Fortescue, BSN Medical break; Clear Channel continues rise; Blue Coat, Delta tweak deals

By Sara Rosenberg

New York, Oct. 12 - Fortescue Metals Group's term loan freed up for trading on Friday, with the debt seen at par-plus levels, BSN Medical's repriced loan began trading and Pro Mach Inc.'s term loan B was a bit higher from its recent breaking levels.

Also in the secondary market, Clear Channel Communications Inc.'s term loan B continued to strengthen as the company launched an amendment to its credit facility and a notes-for-term loans exchange offer.

Moving to the primary, Blue Coat Systems Inc. firmed pricing on its credit facility at the tight end of guidance and added a pricing step-down to the term loan, and Delta Air Lines Inc. upsized its deal while setting coupons at the low end of talk.

Furthermore, Audio Visual Services Corp. (PSAV Presentation Services) came out with price talk on its first-and second-lien term loans in connection with its launch.

Fortescue starts trading

Fortescue's $5 billion five-year covenant-light senior secured term loan (Ba1/BB+/BBB-) emerged in the secondary market on Friday, with levels quoted at par ½ bid, par 5/8 offered and then it moved to par bid, par ¼ offered, according to a trader.

Pricing on the term loan is Libor plus 425 basis points with a 1% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

Recently, the loan was upsized from $4.5 billion, the spread was reduced from Libor plus 475 bps and the floor was cut from 1.25%.

Credit Suisse and J.P. Morgan Securities LLC are leading the deal that will be used to refinance all of the company's existing bank debt and to provide additional liquidity.

The facility extends the earliest repayment date for any of the company's debt to November 2015 and removes financial maintenance covenants that applied under previous facilities.

Fortescue is an East Perth, Australia-based iron ore producer.

BSN frees up

BSN Medical's repriced dollar-denominated term loan began trading too, with levels quoted at par bid, par ½ offered, according to a trader.

The loan is priced at Libor plus 375 bps with a 1.25% floor and was used to take existing term loan pricing down from Libor plus 475 bps with a 1.25% floor. There is 101 soft call protection for one year and the repriced loan was issued at par.

In addition, the company repriced its euro-denominated term loan to Euribor plus 425 bps from Euribor plus 500 bps. The 1% Libor floor was left unchanged. This tranche was sold at a discount of 99½ and also includes 101 soft call protection for one year.

J.P. Morgan Securities LLC led the deal for the Hamburg, Germany-based medical supplies manufacturer.

Pro Mach strengthens

Pro Mach's roughly $245 million term loan B due July 16, 2017 was quoted at par bid, 101 offered on Friday, up from the 99½ bid, par ½ offered level that was seen on the break on Thursday afternoon, according to a market source.

Pricing on the B loan, which includes s $30 million add-on and about $215 million of existing debt, is Libor plus 375 bps with a 1.25% Libor floor, and there is 101 soft call protection for one year. The add-on was sold at an original issue discount of 991/4.

During syndication, the add-on was upsized from $25 million, pricing was reduced from talk of Libor plus 400 bps to 425 bps, and the discount on the new money came at the midpoint of guidance of 99 to 991/2.

Proceeds from the B loan are being used to reprice the existing term loan B from Libor plus 475 bps with a 1.5% Libor floor and for acquisitions.

Pro Mach getting revolver

Pro Mach's roughly $300 million senior secured credit facility (B2/B+) also includes a $55 million revolver due July 2016 that was upsized from $50 million during syndication. Prior to this transaction, the revolver was sized at $35 million.

Pricing on the revolver is Libor plus 375 bps after it too flexed down from talk of Libor plus 400 bps to 425 bps, and it was sold at a discount of 991/4.

Barclays is the arranger on the deal.

Senior secured leverage is 3.8 times, gross leverage is 3.8 times and net total leverage is 3.4 times.

Pro Mach is a Loveland, Ohio-based provider of packaging machinery services and related aftermarket products to clients in the food, beverage, household goods and pharmaceutical industries.

Clear Channel up again

Clear Channel's term loan B continued to grind higher in trading after the company approached lenders in the morning with an amendment that would permit the exchange of up to $5 billion of any of its term loans for new debt securities, according to a trader.

Along with the amendment, Clear Channel launched a private offer to exchange up to $2 billion of its term loans for newly issued 9% priority guarantee notes due 2019.

The notes would first be callable in July 2015 and contain MFN protection designed to enable participants to exchange their notes for new notes that may be issued in future loan-for-bond exchanges.

After the news emerged, one trader was quoting the term loan B at 85½ bid, 86½ offered, up from 85 bid, 86 offered, and the term loan A at 96 bid, 97 offered, up on the bid side from 95½ bid, 97 offered. A second trader, meanwhile, was quoting the B loan at 85¼ bid, 86¼ offered, up from 84½ bid, 85½ offered, and the A loan as high as 97¾ bid, 98¾ offered.

The company's term loan B had already rallied on Thursday as talk of a lender call first hit the market, with levels jumping up from the 82-plus bid, 83-plus offered context into the mid-80s area.

Clear Channel amendment

In addition to allowing for the exchange, Clear Channel's credit facility amendment would combine the term loan B and two delayed-draw term loans into one tranche that would keep the current pricing of Libor plus 365 bps, preserve revolver capacity if all revolver borrowings are repaid, eliminate certain restrictions on Clear Channel Outdoor Holdings Inc.'s ability to incur debt and gain more flexibility to prepay term loan A debt.

Also, after the repayment or extension of all of the term loan A, the company would be allowed to buy back term loans at a discount through Dutch auctions and repurchase up to $200 million of junior debt maturing before January 2016 with cash on hand.

Consents for the amendment and commitments for the exchange are due by noon ET on Oct. 19.

Citigroup Global Markets Inc., Morgan Stanley and Goldman Sachs are leading the transactions, with Citi the left lead on the amendment and Morgan Stanley the left lead on the exchange offer.

Clear Channel is a San Antonio-based media and entertainment company.

Blue Coat sets pricing

Over in the primary, Blue Coat Systems nailed down pricing on its $500 million term loan due 2018 at Libor plus 450 bps with a 1.25% Libor floor and an original issue discount of 99½ for new money, versus prior talk of Libor plus 450 bps to 475 bps with a 1.25% floor and a discount of 99 to 99½ for new money, according to a market source.

Additionally, the term loan now has a step-down to Libor plus 425 bps at 2.25 times total leverage, the source remarked, adding that total leverage at close is 3.4 times.

Unchanged was the term loan's par offer price for rollover commitments and 101 soft call protection for one year.

The company's $525 million senior secured credit facility (B2/BB-) also provides for a $25 million revolver that saw pricing firm at Libor plus 450 bps with a 1.25% Libor floor as well. This tranche was also talked at Libor plus 450 bps to 475 bps.

Blue Coat repaying debt

Proceeds from Blue Coat's credit facility will be used to refinance an existing bank deal that includes a roughly $360 million first-lien term loan priced at Libor plus 600 bps with a 1.5% Libor floor and a roughly $115 million second-lien term loan priced at Libor plus 1,000 bps with a 1.5% Libor floor.

With the refinancing, existing first-lien lenders are getting paid down at 101, and existing second-lien lenders are getting paid down at 103.

Jefferies & Co. is leading the deal.

Blue Coat is a Sunnyvale, Calif.-based web security company.

Delta updates deal

Delta Air Lines made changes too, increasing its six-year term loan B-1 to $1.1 billion from $1 billion and firming the spread at Libor plus 400 bps, the tight end of the Libor plus 400 bps to 425 bps talk, according to a market source. The loan still has a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

Furthermore, the company increased its 31/2-year term loan B-2 to $400 million from $250 million and set pricing at Libor plus 300 bps, compared to prior talk of Libor plus 300 bps to 325 bps, the source continued. The 1.25% Libor floor and original issue discount of 99 were left intact.

Also includes in the company's now $1.95 billion first-lien senior secured credit facility (Ba2/B+) is a $450 million five-year revolver that will be undrawn at close.

Delta lead banks

Delta Air Lines' credit facility is being led by Barclays, Bank of America Merrill Lynch, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc. and UBS Securities LLC.

Recommitments are due at 5 p.m. ET on Monday, the source added.

Proceeds from the credit facility will be used to refinance the company's existing Pacific Routes senior secured credit facility and senior secured notes.

Delta is an Atlanta-based provider of scheduled air transportation for passengers and cargo.

Audio Visual talk emerges

In more primary happenings, Audio Visual Services held a bank meeting on Friday to kick off syndication on its credit facility, and with the launch, price talk on the term loans was announced, according to a market source.

The $340 million six-year first-lien term loan (B1) is talked at Libor plus 450 bps to 475 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source said.

And, the $115 million 61/2-year second-lien term loan (Caa1) is talked at Libor plus 875 bps to 900 bps with a 1.25% Libor floor, an original issue discount of 98 and hard call protection of 103 in year one, 102 in year two and 101 in year three, the source remarked.

Barclays, Macquarie Capital and Nomura are leading the $495 million senior secured credit facility, which also includes a $40 million five-year revolver (B1).

Audio Visual buying Swank

Proceeds from Audio Visual Services' credit facility will be used to help fund the purchase of Swank Audio Visuals LLC, a St. Louis-based provider of audiovisual and event technology services within the hotel, resort, meetings and conference center industries, and to refinance existing debt.

First-lien leverage is 3 times and second-lien leverage is 4 times, the source continued.

Commitments are due at noon ET on Oct. 26.

Long Beach, Calif.-based Audio Visual Services is a Kelso & Co. portfolio company that provides audiovisual equipment and services to the meeting and event industries.

Terex closes

In other news, Terex Corp. completed the repricing of its roughly $460 million term loan to Libor plus 350 bps with a 1% Libor floor from Libor plus 400 bps with a 1.5% Libor floor, according to a news release.

The company also repriced its roughly €200 million term loan to Euribor plus 400 bps with a 1% floor from Euribor plus 450 bps with a 1.5% floor,

Credit Suisse Securities (USA) LLC led the deal.

Terex is a Westport, Conn.-based diversified manufacturer.

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