, Deutsche Bank, Goldman Sachs, Jefferies and Morgan Stanley acted as the lead banks on the deal that was used to refinance existing debt and for general corporate purposes.

Other funds for the refinancing came from $475 million of senior secured notes that priced at par to yield 10¾%. The notes offering was downsized from $500 million.

Integra Telecom is a Portland, Ore.-based provider of voice and internet services.

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