Bausch breaks; Texas Competitive adds MFN to B-3; NV tweaks deal; CCS sets talk; Deerfield canceled

By Sara Rosenberg

New York, Oct. 22 - Bausch & Lomb Inc.'s credit facility allocated and freed up for trading on Monday, with the strip of funded and delayed-draw U.S. term loan debt trading above its discount price, and LCDX headed higher, while cash headed lower.

Moving to the primary, Texas Competitive Electric Holdings Co. LLC (TXU) added a price protection guaranty to its term loan B-3 and has oversubscribed its term loan B-2, and NV Broadcasting LLC (New Vision Television) revised its credit facility to upsize and reduce the discount on the first-lien term loan B, while downsizing the second-lien term loan, and is now getting ready to allocate later on this week.

In other news, CCS Income Trust came out with price talk on its credit facility as the deal launched on Monday, and Deerfield Triarc Capital Corp.'s agreement to purchase Deerfield & Co. LLC was terminated as a result of the inability to complete the term loan that was going to fund the transaction on acceptable terms.

Bausch & Lomb's credit facility hit the secondary during Monday's market hours, with the strip of funded and delayed-draw U.S. term loan debt quoted at 99¾ bid, par ¼ offered on the open and then moving up to par 1/16 bid, par ¼ offered, where it closed out the day, according to a trader.

As for allocations, talk is that some investors were not so happy because they "got really choppy allocations on it. Put in for $50 million and only got $5 million," the trader added.

The $1.2 billion 71/2-year U.S. term loan and the $300 million 71/2-year delayed-draw term loan are both priced at Libor plus 325 basis points, carry 101 soft call protection for one year and were sold to investors at an original issue discount of 993/4.

During syndication, the discount on the U.S. funded and delayed-draw term loans was reduced from 98½ because the tranches were around 5½ times oversubscribed, and the funded term loan was upsized from $1.1 billion after the company's bond offering was downsized to $650 million from $750 million and restructured to consist of one single 9 7/8% eight-year senior cash pay tranche that priced at 99.75 to yield 9.92%.

The delayed-draw term loan is delayed-draw until Dec. 31, 2009 and carries an unused fee of 100 bps for the first six months, 125 bps for the following six months, 150 bps for months 13 through 18 and 200 bps after that.

Bausch & Lomb's $2.575 billion senior secured credit facility (B1/BB-) also includes a $500 million six-year revolver priced at Libor plus 325 bps, with a 50 basis point unused fee, and a $575 million 71/2-year euro equivalent term loan priced at Euribor plus 325 bps that was sold at a discount of 99¼ and carries 101 soft call protection for one year.

During syndication, the discount on the euro term loan was revised from 98½ as the tranche was heard to be around three times oversubscribed.

There is a total net leverage covenant and a $350 million accordion feature.

Credit Suisse, Bank of America, Citigroup and JPMorgan are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by Warburg Pincus for $65.00 per share in cash. The transaction is valued at $4.5 billion, including about $830 million of debt.

The buyout is expected to close on or about Friday.

Bausch & Lomb is a Rochester, N.Y., eye health company.

LCDX stronger, cash softer

Also in trading, it was kind of a "weird day" in the secondary as LCDX traded up and cash traded down, according to a trader.

LCDX 9 went out around 98.65 bid, 98.85 offered, up from Friday's closing levels of 98.35 bid, 98.60 offered, the trader said.

And cash in general was lower by about an eighth of a point, the trader continued.

"Cash felt weaker in the morning and the afternoon but the index felt a little better and the stock market got positive in the afternoon. Cash never really shook its funk," the trader added.

On Monday, Nasdaq ended up 28.77 points, or 1.06%, Dow Jones Industrial Average ended up 44.95 points, or 0.33%, S&P 500 ended up 5.70 points, or 0.38%, and NYSE ended up 10.51 points, or 0.11%.

Texas Competitive B-3 gets price protection

Switching to primary news, Texas Competitive Electric Holdings added Most-Favored-Nation (MFN) language to its $6 billion seven-year term loan B-3, which is not currently being syndicated, and has oversubscribed its $7 billion term loan B-2, according to a market source.

With MFN, buyers of the term loan B-3 would be protected from price pressure in the event that the arrangers sell part or all of the loans that have remained on their books in the future at prices below the original issue discount. Should this happen, the protected loan holders would be rewarded the difference between the original issue discount and the price at which further loan sales occur.

The term loan B-3 is priced at Libor plus 350 bps and is non-callable for three years.

When asked why MFN would be added to the term loan B-3 being that it's not being syndicated right now, the source responded, "maybe they're trying to gain some momentum. We think it may be coming soon but the official word is still that only the B-2 is being done."

Meanwhile, the term loan B-2, which is being syndicated, is heard to be oversubscribed in the 99½ area and may even be oversubscribed at par, the source remarked.

Currently, the B-2 is being offered with a discount in the 99½ area, is priced at Libor plus 350 bps and carries soft call protection of 103 in year one, 102 in year two and 101 in year three.

The tranche has been said to be attracting orders from a wide variety of accounts including high-yield guys, asset managers, hedge funds and traditional loan investors.

Positives working in favor of the deal include that Texas Competitive is a utility-related credit and it has hard assets.

Texas Competitive's $24.5 billion senior secured credit facility (Ba3/B+) also includes a $4.1 billion seven-year final maturity delayed-draw term loan, a $1.25 billion seven-year deposit letter-of-credit facility, a $2.7 billion six-year revolver and a $3.45 billion seven-year term loan B-1, with all of these tranches priced at Libor plus 350 bps as well.

The delayed-draw term loan, revolver, letter-of-credit facility and term loan B-1 are not currently being syndicated.

The term loan B-1 carries no call protection.

The revolver has a commitment fee of 50 bps.

Of the total delayed-draw term loan amount, $2.15 billion was funded at close. It is unclear what B loan tranche this funded delayed-draw debt will fall under at this point, so what type of call protection it will have is not yet known.

The additional $1.95 billion of delayed-draw term loan commitments in place are to ensure available liquidity to fund the construction of new plants.

The delayed-draw term loan has an undrawn fee of 125 bps for the first year and 150 bps after that.

Under the facility, the company must maintain a maximum secured leverage ratio beginning on Sept. 30, 2008 of 7.25 to 1.00.

There is a $2 billion accordion feature.

Citigroup, JPMorgan, Goldman Sachs, Lehman Brothers, Morgan Stanley and Credit Suisse are the joint lead arrangers and bookrunners on the deal, with Citi administrative agent, JPMorgan syndication agent, and Credit Suisse, Goldman, Lehman and Morgan Stanley co-documentation agents.

Proceeds from the credit facility were used to help fund the recently completed leveraged buyout of TXU Corp. by an investor group led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group for $69.25 per share. The transaction was valued at $45 billion.

As of June 30, Texas Competitive's total senior secured debt was 4.8 times pro forma adjusted last-12-months EBITDA and total debt was 6.9 times.

In connection with the buyout, TXU changed its name to Energy Future Holdings Corp.

Energy Future is a Dallas-based energy company.

NV retranches, trims first-lien OID

NV Broadcasting came out with some changes to the tranching of its credit facility on Monday morning and modified the original issue discount on the first-lien term loan B, according to a market source.

Now that these revisions have been made, the expectation is that the deal will allocate on Wednesday, the source said.

Under the changes, the six-year first-lien term loan B (B+) was upsized to $235 million from $215 million and the seven-year second-lien term loan (CCC+) was downsized to $100 million from $120 million.

In addition, the first-lien term loan B is now being offered to investors with an original issue discount of 981/2, compared with the previously outlined discount of 98, the source remarked.

Rumors that the discount on the first-lien term loan B would end up tightening by 50 bps had started circulating last week being that the tranche was heard to be four times oversubscribed.

The first-lien term loan B is priced at Libor plus 300 bps and carries 101 soft call protection for one year.

The second-lien term loan is priced at Libor plus 650 bps, with an original issue discount of 98, and is non-callable for one year, then at 102 in year two and 101 in year three.

NV Broadcasting's $390 million credit facility also includes a $25 million six-year revolver (B+) priced at Libor plus 300 bps and a $30 million senior unsecured holdco loan (CCC+).

The first- and second-lien debt contain total leverage and minimum interest coverage covenants.

UBS Investment Bank is the lead bank on the deal.

Proceeds will be used to help fund New Vision Television's acquisition of Montecito Broadcast Group, LLC and to refinance existing debt.

New Vision Television is a Los Angeles-based owner and operator of television stations.

CCS price talk emerges

CCS Income Trust held a bank meeting at the W Hotel in New York on Monday afternoon to kick off syndication on its proposed C$1.9 billion senior secured credit facility (B1/BB-), and in connection with the launch, price talk surfaced, according to a market source.

The C$500 million six-year revolver, C$1.3 billion seven-year first-lien term loan and C$100 million seven-year delayed-draw for 24 months term loan are all being talked at Libor plus 300 bps and will all be offered with an original issue discount, although that discount is still to be determined, the source said.

The revolver and the delayed-draw term loan both have an undrawn fee of 125 bps.

The funded and delayed-draw term loans carry call protection of 103 in year one, 102 in year two and 101 in year three.

The term loan and delayed-draw term loan will be funded in U.S. dollars and the revolver will be divided between Canadian and U.S. dollars.

There will be a senior secured leverage covenant in the credit agreement.

Goldman Sachs and Deutsche Bank are the lead banks on the deal, with Goldman the left lead.

Proceeds will be used to help fund the buyout of the company for roughly C$3.5 billion by an investor group led by David Werklund, founder, president and chief executive officer of CCS and including CAI Capital Partners, Goldman Sachs Capital Partners, Kelso & Co., Vestar Capital Partners, British Columbia Investment Management Corp., Alberta Investment Management and O.S.S. Capital Management LP.

Other buyout financing will come from a C$600 million senior unsecured bond offering and about C$1.8 billion in equity.

The delayed-draw loan will be available for acquisitions.

CCS Income Trust is a Calgary, Alta.-based provider of integrated and environmentally responsible services to upstream and downstream oil and gas companies in Canada and the United States.

Deerfield goes away

Deerfield Triarc's proposed acquisition of Deerfield & Co. LLC from Triarc Cos. Inc. was mutually terminated because the $155 million five-year senior secured term loan (B1/B) that was backing the transaction was unable to get done on acceptable terms, according to a news release.

The term loan had been launched to investors on July 19 with price talk of Libor plus 250 bps.

Covenants included maximum senior leverage, minimum interest coverage and minimum tangible net worth requirements.

UBS and Bank of America were acting as the joint lead arrangers and joint bookrunners on the deal.

Deerfield Triarc had revealed in mid-August that there were problems with closing the term loan because of the instability in the credit markets, but, under the acquisition agreement, the parties did not have the right to terminate the transaction until Oct. 19.

Under the agreement, Deerfield Triarc was going to pay about $290 million for Deerfield & Co., consisting of about $145 million in stock and $145 million in cash.

Deerfield Triarc is continuing to explore with Triarc Cos. revised terms and conditions for the acquisition, the news release added.

Deerfield Triarc is a Rosemont, Ill., diversified financial company. Deerfield & Co. is a Chicago-based investment adviser.

Hologic closes

Hologic, Inc. completed its acquisition of Cytyc Corp. for 65.8 million shares of Hologic common stock and approximately $2.1 billion in cash, according to a company new release.

To help fund the transaction, Hologic got a new $2.55 billion senior secured credit facility (Ba3/BB) consisting of a $200 million five-year revolver priced at Libor plus 225 bps, a $600 million five-year term loan A priced at Libor plus 225 bps, a $500 million 51/2-year term loan B priced at Libor plus 250 bps and a $1.25 billion 18-month capital markets term loan X priced at Libor plus 175 bps.

The capital markets term loan X is expected to be refinanced with convertible debt or other equity or equity-linked financing.

During syndication, the term loan A was upsized from $250 million while the term loan B was downsized from $850 million.

Goldman Sachs, Bank of America, Citigroup and JPMorgan acted as the joint lead arrangers on the deal, with Goldman Sachs and Bank of America the joint bookrunners and Goldman Sachs the left lead.

Hologic is a Bedford, Mass., developer, manufacturer and supplier of diagnostic and medical imaging systems.

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