Prime Healthcare breaks; US Airways, UAL dip; PVH, Advantage Sales, Lamar, Harvard revise deals

By Sara Rosenberg

New York, April 22 - Prime Healthcare Services Inc.'s credit facility allocated and freed up for trading after the size of the term loan B firmed up, and US Airways Group Inc. and UAL Corp. saw their term loans weaken with news that a merger will not be taking place.

Over in the primary market, Phillips-Van Heusen Corp. (PVH) came out with changes to its term loan B, including lowering pricing and the original issue discount, and Advantage Sales & Marketing modified tranching and pricing on its credit facility.

Also, Lamar Media Corp. reduced the spread and the Libor floor on its well received term loan B, Harvard Drug Group LLC tightened the original issue discount and added a pricing step-down to its term loans, and Intersil Corp. is gearing up to allocate its credit facility early next week.

Prime Healthcare frees to trade

Prime Healthcare's credit facility hit the secondary market late in the session on Thursday, with the $160 million five-year term loan B quoted at 97½ bid, 98½ offered, according to a trader.

Pricing on the term loan B is Libor plus 525 basis points with a 2% Libor floor and an original issue discount of 971/2.

The company's $232 million credit facility (B1) also includes a $72 million four-year term loan A priced at Libor plus 425 bps with a 2% Libor floor and an original issue discount of 981/2.

Being that the term loan A was pretty much tucked away, there were no levels in the secondary market on the debt.

Prime Healthcare led by RBC

RBC is the lead bank on Prime Healthcare's credit facility that will be used to refinance existing debt, make certain investments and for general corporate purposes.

When the deal was first launched, it consisted of a $40 million five-year revolver and a $250 million six-year term loan, with both tranches talked at Libor plus 400 bps with a 2% Libor floor.

Then, the structure was changed to a $40 million four-year revolver, a $50 million four-year term loan A talked at Libor plus 425 bps at 98½ and a $200 million five-year term loan B talked at Libor plus 525 bps at 971/2, with the 2% Libor floor still applying.

Following that, the deal was again restructured, this time to eliminate the revolver, upsize the term loan A to $72 million and downsize the term loan B to $155 million to $160 million - with the B loan size now just firming up at the high end of that guidance.

Prime Healthcare, an Ontario, Calif.-based owner and operator of acute care hospitals, expects to fund its credit facility on Tuesday.

US Airways, UAL soften

US Airways and UAL both saw their term loans head lower in trading after US Airways revealed that it has discontinued recent discussions with UAL regarding a potential merger between the two companies, according to a trader.

Tempe, Ariz.-based US Airways' term loan was quoted at 80¾ bid, 81¾ offered, down from 81¼ bid, 82¼ offered, and Chicago-based UAL's term loan was quoted at 90 bid, 91 offered, down from 90½ bid, 91½ offered, the trader said.

In its announcement, US Airways did not really give a reason as to why the merger talks have ended. In fact, Doug Parker, chairman and chief executive officer, said in the news release that "US Airways has long been a proponent for consolidation."

"It remains our belief that consolidation makes sense in an industry as fragmented as ours. Whether we participate or not, consolidation that leads to a more efficient industry better able to withstand economic volatility, global competition and the cyclical nature of our industry is a positive outcome," Parker added.

PVH reverse flexes

Switching to the primary, Phillips-Van Heusen revised pricing and the original issue discount on its $1.5 billion six-year term loan B as the deal was heavily oversubscribed. It also accelerated the commitment deadline to Monday at 5 p.m. ET from Wednesday, according to a market source.

Under the changes, the U.S. portion of the term loan B is now priced at Libor plus 300 bps, down from initial talk of Libor plus 325 bps to 350 bps, and the euro portion of the term loan B is now priced at Euribor plus 325 bps, down from talk of Euribor plus 350 bps to 375 bps, the source said.

Also, the original issue discount on the entire term loan B tranche was reduced to 99½ from 99, while the 1.75% Libor floor was left unchanged.

The original target was for the term loan B to be two-thirds dollar and one-third euro. The actual breakdown, however, has yet to firm up, the source remarked.

Barclays Capital and Deutsche Bank are the global debt coordinators and bookrunners on the deal, with Barclays the left lead. Other bookrunners include Bank of America, Credit Suisse and RBC Capital Markets.

PVH pro rata still due Wednesday

Even though Phillips-Van Heusen moved up the commitment deadline on its term loan B, the deadline for commitments towards its proposed revolver and term loan A was left for Wednesday, the source continued.

As before, the $450 million five-year revolver and the $500 million five-year term loan A are being talked at Libor plus 300 bps on the U.S. pieces and at Euribor plus 325 bps on the foreign pieces.

The term loan A has a 1.75% Libor floor, while the revolver has no floor.

Upfront fees on the revolver and the term loan A are 100 bps on allocation for a $40 million commitment and 50 bps on allocation for a $20 million commitment.

The revolver is a multi-currency deal and the term loan A is expected to be 50% U.S. dollars and 50% euro.

A senior managing agent round for the revolver and term loan A commenced in March, and that process, which wrapped up around the time of the retail launch, resulted in 10 banks signing on to agent roles.

PVH funding acquisition

Proceeds from Phillips-Van Heusen's $2.45 billion senior secured credit facility (Ba2/BBB) will be used to help fund the acquisition of Tommy Hilfiger BV from Apax Partners LP for €2.2 billion, or about $3 billion, plus the assumption of €100 million in liabilities, and to refinance Phillips-Van Heusen's $300 million of existing senior unsecured notes due in 2011 and 2013.

The consideration to be paid to Apax includes €1.924 billion in cash and €276 million in Phillips-Van Heusen common stock.

The company plans on issuing $525 million of senior notes, completing a $275 million common stock offering, selling $200 million of perpetual convertible preferred stock and using $326 million of cash on hand to fund the acquisition as well.

Initially it was thought that the bonds would be sized at $600 million and the common stock offering would be $200 million, but the company opted to go with more equity and less debt.

New York-based Phillips-Van Heusen and Tommy Hilfiger are apparel companies.

Advantage Sales reworks structure

Advantage Sales & Marketing made a slew of changes to its credit facility on Thursday, including revising tranche sizes so that the overall deal size ended up being reduced to $965 million from $975 million, and cutting pricing, according to a market source.

Regarding tranching, the first-lien term loan was upsized to $655 million from $625 million, the second-lien term loan was downsized to $235 million from $275 million and the $75 million revolver was left unchanged, the source said.

Pricing on the first-lien term loan and the revolver was flexed down to Libor plus 350 bps from Libor plus 375 bps, and pricing on the second-lien term loan was reduced to Libor plus 700 bps from Libor plus 750 bps.

Also, the original issue discount on the first-lien term loan was tightened to 99½ from 99, and the discount on the second-lien term loan was lowered to 99 from 981/2, the source continued.

Advantage Sales cuts floor

Additionally as part of the changes, Advantage Sales & Marketing lowered the Libor floor on all of its credit facility tranches to 1.5% from 2%, the source said.

Call protection on the second-lien term loan remained at 103 in year one, 102 in year two and 101 in year three.

Recommitments were due at 3 p.m. ET on Thursday, the source added. Comments on documentation are due on Friday, and closing and funding is targeted for next week.

Credit Suisse, Bank of America and UBS are the lead banks on the deal that will be used to refinance debt and fund a dividend.

At close, about $10 million of the revolver will be drawn.

Advantage Sales is an Irvine, Calif., consumer packaged goods sales and marketing agency.

Lamar revises pricing

Yet another deal to come out with revisions on Thursday was Lamar Media, as it flexed pricing lower on its well received term loan B, added a leverage-based step down and reduced the Libor floor, according to a market source.

The $575 million term loan B is now priced at Libor plus 300 bps, down from Libor plus 325 bps, and the spread can drop to Libor plus 275 bps when leverage is less than 2.5 times, the source said.

As for the Libor floor on the term loan B, that has been reduced to 1.25% from 1.5%, the source continued.

Unchanged was the original issue discount on the term loan B, which is 991/2.

Lamar refinancing debt

Proceeds from Lamar Media's $1.125 billion credit facility (Baa3/BB) will be used to refinance existing debt.

In addition to the term loan B, the deal includes a $250 million revolver and $300 million term loan A, with both tranches talked at Libor plus 300 bps.

JPMorgan, Wells Fargo and SunTrust are the lead banks on the facility.

Lamar is a Baton Rouge, La.-based provider of outdoor advertising services.

Harvard Drug lowers OID

Harvard Drug Group trimmed the original issue discount on its $160 million six-year term loan and $22 million delayed-draw term loan to 99 from 981/2, according to a market source.

And, while pricing on the term loans was left unchanged at Libor plus 450 bps, a step-down to Libor plus 425 bps was added when leverage falls below 2.5 times, the source said.

There is still a 2% Libor floor.

The company's $202 million senior secured deal (B1/B+) also includes a $20 million revolver.

Credit Suisse and UBS are the lead banks on the deal that will be used to help fund the already completed buyout of the company by Court Square Capital from H.I.G. Capital LLC.

Harvard Drug is a Livonia, Mich.-based independent pharmaceutical distributor.

Intersil readies allocations

Intersil is expecting to free its $465 million credit facility (Ba2/BB+) up for trading on Monday, according to a market source.

The facility includes a $390 million six-year senior secured term loan priced at Libor plus 325 bps, with an original issue discount talked at 99½ to par and a Libor floor guided at 1.5% to 1.75% Libor floor. Earlier this week, pricing on the loan was lowered from the Libor plus 350 bps area and the discount tightened from 99.

Prior to the launch, filings with the Securities and Exchange Commission outlined pricing on the term loan at Libor plus 375 bps if the rating is Ba3/BB- or better and Libor plus 400 bps if the rating is B1/B+ or lower. The filings also said that the term loan would carry a 1.75% Libor floor and would be offered with an original issue discount of 99.

Also part of the facility is a $75 million 31/2-year revolver priced at Libor plus 300 bps, subject to a leverage based grid, with a 50 bps undrawn fee, a Libor floor guided at 1.5% to 1.75% Libor floor, and an original issue discount of 981/2. Pricing on this tranche was lowered from the Libor plus 325 bps area this week.

Intersil acquiring Techwell

Proceeds from Intersil's credit facility will be used to help fund the acquisition of Techwell Inc. for $18.50 per share. Net of Techwell's cash and equivalents, the transaction values Techwell at about $370 million.

Closing on the acquisition is expected to occur during Intersil's second quarter, subject to customary regulatory approvals and the satisfaction of other transaction conditions, including the tender of at least 50% of Techwell's outstanding shares.

Morgan Stanley and Bank of America are acting as the lead banks on credit facility, with Morgan Stanley the left lead.

Intersil is a Milpitas, Calif.-based designer and manufacturer of high-performance analog and mixed-signal semiconductors. Techwell is a San Jose, Calif.-based fabless semiconductor company.

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