Thomson Learning, Concentra, Viant tweak deals; Mitel sets talk; Zuffa breaks; Sirva down again

By Sara Rosenberg

New York, June 20 - Thomson Learning increased pricing on its credit facility and added an original issue discount and soft call protection to the term loan B tranche, and Concentra Inc. and Viant Holdings Inc. both reduced pricing on their first-lien term loans.

In other primary news, Physiotherapy Associates Inc. is anticipated to firm up pricing on its first-lien debt at the high end of talk and Mitel Networks Corp. pricing guidance surfaced as the deal was launched with a bank meeting on Wednesday.

And, over in the secondary, Zuffa LLC's credit facility freed up for trading with the term loan B quoted around par, Sirva Inc.'s term loan continued to plunge lower, Tribune Co.'s term loan was softer on disappointing numbers and LCDX weakened with the rest of the market.

Thomson Learning made a round of changes to its credit facility on Wednesday, including increasing pricing on the revolver and the term loan B, removing the super-priority from the revolver, and adding an original issue discount and soft call protection to the term loan B, according to a market source.

Under the modifications, the $300 million six-year revolver and the $3.44 billion seven-year covenant-light term loan B are now both priced at Libor plus 275 basis points, the source said. The revolver was originally launched at Libor plus 225 bps - when it was still super-priority - and the term loan B was originally launched at Libor plus 250 bps.

In addition, the term loan B is now being offered at a discount that is being talked at 99 to 99¼ and the paper now carries 101 soft call protection for one year, the source continued.

Prior to the changes, the revolver was rated B1/B+ and the term loan was rated B1/B.

RBS Securities, JPMorgan, Citigroup and UBS are the lead arrangers on the $3.74 billion senior credit facility, with RBS the administrative agent, JPMorgan as syndication agent, and Citi and UBS as co-documentation agents.

Proceeds will be used to help fund the acquisition of Thomas Learning, which is a division of Thomson Corp., by Apax Partners and Omers Capital Partners.

Other financing will come from $2.14 billion of bonds, consisting of a $1.1 billion senior unsecured PIK toggle notes offering, a $500 million senior subordinated notes offering and a $540 million PIK holdco notes offering.

On Wednesday, the senior unsecured PIK toggle notes offering was downsized from $1.35 billion and the senior subordinated notes offering was upsized from $250 million.

The Stamford, Conn.-based higher education, careers and library reference assets include Wadsworth, Delmar Learning, Gale, Heinle, Brooks/Cole and South-Western.

The transaction is expected to close in the third quarter, subject to regulatory approvals and other customary closing conditions.

Concentra trims spread

Concentra reverse flexed pricing on its $330 million seven-year first-lien term loan B (B1) on Wednesday morning, while firming up spreads on its other tranches at initial talk, according to a market source.

The first-lien term loan B is now priced at Libor plus 225 bps, down from original talk of Libor plus 250 bps, the source said.

Meanwhile, pricing on the company's $75 million six-year revolver (B1) remained at Libor plus 225 bps and pricing on the $155 million eight-year second-lien PIK toggle term loan (Caa1) remained at Libor plus 550 bps, the source added.

Pricing on the second-lien term loan will step up by 75 bps if PIK is elected.

Call protection on the second-lien loan is non-callable for one year, then at 102 in year two and 101 in year three.

The first- and second-lien term loans and the revolver are covenant-light; however, the revolver has a total leverage covenant when it's drawn or letters of credit are issued.

Citigroup, UBS, Bank of America and JPMorgan are the lead banks on the $560 million deal, with Citi the left lead.

The deal is linked to Viant Holdings Inc.'s spinoff from Concentra.

Under the transaction, Concentra will contribute its network services business to Viant in exchange for additional shares of Viant common stock, $185 million of Viant notes and about $260 million in cash.

Concentra will retire its current senior secured debt using the cash proceeds received from Viant and a portion of the cash proceeds borrowed under its new facility and pay a cash dividend to its stockholders of about $350 million.

Recommitments were due from lenders on Wednesday.

Concentra is a Dallas-based provider of occupational health-care services and specialized cost management services.

Viant flexes

Like Concentra, Viant also lowered pricing on its $275 million seven-year term loan B to Libor plus 225 bps from original talk at launch of Libor plus 250 bps, according to a market source.

Pricing on Viant's $50 million six-year revolver was left unchanged at Libor plus 225 bps, the source added.

Both the term loan and the revolver are covenant-light, with the revolver having a total leverage covenant when it's drawn or letters of credit are issued.

Citigroup, UBS, Bank of America and JPMorgan are the lead banks on the $325 million (B) deal.

Proceeds will be used to help fund Viant's spinoff from Concentra.

Recommitments were due from lenders on Wednesday.

Viant is a Naperville, Ill., health care payment and cost management services company.

Physiotherapy likely at wide end

As the books closed on Wednesday for the Physiotherapy Associates credit facility, expectations were that pricing on the revolver and first-lien term loan B would end up at the wide end of guidance, according to a market source.

More specifically, pricing on the $40 million six-year revolver and the $180 million six-year first-lien term loan B will likely firm at Libor plus 300 bps, compared with original talk at launch of Libor plus 275 bps to 300 bps, the source said.

Pricing on the $50 million 61/2-year second-lien term loan is expected to remain in line with original talk at Libor plus 650 bps, the source added.

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

General Electric Capital Corp. is the lead bank on the $270 million deal.

Leverage is 3.8 times through the first-lien debt and 4.9 times through the second-lien debt.

Proceeds will be used to refinance existing debt and to fund the merger of Benchmark Medical Inc. and Physiotherapy Associates.

Before Benchmark and Physiotherapy had reached an agreement to merge, Benchmark had been in market with a $135 million refinancing credit facility consisting of a $20 million revolver talked at Libor plus 350 bps, an $80 million first-lien term loan talked at Libor plus 350 bps and a $35 million second-lien term loan talked at Libor plus 700 bps, with call protection of 102 in year one and 101 in year two.

However, this credit facility was pulled in May so that the company could re-approach the market with this larger acquisition financing/refinancing credit facility.

Physiotherapy Associates is a provider of outpatient physical rehabilitation services.

Mitel price talk

Guidance on Mitel Networks' $460 million credit facility started making its way around the market on Wednesday as syndication on the deal kicked off with the holding of a bank meeting, according to sources.

The $30 million revolver (Ba3/BB-) and the $245 million first-lien term loan (Ba3/BB-) are being talked at Libor plus 275 bps, and the $185 million second-lien term loan (B3/CCC+) is being talked at Libor plus 600 bps, sources said.

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

The first- and second-lien term loans are covenant-light.

Morgan Stanley is the lead bank on the deal.

Proceeds will be used to help fund the acquisition of Inter-Tel Corp., a full-service provider of business communications solutions, for $25.60 per share in cash, representing a total purchase price of approximately $723 million.

Mitel is an Ottawa provider of unified communications solutions and services for business customers.

EnergySolutions tweaks pricing, OID

EnergySolutions LLC lowered pricing on its $200 million 61/2-year second-lien term loan and revised the original issue discount, according to a market source.

The term loan is now priced at Libor plus 450 bps, down from original talk of Libor plus 475 bps, and the paper is being sold to investors at 99¾ as opposed to at 991/2, the source said.

Call protection is par for months zero through nine, 102 for months 10 through 24, 101 for months 25 through 36 and par after that.

Citigroup is the lead bank on the deal, which will be used to refinance some existing first-lien debt and to fund an acquisition.

In connection with the second-lien deal, the company is amending its first-lien credit facility to allow for the new debt, to loosen the total leverage and interest coverage ratios and to add a first-lien leverage ratio.

EnergySolutions is a Salt Lake City-based national energy services company.

Zuffa frees to trade

Moving to the secondary market, Zuffa's credit facility allocated and broke for trading, with the $325 million term loan B quoted at par bid on the open, according to a market source.

The term loan B is priced at Libor plus 200 bps.

During syndication, the term loan B was upsized from $275 million and pricing was flexed up from original talk at launch of Libor plus 175 bps.

The company's $350 million credit facility (Ba3/BB) also includes a $25 million revolver.

Deutsche Bank acted as the lead bank on the deal, which actually closed on Tuesday.

Proceeds are being used for a dividend recapitalization.

Zuffa is the Las Vegas-based limited liability company that owns the Ultimate Fighting Championship brand.

Sirva trades down some more

Also in the secondary, Sirva's term loan continued its negative momentum in active trading as investors are still reacting to Monday's lender call and the market in general felt weaker, according to a trader.

The term loan ended the day at 95 bid, 96 offered, down from Tuesday's levels of 95¾ bid, 96½ offered, the trader said.

When asked whether the company's amendment request was the primary driver behind the downfall, the trader responded "it's more the budget that's pushing it down but that's private side information."

As was previously reported, the company is currently looking to get covenant relief through 2008 because of the weaker-than-expected domestic real estate market and said the amendment is necessary in order for it to be able to present auditors with an acceptable covenant outlook for 10-Ks and 10-Qs.

Sirva is a Westmont, Ill.-based relocation services provider.

Tribune off on numbers

Tribune's term loan B was lower on Wednesday after the company released revenues and newspaper advertising volume for the period ended May 27, according to a trader.

The term loan B ended the day at 99¼ bid, 99½ offered, down from prior levels of 99 3/8 bid, 99 5/8 offered, the trader said.

For May, the Chicago-based media company's consolidated revenues were $406 million, down 11.1% from last year's $457 million.

Publishing revenues in May were $292 million, down 10.3% from $325 million last year, and advertising revenues decreased 11.8% to $230 million, compared with $261 million in May 2006.

LCDX slides lower

LCDX gave up some more ground during the session on market technicals and the cash market felt weaker as well, according to a trader.

LCDX went out at 99 bid, 99.10 offered, down from morning opening levels of 99.65 bid, 99.70 offered, the trader said.

As for the cash market, that was off by about an eighth to a quarter of a point across the board, the trader continued.

"The market was just soft today," the trader added.

Water Pik closes

EG Capital completed its acquisition of a 60% interest in Water Pik Technologies Inc.'s personal health-care business, which operates under the Water Pik brand name, from the Carlyle Group, who retained the remaining 40% interest, according to a news release.

To help fund the transaction, Water Pik got a new $112 million credit facility consisting of a $15 million five-year revolver (B1/B-) priced at Libor plus 325 bps, with a 50 bps commitment fee, a $67 million six-year first-lien term loan B (B1/B-) priced at Libor plus 325 bps and a $30 million seven-year second-lien term loan (Caa2/CCC) priced at Libor plus 550 bps.

During syndication, pricing on the second-lien term loan firmed up at the tight end of original guidance of Libor plus 550 bps to 600 bps, and the first-lien term loan was upsized by $5 million, with the funds coming out of the second-lien term loan.

Credit Suisse acted as the lead bank on the deal.

Water Pik is a Newport Beach, Calif., developer, manufacturer and marketer of pool products and personal health-care products.

Sirius closes

Sirius Satellite Radio Inc. closed on its $250 million 51/2-year senior secured term loan (B1/B) that is priced at Libor plus 225 bps, according to a news release.

During syndication, pricing on the term loan was reverse flexed from original talk of Libor plus 250 bps.

Morgan Stanley acted as the lead arranger on the deal, which will be used for general corporate purposes.

Covenants are substantially similar to those under the company's existing 9 5/8% senior notes.

Sirius is a New York-based provider of satellite radio services.

Algoma closes

Essar Steel Holdings Ltd. completed its acquisition of Algoma Steel Inc. for C$1.85 billion, according to a news release.

To help fund the transaction, Algoma got a new $850 million senior secured credit facility consisting of a $450 million term loan B (B3/BB-) priced at Libor plus 250 bps and a $400 million ABL revolver.

During syndication, pricing on the term loan B was reverse flexed from Libor plus 300 bps.

UBS acted as the lead bank on the deal.

Algoma Steel is a Sault Ste. Marie, Ont.-based steel producer. Essar Steel is a Mumbai, India-based steel company.

© 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.