TXU trades down; Grande tweaks deal; TriZetto, Town Sports, Sourcecorp, Nexstar set talk

By Sara Rosenberg

New York, April 7 - Texas Competitive Electric Holdings Co. LLC's (TXU) term loans were a little weaker in trading on Thursday likely because of some technical pressure, while the overall market was unchanged to up an eighth of a point.

Over in the primary market, Grande Communications made a number of changes to its credit facility, including reducing the size of both the revolver and the term loan A and raising pricing on the tranches.

Also, TriZetto Group Inc., Town Sports International Holdings Inc. and Sourcecorp Inc. revealed official price talk on their credit facilities as the deals were presented to lenders during the session, and Nexstar Broadcasting Inc. emerged with a term loan B add-on and an amendment proposal.

TXU loans soften

Texas Competitive's term loans B-1, B-2 and B-3 all headed down to 84¾ bid, 84¼ offered from 85 bid, 85½ offered, as levels were probably just pushed lower by a seller who wanted to take some profits, a trader told Prospect News.

The news that the company's senior secured credit facility amendment passed by Thursday's noon ET consent deadline probably had little to do with the move, the trader added.

Under the amendment, the company is revising covenants, including the secured debt to EBITDA requirement, and lenders are acknowledging that the intercompany loans to Energy Future Holdings Corp. comply with the requirement that these loans be made on an "arm's-length" basis and that no excess cash flow mandatory repayments were required for fiscal years 2008, 2009 and 2010.

Lenders were offered a 50 bps amendment fee.

TXU extension in process

When launching the amendment, Texas Competitive also went out to lenders with a maturity extension proposal, and commitments on this transaction are not due until noon ET on Tuesday.

Under the extension, the company is looking to push out the maturity on its first-lien term loan B-1, B-2 and B-3 and deposit letter-of-credit facility by three years to Oct. 10, 2017 and its revolver by three years to Oct. 10, 2016. The extended B-1, B-2 and B-3 debt will be collapsed into one extended term loan.

Pricing on the extended first-lien term loan, deposit letter-of-credit facility and revolver would be Libor plus 450 basis points, compared with non-extended pricing of Libor plus 350 bps, and the undrawn fee on the extended revolver would be 100 bps, up from 50 bps on the non-extended revolver.

The Dallas-based energy company will pay an upfront extension fee of 350 bps on extended term loans and extended deposit letter-of-credit loans.

Citigroup Global Markets Inc. is the left lead bank on the transaction.

Grande reworks deal

Switching to the primary, Grande Communications revised its credit facility, reducing the five-year revolver to $15 million from $20 million and the term loan A to $147.5 million from $165 million, according to a market source.

Also, pricing on both tranches was lifted to Libor plus 425 bps from Libor plus 400 bps, the source said. As before, there is no Libor floor.

In addition, the maturity of the term loan A was shortened to five years from six years, the source said.

Societe Generale and SunTrust Robinson Humphrey Inc. are the co-lead arrangers on the deal.

Grande dividend recap

Proceeds from Grande Communications' $162.5 million credit facility, down from $185 million, will be used to refinance existing debt and fund a dividend.

In 2009, the company obtained an $18.7 million revolver and a $103.8 million term loan, with pricing of Libor plus 675 bps with a 3% Libor floor, and it was sold at an original issue discount of 97.

The size of the dividend was reduced as a result of the facility downsizing.

Closing on the new deal is expected to take place on Monday.

Grande Communications is a San Marcos, Texas-based provider of high-speed internet, local and long-distance telephone and digital cable services.

TriZetto releases guidance

TriZetto Group held a bank meeting on Thursday to kick off syndication on its proposed $750 million credit facility, and in connection with the launch, price talk was announced, according to a market source.

The $100 million five-year revolver is being talked at Libor plus 325 bps with a 62.5 bps undrawn fee and upfront fees of 50 bps to 75 bps, and the $650 million seven-year covenant-light term loan is being talked at Libor plus 325 bps to 350 bps with a 1.25% Libor floor and an original issue discount of 991/2, the source said.

RBC Capital Markets LLC is the lead bank on the deal that will be used to refinance existing debt.

TriZetto is a Greenwood Village, Colo.-based health care information technology company to the health care payer industry.

Town Sports pricing

Town Sports also held a bank meeting on Thursday, at which time price talk of Libor plus 425 bps to 450 bps with a 1.5% Libor floor and an original issue discount of 99½ surfaced on the $300 million seven-year term loan B, according to a market source.

The company's $350 million senior secured credit facility (B) also includes a $50 million revolver.

Deutsche Bank Securities Inc. and KeyBanc Capital Markets LLC are the lead banks on the deal that will be used to repay an existing credit facility and to redeem the company's 11% senior discount notes due 2014.

Town Sports is a New York-based owner and operator of fitness clubs.

Sourcecorp discloses talk

Sourcecorp came out with official price talk on its first- and second-lien term loans on Thursday that was in line with the early guidance that some investors had heard whispered around the market previously, according to a market source.

The $350 million seven-year first-lien term loan (B1) was launched with talk of Libor plus 425 bps with a 1.25% Libor floor and an original issue discount of 991/2, the source said.

And the $200 million eight-year second-lien term loan (Caa2) is being talked at Libor plus 800 bps area with a 1.25% floor and discount of 99, the source continued. Call protection on this tranche is 102 in year one and 101 on year two.

The company's $625 million credit facility, which launched with a bank meeting on Thursday, also provides for a $75 million revolve (B1).

Sourcecorp merging with HOV

Proceeds from Sourcecorp's credit facility will be used to help fund its merger with HOV Services Inc., following which shareholders of Sourcecorp and HOV will each control and receive 50% ownership of the combined company.

The combined company is expected to have about $480 million in revenue.

Closing is subject to customary conditions, including expiration of the antitrust waiting period.

UBS Securities LLC, Credit Suisse Securities (USA) LLC and Jefferies & Co. are the lead banks on the credit facility.

Sourcecorp, a portfolio company of Apollo Management, is a Dallas-based provider of business process outsourcing solutions and consulting services. HOV is a Troy, Mich.-based end-to-end business process outsourcing company.

Nexstar launches add-on

Nexstar Broadcasting held a conference call on Thursday to launch a $50 million term loan B add-on to existing lenders only, according to a market source.

Price talk on the add-on is Libor plus 400 bps with a 1% Libor floor and a par offer price, the source said. This pricing is in line with the company's existing term loan B that was obtained in 2010, except that loan had been sold at an original issue of 99.

Proceeds will be used to redeem $33.4 million of 11 3/8% senior discount notes due 2013, to pay related fees and expenses and for general corporate purposes.

Commitments are due on April 14.

Nexstar seeks amendment

In addition, Nexstar also launched an amendment to its existing credit facility on Thursday, under which the company is asking to preserve the $100 million of incremental term loan capacity, the source remarked.

The amendment is also seeking to allow proceeds from the sale of second-lien notes or senior unsecured notes to be used to refinance existing 7% senior subordinated notes due 2014.

Bank of America Merrill Lynch is the lead bank on the add-on and the amendment, both of which are expected to close at the same time.

The Irving, Texas-based media company's term loan B add-on is conditioned on successful completion of amendment.

American Rock talk emerges

Pricing guidance on American Rock Salt's $250 million covenant-light term loan was released at Libor plus 425 bps to 450 bps with a 1.25% Libor floor and an original issue discount of 99 now that ratings of B2/BB have surfaced, according to a market source.

The company's $290 million credit facility, which also provides for a $40 million revolver, was launched with a bank meeting this past Monday.

RBS Securities Inc. is the lead bank on the deal that will be used, along with $200 million of second-lien notes, to repay debt at the holding company and fund a dividend.

American Rock Salt is a Retsof, N.Y.-based producer of highway deicing rock salt.

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