Tribune up as going-private closing nears; TravelClick firms spreads; Royalty Pharma readies allocations

By Sara Rosenberg

New York, Dec. 19 - Tribune Co.'s term loan B and term loan X were both higher on Wednesday as investors gained confidence in the expected closing of the company's public-to-private transaction.

In other news, TravelClick finalized pricing and original issue discounts on its credit facility as syndication wrapped up with the deal being slightly oversubscribed, and Royalty Pharma is hoping to allocate its term loan B add-on in the very near future as terms on the deal firmed up at initial talk.

Tribune's term loan debt was stronger during an incredibly quiet secondary session, with the move attributed to the anticipation that the company's buyout will close on Thursday, according to traders.

The term loan B ended the day at 86 bid, 86¾ offered, up from 85 bid, 86 offered, one trader said.

The term loan X ended the day at 96 bid, 97 offered, up from 95½ bid, 96½ offered, the trader added.

A second trader had different levels on the term loan X, quoting it at 96½ bid, 97¼ offered, up from 96 bid, 97 offered on Tuesday.

According to the first trader, there were some stories floating around in the morning that the banks might cause a snag in the Tribune buyout deal, but by the afternoon everybody felt more confident in this transaction getting done as rumors came out that the closing would take place on Thursday.

Also on Wednesday, Tribune announced that Dennis FitzSimons will step down as chairman and chief executive officer immediately after the company completes its going-private transaction. FitzSimons will leave the company at the end of the year.

"CEO stepping down was kind of expected as part of Sam Zell's company turnaround plan," the first trader added.

On April 2, Tribune announced its intention to become a private company, owned 100% by the Tribune Employee Stock Ownership Plan.

In the first stage of the public-to-private transaction, which was completed a few months ago, Tribune successfully tendered for 126 million shares at $34 each and refinanced its existing credit facilities.

In the second stage, Tribune is buying all the remaining outstanding shares of the company.

At the time that the buyout was first announced, Sam Zell made an initial investment of $250 million in the company, and in May, he joined Tribune's board of directors. When the transaction closes, his investment in Tribune will increase to $315 million and he will become chairman of the board.

Tribune is a Chicago-based media company.

TravelClick sets spreads

TravelClick firmed up pricing on its $105 million credit facility (Ba3/B+) now that syndication on the oversubscribed deal has come to a close, according to a market source.

Both the $15 million revolver and the $90 million term loan B are priced at Libor plus 400 basis points, the source said.

The revolver was sold to investors with an original issue discount of 98 and the term loan B was sold at a discount of 99, the source added.

The revolver carries a 50 bps unused fee.

Jefferies is the lead bank on the deal, which will be used, along with $40 million of mezzanine financing, to help fund Genstar Capital's acquisition of the company from Bain Capital.

TravelClick is a Schaumburg, Ill., hotel e-marketing services provider.

Royalty Pharma allocations expected shortly

Royalty Pharma's $700 million add-on to its term loan B (BBB-) is hoped to allocate by the end of this week, and if not, definitely by year end, with terms on the deal remaining in line with initial guidance, according to a market source.

The term loan B add-on is priced at Libor plus 225 bps and was sold to investors with an original issue discount of 99, the source said.

Prior to the deal's Dec. 6 launch, spread guidance on the add-on was heard to be Libor plus 200 bps to 225 bps.

Bank of America is the lead bank on the deal, which is being used for acquisition financing.

In connection with the add-on, the company is increasing pricing on its existing term loan B to Libor plus 225 bps from current pricing of Libor plus 150 bps.

Royalty Pharma is a New York-based acquirer of revenue-producing intellectual property, principally royalty interests in marketed and late-stage biopharmaceutical products.

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