Aeroflex sets talk; Tribune flexes up; Noranda adds step; Edgen Murray, Royalty Pharma break

By Sara Rosenberg

New York, May 14 - Aeroflex Inc. came out with price talk on its credit facility as the deal was launched with a bank meeting during Monday's market hours.

In other primary happenings, Tribune Co. increased pricing on its term loan debt, and Noranda Aluminum Acquisition Corp. firmed up pricing on its term loan B at the low end of guidance while adding a leverage-based step down to the tranche.

Over in the secondary market, Edgen Murray, LP's credit facility freed up for trading, with the U.S. first-lien term loan quoted atop par, the Cayman first-lien term loan quoted atop 99 and the second-lien term loan wrapping around 101.

Also freeing up for trading was Royalty Pharma's term loan, with levels ending the day in the upper par context.

Aeroflex held a bank meeting on Monday in New York at 10:30 a.m. ET at the St. Regis hotel to launch its proposed $780 million senior secured credit facility, and with the launch, price talk on the transaction was announced, according to a buyside source.

The $60 million revolver (Ba3/B+) was presented to lenders with talk of Libor plus 200 basis points, the $375 million first-lien term loan (Ba3/B+) and the $100 million U.K. first-lien term loan (Ba3/B) were both presented with talk of Libor plus 225 bps, and the $245 million second-lien term loan (Caa1/CCC+) was presented with talk of Libor plus 575 bps, the source said.

The second-lien term loan carries call protection of 102 in year one and 101 in year two, the source added.

The first- and the second-lien term loans are incurrence covenant-based.

JPMorgan and Lehman Brothers are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by General Atlantic and Francisco Partners in a transaction valued at about $1 billion. Aeroflex stockholders would receive $13.50 per share in cash.

Aeroflex is a Plainview, N.Y., provider of high technology services to the aerospace, defense, cellular and broadband communications markets.

Tribune ups pricing

Tribune flexed pricing higher on its funded and delayed-draw term loan debt and added an original issue discount to the tranches, according to market sources.

The $7.015 billion seven-year term loan and the $263 million seven-year delayed-draw term loan are now both priced at Libor plus 300 bps, up from original talk at launch of Libor plus 250 bps, sources said.

In addition, the tranches, which are being sold to investors as a strip, are now going to carry an original issue discount that is being talked at 99 to 991/4, sources remarked.

Tribune's $10.133 billion senior secured credit facility (Ba2/BB-/BB) also includes a $750 million six-year revolver with a 50 bps undrawn fee and a $2.105 billion seven-year incremental term loan.

JPMorgan, Merrill Lynch, Citigroup and Bank of America are the joint lead arrangers and joint bookrunners on the deal, with JPMorgan administrative agent, Merrill Lynch syndication agent and Citigroup and Bank of America co-documentation agents.

Proceeds from the facility, along with $2.1 billion of notes, will be used to help fund the company's public-to-private transaction.

In the first stage of the public-to-private transaction, Tribune will complete a cash tender offer for about 126 million shares at $34 per share and refinance its existing credit facilities. This stock tender offer commenced on Wednesday and will expire on May 24.

In the second stage, Tribune will buy all the remaining outstanding shares of the company. This part of the transaction is expected to be completed in the fourth quarter.

Tribune's existing publicly traded bonds are expected to remain outstanding.

The going-private transaction is being supported by Sam Zell with a $315 million investment.

Upon completion of the transaction, the company will be privately held, with an Employee Stock Ownership Plan holding all of Tribune's then-outstanding common stock and Zell holding a subordinated note and a warrant entitling him to acquire 40% of Tribune's common stock.

Tribune is a Chicago-based media company.

Noranda sets pricing, adds step

Noranda Aluminum finalized pricing on its $500 million seven-year term loan B on Monday morning and added a step down to the deal, according to a market source.

The term loan B is priced at Libor plus 200 bps, the tight end of original talk of Libor plus 200 bps to 225 bps, and the spread can now step down to Libor plus 175 bps when net senior secured leverage is less than or equal to 1.0 times, the source said.

Recommitments were due from lenders at noon on Monday.

Noranda Aluminum's $750 million credit facility (Ba2/BB-) also includes a $250 million six-year revolver. Pricing on this tranche has yet to be announced.

Allocations on the transaction are expected to go out on Tuesday or Wednesday of this week, the source added.

Merrill Lynch, Citigroup and Goldman Sachs are the lead banks on the deal, with Merrill Lynch the left lead.

Proceeds will be used to help fund Apollo Management LP's acquisition of Xstrata Aluminum from Xstrata plc for a total cash consideration of $1.15 billion.

Xstrata Aluminum was created from the former Falconbridge Group's aluminum assets, known as Noranda Aluminum, following Xstrata's acquisition of Falconbridge Ltd. in 2006.

Noranda Aluminum comprises a 100% owned primary smelter in New Madrid, Tenn., and three modern rolling mills in Tennessee, North Carolina and Arkansas, together with a 50% interest in the Gramercy aluminum refinery in Louisiana and St. Ann bauxite mine in Jamaica, both of which are owned through a joint venture with Century Aluminum Inc.

Gate Gourmet flexes higher

Gate Gourmet Inc. increased pricing on both its CHF 425 million funded term loan (B2/B) and CHF 300 million delayed-draw term loan (B2/B) to Libor plus 250 bps from original talk of Libor plus 225 bps, according to a market source.

The company's CHF 850 million credit facility also includes a CHF 125 million revolver (Ba2/B+).

Goldman Sachs and Deutsche Bank are the lead banks on the deal, which will be used to refinance existing debt.

Gate Gourmet is a Zurich, Switzerland, provider of airline catering and provisioning services.

Edgen Murray frees to trade

Moving to the secondary, Edgen Murray's credit facility allocated and freed up for trading early on in the session on Monday, according to a trader.

The $280 million seven-year first-lien term loan (B3/B) at a U.S. borrower was quoted at par ½ bid, par ¾ offered, the $145 million first-lien term loan (B3/B) at a Cayman borrower was quoted at 99½ bid, 99¾ offered and the $75 million eight-year second-lien term loan (B3/CCC+) was quoted at par ½ bid, 101½ offered, the trader said.

The U.S first-lien term loan is priced at Libor plus 275 bps, the Cayman first-lien term loan is priced at Libor plus 275 bps and was sold to investors with an original issue discount of 991/2, and the second-lien term loan is priced at Libor plus 625 bps, with a step down to Libor plus 600 bps if leverage falls below 4.0 times, and carries call premiums of 102 in year one and 101 in year two.

During syndication, the Cayman first-lien term loan saw the addition of the original issue discount and the second-lien term loan saw pricing firm up at the wide end of original guidance of Libor plus 600 bps to 625 bps with the addition of the step.

Lehman Brothers and Jefferies Finance LLC are the lead banks on the $500 million in new term loans.

Edgen Murray will also be getting a $150 million ABL revolver that is being led by GMAC and being done via a separate syndication.

Proceeds will be used for a recapitalization of the company that will include the refinancing of existing credit facility debt, $136 million of 9 7/8% senior secured notes due 2011 and $130 million of senior secured floating-rate notes due 2010.

In addition, Jefferies Capital Partners and Edgen Murray management will purchase the company's subsidiaries from its existing partners, using cash from a portion of the refinancing proceeds and equity financing proceeds.

The remainder of the net cash proceeds are expected to be used for general corporate purposes.

Edgen Murray is a Baton Rouge, Pa.-based distributor of high performance carbon and alloy steel products for use primarily in specialized applications in the energy infrastructure market.

Royalty Pharma breaks

Another deal to hit the secondary on Monday was Royalty Pharma's $1.4 billion senior secured term loan (BB+), with levels quoted at par 3/8 bid, par 5/8 offered on the open and then moving up to par ½ bid, par ¾ offered, where it closed out the day, according to a trader.

The term loan is priced at Libor plus 150 bps with a step down to Libor plus 137.5 bps based on the company meeting a leverage test.

The step down was added to the loan during syndication.

Bank of America is the lead bank on the deal, which will be used to refinance existing debt and to fund the acquisition of royalty streams.

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

Skillsoft closes

SkillSoft plc closed on its $225 million secured credit facility (B2/B+) on Monday consisting of a $25 million five-year revolver priced at Libor plus 275 bps, with a 50 bps commitment fee, and a $200 million six-year term loan B priced at Libor plus 275 bps, according to an 8-K filed with the Securities and Exchange Commission.

During syndication, pricing on both tranches firmed up at the high end of original guidance of Libor plus 250 bps to 275 bps.

Credit Suisse acted as the lead bank on the deal, which was used to fund the acquisition of NETg from the Thomson Corp. for about $285 million.

SkillSoft is a Nashua, N.H., provider of e-learning and performance support services for business, government and education. NETg is a Scottsdale, Ariz., developer of e-learning courses for information technology, desktop skills and professional development.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.