DaVita, HealthSpring break; Univision extended loan trading; Supervalu dips; Travelport rises

By Sara Rosenberg

New York, Oct. 19 - DaVita Inc. and HealthSpring Inc. saw their credit facilities free up for trading on Tuesday, with their term loan Bs quoted above their original issue discount prices, and Univision Communications Inc.'s extended term loan started getting quoted in the gray market.

In more trading happenings, Supervalu Inc.'s term loans were softer after the company announced weak quarterly numbers and lowered guidance, and Travelport Holdings Ltd.'s strip of term loan and letter-of-credit facility was stronger after word hit that the company revised its amendment and extension proposal.

Over in the primary, Asurion subscribed its term loan after increasing the original issue discount, and Radio Systems Corp.'s credit facility is heard to have filled out in advance of the commitment deadline that is still days.

Also, Gateway Casinos & Entertainment saw guidance emerge ahead of its bank meeting, Vertafore released price talk on its second-lien term loan as the deal was presented to lenders, and CB Richard Ellis Group Inc. and SoftLayer Technologies launched their new credit facilities as well.

Furthermore, Green Mountain Coffee Roasters Inc. firmed up timing on the launch of its credit facility, Columbian Chemicals Co. is getting ready to bring an all pro rata deal to market later this week and Hanger Orthopedic Group Inc. is eyeing early next month for its launch.

DaVita frees up

DaVita's credit facility hit the secondary market late in the day, with one trader quoting the $1.75 billion six-year term loan B at par ¾ bid, 101¼ offered and the $1 billion five-year term loan A at 99¾ bid, par ½ offered.

A second trader said that the term loan B was at par 5/8 bid, 101 1/8 offered on the break and then it moved up to par 7/8 bid, 101¼ offered.

Pricing on the term loan B is Libor plus 300 basis points with a step-down to Libor plus 275 bps if corporate ratings are upgraded to Ba2/BB. It has a 1.5% Libor floor and 101 soft call protection for one year and was sold at an original issue discount of 991/2.

Pricing on the term loan A and on a $250 million five-year revolver is Libor plus 275 bps.

During syndication, pricing on the term loan B was flexed down from Libor plus 350 bps, the discount tightened from 99 and call protection was added, and pricing on the revolver and term loan A was reduced from Libor plus 300 bps.

DaVita refinancing debt

Proceeds from DaVita's $3 billion secured credit facility (Ba2/BB/BB), along with $1.55 billion of notes that was upsized from $1.45 billion, will be used to refinance $1.8 billion of outstanding bank debt, $700 million of 6 5/8% senior notes due 2013 and $850 million of senior subordinated notes due 2015.

Also, proceeds will be used for general corporate purposes and other opportunities, including potential acquisitions, share repurchases and other growth investments.

JPMorgan, Bank of America, Credit Suisse, Barclays, Goldman Sachs and Wells Fargo are the joint lead arrangers and bookrunners on the deal.

DaVita is a Denver-based provider of dialysis services.

HealthSpring starts trading

Another deal to break for trading was HealthSpring, with its $250 million six-year term loan B quoted at 98¾ bid, 99½ offered, according to a trader.

Pricing on the term loan is Libor plus 450 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 981/2. There is 101 soft call protection for one year.

The company's $400 million of new bank debt (Ba3/B+) also includes a $150 million term loan A due Feb. 11, 2015.

JPMorgan and Bank of America are the joint lead arrangers and bookrunners on the deal, and Raymond James Bank is a co-arranger.

HealthSpring acquiring Bravo

Proceeds from HealthSpring's new term loans will be used to help fund the acquisition of Bravo Health Inc., a Baltimore-based operator of Medicare Advantage coordinated care plans, for $545 million.

At close, leverage on a pro forma EBITDA basis is anticipated to be 1.6 times, and debt to capital is expected in the mid- to high 30s.

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

HealthSpring is a Nashville, Tenn.-based Medicare Advantage coordinated care plans.

Univision extended breaks

Univision's extended term loan began trading in the secondary market on a when-issued basis, with levels quoted at 93 3/8 bid, 93 7/8 offered, according to traders.

The company's non-extended term loan B was quoted by one trader at 92¼ bid, 93 offered, basically flat on the day, and by a second trader at 92½ bid, 92 7/8 offered, also unchanged.

Under the amendment, which has passed, the company was looking to extend $2.5 billion of its term loan due September 2014 by two and a half years to March 2017 and its $750 million revolver due March 2014 by two years to 2016.

Chatter is that the extended term loan is oversubscribed, and as a result, the company may extend more than the original $2.5 billion requested.

Univision extended pricing

Pricing on Univision's extended term loan is Libor plus 425 bps with a step-down to Libor plus 400 bps when net leverage is 8.5 times, while pricing on the non-extended term loan is Libor plus 225 bps.

During the amendment negotiation process, the company increased pricing on the extended term loan from Libor plus 400 bps and added the step down.

Also, as part of the negotiations, the company agreed to use $1.1 billion of the pending $1.2 billion investment by Grupo Televisa SAB to repay PIK toggle notes, as opposed to that cash going to the sponsors.

And, a springing maturity was added to the extended term loan to up to 45 days before the PIK toggle notes expire if there is more than $250 million of those notes outstanding and the Televisa transaction has not closed.

Univision paying down debt

Univision's amendment and extension is conditioned on the company selling at least $750 million of notes to repay term loan borrowings.

To that end, on Monday, the company priced $750 million of senior secured notes at par to yield 7 7/8%.

Deutsche Bank is the lead bank on the credit facility amendment, which is expected to close on Friday.

Lenders were offered a 5 bps amendment fee.

Univision is a Los Angeles-based Spanish-language media company.

Supervalu slides with numbers

Supervalu's term loans headed lower in trading following the release of fiscal 2011 second quarter and a downward adjustment in expected full-year earnings, according to traders.

The term loan B-1 and the term loan B-2 were quoted by one trader at 97 1/8 bid, 97 5/8 offered, down from 97¾ bid, 98¼ offered.

Meanwhile, a second trader had the term loan B-1 quoted at 97 bid, 98 offered, versus 97 1/8 bid, 97 5/8 offered on Monday and the B-2 quoted at 97 bid, 97¾ offered, versus 97 3/8 bid, 97 7/8 offered.

For the fiscal 2011 second quarter, Supervalu reported a net loss of $1.47 billion or $6.94 per diluted share, compared to net income of $74 million, or $0.35 per diluted share, last year.

And, net sales for the quarter were $8.7 billion, compared to net sales of $9.5 billion in the fiscal 2010 second quarter.

Supervalu revises guidance

In addition, on Tuesday, Supervalu modified its fiscal 2011 guidance since "it will take longer than originally anticipated to realize the benefit of the marketing, merchandising and operational initiatives that we continue to build upon," said Craig Herkert, chief executive officer and president, in a news release.

Net loss in fiscal 2011 is now expected in the range of $5.94 to $5.74 per diluted share on a GAAP basis, as opposed to the previous guidance of net income in the range of $1.61 to $1.81 per diluted share.

Identical store sales, excluding fuel, are now projected to be around negative 5.5% for the year compared to previous guidance of negative 5%.

Also, full-year debt reduction is expected to total $650 million, instead of around $600 million.

Supervalu is an Eden Prairie, Minn.-based supermarket operator.

Travelport trades higher

Travelport's strip of term loan and letter-of-credit facility debt moved up to 99 bid, 99½ offered from 98¾ bid 99 offered as a "couple of buyers came in" after the company modified its amendment and extension proposal, according to a trader.

Under the changes, pricing on the extended term loan and letter-of-credit facility debt was lifted to Libor plus 450 bps from Libor plus 400 bps and a previously planned pricing step down was removed.

By comparison, current pricing on the debt is Libor plus 250 bps.

Also, letter-of-credit facility lenders may now opt to convert their commitments into term loans.

As before, the company is looking to extend the maturity date on the term loan and letter-of-credit facility by two years from August 2013.

Travelport lead banks

Credit Suisse and UBS are leading Travelport's amendment and extension and are offering lenders a 25 bps amendment fee.

In addition to the maturity extension, the amendment would increase the leverage ratio and allow for the refinancing of non-extended term loan debt with new second-lien or junior debt.

Furthermore, the amendment would allow for an extension of revolver commitments at a later date.

Consents and commitments are still due on Wednesday.

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

Asurion revises OID

Switching to the primary, Asurion increased the original issue discount on its $900 million incremental first-lien term loan to 96 from most recent talk of 98 and initial talk at launch of 99, according to sources.

Also, the call protection was revised to 102 in year one and 101 in year two from just 101 in year one, sources said.

Pricing on the loan remained at Libor plus 525 bps, where it was adjusted to earlier in the syndication process from initial talk of Libor plus 450 bps, and there is still a 1.5% Libor floor.

Barclays, Credit Suisse, Morgan Stanley and Goldman Sachs are the lead banks on the now filled out deal that will be used to fund a dividend.

Asurion is a Nashville, Tenn.-based provider of technology protection services.

Radio Systems nets interest

Radio Systems' $225 million senior secured credit facility (B1/B+) is said to be fully subscribed and lenders still have until Friday to place their orders, according to sources.

"Same size as before and they had a lot of relationship banks," one source remarked as to why the deal has been well received.

The facility consists of a $75 million revolver and a $150 million term loan. Price talk on the term loan is Libor plus 450 bps with a 1.5% Libor floor and an original issue discount of 99, sources said.

Proceeds will be used to refinance existing debt.

Fifth Third Bank and BMO are the lead banks on the facility, which went out primarily to existing lenders.

Radio Systems is a Knoxville, Tenn.-based provider of electronic pet containment products, pet training products and pet doors.

Gateway guidance surfaces

Gateway Casinos & Entertainment released price talk on its $250 million five-year first-lien term loan as the deal is getting ready to launch with a bank meeting on Wednesday, according to a market source.

The term loan is being talked at Libor plus 525 bps to 550 bps with a 1.75% Libor floor and an original issue discount of 981/2, the source said.

Jefferies, RBS, Goldman Sachs, JPMorgan and Morgan Stanley are the lead banks on the $285 million credit facility that also includes a $35 million revolver.

Proceeds from the facility, along with $250 million of seven-year second-lien notes, will be used to refinance an exit financing term loan.

Gateway Casinos is a Burnaby, B.C.-based casino and entertainment company.

Vertafore sets talk

Vertafore launched its $260 million seven-year second-lien term loan (Caa1) on Tuesday, and in connection with the event, official price talk was announced, according to a market source.

The loan is being talked at Libor plus 800 bps to 850 bps with a 1.75% Libor floor and an original issue discount of 98 to 981/2, the source said.

There is call protection of 103 in year one, 102 in year two and 101 in year three, the source added.

Bank of America, Credit Suisse, Barclays and RBC Capital are the lead banks on the deal that will be used to refinance an unsecured term loan.

Vertafore is Bothell, Wash.-based provider of software and information to the insurance industry.

CB Richard launches

Another deal to launch on Tuesday was CB Richard Ellis' $1.35 billion senior secured credit facility (Ba1/BB) that consists of a $700 million 41/2-year revolver, a $350 million five-year term loan A and a $300 million six-year term loan B.

Price talk on the revolver and the term loan A is Libor plus 225 bps, and price talk on the term loan B is Libor plus 350 bps. The term loan B is being offered at an original issue discount of 99 and does not include a Libor floor.

Proceeds, along with $500 million of cash on hand and $350 million of notes, will be used to refinance $1.5 billion of existing bank debt.

Credit Suisse, Bank of America and HSBC Securities are the lead banks on the credit facility.

CB Richard Ellis is a Los Angeles-based commercial real estate services firm.

SoftLayer hits market

SoftLayer Technologies also held a bank meeting during the session to kick off syndication on a proposed $275 million credit facility that is comprised of $20 million five-year revolver and a $255 million six-year term loan.

As was previously reported, both the revolver and the term loan are being talked at Libor plus 450 bps to 500 bps with an original issue discount of 98 to 981/2. The term loan has a 1.75% Libor floor, while the revolver has no floor.

SunTrust and RBC Capital are the lead banks on the deal that 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, as is SoftLayer.

Net leverage will be under 2.5 times.

SoftLayer is a Dallas-based provider of on-demand data center and hosting services.

Green Mountain timing

Green Mountain Coffee Roasters nailed down timing on the launch of its proposed $1.35 billion senior secured credit facility (B+) with the scheduling of a bank meeting for Oct. 27, according to a market source. Previously, timing was labeled simply as October business.

The facility consists of a $750 million five-year revolver, a $250 million five-year term loan A and a $350 million six-year term loan B.

Upon announcing the deal last month, the company said in a conference call that assuming an interest rate in the 5% to 6% range on the new bank debt is likely a fair guess.

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

Green Mountain buying Van Houtte

Proceeds from Green Mountain's credit facility will be used to help fund the acquisition of LJVH Holdings Inc. (Van Houtte), a Montreal-based gourmet coffee brand, from Littlejohn & Co. LLC for about $890 million, and to refinance existing debt.

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 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.

Columbian Chem readies deal

Columbian Chemicals is scheduled to hold a bank meeting on Thursday to launch its proposed $375 million senior secured credit facility (Ba3) due in 2015 that is being led by UBS and JPMorgan, according to a market source.

The facility consists of a $300 million term loan A and a $75 million revolver, the source said.

Proceeds will be used to refinance existing bank debt.

Columbian Chemicals is a Marietta, Ga.-based manufacturer of carbon black.

Hanger targeted launch

Hanger Orthopedic is targeting Nov. 1 as the day for its bank meeting to launch a proposed $425 million credit facility (Ba3/BB-), but that date is not yet finalized, according to a market source.

The facility consists of a $100 million revolver and a $325 million term loan B, company officials said in a conference call on Tuesday.

Bank of America, Jefferies, Oppenheimer, SunTrust and RBC are the lead banks on the deal that will be used to help fund the acquisition of Accelerated Care Plus, a Reno, Nev.-based provider of integrated clinical programs for sub-acute and long-term care rehabilitation providers, for about $155 million in cash, and to refinance existing bank debt.

Hanger Orthopedic notes

Hanger Orthopedic officials also said in the conference call that other funds for the transaction will come from cash on hand and $200 million in senior notes.

The roadshow for the notes kicked off on Tuesday morning.

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

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

Burger King closes

In other news, 3G Capital completed its buyout of Burger King Holdings Inc., which was funded in part by a new $2 billion credit facility (Ba3/BB-), consisting of a $150 million revolver and a $1.85 billion term loan.

Pricing on the term loan is Libor plus 450 bps for the U.S. piece and Euribor plus 475 bps on the euro piece, with the whole tranche having a 1.75% Libor floor and 101 soft call protection for one year. The debt was issued at an original issue discount of 99.

During syndication, the term loan was upsized from $1.75 billion as the company's bonds were downsized by $100 million, the size of the euro tranche firmed at €250 million from talk of €200 million to €250 million, pricing on the U.S. tranche was reduced from Libor plus 475 bps, the original issue discount on the entire term loan was tightened from 98½ and soft call protection was added.

JPMorgan and Barclays Capital acted as the lead banks on the Miami-based fast food hamburger chain's deal.

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