Travelport gains with amendment, restructuring; Avis ups deadline; NewPage tweaks deal

By Sara Rosenberg

New York, Sept. 19 - Travelport Ltd.'s extended U.S. institutional bank debt, and Travelport Holdings Ltd.'s unsecured payment-in-kind term loan were stronger in trading on Monday following news that a restructuring of the PIK debt, along with a credit facility amendment, are being sought.

Over in the primary, Avis Budget Group Inc. accelerated the commitment deadline on its term loan B due to oversubscription, NewPage Corp. reverse flexed pricing on its debtor-in-possession second-out term loan, and Web.com firmed up timing on the launch of its first-and second-lien term loans.

Travelport heads higher

Travelport's extended institutional bank debt was better on Monday as the company launched an amendment to its senior secured credit facility to facilitate the restructuring of Travelport Holdings' roughly $715 million unsecured PIK term loan due March 27, 2012, and the PIK loan posted positive returns in trading as well, according to traders.

The strip of extended U.S. institutional bank debt was quoted by traders at 92 bid, 93 offered, up from 90 bid, 91 offered, while the PIK loan was seen at 60 bid, 65 offered, up from 45 bid, 50 offered.

Under the amendment, the company would be allowed to get a new $342.5 million second-lien loan, the current accordion feature would be terminated, the total leverage ratio would be increased and a first-lien leverage ratio would be added.

The amendment would also add a minimum liquidity requirement, revise restricted payments capacity and the general basket for investments, increase the excess cash flow sweeps and provide additional collateral.

Travelport second-lien terms

Travelport's new second-lien term loan due Dec. 1, 2016 would be priced at Libor plus 600 basis points PIK toggle, with the condition that if first-lien leverage is above or equal to 3.0 times, cash interest cannot be paid.

Of the total second-lien loan amount, $207.5 million would be issued in exchange for PIK debt and $135 million would be used to guarantee a $135 million PIK tranche that would be extended to Sept. 30, 2012 at pricing of Libor plus 600 bps PIK.

The company would push out the maturity on another $287.5 million of the outstanding PIK debt to Dec. 1, 2016 at pricing of Libor plus 1,350 bps PIK.

Also, PIK lenders are being offered an $85 million pro-rata cash repayment and equity of the parent company equal to 15%, which may increase over time to a maximum of 44% if the PIK loans are not repaid or a refinancing transaction has not been announced.

Travelport revolver extension

In addition to permitting the restructuring, Travelport's amendment would extend its revolver to April 28, 2014 from Aug. 23, 2012 at pricing of Libor plus 450 bps, an increase of 175 bps over current pricing, with a 75 bps unused fee, up from 50 bps.

As part of the extension, the company would voluntarily reduce revolver commitments by 20%, subject to a minimum extension of 50% of the facility.

Extended revolver consents are due by 5 p.m. ET on Sept. 28, while amendment consents are due by 3 p.m. ET on Sept. 23.

Revolver lenders are being offered a 200 bps amendment fee, plus an additional 200 bps if they extend their commitments, and term loan and non-extended synthetic letter-of-credit facility lenders are being offered a 400 bps fee.

Credit Suisse Securities (USA) LLC and UBS Securities LLC are leading the amendment.

Travelport bankruptcy warning

Travelport also said on Monday that, along with this solicitation process, it is asking for consents on a consensual plan of reorganization, which would require less approvals from PIK loan lenders than the unanimous approval rate need for the proposed restructuring.

If the restructuring does not pass, Travelport Holdings plans to proceed with a consensual plan of reorganization through a Chapter 11 filing. Travelport Ltd. would not be a party to the plan.

Pro forma for the proposed out-of-court restructuring, net leverage would be 6.7 times, gross leverage would be 7.2 times, total secured leverage would be 3.3 times and total first-lien term loan leverage would be 2.7 times.

Travelport is an Atlanta-based provider of transaction processing services to the travel industry.

Avis shutting early

Moving to the primary, Avis moved the commitment deadline on its $420 million seven-year term loan B (Ba1) to end of day Tuesday from Thursday as the deal has been met with strong demand since relaunching on Sept. 13, according to a market source.

Price talk on the B loan was left unchanged at Libor plus 525 basis points with a 1.5% Libor floor and an original issue discount of 97 to 98, and there is 101 soft call protection for one year.

However, when the deal was first launched in early August, before the large market sell-off, the term loan B was sized at $400 million and talked at Libor plus 350 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

Some factors that sources have previously attributed to the loan's success following its relaunch is Avis' dropped bid for Dollar Thrifty Automotive Group Inc. and the release of detailed information on the company's proposed capital structure.

Avis plans other debt

In an 8-K filed last week with the Securities and Exchange Commission, Avis revealed that in addition to the term loan B, funding for its purchase of Avis Europe plc will come from a $20 million tranche A term loan and a $200 million revolver add-on, both having pricing ranging from Libor plus 275 bps to 325 bps based on ratings, and $250 million of senior notes.

By comparison, at the original launch, the credit facility was talked with a $200 million term loan A and a $300 million revolver add-on, both of which were guided at Libor plus 300 basis points, subject to a ratings-based grid, with no Libor floor.

Also, the company plans to use cash of $955 million, borrow an additional $140 million under certain of its existing fleet debt financing arrangements, assume Avis Europe's existing vehicle finance leases of roughly $440 million, assume about $50 million of existing Avis Europe corporate debt and enter into a financing arrangement secured by certain of Avis Europe's vehicle assets.

Avis closing soon

Avis anticipates closing on its acquisition of Avis Europe in October, subject to Avis Europe shareholder approval, court approval and regulatory clearances.

Under the purchase agreement, Avis is buying Avis Europe for £3.15 in cash per share. The transaction is valued at £635 million, or about $1 billion.

Morgan Stanley & Co., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Scotia Capital (USA) Inc. and RBS Securities Inc. are the lead banks on the credit facility and the notes that will be used for the transaction.

Parsippany, N.J.-based Avis and Bracknell, England-based Avis Europe are vehicle rental companies.

NewPage cuts pricing

Also seeing strong demand is NewPage's $250 million debtor-in-possession second-out term loan, and, as a result, pricing was reduced on Monday morning to Libor plus 650 bps from Libor plus 700 bps, with lenders having until the close of business to provide recommitments, according to a market source.

As before, the loan includes a 1.5% Libor floor and original issue discount of 99.

Talk that the deal has been going well has been around since launch based on the fact that at the bank meeting, price talk came out lower-than-expected. Prior to launch, talk on the loan had been circulating at Libor plus 750 bps with a 1.5% Libor floor and a discount that was still to be determined.

The company's $600 million 18-month debtor-in-possession facility also includes a $350 million first-out ABL revolver that is priced in line with talk at Libor plus 325 bps with no Libor floor.

J.P. Morgan Securities LLC and Barclays Capital Inc. are the lead banks on the term loan and the revolver. Wells Fargo Securities LLC is a lead on the revolver as well.

NewPage repaying debt

Proceeds from NewPage's debtor-in-possession deal will be used to repay outstanding revolver debt and for general corporate purposes during the company's Chapter 11 process.

The company announced its bankruptcy filing early this month, saying that the goal is to facilitate a debt restructuring and position the overall business for long-term success.

Investors weren't exactly surprised by the bankruptcy news since the company had already warned that this step may have to be taken back in mid-August. At that time, it was revealed in a filing with the SEC that there are issues with the maturity of the company's revolver due to its floating-rate and 10% second-lien senior secured notes not being refinanced.

NewPage is a Miamisburg, Ohio-based producer of printing and specialty papers.

Web.com sets launch

In more primary happening, Web.com nailed down timing on its $750 million of senior secured term loans, scheduling a bank meeting for 11 a.m. ET, according to a market source.

The debt is comprised of a $600 million seven-year first-lien term loan B and a $150 million eight-year second-lien term loan, the source said, with price talk still to be determined.

Filings with the SEC previously outlined expected pricing on the first-lien term loan B at Libor plus 425 bps with a 1.25% Libor floor and on the second-lien term loan at Libor plus 800 bps with a 1.25% Libor floor. It was said that the second-lien loan would have call protection of 102 in year one and 101 in year two.

Furthermore, based on the filings, the credit facility is expected to include a $50 million five-year revolver priced at Libor plus 425 bps.

Web.com lead banks

J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. and SunTrust Robinson Humphrey Inc. are the joint lead arrangers and bookrunners on Web.com's credit facility.

Proceeds will be used to help fund the acquisition of a majority interest in Network Solutions from General Atlantic LLC for $405 million in cash and 18 million shares of common stock, to refinance existing debt and for general corporate purposes.

Closing is expected in the fourth quarter, subject to Web.com shareholder approval and customary regulatory approvals and conditions, at which time leverage will be 4.0 times through the first-lien and 5.0 times through the second-lien.

Web.com is a Jacksonville, Fla.-based provider of internet services and online marketing solutions. Network Solutions is a Herndon, Va.-based provider of website services, online marketing and domain name registration.

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