Travelport ups U.S. institutional pricing; Sorenson, Regency, Kendle break; Movie Gallery softens

By Sara Rosenberg

New York, Aug. 11 - Travelport Inc. flexed pricing higher on its U.S. term loan and synthetic letter-of-credit facility debt, with the addition of a step down, and firmed up pricing on all other tranches as well as the size of the euro term loan carve out.

In secondary happenings, Sorenson Communications freed for trading with its first-lien term loan quoted atop par and its second-lien term loan quoted atop 101. In addition, Regency Gas Services LP and Kendle International Inc. also hit the market Friday with both of their term loans quoted in the upper-par type context.

Also in the secondary, Movie Gallery Inc.'s term loan B headed lower again as investors continued to react to the company's recently announced second-quarter financials.

Travelport finalized the structure on its $2.6 billion senior secured credit facility (B1/B+), increasing pricing on the U.S. institutional bank debt while adding a step down provision, setting pricing on the revolver and euro term loan at the high end of talk, and deciding on a specific size for the euro term loan carve out, according to a market source.

Under the changes, the U.S. seven-year term loan and the $125 million seven-year synthetic letter-of-credit facility are now priced with an interest rate of Libor plus 300 basis points and carry a step down to Libor plus 275 basis points at 41/2x leverage, the source said. Original price talk on these two tranches had been Libor plus 250 to 275 basis points with no step down.

Meanwhile, pricing on the euro seven-year term loan and the $275 million revolver firmed up at Libor plus 275 basis points, the wide end of original guidance of Libor plus 250 to 275 basis points, the source continued.

Lastly, it was determined that of the total $2.2 billion total seven-year term loan size, the euro piece would be €620 million, the source added. When the deal was launched it was heard that the euro carve out would be at least €500 and possibly as high as €750 million.

Of the total $275 million revolver amount, $175 million is in U.S. dollars and $100 million is multicurrency including euro, sterling and dollars.

UBS Investment Bank, Credit Suisse Securities LLC and Lehman Brothers Inc. are the lead banks on the credit facility.

Proceeds will be used to help fund The Blackstone Group's leveraged buyout of Travelport from Cendant Corp. for about $4.3 billion in cash.

Travelport is a Parsippany, N.J.-based travel distribution services company.

Roofing Supply flexes up

The Roofing Supply Group increased pricing on its revolver, first-lien term loan and second-lien term loan tranches under its $320 million credit facility, according to a market source.

Pricing on the $50 million revolver was flexed up to Libor plus 300 basis points from original talk at launch of Libor plus 250 basis points, pricing on the $185 million first-lien term loan B was flexed up to Libor plus 300 basis points from original talk at launch of Libor plus 250 to 275 basis points and pricing on the $85 million second-lien term loan was flexed up to Libor plus 700 basis points from original talk at launch of Libor plus 600 to 650 basis points, the source said.

JPMorgan and Goldman Sachs are the lead banks on the deal, with JPMorgan the left lead.

Proceeds will be used to help fund Sterling's leveraged buyout of the company.

Sorenson breaks

Switching to the secondary, Sorenson freed for trading late in the day, with the $600 million first-lien term loan quoted at par ¼ bid, par ½ offered and the $385 million second-lien term loan quoted at 101 3/8 bid, 101 5/8 offered, according to various sources.

The first-lien term loan is priced at Libor plus 300 basis points and the second-lien term loan is priced at Libor plus 700 basis points. During syndication, the first-lien loan was downsized from $660 million and the second-lien term loan was upsized from $300 million.

Sorenson's $1.005 billion credit facility also includes a $20 million revolver priced at Libor plus 300 basis points.

The company is also getting a $75 million holdco PIK loan, which was downsized from $100 million during syndication, priced at Libor plus 900 basis points PIK.

Both the second-lien term loan and the mezzanine loan carry call protection of 102 in year one and 101 in year two.

Goldman Sachs and RBS Securities are joint bookrunners on the deal, with Goldman administrative agent on the first-lien loan and RBS administrative agent on the second-lien loan.

Proceeds from the debt financings will be used for a dividend recapitalization.

Sorenson Communications is a Salt Lake City-based provider of video relay services and equipment for the deaf and hard-of-hearing community.

Regency frees to trade

Regency Gas' credit facility also broke for trading during the Friday session, with the $600 million seven-year term loan B quoted at par 5/8 bid, par 7/8 bid, offered, according to a trader.

The term loan B is priced with an interest rate of Libor plus 250 basis points. During syndication, pricing on this tranche was flexed up from original talk at launch of Libor plus 225 basis points.

Regency's $850 million credit facility (B+) also contains a $250 million five-year revolver.

UBS, Wachovia and Citigroup are the lead banks on the deal, with UBS the left lead on the term loan B and Wachovia the left lead on the revolver.

Proceeds will be used to help fund Regency Energy Partners LP's acquisition of TexStar Field Services, LP from affiliates of HM Capital Partners LLC in a transaction valued at $350 million, and to refinance existing debt.

Total leverage is 4.9x.

The acquisition is expected to be immediately accretive to cash available for distribution and is expected to add about $40 million to 2007 EBITDA.

Regency is a Dallas-based midstream master limited partnership. TexStar is a San Antonio-based midstream natural gas gathering, processing and treating company.

Kendle sees upper-par levels

Kendle's credit facility hit the secondary on Friday as well, with the $200 million six-year term loan quoted at par 5/8 bid, par 7/8 offered, a trader told Prospect News.

The term loan is priced with an interest rate of Libor plus 275 basis points, with a step down to Libor plus 250 basis points under certain conditions. During syndication, pricing on this tranche was flexed up from original talk at launch of Libor plus 250 basis points with the addition of the step.

Kendle's $225 million senior secured credit facility (B1/B+) also contains a $25 million five-year revolver with an interest rate of Libor plus 275 basis points. Pricing on the revolver was also flexed up from original talk at launch of Libor plus 250 basis points during syndication.

UBS is the lead arranger on the deal that will be used to help fund the company's purchase of Charles River Laboratories International, Inc.'s Phase II-IV Clinical Services business, a provider of phase 2-4 clinical trials management services to the pharmaceutical and biotechnology industries.

Kendle is a Cincinnati-based clinical research organization that provides a range of phase 1-4 clinical development services to the pharmaceutical and biotechnology industries.

Movie Gallery slips lower

Movie Gallery's term loan B continued to slide in Friday's session still on follow through from the Thursday's release of disappointing second-quarter results, according to a trader.

The term loan B closed the day quoted at 94 bid, 95 offered, after trading as low as 94, the trader said. By comparison, on Thursday, the bank debt closed the day at 95½ bid, 96½ offered, according to one trader and at 96¼ bid, 96¾ offered, according to a second trader. Immediately prior to the release of numbers, the loan was quoted at 97 1/8 bid, 97 5/8 offered.

For the second quarter, the company reported a net loss of $14.9 million, or $0.47 per diluted share, compared with a loss of $12.2 million, or 39 cents per share, during the same period last year.

Other second-quarter results included total revenues of $601.3 million as compared to $504.7 million in the comparable period last year and adjusted EBITDA of $57.6 million.

The Dothan, Ala.-based video rental company also announced on Thursday that it hired Merrill Lynch & Co. as an adviser to explore opportunities to strengthen its balance sheet and Alvarez & Marsal Inc., a turnaround management, restructuring and corporate advisory firm.

VNU closes

VNU NV closed on its new approximately €4.861 billion senior secured credit facility (B1/B+), according to a company news release. Citigroup, Deutsche Bank and JPMorgan acted as the lead banks on the deal, with Citi the left lead.

The facility consist of a $4.1875 billion seven-year U.S. dollar term loan B with an interest rate of Libor plus 275 basis points that was issued with an original discount of 991/2, an €800 million seven-year term loan B with an interest rate of Euribor plus 250 basis points that was also sold to investors with an original issue discount of 991/2, and a $687.5 million six-year multi-currency revolver with an interest rate of Libor plus 250 basis points.

During syndication, The U.S. term loan B was downsized twice, first from $4.7125 billion and then from $4.625 billion, pricing was flexed up from original talk at launch of Libor plus 250 basis points and the original issue discount was added. The euro term loan B was upsized twice, first from €380 million and then from €450 million, to correspond with the U.S. term loan B downsizings, and the original issue discount was added.

In addition, during the syndication process, an interest charge covenant was added to the credit agreement.

Proceeds from the credit facility were used to help back the acquisition of VNU by Valcon Acquisition BV, a company controlled by a private equity group consisting of affiliated funds of AlpInvest Partners NV, The Blackstone Group LP, The Carlyle Group, Hellman & Friedman LLC, Kohlberg Kravis Roberts & Co. LP and Thomas H. Lee Partners LP.

VNU is a Netherlands-based information and media company.

Barrington closes

Barrington Broadcasting Corp. closed on its new $172.5 million credit facility (Ba3/B), according to a company news release. Bank of America and Wachovia acted as the lead banks on the deal.

The facility consists of a $25 million revolver and a $147.5 million term loan B with an interest rate of Libor plus 225 basis points.

Proceeds from the credit facility, along with $125 million of bonds, were used to fund the acquisition of 12 television stations from Raycom Media, Inc. for a combined purchase price of $262 million.

Barrington is a Hoffman Estates, Ill., operator of television stations in mid-sized markets.

TFS Acquisition closes

Platinum Equity completed its acquisition of Textron Inc.'s Fastening Systems unit for $630 million in cash plus the assumption of certain liabilities, according to a company news release.

To help fund the transaction, TFS Acquisition Corp. got a new $500 million credit facility consisting of a $175 million five-year ABL revolver at Libor plus 175 basis points and a $325 million six-year term loan (B2/B+) at Libor plus 350 basis points, with 101 soft call protection for one year.

During syndication, pricing on the term loan was flexed up from original talk at launch of Libor plus 275 basis points with the addition of the call protection.

Credit Suisse acted as the lead bank on the deal.

TFS is a Troy, Mich., provider of full-service fastening systems to customers in the aerospace, automotive, construction, electronics, industrial equipment and non-automotive transportation industries.

Savers closes

Freeman Spogli & Co. completed its leveraged buyout of Savers Inc. from Berkshire Partners LLC, according to a news release.

To help fund the LBO, Savers got a new $212 million credit facility (B1/B) consisting of a $25 million revolver and a $187 million term loan.

CIBC acted as the lead bank on the deal.

Savers is a Bellevue, Wash., for-profit thrift store chain.

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