Immucor, Cengage Learning, Texas Competitive dip with market; U.S. Coal still in progress

By Sara Rosenberg

New York, Aug. 18 - Immucor Inc.'s term loan B headed lower in its second day of trading, and Cengage Learning and Texas Competitive Electric Holdings Co. were weaker too, as the market in general felt heavier in sympathy with equities.

Over in the primary, U.S. Coal Corp.'s term loan is still being discussed with investors with hopes of getting the deal done. The only change made to date was the beefing up of yearly amortization that was announced early this month.

Immucor loan slides

Immucor's $615 million seven-year term loan B headed down to 96 bid, 97 offered from its 96½ bid, 97½ offered breaking level on Wednesday as the overall secondary market traded down, according to a trader.

Pricing on the B loan is Libor plus 575 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 96. There is 101 soft call protection for one year.

During syndication, the loan was upsized from $600 million, pricing was raised from talk of Libor plus 450 bps to 475 bps, the original issue discount widened from 99 and a senior secured net leverage covenant of 5.25 times was added to what was previously a covenant-light deal. The upsizing was to account for the larger discount price.

The company's $715 million senior secured credit facility (Ba3/BB-) also includes a $100 million five-year revolver, of which no more than $25 million can be drawn at closing.

Immucor being acquired

Proceeds from Immucor's credit facility, $400 million of new senior notes and up to $691 million of equity will be used to fund the buyout of the company by TPG Capital for $27.00 per share in cash. The transaction has a fully diluted equity value of $1.973 billion.

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the joint lead arrangers and bookrunners on the deal, and UBS Securities LLC is a bookrunner as well.

Closing on the buyout is subject to, among other things, approval under the Hart-Scott-Rodino Antitrust Improvements Act and the receipt of approvals under German antitrust or merger control laws, and both of these conditions have been met already.

Immucor is a Norcross, Ga.-based provider of automated instrument-reagent systems to the blood transfusion industry.

Cengage, TXU fall

As mentioned above, the secondary market saw a negative bias on Thursday, but it seemed that the size of the fall was name dependent, a trader said, citing Cengage and Texas Competitive as examples.

Cengage, a Stamford, Conn.-based provider of teaching, learning and research services for the academic, professional and library markets, saw its term loan B quoted at 82¾ bid, 83½ offered, down from 84½ bid, 85¼ offered, the trader remarked.

Meanwhile, Texas Competitive, a Dallas-based energy company, saw its extended term loan quoted at 71 bid, 72 offered, down from 72½ bid, 73½ offered and its non-extended term loan quoted at 75 bid, 76 offered, down from 76 bid, 77 offered.

The trader went on to say that early on, the market only felt about a half a point weaker, but after the Federal Reserve Bank of Philadelphia announced that its index of manufacturing conditions decreased to negative 30.7 from positive 3.2 in July, things took a turn for the worse as people are worrying over the state of the economy.

U.S. Coal still working

Moving to the primary, U.S. Coal's $105 million six-year term loan (B2/B+) is still in the process of being syndicated, a market source told Prospect News on Thursday.

Price talk on the loan is Libor plus 600 bps with a 1.5% Libor floor and an original issue discount of 99, and there is call protection of 103 in year one, 102 in year two and 101 in year three.

In early August, amortization on the term loan was revised to 10% per annum from 1%. No other terms on the transaction have been modified.

Credit Suisse Securities (USA) LLC is the lead bank on the deal that will be used to refinance existing debt.

U.S. Coal is a Lexington, Ky.-based producer of coal in Central Appalachia.

Lender Processing closes

In other news, Lender Processing Services Inc. completed its $1.185 billion senior secured credit facility (Baa3/BBB), consisting of a $250 million seven-year term loan B, a $535 million five-year term loan A and a $400 million five-year revolver, according to a news release.

Pricing on the B loan is Libor plus 450 bps with a 1% Libor floor, and it was sold at an original issue discount of 981/2. Pricing on the A loan and revolver is Libor plus 225 bps, with the revolver having a 50 bps unused fee.

The term loan B has 101 soft call protection for one year.

During syndication, the term B was downsized from $550 million and pricing was revised from initial talk of Libor plus 325 bps to 350 bps with a 1% floor and a discount of 991/2, and the term A was upsized from $350 million.

Lender Processing lead banks

J.P. Morgan Securities LLC, Wells Fargo Securities LLC, U.S. Bank and SunTrust Robinson Humphrey Inc. acted as the lead banks on Lender Processing's credit facility that was used to refinance existing debt, including an existing senior secured credit facility, and for general corporate purposes. Pricing on the prior facility was Libor plus 200 bps on the revolver and term loan A and Libor plus 250 bps on the term loan B.

The goal of the refinancing was to enhance liquidity, extend maturities and provide more flexibility under covenants.

As a result of the tranche size changes, the company got $115 million less term loan debt than originally planned. To make up for this, more borrowings were made under the revolver.

Lender Processing Services is a Jacksonville, Fla.-based provider of integrated technology, services and loan performance data and analytics to the mortgage, consumer lending, capital markets and real estate industries.

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