Fifth Third, Univar break; SoftLayer, Focus tweak deals; Gavilon, Virtual, Hanger set talk

By Sara Rosenberg

New York, Oct. 29 - Fifth Third Processing Solutions LLC's credit facility freed up for trading on Friday, with both the first- and second-lien term loans quoted well above their original issue discount prices, and Univar Inc.'s term loan add-on started trading as well.

In more secondary happenings, Texas Competitive Electric Holdings Company LLC's term loans drifted lower on its earnings news, and Calpine Corp.'s new term loan was firm as the company announced mostly positive third-quarter numbers and adjusted its outlook.

Over in the primary market, SoftLayer Technologies came out with some changes to its term loan B, including flexing pricing guidance higher and narrowing down the original issue discount at the tight end of talk, and Focus Brands Inc. raised the spread on its facility.

Also, Gavilon LLC released price talk on its term loan as the deal was presented to lenders, Virtual Radiologic outlined tranching and some price talk on its upcoming deal, and Hanger Orthopedic Group Inc. began circulating guidance on its B loan.

In addition, TransDigm Group Inc. revealed timing on the launch of its credit facility, as well as structure, and disclosed just how much of a paydown existing lenders should expect with this new transaction.

Fifth Thirds frees up

Fifth Third Processing Solutions' credit facility hit the secondary market on Friday afternoon, with the $1.575 billion six-year first-lien term loan (Ba3/BB-) quoted at par ¾ bid, 101¼ offered on the open and then moved up to 101 bid, 101½ offered, according to traders

And, the $200 million seven-year second-lien term loan (B2/B-) was quoted at 101¼ bid, 101¾ offered on the break and then moved up to 101½ bid, 102 offered, traders said.

Pricing on the first-lien term loan is Libor plus 400 basis points, and pricing on the second-lien is Libor plus 675 bps, with both having a 1.5% Libor floor. Both were sold at an original issue discount of 99. The second-lien has soft call protection of 102 in year one and 101 in year two.

During syndication, the first-lien term loan was upsized from $1.5 billion, and the spread was reduced from initial talk of Libor plus 425 bps to 450 bps, while the second-lien was downsized from $275 million, pricing came in from talk of Libor plus 700 bps to 725 bps, the floor was cut from 1.75% and the discount was tightened from 98.

Fifth Third revolver

Fifth Third Processing Solutions' $1.925 billion facility also includes a $150 million revolver (Ba3/BB-) that is priced in line with initial talk at Libor plus 350 bps with a 50 bps unused fee.

Goldman Sachs, JPMorgan, Credit Suisse, Morgan Stanley and Bank of America are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of National Processing Co., a Louisville, Ky.-based merchant acquirer focused on the small and medium enterprise market, and to refinance existing debt.

The transaction is expected to close in early November, pending satisfaction of customary closing conditions.

Fifth Third Processing is a Cincinnati-based provider of payment transaction processing and acceptance services.

Univar starts trading

Univar's $300 million term loan add-on also broke for trading on Friday morning, with levels quoted at 99¾ bid, par ½ offered on the open and then moving up to par bid, par ½ offered, according to a trader.

Pricing on the Redmond, Wash.-based chemical distributor's term loan is Libor plus 450 basis points with a 1.75% Libor floor, and it was sold at an original issue discount of 99.

During syndication, the term loan was upsized from $250 million.

Bank of America is the lead bank on the deal that will be used to fund the acquisition of Basic Chemical Solutions LLC, a Redwood City, Calif.-based distributor and trader of commodity chemicals.

Texas Competitive slides

Texas Competitive's term loans B-1, B-2 and B-3 were all quoted at 77 7/8 bid, 78 3/8 offered, down from 78½ bid, 79 offered, following the release of third-quarter numbers by its parent company, Energy Future Holdings Corp.

For the quarter, Energy Future reported a net loss of $2.902 billion, compared to a net loss of $80 million for the third quarter 2009.

And, operating revenues for the quarter were $2.607 billion, compared to $2.885 billion in the prior year.

Texas Competitive is a Dallas-based energy company.

Calpine firm on numbers

Calpine's new term loan was unchanged to better on Friday as the company released earnings results, with one trader quoting it at 102 bid, 102½ offered, up from 101¾ bid, 102¼ offered, and a second trader also quoting it at 102 bid, 102½ offered, but saying it was flat from late Thursday.

The old term loan was unchanged at 99½ bid, par offered, the traders added.

For the third quarter, Calpine reported net income of $217 million, or $0.45 per diluted share, compared to $238 million, or $0.49 per diluted share, last year.

Operating revenues for the quarter were $2.13 billion, compared to $1.822 billion in the third quarter of 2009.

Adjusted EBITDA for the quarter was $663 million, up 13% from $586 million in the previous year.

And, adjusted recurring free cash flow for the quarter was $368 million, compared to $311 million in 2009 period.

Calpine revises guidance

In addition on Friday, Calpine said that it raised and tightened its full-year guidance because of the strength of its third-quarter numbers and updated its 2011 guidance.

For 2010, the company now expects adjusted EBITDA of $1.685 billion to $1.725 billion and adjusted recurring free cash flow of $500 million to $540 million.

And, for 2011, the company projects adjusted EBITDA of $1.7 billion to $1.8 billion and adjusted recurring free cash flow of $440 million to $540 million.

"When viewed against the backdrop of persistently difficult market conditions, our projections for 2011 are very encouraging and speak to the continued effectiveness of our hedging strategy," said Jack Fusco, president and chief executive officer, in a news release.

Calpine mulls refinancing

Calpine officials remarked in a conference call on Friday that they are in discussions and weighing the pros and cons of refinancing the company's existing revolving credit facility with one that has a more flexible covenant package.

The company said that it does have the commitments to refinance the $1 billion first-lien revolver.

"We have now addressed approximately $5 billion of the original $6.3 billion in 2014 maturities under the first-lien term loan," said Zamir Rauf, chief financial officer, in the news release.

"This has substantially reduced our refinancing risk and represents meaningful progress toward establishing a longer-dated and more balanced maturity profile while transitioning to a more flexible covenant package that should provide us with more options to improve shareholder value. We will continue to be opportunistic about refinancing the balance of the first-lien facility," Rauf added.

Calpine is a Houston-based power generation company.

SoftLayer revises talk

Switching to the primary, SoftLayer increased price talk on its $255 million six-year term loan to Libor plus 525 bps to 550 bps from initial guidance of Libor plus 450 bps to 500 bps, according to a market source.

In addition, the original issue discount on the term loan B was narrowed down to 98½ from previous talk that was in the 98 to 98½ range, the source continued.

As before, the B loan includes a 1.75% Libor floor.

Meanwhile, the company's $20 million five-year revolver is expected to price 50 bps below the term loan B.

SunTrust and RBC Capital are the lead banks on the $275 million credit facility (B1/B+), with SunTrust the left lead.

SoftLayer changes well met

As a result of the new price level on SoftLayer, the deal is now oversubscribed with a number of investors still working before Tuesday's commitment deadline hits.

"Book got great traction after pricing [moved] from original talk of 450-500 to current spread levels," the source remarked.

"Investors initially reluctant to come in at lower spread due to sector - high growth of company coupled with capex spend. Offset to this was the low leverage of 2.5 times, 2.3 times net, and 70-plus% equity contribution," the source explained.

Proceeds from the credit facility will be used to help fund a merger with ThePlanet.com Internet Services, a Houston-based provider of internet infrastructure services that is owned by GI Partners.

SoftLayer is a Dallas-based provider of on-demand data center and hosting services that is also owned by GI Partners.

Focus Brands ups pricing

Focus Brands lifted pricing on its $285 million credit facility (B2/B) to Libor plus 550 bps from talk of Libor plus 475 bps to 500 bps, while leaving the 1.75% Libor floor and original issue discount of 98½ intact, according to a market source.

The facility, which is now oversubscribed, consists of a $10 million revolver and a $275 million term loan.

Commitments were due on Friday and allocations are expected to go out during the week of Nov. 1, the source said.

Credit Suisse is the lead bank on the deal that will be used to refinance existing debt and fund the acquisition of Auntie Anne's, a Lancaster, Pa.-based hand-rolled soft pretzel chain.

Focus Brands is an Atlanta-based franchisor and operator of ice cream stores, bakeries, restaurants and cafes.

Gavilon guidance emerges

Gavilon held a bank meeting on Friday morning to launch syndication of its proposed $900 million term loan, and in connection with the event, price talk was announced, according to a market source.

The term loan is being guided at Libor plus 425 bps with a 1.75% Libor floor and an original issue discount on 981/2, the source said, adding that there's 101 soft call protection for one year.

BNP Paribas, Bank of America, JPMorgan and Morgan Stanley are the lead banks on the deal, with BNP the left lead.

Commitments are due on Nov. 12.

Gavilon upsizing revolver

In connection with the new term loan, Gavilon is considering increasing its existing asset-based revolver to somewhere in the $2.25 billion to $2.5 billion area from the current size of around $1.7 billion, the source said.

Pricing on the revolver will remain unchanged at Libor plus 275 bps with a 50 bps unused fee.

Proceeds from the new debt will be used to help fund the acquisition of DeBruce Cos., a Kansas City, Mo.-based agricultural firm.

Closing on the acquisition is expected in November, subject to receipt of certain regulatory approvals.

Gavilon is an Omaha-based commodity management firm.

Virtual Radiologic structure

Some more details on Virtual Radiologic's proposed $253 million senior secured credit facility came out as the deal is getting ready for its Tuesday bank meeting, according to a market source.

It is now known that the facility is comprised of a $40 million revolver and a $213 million term loan B and that price talk on the B loan is Libor plus 550 bps with a 1.75% Libor floor and an original issue discount that is still to be determined, the source said.

GE Capital and SunTrust are is the joint bookrunners on the deal that will be used to help fund the acquisition of NightHawk Radiology Holdings Inc. for $6.50 per share in cash. The transaction is valued at roughly $170 million.

Virtual Radiologic other debt

In addition to the credit facility, Virtual Radiologic has received an $80 million debt commitment from BlackRock Kelso Capital Advisors LLC, Newstone Capital Partners LLC and Providence Equity Capital Markets LLC for acquisition financing.

Closing on the transaction is expected in the first quarter of 2011, subject to customary conditions, including the approval of NightHawk's stockholders.

Virtual Radiologic is an Eden Prairie, Minn.-based radiology practice and developer of radiologist workflow technology. NightHawk is a Scottsdale, Ariz.-based provider of radiology services to radiology groups.

Hanger floats talk

Hanger Orthopedic started whispering price talk of Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 99 on its $325 million term loan B ahead of its Monday bank meeting launch, according to a market source.

Bank of America, Jefferies, Oppenheimer, SunTrust and RBC are the lead banks on the $425 million credit facility (Ba3/BB-) that also includes a $100 million revolver.

Proceeds from the facility, along with cash on hand and $200 million of senior notes, will be used to help fund the acquisition of Accelerated Care Plus, a Reno, Nev.-based provider of integrated clinical programs for rehabilitation providers, for about $155 million in cash and to refinance existing bank debt.

Closing is expected around Dec. 1, subject to customary conditions, including regulatory approvals and financing.

Hanger is an Austin, Texas-based provider of orthotic and prosthetic patient care services.

TransDigm timing surfaces

TransDigm disclosed in an 8-K filed with the Securities and Exchange Commission on Friday that it will hold a bank meeting on Wednesday with a 10:00 a.m. ET start to launch a proposed $1.2 billion senior secured credit facility.

The facility consists of a $900 million six-year term loan and a $300 million five-year revolver.

Total size of the bank deal is coming a little smaller than expected, as the company had previously revealed that it received a commitment for a $1.3 billion credit facility.

Credit Suisse, UBS, Barclays and Morgan Stanley are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds from the credit facility, along with $780 million of new senior subordinated debt, will be used to fund the $1.27 billion acquisition of McKechnie Aerospace Holdings Inc., an Irvine, Calif.-based supplier of aerospace products, from JLL Partners.

TransDigm paying down

TransDigm is also using proceeds from its credit facility and subordinated debt issuance to repay about $280 million of existing term loan borrowings and refinance its revolver.

The company expects that $500 million of its existing term loan debt and $1 billion of its existing 7¾% senior subordinated notes will remain outstanding after the completion of these transactions.

The refinancing/paydown is not a surprise, given that the company had previously said that in connection with the acquisition and depending on market conditions, it would replace its existing revolver with a new, possibly larger revolver and may repay a portion of its existing term loan borrowings.

Closing on the transactions is expected before the end of the year, subject to regulatory approvals and customary conditions.

TransDigm is a Cleveland-based designer, producer and supplier of highly engineered aircraft components.

Green Mountain nets interest

In other news, Green Mountain Coffee Roasters Inc.'s $1.45 billion senior secured credit facility (Ba3/B+) is heard to have "good momentum" since launching with a bank meeting this past Wednesday, according to a market source.

The facility consists of a $650 million five-year revolver and a $250 million five-year term loan A that are both being talked at Libor plus 350 bps, and a $550 million six-year term loan B that is being talked at Libor plus 400 bps to 425 bps with a 1.75% Libor floor and an original issue discount of 98½ to 99. The B loan includes 101 soft call protection for one year.

Prior to launch, the term loan B was upsized from $350 million and the revolver was downsized from $750 million, resulting in a $100 million increase to the overall deal size.

Bank of America and SunTrust are the lead banks on the deal

Green Mountain acquisition

Proceeds from Green Mountain Coffee Roasters' credit facility will be used to help fund the acquisition of LJVH Holdings Inc. (Van Houtte) and refinance existing debt.

Green Mountain is buying Van Houtte, a Montreal-based gourmet coffee brand, from Littlejohn & Co. LLC for about $890 million.

The transaction is expected to close by the end of the year, subject to customary conditions, including certain regulatory approvals.

Leverage at closing is expected to be around 3.5 times. In the long term, the company is targeting leverage of less than 3.0 times.

Green Mountain is a Waterbury, Vt.-based specialty coffee company.

Leslie's going well

Leslie's Poolmart Inc.'s $300 million credit facility is a "blow out," according to a market source, and lenders still have until Thursday to get their orders in.

The facility consists of a $225 million seven-year term loan talked at Libor plus 475 bps with a 1.5% Libor floor and an original issue discount of 981/2, and a $75 million revolver.

Bank of America, Wells Fargo and Goldman Sachs are the lead banks on the deal that will be used to refinance existing bonds and an existing revolver and to pay off a shareholder that is exiting the investor group.

Leslie's Poolmart is a Phoenix-based retailer of swimming pool supplies and related products.

Global Auto oversubscribed

Global Auto Care's (Viking Acquisition Inc.) $300 million term loan is more than two times oversubscribed and investors are expecting to see pricing come in from the current Libor plus 475 bps with a 1.75% Libor floor and original issue discount of 98½ price talk as a result, according to a market source.

JPMorgan, Natixis and RBC Capital are the joint lead arrangers on the $350 million credit facility (Ba3) that also includes a $50 million revolver.

Proceeds will be used to help fund the acquisition of Clorox Co.'s global auto care business by Viking Acquisition Inc., an entity formed by Avista Capital Partners, for roughly $780 million.

Closing on the acquisition is expected by year-end, subject to regulatory and other customary approvals and conditions.

Global Auto Care is a manufacturer, marketer and distributor of automotive aftermarket appearance and performance auto-care products.

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