Texas Competitive up on amend and extend; Wesco, Global Defense, Belfor tweak deals

By Sara Rosenberg

New York, April 1 - Texas Competitive Electric Holdings Co. LLC's term loans headed higher on Friday as the company revealed that it is looking to extend maturities at higher pricing and amend certain terms of the credit agreement.

Moving to the primary, Wesco Aircraft Hardware Corp. made some revisions to its credit facility, including shifting some funds between tranches, and adding a pricing step-down and tightening the original issue discount on the term loan B.

Other deals to come out with updates were Global Defense Technology & Systems Inc., as it raised pricing on its credit facility, Belfor, which changed term loan sizes and reduced B loan pricing, and Harron Communications LP, which firmed the spread on its term loan B at the tight end of talk.

And, in more primary news, MoneyGram International Inc. released price talk on its term loan as the deal was launched to lenders with a bank meeting during the session, and TriZetto Group Inc. and LNR Property LLC announced plans to bring refinancing transactions to market.

Texas Competitive rises

Texas Competitive's term loans rallied by a few points during Friday's trading session as the company held a lender call in the morning to launch and amendment and extension of its senior secured credit facility, according to traders.

One trader had the term loan B-1 and B-2 quoted at 87¼ bid, 87¾ offered around midday, up from 84 1/8 bid, 84 5/8 offered.

Meanwhile, a second trader had the term loan B-1 and B-2 quoted around midday at 87 bid, 87½ offered, up from 84½ bid, 84 7/8 offered, and the term loan B-3 quoted at 86¾ bid, 87¼ offered, up from 84 3/8 bid, 84 5/8 offered. By late day, this trader had the B-1 and B-2 quoted at 86 3/8 bid, 86 7/8 offered and the B-3 quoted at 86¼ bid, 86¾ offered.

A third trader also saw levels come in from their highs by the late afternoon. He was quoting the term loan B-1 and B-2 at 86½ bid, 86¾ offered, versus 84 1/8 bid, 84½ offered on Thursday.

Texas Competitive price talk

Under the proposal, Texas Competitive is offering pricing of Libor plus 450 basis points on the extended first-lien term loan, deposit letter of credit facility and revolver, compared to non-extended pricing of Libor plus 350 bps, and the undrawn fee on the extended revolver will be 100 bps, up from 50 bps on the non-extended.

Also, the Dallas-based energy company will pay an upfront extension fee of 350 bps on extended term loans and extended deposit letter of credit loans to lenders that agree to extend their commitments by 12 p.m. ET on April 12.

The company is asking to push out its first-lien term loan B-1, B-2 and B-3 and deposit letter of credit facility by three years to Oct. 10, 2017, and its revolver by three years to Oct. 10, 2016. The B-1, B-2 and B-3 debt that is extended will be collapsed into one extended term loan tranche.

The extension of the term loans and deposit letter of credit facility is not conditioned on the revolver extension, however, as a condition to the entire extension transaction, the company must complete a senior secured notes offering to fund pro rata repayments of certain outstanding loans.

Texas Competitive amending

On top of the maturity extensions, Texas Competitive is asking to amend its credit facility to revise its secured debt to EBITDA covenant.

The company is also requesting that lenders acknowledge that the intercompany loans to Energy Future Holdings Corp. comply with the requirement that these loans be made on an "arm's-length" basis, and that no excess cash flow mandatory repayments were required for fiscal years 2008, 2009 and 2010.

Back in February, Aurelius Capital Management LP, a lender under the credit facility, alleged that Texas Competitive was in default because of these intercompany loans. Texas Competitive claimed that the default allegations were without merit.

The amendment is not conditioned on the extension of maturities, and lenders are being offered a 50 bps amendment fee for consents provided by 12 p.m. ET on April 7.

Citigroup Global Markets Inc. is the left lead bank on the transaction.

Wesco reworks deal

Switching to the primary, Wesco Aircraft Hardware modified tranche sizes and updated term loan B pricing in the morning, and asked for recommitments by 5 p.m. ET on Friday so that allocations could go out on Monday, according to a market source.

Under the changes, the five-year term loan A is now sized at $265 million, up from $200 million, while pricing was left unchanged at Libor plus 300 bps with no Libor floor.

On the flip side, the six-year term loan B is now sized at $350 million, down from $415 million. Pricing on this tranche recently firmed at Libor plus 300 bps, the tight end of the Libor plus 300 bps to 325 bps talk, and now, a step-down was added to Libor plus 275 bps when leverage is less than 2.5 times, but only after June 30, 2012. Also, the original issue discount was tightened on Friday to 99¾ from 991/2. As before, the loan includes a 1.25% Libor floor and 101 soft call protection for one year.

Wesco getting revolver

Wesco's $765 million credit facility (Ba3/BB-) also includes a $150 million five-year revolver priced in line with initial talk at Libor plus 300 bps with no Libor floor and a 50 bps unused fee.

A bank meeting for the revolver and term A took place on March 16. The term B, however, was not launched at that time because of market conditions. Instead, on March 25, institutional lenders were simply given price talk on the B loan and information to listen to the replay of the pro rata bank meeting.

Proceeds will be used to refinance existing debt.

Bank of America Merrill Lynch and Barclays Capital Inc. are the joint lead arrangers and bookrunners on the $765 million credit facility (Ba3/BB-), with J.P. Morgan Securities LLC, Morgan Stanley & Co. Inc., RBC Capital markets LLC and Sumitomo bookrunners as well.

Wesco is a Valencia, Calif.-based integrated inventory management services provider and distributor of hardware and other components to the aerospace industry.

Global Defense flexes

Also coming out with changes was Global Defense Technology & Systems, as it lifted pricing on its $157.5 million credit facility to Libor plus 550 basis points from Libor plus 500 bps, while leaving the 1.5% Libor floor unchanged, according to a market source.

The facility is comprised of a $132.5 million six-year term loan B, which is still be offered at an original issue discount of 99, and a $25 million five-year revolver.

The source said that the pricing change was a result of credit facility ratings coming out lower than expected at B3/B.

Wells Fargo Securities LLC and SunTrust Robinson Humphrey Inc. are the lead banks on the deal.

Global Defense being bought

Proceeds from Global Defense Technology's credit facility will be used to help fund its buyout by Ares Management LLC through a cash tender offer at $24.25 per share. The transaction is valued at about $315 million, including the assumption of debt and prior to expenses.

Closing is expected in the second quarter, subject to the tender of a majority of the company's shares and regulatory approvals.

Upon completion of the acquisition, the company will be wholly owned by Sentinel Acquisition Holdings Inc., an affiliate of Ares.

Global Defense Technology is a McLean, Va.-based provider of mission-critical, technology-based systems and services for national security agencies and programs of the U.S. government.

Belfor revises facility

Belfor downsized its six-year term loan B to $250 million from $260 million and upsized its $85 million term loan A from $75 million, according to a market source.

In addition, pricing on the term loan B was set at Libor plus 300 bps with a 1.5% Libor floor and an original issue discount of 99 1/2, compared to initial talk of Libor plus 325 bps to 350 bps with a 1.5% floor and a discount of 99 to 991/2. There is still 101 soft call protection for one year.

The company's $460 million credit facility (Ba2/BB-) also includes a $125 million revolver.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to refinance existing debt.

Belfor is a disaster recovery and property restoration company.

Harron sets spread

Meanwhile, Harron Communications firmed the spread on its $300 million term loan B due 2017 at Libor plus 375 bps, the low end of the Libor plus 375 bps to 400 bps talk, while leaving the 1.5% Libor floor, original issue discount of 99½ and 101 soft call protection for one year intact, according to a market source.

Prior to launch, the term loan B had been talked at Libor plus 325 bps with a 1.25% Libor floor, a discount of 99½ and 101 soft call protection for one year. However, once the bank meeting took place, it was known that pricing would need to widen out as a result of market conditions and credit facility ratings coming out lower than expected at B2/B.

In fact, the credit facility had even been put on unofficial hold for a few days while the company evaluated whether it wanted to move forward with the financing plans at the higher pricing levels.

In the end, the term loan B ended up oversubscribed at the current pricing, the source remarked.

Harron pro rata terms

Harron's $600 million credit facility (B2/B) also includes a $100 million revolver due 2016 and a $200 million term loan A due 2016, with both of these tranches priced in line with initial talk at Libor plus 300 bps with no Libor floor.

Allocations on the credit facility are expected to go out during the week of April 4.

SunTrust Robinson Humphrey Inc., Wells Fargo Securities LLC and Credit Agricole Securities (USA) Inc. are the lead banks on the deal that will be used to refinance an all pro rata bank deal and redeem about $54 million in preferred equity.

Harron Communications is a Frazer, Pa.-based provider of digital television, high speed internet, digital phone and business services.

MoneyGram talk emerges

Also on the new deal front, MoneyGram held a bank meeting on Friday to kick off syndication on its credit facility, and in connection with the launch, talk on the $390 million term loan was announced as Libor plus 350 bps with a 1.25% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year, according to a market source.

The company's $540 million senior secured credit facility (Ba1/BB-) also includes a $150 million revolver.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Wells Fargo Securities LLC are the lead banks on the deal.

Proceeds will be used by the Dallas-based payment services company to help fund a recapitalization that will include the repayment of roughly $140 million of outstanding bank debt and the conversion of preferred stock by Thomas H. Lee Partners and Goldman Sachs.

MoneyGram recap details

Specifically under the agreement, Thomas H. Lee will convert all of its MoneyGram series B preferred into common stock, and Goldman Sachs will convert all of its series B-1 preferred into shares of series D participating convertible preferred stock.

Thomas H. Lee will receive about 28.2 million additional shares of common stock and $140.8 million in cash, and Goldman Sachs will receive about 15,504 additional shares of series D preferred and $77.5 million in cash as consideration for completing the recapitalization.

The $218 million inducement payment to Thomas H. Lee and Goldman Sachs will be funded with the credit facility borrowings.

Closing on the transaction is expected mid-year, subject to shareholder approval and completion of financing.

TriZetto plans refi

TriZetto Group has set a bank meeting for Thursday to launch a proposed $750 million credit facility that will be used to refinance existing debt, according to a market source.

The facility consists of a $100 million five-year revolver and a $650 million seven-year covenant-light term loan, the source said.

RBC Capital Markets LLC is the lead bank on the deal.

TriZetto is a Greenwood Village, Colo.-based health care information technology company to the health care payer industry.

LNR readies deal

LNR Property is expected to hold a bank meeting during the week of April 4 to launch a proposed $365 million senior secured credit facility that consists of a $325 million term loan B due 2016 and a $40 million revolver due 2014, according to a market source.

Goldman Sachs & Co. and Bank of America Merrill are the joint lead arrangers and joint bookrunners on the deal, and Credit Suisse is the documentation agent.

Proceeds, along with cash on hand, will be used to refinance existing bank debt.

LNR is a Miami-based diversified real estate, investment, finance and management company.

Golden Nugget educating lenders

In other news, Landry's Golden Nugget Atlantic City continues to keep price talk on its $110 million five-year senior secured credit facility as to be determined as the lead is "working to educate accounts on the story," according to a market source.

The facility, which launched with a bank meeting on Thursday, consists of a $10 million revolver and a $100 million term loan.

Jefferies & Co. is the lead bank on the deal that will be used to fund the purchase, renovation and rebranding of the Trump Marina Hotel and Casino in Atlantic City by Tilman J. Fertitta, chairman, president, chief executive officer and owner of Landry's Inc., a full-service restaurant, hospitality and entertainment company.

Radio One closes

Radio One Inc. completed its $411 million credit facility that consists of a $25 million four-year super-priority revolver (B1/B+) and a $386 million five-year term loan B (B2/B), according to a news release.

Pricing on the revolver is Libor plus 550 bps, while pricing on the B loan is Libor plus 600 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 98. There is call protection on the term loan B of 103 in year one, 102 in years two and three and 101 in year four.

During syndication, the term loan B discount widened from 99 and the call protection was changed from just 101 soft call for one year.

Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. acted as the lead banks on the deal that was used by the Lanham, Md.-based urban-oriented multi-media company to refinance existing debt.

© 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.