Frontier Drilling rises; Sophos, TI Auto tweak deals; Fidelity sets launch; Precision, NRG pass

By Sara Rosenberg

New York, June 28 - Frontier Drilling (FDR Holdings Ltd.) saw its first-lien term loan head higher during Monday's quiet trading session after news emerged that the company is being acquired by Noble Corp.

Meanwhile, over in the primary market, Sophos plc came out with two final changes to its credit facility, which is now oversubscribed, while TI Automotive flexed pricing higher on its proposed term loan and is giving lenders more time to throw in their orders.

Also, Fidelity National Information Services Inc. firmed up timing on the launch of its term loan B, Willbros Group Inc. is getting closer to figuring out call protection terms on its loan, and Precision Drilling Corp. and NRG Energy Inc. received enough consents from lenders to get their amendments done.

Frontier up on acquisition

Frontier Drilling's first-lien term loan strengthened in the secondary market to 99 bid, par offered from 96 bid, 98 offered on Friday on news that it will be purchased by Noble in a cash transaction, which values the enterprise at $2.16 billion, according to a trader.

Noble plans on funding the acquisition with cash on hand, a drawdown on its existing credit facility and an $800 million bridge loan.

Noble, a Switzerland-based offshore drilling contractor, then anticipates securing permanent financing to replace the bridge loan and pay down the revolver.

Closing on the transaction is expected by the end of July, subject to customary conditions.

Frontier Drilling is a Houston-based offshore drilling services and well construction contractor.

Sophos revises B loan

Moving to the primary, Sophos announced some additional modifications to its term loan B, including increasing the original issue discount again and carving out a euro tranche, according to a market source.

Specifically, the discount on the $229.4 million six-year term loan B has been moved to 96 from the most recent level of 97 and from initial talk in the 99 context, the source said.

And, the term loan B is now comprised of a $25 million euro-equivalent piece and a $204.4 million U.S. piece, as opposed to being all U.S. denominated, the source continued.

Pricing on the term loan B is Libor/Euribor plus 575 basis points with a 2% Libor floor and 101 soft call protection for one year. Last week, pricing on the tranche had been flexed up from the Libor plus 475 bps area and the call premium was added.

Other changes made to the term loan B last week included upsizing the tranche to $229.4 million from $225 million to account for the larger original issue discount, shortening the tenor from seven years and increasing amortization to 3% per year from 1%.

Sophos getting revolver, term A, too

Sophos' $324.4 million senior secured credit facility (B2/B+) also includes a $75 million six-year euro equivalent term loan A and a $20 million six-year revolver, which are both priced at Libor plus 450 bps after flexing up last week from Libor plus 400 bps.

The credit agreement has an excess cash flow sweep of 75%, which was raised from 50% last week, and an accordion feature of $75 million with 25 bps of MFN, revised from $100 million with no MFN last week.

RBC and HSBC are the lead banks on the deal, with RBC the left lead. These banks opted to hold onto the revolver and term loan A and only really syndicate the term loan B.

When the deal was first announced, initial indications were that the term debt would be comprised of a $90 million term loan A and a $210 million term loan B; however, those sizes were labeled as preliminary and likely to change.

Sophos fills out, allocating soon

Following the final revisions to the term loan B, Sophos' credit facility reached oversubscription levels, and the target is to get allocations out late this week, the source remarked.

Proceeds from the credit facility will be used to help fund the buyout of the company by Apax Partners in a transaction valued at $830 million.

When the buyout is completed, the founders of the company will retain a significant minority shareholding. TA Associates, a minority shareholder in Sophos since 2002, will sell its full interest to Apax in this transaction.

Leverage is around 3.8 times.

Sophos is a Boston-based IT security and data protection firm.

TI Automotive ups spread

TI Automotive came out with a change to its $200 million six-year term loan, under which pricing was raised to Libor plus 650 basis points from initial talk of Libor plus 550 bps, according to a market source.

Left unchanged was the term loan's 2% Libor floor, 101 soft call protection for one year and original issue discount of 98.

Also, price talk on the company's proposed $50 million four-year asset-based revolver is still at Libor plus 350 bps.

Citigroup is the lead bank on the term loan, and Citi and UBS are leading the revolver.

TI Automotive extends deadline

Following the term loan pricing change, TI Automotive decided to give lenders time this week to throw in their commitments towards the deal, the source said.

Previously, commitments had been due this past Friday.

Proceeds from the credit facility will be used to refinance existing debt.

TI Automotive is a provider of fluid storage, carrying and delivery technology to automotive manufacturers.

Fidelity National timing emerges

Fidelity National has scheduled a call for 1 p.m. ET on Wednesday to launch its proposed $1.4 billion six-year term loan B, according to a market sources.

JPMorgan and Bank of America are the lead banks on the deal that will be used to help fund the company's recapitalization plan, under which it will repurchase up to $2.5 billion of its common stock in a modified Dutch auction tender offer.

The company had previously said that it would get $2.5 billion of additional term loans and long-term bonds to fund the plan.

Fidelity National is a Jacksonville, Fla.-based provider of financial institution core processing and card-issuer and transaction-processing services.

Willbros outlines some premium details

Willbros Group now expects that its $300 million four-year term loan B will have call protection of 102 in year one and 101 in year two, but it is not yet decided whether that will be hard or soft call, according to a market source.

The term loan B is being talked at Libor plus 750 bps with a 2% Libor floor and an original issue discount in the 97 to 98 area.

Willbros' $475 million senior credit facility (B2/BB-) also includes a $175 million three-year revolver that is priced in line with original talk at Libor plus 425 bps, with a step-down to Libor plus 375 bps after an interim period.

Upfront fees on the revolver were offered anywhere from 112.5 bps to 137.5 bps based on commitment size.

Willbros lead banks

Crédit Agricole Corporate and Investment Bank and UBS Securities are the joint bookrunners on Willbros' term loan B. Crédit Agricole is the bookrunner on the revolver.

When the deal was first launched in early April, the B loan was sized at $300 million and was talked at Libor plus 450 bps to 500 bps with a 2% Libor floor and an original issue discount of 98 to 981/2. Also, pricing was able to step down by 50 bps after an interim period.

The loan, however, was not getting done at those terms, so the company decided to leave price talk unchanged but downsize the term loan B to $50 million and approach the high-yield market with a $250 million six-year senior secured second-lien notes offering that was talked in the 12% area.

The notes were then discarded as a result of weakness in the high-yield market, resulting in the loan going back to its original size with pricing increased.

Willbros funding acquisition

Proceeds from Willbros' credit facility will be used to help fund the acquisition of InfrastruX Group Inc., a Seattle, Wash.-based provider of electric power and natural gas transmission and distribution infrastructure services.

Wilbros will be paying stockholders of InfrastruX cash of $360 million in addition to 7.9 million of new Willbros shares.

In addition, InfrastruX stockholders will be eligible for contingent earn-out payments of up to $125 million.

The company expects to complete the transaction on or around July 1.

Willbros is a Houston-based independent contractor for the oil, gas, power, refining and petrochemical industries.

Precision Drilling gets OK

Precision Drilling attracted enough support from lenders by Friday's consent deadline to get its credit facility amendment passed, a market source told Prospect News on Monday.

Under the amendment, the company asked to lower pricing on its term loan B-1 and term loan B-2 to Libor plus 500 bps with a 1.75% Libor floor.

By comparison, prior to the amendment, the term loan B-1 carried pricing of Libor plus 600 bps and the term loan B-2 carried pricing of Libor plus 800 bps, with both tranches providing for a 3.25% Libor floor.

Consenting lenders are getting a 50 bps fee.

RBC is the administrative agent on the deal.

Precision Drilling is a Calgary, Alberta-based provider of energy services to the oil and gas industry.

NRG Energy approved

NRG Energy's credit facility amendment and extension proposal was approved by lenders at the modified terms that were announced late last week, according to a market source.

And, following the news, the strip of term loan B and synthetic letter-of-credit facility debt was unchanged in trading from previous levels at 95 7/8 bid, 96 3/8 offered, a trader added.

Under the transaction, the company was looking to extend at least $1 billion of its term loan B and synthetic letter-of-credit facility debt to August 2015 from Feb. 1, 2013.

Pricing on the extended debt is Libor plus 325 bps, while pricing on the non-extended debt is Libor plus 175 bps. Initially, lenders were being offered pricing of Libor plus 275 bps on the extended piece, but that spread was later increased.

The extended debt has 101 soft call protection for one year. This feature was added during the amendment talks.

NRG Energy paying fees

Lenders on NRG Energy's credit facility were offered a 25 bps amendment fee, and term loan B and letter-of-credit facility lenders also got a 12.5 bps extension fee. The amendment fee had been increased from the initially proposed 12.5 bps.

Commitments had been due last Friday.

In addition to the institutional debt extension, the company is looking to refinance its $1 billion revolving credit facility with a new five-year facility.

Citigroup is the lead bank on the deal.

NRG is a Princeton, N.J.-based owner and operator of diverse power generation portfolios.

Capella Healthcare closes

In other news, Capella Healthcare Inc. closed on its $100 million ABL revolving credit facility, according to a news release.

Bank of America, Citigroup and Barclays acted as the lead banks on the deal, with Bank of America the administrative agent.

Pricing on the revolver is Libor plus 325 bps.

Proceeds from the revolver, along with a $500 million senior unsecured notes offering, were used to refinance the company's existing bank debt.

Capella Healthcare is a Franklin, Tenn.-based operator of community hospitals.

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