QVC OID emerges; BRSP tweaks deal; Travelport launches loan; VNU amendment passes

By Sara Rosenberg

New York, June 17 - QVC Inc. released guidance on the original issue discount for its term loan as the transaction was presented to lenders on Wednesday, and BRSP LLC came out with some changes to its well oversubscribed term loan that included increasing the size of the deal, reducing the original issue discount and changing call protection.

Also on the new deal front, Travelport Ltd. approached investors early on in the session with an incremental term loan and some are expecting the deal to go well based on the credit and the size of the existing bank group, but in the secondary, the company's existing loan traded lower with the news.

In other news, VNU Group BV's (Nielsen Co. BV) amendment proposal ended up receiving enough consents from lenders to get done after an amendment fee was added and distributions on any extended term loan debt were changed. In trading, however, the existing term loan B weakened.

QVC reveals discount talk

QVC held a bank meting during market hours to kick off syndication on its proposed $500 million term loan B, and in connection with the launch, talk on the original issue discount was announced, according to a market source.

The term loan B discount is being guided in the area of 98 to 981/2, the source said.

As was already reported, actual spread on the loan is talked at Libor plus 350 bps with a 2% Libor floor.

When asked whether he thought the deal would go well, the source responded: "Tough to say. Attendance was OK at maybe 60 - 70, but [I] imagine a lot of lenders, not including us, looking at this are familiar with story and involved already in one of the many tranches of existing bank debt."

Bank of America and JPMorgan are the lead banks on the deal that will be used for general corporate purposes.

QVC extends maturities

As mentioned by the market source, QVC has a bunch of outstanding bank debt already and recently the maturities on some of that debt were extended.

Under an amendment, the company's existing credit facility will mature in six tranches between June 2010 and March 2014 with 11% of the outstanding principal due in 2010, 16% due in 2011, 9% due in 2012, 9% due in 2013 and 55% due in 2014.

Lenders consenting to the amendment, which represent $4.998 billion in commitments, received modified terms, including pricing that now varies from Libor plus 350 bps to 550 bps, depending on the tranche maturity.

Loans held by non-consenting lenders, which represent $252 million in commitments, will remain under the pricing terms of the previous credit facility, with such debt maturing in 2011. Non-consenting lenders will continue to receive a maximum interest margin of Libor plus 100 bps.

Concurrent with the closing of amendment, $750 million of loans were retired at par and another $18 million of unfunded commitments were canceled, bringing the remaining debt size to $4.48 billion.

QVC is a West Chester, Pa.-based multimedia retailer.

BRSP modifies loan

In more primary news, on Wednesday, BRSP upsized its term loan, cut the original issue discount and modified call protection as the deal was around three times oversubscribed, according to a market source.

The five-year senior secured term loan (B1/BB-) is now sized at $290 million, up from $275 million, with the extra $15 million in proceeds going towards the reduction of out of pocket expenses, the source said.

And, while pricing was left unchanged at Libor plus 450 basis points with a 3% floor, the original issue discount was revised to 94 from original guidance that was in the 92 to 93 area, the source continued.

Furthermore, call protection on the loan was changed to 102 in year one, and 101 in years two and three, from 104 in year one, 102 in year two and 101 in year three.

As before, covenants include a debt service coverage ratio.

Recommitments were due from lenders at the close of business on Wednesday.

BRSP allocating soon

Now that the changes have been made, BRSP is targeting allocating its term loan sometime early next week, the source said.

Barclays Capital is the lead bank on the deal.

Proceeds from the new term loan will be used to refinance an existing term loan that was put in place in 2006.

Sources had previously told Prospect News that syndication of the loan was going so well because investors were attracted to the pricing and the original issue discount.

BRSP is a special purpose entity covering two gas-fired power plants - Broad River and South Point - that are operated by Calpine Corp.

Travelport seeks term loan

Travelport launched a $105 million term loan on Wednesday morning in what is hoped to be a quickie deal as the books are scheduled to close on Thursday afternoon, and some are speculating that the syndication process should go smoothly, according to a market source.

"Think it will go pretty well. People know the credit. Small tranche for big bank group," the source remarked.

The term loan is talked at Libor plus 800 basis points with a 3% Libor floor and is being offered at an original issue discount of 95, the source said.

Credit Suisse is the lead bank on the deal that will be used for general corporate purposes.

The deal is being done under the company's existing credit facility accordion feature.

Travelport softens

Following the news of the incremental term loan, Travelport's existing term loan moved lower in the secondary market, according to a trader.

The term loan was quoted at 79 bid, 81 offered, down from 81 bid, 83 offered, the trader said.

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

VNU gets lender OK

VNU received enough approvals from lenders by the revised Tuesday consent deadline to get its amendment passed, according to a market source. Consents had initially been due on Monday, but the deadline was extended after some changes were made.

As was previously reported, the amendment allows for the extension of $1.25 billion of the company's term loan to May 1, 2016 from Aug. 9, 2013, with the extended debt priced at Libor plus 375 bps, and revolving commitments can be extended as well.

The amendment also allows for the issuances of additional secured notes or loans, as long as $500 million of the proceeds are used to prepay term loans at par and 90% of the net cash proceeds in excess of the first $500 million from any such issuance are used to prepay term loans at par.

The company's original amendment proposal was turned down by lenders, but once a 10 bps amendment fee was added - as opposed to lenders getting no fee - and allocations on the extended term loan were changed to pro rata from non-pro-rata, the transaction was approved.

Citigroup acted as the lead bank on the amendment.

VNU sells notes

According to a market source, VNU already entered into an agreement to sell $500 million of senior secured notes to Goldman Sachs, but that transaction couldn't be finalized until the amendment was approved.

The notes are priced at 8.5% cash pay plus an original issue discount of 98.

The source explained that the notes were a sore spot for loan investors since they rank pari passu with the bank debt, so the risk is the same, but the return on the notes is much higher.

As required by the amendment, all of the proceeds from the notes will be used to pay down non-extended term loan debt.

VNU loses ground

Even with the passing of VNU's amendment, the company's term loan B softened in trading, although the move may have been more technically driven than credit specific, according to a trader.

The term loan B was quoted at 90¾ bid, 91¾ offered, down from 91¾ bid, 92¾ offered, the trader said.

"A lot of things seem to be down a point or two today," the trader added.

VNU is a New York-based, Netherlands-based information and media company.

LCDX slides

Also lower on Wednesday was the LCDX 12 index, but stocks ended the day mixed, according to a trader.

The index was quoted at 86.25 bid, 86.55 offered, down from 86.50 bid, 86.80 offered, the trader said.

Meanwhile, Nasdaq closed up 11.88 points, or 0.66%, Dow Jones Industrial Average closed down 7.49 points, or 0.09%, S&P 500 closed down 1.26 points, or 0.14%, and NYSE closed down 22.21 points, or 0.38%.

Weight Watchers holds steady

In more secondary happenings, Weight Watchers International Inc.'s bank debt held firm during market hours after news surfaced that the company will be approaching lenders with an amendment proposal on Thursday, according to a trader.

The amendment, led by Credit Suisse, is to allow for the extension of the maturity on term loan debt.

At the end of the day, the company's term loan A was quoted at 94¼ bid, 95 offered, the term loan A-1 was quoted at 91 bid, 93 offered and the term loan B was quoted at 94½ bid, 95¾ offered, the trader said, adding that all tranches were unchanged from previous levels.

Weight Watchers is a New York-based provider of weight management services.

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