Telesat, Sonneborn free up; International Lease softens on refi; Mercury reworks pricing

By Sara Rosenberg

New York, March 26 - Telesat Canada and Sonneborn LLC saw their new deals break for trading on Monday, with their term loan Bs seen above their original issue discount prices, and International Lease Finance Corp.'s tranche 2 term loan was a little softer with news of a refinancing.

Over in the primary, Mercury Payment Systems LLC made some changes to its term loan, including reducing the coupon while increasing the Libor floor, and Handy & Harman Ltd. released price talk with its launch.

Also, Ascend Performance Materials LLC began circulating guidance on its upcoming term loan B and HD Supply Inc. emerged with plans to bring a new deal to market.

Telesat starts trading

Telesat Canada's credit facility made its way into the secondary market late in the session Monday, with the $1.725 billion U.S. seven-year term loan B quoted at 99¾ bid, par ¼ offered on the open and then it moved to 99 7/8 bid, par 1/8 offered, according to a trader.

Pricing on the U.S. B loan is Libor plus 325 basis points with a 1% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

The company is also getting a $175 million equivalent Canadian seven-year term loan B priced at BA plus 375 bps with a 1.25% floor, and sold at a discount of 99. This debt also has 101 soft call protection for one year.

During syndication, the Canadian carve-out first emerged at $150 million, making the U.S. piece $1.75 billion, but then funds were shifted between the tranches so as to end up at the final amounts. Furthermore, pricing on the U.S. loan was reduced from Libor plus 350 bps, the floor was cut from 1.25% floor and the discount tightened from 99.

Telesat revolver, A loan

In addition to the term loan B borrowings, Telesat's $2.55 billion senior credit facility (Ba3/BB-) includes a $150 million U.S. and Canadian five-year revolver that is priced at Libor plus 300 bps and a $500 million five-year Canadian dollar-equivalent term loan A priced at BA plus 300 bps.

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and UBS Securities LLC are the joint lead arrangers and bookrunners on the term loan B, and CIBC and JPMorgan are the joint lead arrangers and bookrunners on the term loan A and revolver.

Proceeds will be used to refinance an existing credit facility, to fund a roughly C$705 million distribution to shareholders and for general corporate purposes.

Total secured debt is 3.9 times, total debt is 5.6 times and net debt is 5.5 times.

Telesat, an Ottawa-based fixed satellite services operator, expects to close on the new credit facility sometime this month.

Sonneborn tops OID

Sonneborn's credit facility also hit began trading, with the $240 million six-year term loan B quoted at 99½ bid, par ½ offered, according to a market source.

Pricing on the B loan is Libor plus 500 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 98.

During syndication, pricing was reduced from the Libor plus 550 bps context and the 101 soft call protection for one year was eliminated.

The $270 million senior secured facility (B1/B) also includes a $30 million five-year revolver.

Macquarie Capital and BMO Capital Markets Corp. are leading the deal that will fund the company's buyout by One Equity Partners from Sun Capital Partners Inc. Closing is targeted for March 30.

Sonneborn, a Parsippany, N.J.-based manufacturer and supplier of high-purity specialty hydrocarbons, will have total and senior leverage of 3.8 times.

International Lease dips

In more trading news, International Lease Finance's tranche 2 term loan slid to 99¾ bid, par ¾ offered from par bid, par 3/8 offered as the company announced that it will replace the debt with a new $550 million senior secured term loan, according to traders.

Pricing on the existing $550 million senior secured term loan 2 due March 17, 2016 is Libor plus 500 bps with a 2% Libor floor.

The new loan, for which price talk is not yet available, will have essentially the same maturity as the loan it is taking out.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Goldman Sachs & Co. are the lead banks on the deal that is set to launch with a conference call on Tuesday.

International Lease is a Los Angeles-based independent aircraft lessor.

Mercury revises terms

Switching to the primary, Mercury Payment Systems modified its $199 million term loan (B1), cutting the spread to Libor plus 400 bps from Libor plus 425 bps while lifting the Libor floor to 1.5% from 1.25%, according to a market source.

The par offer price and 101 soft call protection for one year were left unchanged, the source said.

Lead banks, Deutsche Bank Securities Inc., Barclays Capital Inc. and Credit Suisse Securities (USA) LLC, are now seeking commitments by noon ET on Tuesday. Originally, commitments were scheduled to be due on Monday.

Proceeds will be used to reprice an existing $199 million term loan that was obtained last year at Libor plus 500 bps with a 1.5% Libor floor.

Mercury Payment Systems is a Durango, Colo.-based payment processing company that partners with point-of-sale developers and resellers.

Handy & Harman talk

Handy & Harman held a bank meeting on Monday afternoon, launching its $200 million term loan B with talk of Libor plus 550 bps, with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, a market source told Prospect News.

Wells Fargo Securities LLC and Bank of America Merill Lynch are the lead banks on the deal that will yield 7%.

Proceeds will be used to refinance roughly $90 million of first- and second-lien term loans and around $40 million of subordinated debt.

With the new term loan B, the company will be upsizing its existing ABL revolver to $125 million from $110 million.

Handy & Harman is a White Plains, N.Y.-based industrial company involved in precious metals, tubing and engineered materials.

Ascend guidance emerges

Ascend Performance Materials revealed price talk on its $550 million six-year term loan B at Libor plus 550 bps to 575 bps with a 1.25% Libor floor and an original issue discount of 98 as the debt is gearing up to launch with a bank meeting on Tuesday afternoon, according to sources.

The loan is non-callable for one year, then at 101 in year two, sources remarked.

The company's $875 million credit facility also includes a $325 million three-year ABL revolver.

Bank of America Merrill Lynch, Jefferies & Co., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the lead banks on the deal that will be used to refinance existing debt and fund a dividend.

Ascend Performance Materials is a Houston-based producer of nylon chemicals.

HD Supply joins calendar

HD Supply announced plans for a new 51/2-year term loan B and a $1.5 billion ABL revolver, with a bank meeting for the term loan B and a 10:30 a.m. ET conference call for the revolver both slated to take place on Tuesday, according to sources.

Also, the company plans on getting new seven-year first priority notes and about $775 million of eight-year second priority notes. A roadshow for the notes will kick off on Thursday and pricing is expected in the middle of the week of April 2.

While specific sizes on the term loan B and first priority notes are not yet available, it is known that the two pieces of debt will total $1.85 billion, sources remarked.

HD Supply lead banks

HD Supply's term loan B is being led by Bank of America Merrill Lynch, Goldman Sachs & Co., Barclays Capital Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Wells Fargo Securities LLC and UBS Securities LLC.

As for the revolver, GE Capital Markets is the left lead on the tranche.

Proceeds from the credit facility and notes will be used to refinance an existing senior secured term loan and ABL facility, as well as 12% senior cash pay notes due 2014.

HD Supply is an Atlanta-based wholesale distributor serving the Infrastructure & Energy, Maintenance, Repair & Improvement and Specialty Construction sectors.

Atlantic Broadband well met

In other news, Atlantic Broadband Finance LLC's $1.06 billion senior secured credit facility has seen strong demand since launching on March 21, resulting in the deal being oversubscribed, according to a market source.

The facility consists of a $50 million five-year revolver, a $660 million seven-year first-lien term loan B and a $350 million 71/2-year second-lien term loan.

The revolver and first-lien term loan are talked at Libor plus 400 bps with a 1.25% Libor floor and an original issue discount of 99. The first-lien term loan has 101 soft call protection for one year.

Meanwhile, the second-lien term loan is talked at Libor plus 850 bps with a 1.25% floor and a discount of 98. This tranche is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four, subject to a carve-out for change of control within the first 24 months.

Atlantic recapitalizing

Proceeds from Atlantic Broadband's credit facility will be used to replace an existing $25 million revolver due in 2015 and a $485.8 million term loan due in 2016, repay all 9.375% senior subordinated notes due 2014, and fund a roughly $345 million dividend.

Credit Suisse Securities (USA) LLC is the lead bank on the deal.

Leverage is 4.3 times through the first lien and 6.5 times through the second lien.

Atlantic Broadband is a Quincy, Mass.-based cable provider.

TASC nets interest

TASC Inc.'s $65 million incremental term loan (B1/BB-) has filled out within talk and is expected to allocate by mid-week, according to a market source.

Pricing on the loan is Libor plus 325 basis points with a 1.25% Libor floor, in line with existing term loan pricing, and the original issue discount is guided at 98 to 981/2.

Final discount price is still being nailed down, the source added.

Barclays Capital Inc., RBC Capital Markets LLC, KKR Capital Markets and Deutsche Bank Securities Inc. are leading the deal that will be used to take out some of the company's mezzanine notes.

TASC is a Chantilly, Va.-based provider of advanced systems engineering and technical assistance to the defense, intelligence, federal and homeland security markets.

Monitronics closes

Monitronics International Inc. completed its $700 million credit facility (Ba3/B) consisting of a $150 million five-year revolver and a $550 million six-year term loan B, according to a news release.

Pricing on the term loan B is Libor plus 425 bps with a 1.25% Libor floor. It was sold at an original issue discount of 99 and includes 101 soft call protection for one year.

During syndication, the B loan was upsized from $500 million as the company's notes offering was trimmed to $410 million from $460 million, and the spread firmed at the tight end of the Libor plus 425 bps to 450 bps talk.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC led the deal that was used to repay all outstanding borrowings under an existing senior secured credit facility and to purchase notes under, and terminate, an existing securitization debt.

Monitronics is a Dallas-based alarm monitoring company.

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