LPL Financial, Momentive, Covanta, PetroLogistics, NPC and UTEX break; Telesat tweaks deal

By Sara Rosenberg

New York, March 23 - LPL Financial LLC shifted funds between its term loans and then hit the secondary market with the institutional debt seen trading above its original issue discount price, and Momentive Performance Materials Inc., Covanta Energy Corp., PetroLogistics, NPC International Inc. and UTEX Industries Inc. freed up as well.

Switching to the primary, Telesat Canada made a number of changes to its credit facility, shifting some funds between the U.S. and Canadian term loan Bs, and reducing the coupon, floor and original issue discount on the U.S. tranche.

Additionally, Toys 'R' Us Inc. and Sprouts Farmers Market came out with original issue discount guidance on their term loans, and Handy & Harman Ltd. and Bass Pro Shops surfaced with new deal plans.

LPL tops OID

LPL Financial's credit facility made its way into the secondary market on Friday after tranche sizes firmed up, with the $615 million seven-year term loan B quoted at 99¾ bid, par ¼ offered on the break and then it moved up to 99 7/8 bid, par 3/8 offered, according to a trader.

Pricing on the term loan B is Libor plus 300 basis points with a step-down to Libor plus 275 bps at net leverage of 1.75 times. There is a 1% Libor floor as well as 101 soft call protection for one year, and it was sold at an original issue discount of 991/2. The step-down was added on Thursday, at which time the discount firmed at the tight end of the 99 to 99½ guidance.

The company's $1.6 billion credit facility (Ba2) also includes a $250 million five-year revolver and a $735 million five-year term loan A, both priced at Libor plus 250 bps, subject to a net leverage grid.

Initially, the term B was talked at $800 million and the term A was talked at $550 million. Then, it was heard that the B loan would be in the area of $600 million to $675 million and the A loan would be in the range of $675 million to $750 million, before sizes finalized in the early part of the day.

LPL lead banks

Bank of America Merrill Lynch and Goldman Sachs & Co. are the joint lead arrangers on LPL's credit facility and bookrunners with Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC.

Proceeds will be used to refinance an existing $163.5 million revolver priced at Libor plus 350 bps and $1.33 billion of term loan borrowings split between a 2013 tranche priced at Libor plus 175 bps, a 2015 tranche priced at Libor plus 275 bps with a 1.5% floor and a 2017 tranche priced at Libor plus 375 bps with a 1.5% floor.

Closing is expected to occur in the second quarter.

LPL Financial is a broker-dealer, an RIA custodian and a consultant to retirement plans with offices in Boston, Charlotte, N.C., and San Diego.

Momentive levels emerge

Momentive Performance Materials' $175 million senior secured term loan B-3 (B) due May 5, 2015 broke on Friday at 95¼ bid, 96 offered, as its original issue discount price firmed at 95 - the high side of 95 to 95½ talk, according to a trader.

Pricing on the loan is Libor plus 350 bps with no Libor floor, in line with the existing roughly $925 million term loan due 2015.

J.P. Morgan Securities LLC, BMO Capital Markets Corp., Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., Morgan Stanley Senior Funding Inc. and UBS Securities LLC are the bookrunners on the deal that will be used to repay existing term loans maturing Dec. 4, 2013.

Momentive is a Columbus, Ohio-based producer of thermoset resins.

Covanta frees up

Covanta's credit facility began trading too, with the $300 million seven-year term loan B quoted at par bid, par ½ offered, according to a trader.

Pricing on the term loan B is Libor plus 300 bps with a step-down to Libor plus 275 bps when leverage is 1.5 times or less at the borrower level. There is a 1% Libor floor and the debt was sold at an original issue discount of 991/2.

The pricing step-down was added and the discount firmed at the tight end of the 99 to 99½ talk during the syndication process.

The company's $1.2 billion credit facility (Ba1/BB+/BB+) also provides for a $900 million five-year revolver priced at Libor plus 225 bps with a 50 bps unused fee. The coupon can range from Libor plus 200 bps to 275 bps based on leverage.

Covanta repaying debt

Proceeds from Covanta's credit facility will be used to refinance an existing credit facility. To this end, the company is also getting $400 million of senior notes that priced on March 8 at par to yield 6 3/8%.

Specifically, the notes are being used to repay some existing term loan borrowings.

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC, Barclays Capital Inc., Credit Agricole Securities (USA) Inc. and J.P. Morgan Securities LLC are the lead banks on the new credit facility.

Covanta is a Morristown, N.J.-based owner and operator of energy-from-waste and power generation projects.

PetroLogistics starts trading

Also breaking was PetroLogistics' credit facility, with the $350 million five-year term loan B quoted at 99½ bid, par ½ offered, a market source told Prospect News.

Pricing on the term loan B is Libor plus 575 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 98. The debt is non-callable for one year, then at 102 in year two and 101 in year three.

The company's $470 million senior secured credit facility (B1/B) also includes a $120 million 41/2-year revolver.

Morgan Stanley Senior Funding Inc. is the lead arranger and bookrunner on the deal that will be used to refinance project debt and fund a payment to investors to return construction capital.

PetroLogistics is a Houston-based producer of propylene.

NPC hits secondary

NPC's $375 million term loan B (Ba3/B) due Dec. 28, 2018 began trading as well, with levels seen at par bid, 101 offered, according to a trader.

Pricing on the B loan is Libor plus 400 bps, after firming recently at the low end of the Libor plus 400 bps to 425 bps talk. It was sold at par and includes a 1.25% Libor floor and 101 soft call protection for one year.

Proceeds will be used to refinance an existing $375 million term loan B due Dec. 28, 2018 that was done in late 2011 at pricing of Libor plus 525 bps with a 1.5% Libor floor and sold at an original issue discount of 98. Existing lenders are getting repaid at 101 as a result of soft call protection.

Barclays Capital Inc. and Goldman Sachs & Co. are leading the deal that is expected to close in the week of March 26.

NPC is an Overland Park, Kan.-based Pizza Hut franchisee.

UTEX breaks

Yet another deal to emerge in the secondary market was UTEX Industries' $97 million add-on term loan, with levels on the debt quoted at 99 bid, par offered, according to a market source. The add-on trades as one tranche with the existing term loan.

Pricing is Libor plus 550 bps with a 1.5% Libor floor, and it was sold at a discount of 99.

Societe Generale, GE Capital Markets and ING Financial Markets LLC are the joint lead arrangers on the deal that is being used to fund a dividend, with Societe Generale and GE as bookrunners.

With the add-on, the company is amending its existing credit facility to allow for the new debt and the dividend, to eliminate the existing $30 million delayed-draw term loan and to increase pricing on the existing term loan to Libor plus 550 bps from Libor plus 500 bps.

Lenders were offered a 25 bps amendment fee.

UTEX Industries, a Houston-based designer and manufacturer of sealing products, has total leverage of 3.9 times.

Telesat reworks deal

Moving to the primary, Telesat Canada revised its credit facility in the morning, updating U.S. and Canadian term loan B sizes while reverse flexing pricing on the U.S. piece and, with the changes, lenders were asked to get their recommitments in by 5 p.m. ET on Friday, according to a market source.

The U.S. seven-year term loan B is now sized at $1.725 billion, down from a recently outlined amount of $1.75 billion, and pricing is Libor plus 325 bps with a 1% Libor floor and an original issue discount of 991/2, versus initial talk of Libor plus 350 bps with a 1.25% floor and a discount of 99, the source said.

Meanwhile, the Canadian seven-year term loan B is sized at $175 million equivalent, up from $150 million, the source remarked. Pricing on this tranche had been described at 50 bps higher than the U.S. piece, and that's where it ended up - BA plus 375 bps. The 1.25% floor and an original issue discount of 99 were left unchanged.

Furthermore, the company added 101 soft call protection for one year to its entire B loan tranche.

Telesat pro rata debt

Telesat's $2.55 billion senior credit facility (Ba3/BB-) also includes a $150 million U.S. and Canadian five-year revolver that is priced at Libor plus 300 bps and a $500 million five-year Canadian dollar-equivalent term loan A priced at BA plus 300 bps.

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and UBS Securities LLC are the joint lead arrangers and bookrunners on the term loan B, and CIBC and JPMorgan are the joint lead arrangers and bookrunners on the term loan A and revolver.

Proceeds will be used to refinance an existing credit facility, to fund a roughly C$705 million distribution to shareholders and for general corporate purposes.

Total secured debt is 3.9 times, total debt is 5.6 times and net debt is 5.5 times.

Telesat, an Ottawa-based fixed satellite services operator, expects to close on the new credit facility sometime this month.

Toys 'R' Us OID talk

In more primary happenings, Toys 'R' Us held a conference call on Friday to kick off syndication on its proposed $300 million covenant-light incremental term loan B-3 (B1/NA/B-) due May 25, 2018, and with the event, original issue discount guidance of 98 to 98½ emerged, according to a market source.

As was previously reported, price talk on the loan is Libor plus 375 bps with a 1.5% Libor floor, and there is 101 soft call protection for one year.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Goldman Sachs & Co., Wells Fargo Securities LLC, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are leading the deal that will be used for general corporate purposes, including the repayment, repurchase or redemption of debt.

Toys 'R' Us is a Wayne, N.J.-based toy retailer.

Sprouts reveals discount

Sprouts Farmers Market disclosed that its $100 million add-on term loan is being offered with an original issue discount of 981/2, according to a market source. The deal had launched with a conference call on Wednesday, but discount talk had been unavailable until now.

As was already reported, price talk on the loan is Libor plus 475 bps with a 1.25% Libor floor, in line with existing term loan pricing.

Jefferies & Co., Apollo Global Securities and Natixis are leading the deal that will be used to help fund the acquisition of Sunflower Farmers Market.

Closing is expected in mid-Spring, subject to regulatory approval.

Sprouts Farmers Market is a Phoenix-based grocer that operates in the farmers market specialty segment of the retail food industry. Sunflower Farmers Market is a chain of full-service grocery stores.

Handy & Harman sets launch

Handy & Harman joined the calendar, scheduling a bank meeting for Monday afternoon in New York to launch a proposed $200 million term loan B that is being led by Wells Fargo Securities LLC, according to a market source.

Proceeds will be used to refinance existing debt, including around $90 million of first-and second-lien term loans and roughly $40 million of subordinated debt.

With the term loan B, the company will be upsizing its existing ABL revolver to $125 million from $110 million, the source added.

Handy & Harman is a White Plains, N.Y.-based industrial company involved in precious metals, tubing, and engineered materials.

Bass Pro readies deal

Bass Pro Shops will be holding a conference call on Tuesday to launch a $200 million add-on term loan that is expected to price in line with the existing term loan at Libor plus 400 bps with a 1.25% Libor floor, according to a market source, who said there is 101 soft call protection for one year.

Bank of America Merrill Lynch is the lead bank on the deal.

Proceeds will be used by the Springfield, Mo.-based outdoor retailer to fund a dividend and for general corporate purposes.

WCA Waste closes

WCA Waste Corp.'s buyout by Macquarie Infrastructure Partners II for $6.50 per share in cash has been completed, according to a news release, for which a new $375 million credit facility (B1/B+) was obtained.

The facility consists of a $100 million five-year revolver priced at Libor plus 425 bps with a 1.25% Libor floor and sold at an original issue discount of 981/2, and a $275 million six-year term loan priced at Libor plus 425 bps with a 1.25% Libor floor and sold at an original issue discount of 99. The term loan has 101 soft call protection for one year.

During syndication, pricing on the entire deal was reduced from Libor plus 500 bps, and the original issue discount on the term loan was tightened from 99.

Credit Suisse Securities and Macquarie Capital lead the deal.

WCA, a Houston-based non-hazardous solid-waste services company, has total leverage of 4.25 times and 50% plus of equity.

Armstrong wraps add-on

Armstrong World Industries Inc. closed on its $250 million add-on term loan B (B1/BB-), according to an 8-K filed with the Securities and Exchange Commission on Friday.

Pricing on the add-on matches the existing term loan at Libor plus 300 bps with a 1% Libor floor. The new debt was sold at an original issue discount of 99, after tightening during syndication from 981/2.

Bank of America Merrill Lynch, J.P. Morgan Securities Inc. and Barclays Capital Inc. led the deal that is being used to help fund a special cash dividend of about $500 million, or about $8.55 per share.

Armstrong is a Lancaster, Pa.-based designer and manufacturer of floors, ceilings and cabinets.

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