U.S. Foodservice, Trilogy tweak deals; Harlan, Norwood set talk; Tribune rebounds with market

By Sara Rosenberg

New York, June 21 - U.S. Foodservice Inc. made some changes to its credit facility, including increasing pricing on its cash flow revolver, term loan B and synthetic letter-of-credit facility and adding an original issue discount to the institutional tranches, and Trilogy International Partners LLC upsized its term loan tranche.

In other primary news, Harlan Sprague Dawley, Inc. and Norwood Promotional Products Inc. came out with price talk on their credit facilities as both deals were launched with bank meetings during Thursday's market hours.

Meanwhile, over in the secondary, Tribune Co.'s term loan rebounded from Wednesday's losses as the cash market in general got a push up.

U.S. Foodservice announced some modifications to its credit facility on Thursday morning, including flexing pricing higher on all tranches other than the ABL revolver and deciding to sell the institutional paper at a discount, according to a market source.

With the changes, the $100 million cash flow revolver, the $1.565 billion term loan B and the $500 million synthetic letter-of-credit facility are all now priced at Libor plus 275 basis points, up from original talk at launch of Libor plus 250 bps, the source said.

In addition, the term loan B and the synthetic letter-of-credit facility are now both being offered with an original issue discount of 99½ as opposed to at par, the source added.

The company's $3.365 billion credit facility (B2) also includes a $1.2 billion ABL revolver.

Citigroup, Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley and Royal Bank of Scotland are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by Clayton, Dubilier & Rice, Inc. and Kohlberg Kravis Roberts & Co. LP from Royal Ahold NV in a transaction valued at $7.1 billion.

Completion of the transaction, which is expected to occur in the second half of the year, is subject to regulatory approvals, approval of Ahold's shareholders and customary closing conditions.

U.S. Foodservice is a Columbia, Md., broadline foodservice distributor.

Trilogy upsizes

Trilogy International Partners increased the size of its five-year senior secured term loan (B2/B-) to $250 million from $200 million, according to a market source.

Pricing on the term loan was left unchanged at Libor plus 350 bps, the source added.

Deutsche Bank, JPMorgan, Bear Stearns and Goldman Sachs are the joint bookrunners on the deal, with Deutsche and JPMorgan the joint lead arrangers.

Proceeds from the term loan will be used to refinance debt and for general corporate purposes.

Trilogy is a Bellevue, Wash., telecommunications company.

Harlan price talk

Harlan Sprague Dawley held a bank meeting on Thursday to kick off syndication on its proposed $360 million senior secured credit facility, and in connection with the launch, price talk on the transaction emerged, according to a market source.

The $15 million six-year U.S. super-priority revolver (BB), the $15 million six-year euro-denominated super-priority revolver (BB) and the $330 million seven-year first-lien term loan (B+) were all presented to investors with talk of Libor plus 225 bps, the source said.

UBS Investment Bank is the lead bank on the deal.

Proceeds will be used to finance Harlan's acquisition of E.M. Developments Ltd., SafePharm Laboratories Ltd., ILS Ltd. and SafePharm USA, Inc. and to refinance existing debt.

Harlan is an Indianapolis-based provider of preclinical research tools and services for the pharmaceutical, biotechnology, agrochemical, industrial chemical and food industries.

Norwood guidance surfaces

Also coming out with price was Norwood Promotional Products as it too held a bank meeting on Thursday to launch a new credit facility, according to a market source.

The $50 million five-year ABL revolver is being talked at Libor plus 150 bps, the $135 million seven-year first-lien term loan (B2/B) is being talked at Libor plus 275 bps and the $75 million 71/2-year second-lien term loan (B3/CCC) is being talked at Libor plus 600 bps, the source said.

The revolver has a 37.5 bps commitment fee.

Call protection on the second-lien loan is 102 in year one and 101 in year two.

Credit Suisse is the lead bank on the $260 million deal, which will be used to refinance existing debt.

Norwood Promotional is an Indianapolis-based supplier of promotional items.

Biomet likely to firm at tight end

Biomet Inc. is anticipated by some investors to end up at the tight end of pricing guidance, being that the deal is heard to be oversubscribed at that pricing level, according to buyside sources.

More specifically, the $3.6 billion covenant-light 71/2-year term loan B (B3/B+) should clear at Libor plus 225 bps, the low end of the original Libor plus 225 bps to 250 bps talk, sources said.

Of the total term loan B amount, $1 billion will be a euro sub-tranche.

Biomet's $4.35 billion senior secured credit facility also includes a $400 million six-year covenant-light cash-based revolver and a $350 million six-year asset-based revolver (Ba2/BB-).

Bank of America and Goldman Sachs are joint lead arrangers on the deal; Bank of America, Goldman, Bear Stearns, Lehman and Merrill Lynch are joint bookrunners; and Wachovia is co-manager. Bank of America is administrative agent, Goldman is syndication agent, and Bear Stearns, Lehman and Merrill Lynch are co-documentation agents.

Proceeds will be used to help fund the buyout of the company by the Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. and TPG.

Earlier this month, the consortium raised their buyout price for Biomet to $46.00 per share from $44.00 per share, or roughly $11.4 billion compared with $10.9 billion, and commenced a tender offer to buy the company's common stock shares.

The increase in the purchase price is being funded by an increase in the amount of equity being used for the transaction.

Completion of the tender offer is subject to the condition that at least 75% of Biomet common shares are tendered.

Biomet is a Warsaw, Ind., designer and manufacturer of musculoskeletal medical products.

Inverness trims pricing

Inverness Medical Innovations Inc. reverse flexed pricing on its first- and second-lien term loans, according to a market source.

The $900 million seven-year first-lien term loan B (B1/BB) is now priced at Libor plus 200 bps, down from original talk of Libor plus 225 bps, and the $200 million eight-year second-lien term loan (Caa1/B-) is now priced at Libor plus 425 bps, down from original talk of Libor plus 500 bps, the source said.

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

Inverness' $1.25 billion senior secured credit facility also includes a $150 million six-year revolver (B1/BB) that is still being talked at Libor plus 225 bps, in line with original guidance, and is expected to firm up there, the source added.

Prior to the deal's launch, the credit facility was revised to increase the term loan B size from $850 million and to add the second-lien term loan to the capital structure as the company opted to do away with its proposed $300 million unsecured senior subordinated notes offering.

General Electric Capital Corp. and UBS are the joint lead arrangers on the deal, with General Electric Capital the left lead on the first-lien debt and UBS the left lead on the second-lien debt.

Proceeds from the credit facility will be used to help fund the acquisition of Biosite Inc. in a cash tender offer for $92.50 per share. The tender offer expires on June 25.

Inverness is a Waltham, Mass.-based developer of advanced diagnostic devices. Biosite is a San Diego-based biomedical company.

Appleseed's flexes up

Appleseed's Topco Inc. increased pricing on its $335 million first-lien term loan to Libor plus 350 bps from original talk of Libor plus 300 bps, according to a market source.

The company's $710 million credit facility also includes a $125 million ABL revolver priced at Libor plus 175 bps and a $250 million second-lien PIK toggle term loan priced at Libor plus 575 bps cash pay.

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

UBS and American Capital Strategies are the lead banks on the deal.

Leverage will be 3.8 times through the first-lien and 6.2 times through the second-lien, the source added.

Proceeds will be used to back the already completed acquisition of Blair Corp., a Warren, Pa.-based apparel and home products company, for $42.50 per share in cash.

Appleseed's Topco, a portfolio company of Golden Gate Capital, is a marketer of apparel and home products.

WideOpenWest shifts funds

WideOpenWest Holdings LLC moved some funds out of its second-lien term loan and into its first-lien term loan and increased pricing once again on the second-lien term loan, according to a market source.

The first-lien seven-year term loan B (B2/B-) is now sized at $975 million, up from $925 million, while pricing was left unchanged at Libor plus 250 bps, the source said.

On the flip side, the eight-year PIK toggle second-lien term loan (Caa2/CCC) is now sized at $235 million, down from $285 million, and pricing was flexed up to Libor plus 625 bps cash pay from most recent talk of Libor plus 575 bps cash pay and from original talk at launch of Libor plus 525 bps cash pay, the source remarked.

In addition, the PIK feature is now only available for three years as opposed to five years, the source added.

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

WideOpenWest's $1.31 billion credit facility also includes a $100 million six-year revolver (B2/B-) priced at Libor plus 250 bps, with a 50 bps commitment fee.

Credit Suisse and Deutsche Bank are the joint lead arrangers on the deal, which will be used for a recapitalization.

WideOpenWest is an Englewood, Colo., provider of cable television, high-speed internet and telephone services.

Tribune regains ground

Moving to the secondary market, Tribune's term loan B recouped its previous day's losses, and then some, as the overall cash loan market felt better by as much as an eighth to a quarter of a point, according to a trader.

The term loan B ended the day at 99½ bid, 99¾ offered, up from 99¼ bid, 99½ offered, the trader said. On Tuesday, the loan was quoted at 99 3/8 bid, 99 5/8 offered.

The bank debt had fallen on Wednesday after the company released poor revenues and newspaper advertising volume for the period ended May 27 and because the general market tone was weaker.

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, 10.3% lower than last year's $325 million, and advertising revenues decreased 11.8% to $230 million, compared with $261 million in May 2006.

"Yesterday was kind of panic mode. Today people stepped in," the trader explained. "Cash market was better today pretty much across the board. Two days in a row of softness, at some point people are going to step in."

LCDX bounces around

As for LCDX, that was unchanged on a day-over-day basis, but was trading lower during the morning hours, according to a trader.

The index went out once again at 99 bid, 99.10 offered, the trader said.

However, LCDX did trade as low as 98.05 early on in the day, before rebounding with the rest of the loan market, the trader added.

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