Yankee upsizes, cuts spread; TransDigm downsizes; Evenflo tweaks deal; Reader's sets talk; Neiman dips

By Sara Rosenberg

New York, Jan. 31 - The Yankee Candle Co. Inc. made some changes to its credit facility Wednesday, including increasing its term loan size upon reducing its bond offering, and lowering pricing on the term loan tranche.

In other primary news, TransDigm Group Inc. downsized its term loan B add-on, Evenflo Co. Inc. reduced pricing on its second-lien term loan and added a step down provision to its first-lien term loan, and The Reader's Digest Association Inc. began floating price talk around as it launched its new deal.

On the secondary side of things, The Neiman Marcus Group Inc.'s term loan B softened in trading as news of a repricing hit the market.

Yankee Candle reworked its credit facility structure by upsizing its term loan by $50 million to account for a $50 million downsizing to its bond offering, and reverse flexing pricing on the term loan paper, according to a market source.

The term loan is now sized at $700 million, up from $650 million, and pricing was reduced to Libor plus 200 basis points from original talk at launch of Libor plus 250 bps, the source said.

On the flip side, the company's senior unsecured notes offering was downsized to $275 million from $300 million and its senior subordinated notes offering was downsized to $200 million from $225 million, leaving the total funded debt unchanged, the source added.

Yankee's now $825 million (up from $775 million) senior secured credit facility (Ba3/B+) also includes a $125 million revolver.

Lehman Brothers and Merrill Lynch are the lead banks on the facility that will be used, along with the bonds, to fund Madison Dearborn Partners, LLC's leveraged buyout of Yankee for $34.75 in cash per common share. The total value of the transaction, including assumed debt, is $1.7 billion.

Equity financing for the transaction is expected to total $433.3 million.

The acquisition, which is expected to close in February, is subject to approval by Yankee's shareholders as well as other customary closing conditions.

On Jan. 23, shareholders voted in favor of the buyout.

Yankee is a South Deerfield, Mass., designer, manufacturer, wholesaler and retailer of scented candles.

TransDigm reduced add-on size

TransDigm downsized its term loan B add-on to $130 million from $180 million as its 7¾% bond offering was upsized to $300 million from $250 million, according to a market source.

Pricing on the term loan B add-on was left unchanged at Libor plus 200 bps.

The company is also in market with a $50 million revolver add-on that is also priced at Libor plus 200 bps.

Credit Suisse and Lehman are the lead banks on the now $180 million (down from $230 million) in incremental bank debt (Ba3/B+/BB-).

Proceeds from the term loan add-on and the bonds, which are expected to close on Feb. 7, will be used to fund the acquisition of Aviation Technologies Inc. for about $430 million in cash.

The revolver add-on will not actually be used for acquisition financing; it is just being done in conjunction with the deal.

Following the acquisition, debt to EBITDA is expected to be around 5.7 times and EBITDA to interest coverage is expected to be around 2.9 times.

TransDigm is a Cleveland-based designer, producer and supplier of highly engineered aircraft components. Aviation Technologies is a Seattle-based supplier of aerospace products.

Evenflo trims second-lien spread

Evenflo reverse flexed pricing on its $45 million seven-year second-lien term loan to Libor plus 600 bps from original talk at launch of Libor plus 650 bps, according to a market source.

Call premiums on the second lien of 102 in year one and 101 in year two were left unchanged.

In addition, the company added a step down to its $120 million six-year first-lien term loan B under which pricing can drop from the current spread of Libor plus 250 bps to Libor plus 225 bps based on meeting a leverage test, the source said.

Evenflo's $205 million credit facility also includes a $40 million five-year revolver priced at Libor plus 250 bps.

Credit Suisse is the lead bank on the deal that will be used to fund the leveraged buyout of the company by Weston Presidio from Harvest Partners.

Evenflo is a Vandalia, Ohio, manufacturer and marketer of a full line of juvenile products.

Reader's floats talk

Reader's Digest price talk began making its way around the market as the company held a bank meeting on Wednesday to kick off syndication on the transaction, according to market sources.

The company's $1.16 billion seven-year term loan was heard to be talked in the Libor plus 200 to 225 bps area, sources said.

Reader's Digest's $1.46 billion senior secured credit facility also includes a $300 million six-year revolver.

JPMorgan, Citigroup, Merrill Lynch and RBS Securities are the lead banks on the deal.

Proceeds from the credit facility will be used to help fund the leveraged buyout of Reader's Digest by an investor group led by Ripplewood Holdings LLC in combination with two Ripplewood portfolio companies - Direct Holdings Worldwide LLC, a direct marketer of entertainment products, and WRC Media Inc., a publisher of supplementary educational materials.

Under the LBO agreement, Reader's Digest shareholders will receive $17.00 per share in cash, for a total transaction value of about $2.4 billion.

In addition to Ripplewood, the investor group includes the J. Rothschild Group, GoldenTree Asset Management, GSO Capital Partners, Merrill Lynch Capital Corp. and Magnetar Capital.

The transaction is subject to the receipt of the affirmative vote of common shareholders, the availability of the investor group's committed debt and preferred equity financing and other customary conditions, including antitrust clearance.

A special shareholder meeting to vote on the transaction has been scheduled for Feb. 2.

Reader's Digest is a Pleasantville, N.Y., publisher and direct marketing company that creates and delivers products and content for magazines, books, recorded music collections, home videos and online web sites.

GEO finalizes pricing

The GEO Group, Inc. finalized pricing on its new $365 million seven-year term loan B at Libor plus 150 bps, according to a company news release.

The company's $515 million senior secured credit facility (BB) also includes a $150 million five-year revolver priced at Libor plus 225 bps.

Proceeds were used to fund the recently completed acquisition of CentraCore Properties Trust, a Palm Beach Gardens, Fla.-based correctional real estate investment trust, for $427.6 million.

BNP Paribas acted as the lead bank on the deal.

GEO is a Boca Raton, Fla., provider of correctional and mental health services.

Neiman slides on repricing

Moving to the secondary, Neiman's term loan B was weaker on Wednesday after news surfaced that the debt would be repriced, according to traders.

The term loan B closed the day at par 5/8 bid, 101 offered, down from previous levels of 101 1/8 bid, 101 3/8 offered, traders said.

Under the amendment proposal, Neiman is looking to take pricing down on the term loan B to Libor plus 200 bps from Libor plus 225 bps.

The company will launch the repricing with a conference call on Thursday via Credit Suisse.

Neiman Marcus is a Dallas-based high-end specialty retailer.

Baldor closes

Baldor Electric Co. completed its acquisition of Reliance Electric Co. and certain of its affiliated companies from Rockwell Automation, Inc. for $1.8 billion, comprised of $1.75 billion in cash and 1.6 million shares of Baldor common stock, according to a news release.

To help fund the transaction, Baldor got a new $1.2 billion credit facility (Ba3/BB) consisting of a $1 billion seven-year term loan priced at Libor plus 175 bps and a $200 million five-year revolver priced at Libor plus 225 bps.

During syndication, pricing on the term loan was reverse flexed from original talk at launch of Libor plus 225 bps due to strong market demand.

BNP Paribas and SunTrust acted as the lead banks on the deal.

Baldor is a Fort Smith, Ark., manufacturer of industrial electric motors, drives and generators.

David's Bridal closes

Leonard Green & Partners, LP completed its acquisition of the David's Bridal Inc. and Priscilla of Boston businesses from Federated Department Stores, Inc. for about $750 million in cash, according to a company news release.

To help fund the transaction, David's Bridal got a new $450 million credit facility consisting of a $340 million seven-year term loan B (B2/B) priced at Libor plus 200 bps and a $110 million six-year asset-based revolver.

During syndication, the term loan B was upsized from $315 million as a senior subordinated notes transaction was reduced to $150 million from $175 million, and pricing was reverse flexed from original talk at launch of Libor plus 250 bps.

Bank of America, Credit Suisse and JPMorgan acted as the lead banks on the deal, with Bank of America the left lead.

David's Bridal is a Conshohocken, Pa., retail chain specializing in bridal gowns.

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