Sensus, Town Sports break; Harland Clarke down on numbers; primary sees wave of deal changes

By Sara Rosenberg

New York, May 5 - Sensus USA Inc. and Town Sports International Holdings Inc. freed up for trading during Thursday's session, and Harland Clarke Holdings Corp.'s term loan slid lower after the company released first-quarter results that showed

Over in the primary, Delphi Corp. reworked pricing guidance, the Libor floor and original issue discount on its term loan B due to strong demand, Springleaf Financial Funding Co. increased the size of its loan, and Sourcecorp Inc. widened original issue discount prices.

Aeroflex Inc., Decision Resources Inc. and Renfro Corp. also came out with changes, with Aeroflex reverse flexing pricing on its oversubscribed term B, Decision Resources upsizing its second-lien loan and cutting pricing and Renfro reducing the Libor floor on its deal.

Also in the primary, Endo Pharmaceuticals released official price talk on its pro rata bank debt in connection with its launch and an anticipated timeframe for its institutional bank meeting started circulating, and Xerium Technologies Inc. disclosed structure and talk on its credit facility.

Sensus hits secondary

Sensus USA, a Raleigh, N.C.-based technology company providing energy and water utility customers with conservation products and services, saw its credit facility break for trading on Thursday, with the $425 million six-year first-lien term loan quoted at par 3/8 bid, par ¾ offered, according to a trader.

And, the company's $150 million seven-year second-lien term loan was quoted at 101½ bid on the open and then it moved up to 102¼ bid, 102¾ offered, the trader said.

Pricing on the first-lien term loan is Libor plus 350 basis points with a step-down to Libor plus 325 bps if total net leverage is less than 4 times. There is a 1.25% Libor floor and 101 soft call protection for one year, and the debt was sold at an original issue discount of 991/2.

The second-lien term loan, meanwhile, is priced at Libor plus 725 bps with a 1.25% Libor floor, and it was sold at a discount of 99. There is call protection of 103 in year one, 102 in year two and 101 in year three.

Sensus getting revolver

Sensus' $675 million senior secured credit facility, which is being led by Credit Suisse Securities (USA) LLC and Goldman Sachs & Co., also includes a $100 million five-year revolver.

During syndication, the first-lien term loan was upsized from $375 million, pricing was cut from Libor plus 375 bps, the step-down and call protection were added and the discount price was changed from 99.

As for the seven-year second-lien term loan, it was reduced from $200 million, pricing was trimmed from Libor plus 750 bps and the original issue discount was moved from 981/2.

Prior to the changes, the revolver and first-lien term loan were rated Ba3/B+, and the second-lien term loan was rated B3/B-.

Proceeds from the credit facility, along with cash on hand, will be used to fund a tender offer that expires on May 9 for the company's $275 million of 8 5/8% senior subordinated notes due 2013, refinance existing bank debt, pay a $50 million dividend and put some working capital cash on the balance sheet.

Town Sports frees up

Town Sports' $300 million seven-year term loan B also made its way into the secondary market, with levels quoted at par bid, 101 offered on the break, according to a market source.

Pricing on the term loan B is Libor plus 550 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 99. There is hard call protection of 102 in year one and 101 in year two.

During syndication, pricing was increased from most recent talk of Libor plus 475 bps and from initial talk at launch of Libor plus 425 bps to 450 bps, the discount widened from 991/2, and call protection was sweetened from 101 soft call for one year.

Deutsche Bank Securities Inc. and KeyBanc Capital Markets LLC are the lead banks on the deal that will be used by the New York-based owner and operator of fitness clubs to repay an existing credit facility and to redeem the company's 11% senior discount notes due 2014.

Harland Clarke softens

Harland Clarke's term loan weakened in trading after the company announced results for the first quarter ended March 31, with one trader quoting it at 94½ bid, 95½ offered, down from 95½ bid, 96¼ offered, and a second trader quoting it at 94 bid, 95 offered, down from 96 bid, 97 offered.

For the quarter, the company reported net income of $23.4 million, compared to net income of $32.2 million in the prior year, consolidated net revenues were $403.9 million, down 6.1% from $430 million in the first quarter of 2010, and adjusted EBITDA was $106.3 million, down 16.6% from $127.5 million in the previous year.

Decatur, Ga.-based Harland Clarke operates through three business segments: Harland Clarke, a provider of checks, direct marketing services and customized business and home office products; Harland Financial Solutions, a provider of technology products to financial institutions; and Scantron, a provider of data management services to educational, health care, commercial and governmental entities.

Delphi tweaks deal

Moving to the primary, Delphi trimmed price talk on its $1.15 billion six-year term loan B to Libor plus 250 bps to 275 bps from talk of Libor plus 300 bps to 325 bps, cut the Libor floor to 1% from 1.25%, moved the original issue discount to 99¾ from 99½ and added 101 soft call protection for six months, according to a market source.

The company's $2.4 billion credit facility (Baa3) also includes a $1 billion five-year revolver and a $250 million five-year term loan A.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used, along with $1.1 billion of senior notes, to help fund $4.4 billion of stock repurchases representing the stakes of General Motors Corp. and the Pension Benefit Guaranty Corp. in Delphi.

Delphi is a Troy, Mich.-based automotive electronics manufacturer.

Springleaf upsizes

Springleaf Financial Funding raised its six-year senior secured term loan to $3.75 billion from $3 billion, while leaving pricing at Libor plus 425 bps with a 1.25% Libor floor and an original issue discount of 991/2, and call protection at 102 in year one and 101 in year two, according to market source.

Recommitments are due from lenders on Friday morning and allocations are expected to go out later that day.

Bank of America Merrill Lynch is the lead arranger on the deal that will be used to refinance an existing term loan obtained last year at pricing of Libor plus 550 bps with a 1.75% Libor floor and sold at an original issue discount of 981/2.

The additional funds being raised will be used for general corporate purposes.

Springleaf Financial is an Evansville, Ind.-based provider of loans, retail financing and other credit related products.

SourceCorp reworks OIDs

Sourcecorp modified the discount on its $350 million six-year first-lien term loan (B1) to 96½ from most recent talk of 97 and from initial talk of 99½ and on its $200 million seven-year second-lien term loan (Caa2) to 95½ from prior talk of 96 and from initial talk of 99, according to a market source.

Pricing on the first-lien term loan is Libor plus 537.5 bps with a 1.25% Libor floor, and there is 101 soft call protection for one year, and pricing on the second-lien term loan is Libor plus 925 bps with a 1.25% floor and the tranche is non-callable for one year, then at 102 in year two and 101 in year three.

Earlier in syndication, pricing on the first-lien term loan was lifted from revised talk of Libor plus 500 bps and from initial talk of Libor plus 425 bps, the call protection and a 75% cash flow sweep were added, and the maturity was shortened from seven years.

As for the second-lien, pricing had been raised from revised talk of Libor plus 900 bps and initial talk of Libor plus 800 bps, call protection moved from 102 in year one and 101 in year two, and the maturity was shortened from eight years.

Sourcecorp funds merger

Proceeds from Sourcecorp's credit facility were used to fund the recently completed merger with HOV Services Inc., a Troy, Mich.-based end-to-end business process outsourcing company.

With the merger, shareholders of Sourcecorp and HOV each control and received 50% ownership of the combined company.

UBS Securities LLC, Credit Suisse Securities (USA) LLC and Jefferies & Co. are the lead banks on the $625 million credit facility, which also includes a $75 million revolver (B1).

Sourcecorp is a Dallas-based provider of business process outsourcing and consulting services.

Aeroflex cuts spread

Aeroflex lowered pricing on its $725 million seven-year term loan B to Libor plus 300 bps from talk of Libor plus 325 bps to 350 bps, while leaving the 1.25% Libor floor and original issue discount of 99½ intact, according to a market source.

Recommitments towards the term loan, which also includes 101 soft call protection for one year, were due on Thursday.

The company's $800 million credit facility (B1/BB-) also provides for a $75 million five-year revolver.

J.P. Morgan Securities LLC, Goldman Sachs & Co., Morgan Stanley & Co. Inc. and Credit Suisse Securities (USA) LLC are leading the deal that will be used to refinance existing debt.

Aeroflex is a Plainview, N.Y., maker of radio frequency and microwave integrated circuits, components and systems used in wireless communication systems.

Decision Resources ups loan

Decision Resources increased its second-lien term loan to $60 million from $50 million and lowered pricing to Libor plus 800 bps from Libor plus 850 bps, according to a market source.

There is still a 1.5% Libor floor and call protection of 103 in year one and 102 in year two, and an original issue discount price of 99.

GE Capital Markets is the lead bank on the deal that will be used to fund a dividend.

Decision Resources is a Burlington, Mass.-based research and advisory firm focused on health care insights and analysis.

Renfro trims floor

Renfro reduced the Libor floor on its term loan to 1.25% from 1.5% and firmed pricing at Libor plus 425 bps, according to a market source. Early guidance had the loan talked at Libor plus 425 bps to 450 bps.

The original issue discount was left unchanged at 99 7/8 and there is 101 soft call protection for one year.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to reprice an existing term loan. Pricing on the existing deal is Libor plus 500 bps with a 1.75% Libor floor.

Renfro is a Mount Airy, N.C.-based manufacturer of socks.

Endo pro rata talk

Endo Pharmaceuticals held a bank meeting on Thursday to kick off syndication on its $500 million five-year revolver and $1.5 billion five-year term loan A, and with the launch, official talk of Libor plus 250 bps was announced, with the revolver having a 50 bps unused fee, according to a market source.

Pricing on the tranches can range from Libor plus 175 bps to 250 bps based on leverage.

The price talk came out in line with what was previously outlined by the company in filings with the Securities and Exchange Commission.

Those filings also said that the revolver unused fee can range from 37.5 bps to 50 bps based on leverage and that amortization on the term loan A is 3.75% in year one, 7.5% in year two, 10% in years three and four, and 15% in year five.

Endo term B timing

With the launch of Endo's pro rata debt, talk began making its way around the market as to when the $900 million seven-year term loan B will be coming, and one source said that he was hearing that a bank meeting is expected to take place during the week of May 16.

A second source told Prospect News that term loan B timing is still to be determined.

Official price talk on the term loan B is not yet available, however, the filings with the SEC said that the tranche would be priced at Libor plus 325 bps with a step-down to Libor plus 300 bps at 3.75 times leverage. There is expected to be a 1% Libor floor and 101 soft call protection for six months.

The filings also said that amortization on the term loan B is 1% per year.

Morgan Stanley & Co. Inc. and Bank of America Merrill Lynch are the lead banks on the $2.9 billion senior secured credit facility, with Morgan Stanley the administrative agent.

Endo funding acquisition

Proceeds from Endo's credit facility, along with $700 million of senior notes, will be used to help fund the acquisition of American Medical Systems for $30 per share, or $2.9 billion in cash, which includes the assumption and repayment of $312 million of debt.

The notes are backed by a commitment for a $700 million one-year bridge loan priced at Libor plus 625 bps, increasing by 50 bps at the end of each three-month period. There is a 1% Libor floor.

Closing on the transaction is expected late in the third quarter, subject to customary conditions, regulatory approval and American Medical stockholder approval.

Endo is a Chadds Ford, Pa.-based specialty health care company focused on branded products and specialty generics. American Medical is a Minnetonka, Minn.-based provider of devices and therapies for male and female pelvic health.

Xerium details emerge

Xerium Technologies also held a bank meeting on Thursday, and with the launch, structure and price talk were revealed on its roughly $285 million multi-currency senior secured credit facility (Ba2/BB-), according to market sources.

The facility consists of a $40 million revolver, a $120 million term loan and an €87 million term loan, with the revolver and U.S. term loan talked at Libor plus 425 bps to 450 bps and the euro term loan talked at Euribor plus 450 bps to 475 bps, sources said. All tranches have a 1.5% floor and are being offered at a discount of 991/2, and the term loans include 101 soft call protection for one year.

Citigroup Global Markets Inc. and Jefferies & Co. are the lead banks on the deal that will be used, along with $240 million of senior unsecured notes, to refinance existing bank debt.

Xerium, a Raleigh, N.C.-based manufacturer of industrial textiles and rolls used primarily in the paper production process, expects to complete the refinancing later this month.

Gundle waiting on ratings

Gundle/SLT Environmental Inc. launched its credit facility too, but price talk has yet to surface as the leads are waiting on ratings, according to a market source.

The up to $210 million credit facility consists of a $40 million to $45 million revolver, a $125 million first-lien term loan that has 101 soft call protection for one year and a $40 million second-lien term loan that has call protection of 102 in year one and 101 in year two.

Late in the day, ratings from Standard & Poor's came out at B- on the revolver and first-lien term loan and CCC+ on the second-lien term loan.

Jefferies & Co. and GE Capital Markets are the lead banks on the deal that will be used to refinance existing ABL credit facility debt and notes.

Leverage is 3.5 times through the first-lien and 4.8 times total.

Gundle/SLT is a Houston-based manufacturer and marketer of geosynthetic lining products and services.

Terra-Gen launches

Yet another deal to launch was Terra-Gen Finance Co. LLC's $360 million senior secured credit facility on Thursday, however, price talk on this transaction is waiting on ratings as well, according to a market source.

A BB rating on the facility surfaced from Standard & Poor's in the evening.

The New York-based renewable energy provider's facility consists of a $60 million five-year working capital revolver and a $300 million six-year term loan B.

Proceeds from the term loan will be used to fully repay existing corporate level debt, fund a cash distribution to parent company Terra-Gen Power LLC and partially fund a debt service reserve. The revolver will be used to issue letters of credit and for partially funding the debt service reserve.

Goldman Sachs & Co. and Credit Suisse Securities (USA) LLC are the joint lead arrangers, joint bookrunners and syndication agents on the deal that is expected to close late this month.

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