Tropicana jumps on potential repayment; Dura postponed; Numonyx sets talk; Husky adds step down

By Sara Rosenberg

New York, Dec. 13 - Tropicana Entertainment LLC's first-lien term loan saw a significant upswing in trading on Thursday as news of a possible paydown from an asset sale hit the market.

In other news, Numonyx came out with price talk on its credit facility as the deal was launched with a bank meeting during the session. Dura Automotive Systems Inc. has opted to put off syndicating its exit financing credit facility because of poor primary conditions.

Also in the primary, Husky Injection Molding Systems Ltd. added a leverage-based step down in pricing to its term loan.

Tropicana Entertainment's first-lien term loan gained a couple of points during a pretty quiet trading session after news of a possible repayment surfaced, according to traders.

The first-lien term loan ended the day around 97 bid, 98 offered, up from Wednesday's levels of around 95 bid, 96 offered, traders said.

"The Atlantic City Tropicana Casino lost its gaming license and they will have to sell the Atlantic City asset. They will pay down first-lien bank debt," one trader remarked.

The trader went on to say that the paper didn't move all the way up to par because there are still a lot of factors that need to be figured out before the Atlantic City asset is sold.

"Plus, it's still unclear whether the entire first-lien term loan will be taken out," the trader added.

On Thursday morning, Tropicana Entertainment announced that the New Jersey Casino Control Commission denied the gaming license renewal application at its Tropicana Casino and Resort in Atlantic City and that the commission ordered that the property be transferred immediately to a trustee until a sale can be arranged.

The company also revealed that proceeds from the Atlantic City sale will be used to repay debt under its credit facility.

The trustee is required to complete the sale of the Tropicana Atlantic City within 120 days of the transfer of the property to his control, although this period of time may be extended by the commission.

Tropicana Entertainment intends to appeal the commission's determination through the New Jersey appellate court system.

If the company's appeal is unsuccessful by Dec. 19, it will be in default under its credit facility, and if lenders accelerate the bank debt, then the company will also be in default under its senior subordinated notes and under the term loan of unrestricted subsidiary Tropicana Las Vegas Resort & Casino LLC.

The company said that it plans to continue its efforts to work with the lenders under its credit facility to prevent an acceleration from occurring. There can be no assurance that the lenders will not accelerate, which could compel Tropicana Entertainment to seek alternatives, including, without limitation, bankruptcy protection.

In reaction to this news, Standard & Poor's lowered its corporate credit ratings on Tropicana Entertainment and Tropicana Las Vegas Resort & Casino to CCC from B and placed the ratings on CreditWatch with developing implications.

Tropicana Entertainment is a Fort Mitchell, Ky.-based gaming entertainment provider.

Numonyx price talk

Over in the primary, Numonyx held a bank meeting on Thursday morning to kick off syndication on its $750 million credit facility, and in connection with the launch, price talk was announced, according to a market source.

The $100 million revolver and the $650 million term loan were both presented to lenders with guidance of Libor plus 500 basis points to Libor plus 550 bps, the source said.

The term loan is being offered with an original issue discount in the range of 97 to 98, the source added.

Goldman Sachs, JPMorgan and Merrill Lynch are the lead banks on the deal.

Proceeds will be used to help fund the creation of Numonyx by Francisco Partners, STMicroelectronics and Intel from the key assets of businesses that last year generated roughly $3.6 billion in combined annual revenue.

Numonyx is a Switzerland-based semiconductor company, with a focus on supplying flash memory solutions for consumer and industrial devices, including cellular phones, MP3 players, digital cameras, computers and other high-tech equipment.

Dura pulls deal

Dura Automotive Systems has basically pulled its $425 million senior secured exit financing credit facility from market saying that the "financing terms available in this market are not acceptable to the company," according to a company news release.

The company plans on evaluating its financing strategy early next year and determining a plan for emergence as soon as possible.

The credit facility consisted of a $125 million three-year ABL revolver, a $225 million three-year first-lien term loan B and a $75 million three-and-a-half-year second-lien term loan.

At launch, the first-lien term loan B was being talked in the Libor plus 550 bps area, at a discount of 99, and the second-lien term loan was being talked in the Libor plus 850 bps area, at a discount of 99.

However, last week, in an attempt to attract more investors, pricing on the first-lien term loan B was increased to Libor plus 625 bps, pricing on the second-lien term loan was increased to Libor plus 925 bps, and the discount on both tranches was widened to 93.

The first-lien term loan carried call protection of 102 in year one and 101 in year two, and the second-lien term loan was non-callable for one year, then at 102 in year two and 101 in year three.

As for the ABL revolver, that was being marketed with price talk of Libor plus 250 bps throughout the syndication process.

Goldman Sachs and Barclays Capital were acting as the lead banks on the deal, which was going to be used to help repay the company's debtor-in-possession facility and pre-bankruptcy second-lien term loan and to fund plan distributions.

As a consequence of postponing the exit financing, the company has requested the Bankruptcy Court continue its confirmation hearing to early next year.

Dura is a Rochester Hills, Mich.-based automotive parts maker.

Husky term loan gets step down

Husky Injection Molding Systems added a pricing step down to its $410 million term loan that will be effective upon the company meeting a leverage test, according to a market source.

As was previously reported, the term loan is priced at Libor plus 325 bps, but now that pricing can drop to Libor plus 300 bps when leverage falls, the source said.

The term loan was sold to investors at an original issue discount of 991/2.

Husky's $520 million credit facility also includes a $110 million revolver that is priced at Libor plus 325 bps as well.

Earlier on in syndication, the revolver was upsized from $85 million due to market demand.

Allocations on the deal were in the process of going out on Thursday, with the expectation being that the facility will free up for trading on Friday.

RBC Capital acted as lead bank on the deal, which was used to help fund the buyout of the company by Onex Corp., a transaction that was completed on Thursday.

Onex bought the company for C$8.235 for each share held by all shareholders other than Robert and Elizabeth Schad and their holding company and for C$8.10 per share for the shares held by the Schads and their holding company. The total transaction was valued at about C$960 million.

Husky is a Bolton, Ont., supplier of injection molding equipment and services to the plastics industry.

PRA closes

Genstar Capital, LLC completed its $797 million acquisition of PRA International, according to a news release.

To help fund the buyout, PRA got a new $295 million senior secured credit facility consisting of a $40 million revolver (B1/BB-) priced at Libor plus 325 bps, a $170 million first-out term loan (B1/BB-) priced at Libor plus 325 bps and an $85 million first-loss term loan (B3/CCC+) that was placed prior to syndication.

The first-out term loan was sold to investors at an original issue discount of 98.

UBS Securities LLC and Jefferies Finance LLC acted as the joint lead arrangers and joint bookrunners on the deal.

Other buyout financing came from $170 million in mezzanine financing.

Originally, the company planned to finance the buyout with a $40 million six-year revolver expected at Libor plus 275 bps, a $255 million seven-year first-lien term loan expected at Libor plus 275 bps, a $115 million 71/2-year second-lien term loan expected at Libor plus 650 bps and $55 million of mezzanine debt, according to filings with the Securities and Exchange Commission.

PRA is a Reston, Va., clinical research organization.

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