IMS U.S. loan expected at low end; Dole firms spread, breaks; Bucyrus, U.S. TelePacific free up

By Sara Rosenberg

New York, Feb. 12 - Market chatter is that IMS Health Inc.'s U.S. term loan tranche will likely come at the tight end of price talk and the euro term loan tranche may come at the wide end, as the deal seems to be going better in the United States.

Also on the new deal front, Dole Food Co. Inc. finalized pricing on its term loan at the low end of guidance and then allocated and freed the deal up for trading, with levels in the secondary seen above the original issue discount price.

Another credit facility that hit the secondary market on Friday was Bucyrus International Inc., with its term loan quoted a little above par, and U.S. TelePacific broke as well.

In other news, SkillSoft plc joined the forward calendar as the company announced plans to get a new credit facility to help fund its buyout by Berkshire Partners LLC, Advent International Corp. and Bain Capital Partners LLC.

IMS pricing expectations

Some investors are hearing that IMS Health's U.S. term loan tranche will end up with pricing of Libor plus 350 basis points, the low end of the initial Libor plus 350 bps to 375 bps guidance, according to a buyside source.

Also, the original issue discount on the term loan is expected to end up at 99, compared to initial talk at launch of 98½ to 99, the source continued.

The 1.75% Libor floor on the term loan is anticipated to remain unchanged.

Meanwhile, the euro term loan tranche is heard to be coming at Libor plus 375 bps, the wide end of the 350 bps to 375 bps talk, with the same Libor floor and original issue discount as the U.S. tranche, the source remarked.

The source added that the book was going well in the United States ahead of Friday's commitment deadline. In fact, just recently, it was rumored that there were around $3 billion in orders towards the term loan.

IMS term loan breakdown

Prior to launch, it was expected that of IMS Health's total $2 billion term loan amount, about $750 million would be in dollars and about $750 million would be in euros. The remaining $500 million was expected to be held by left lead bank Goldman Sachs.

However, whether this will be the final breakdown on the loan is still unclear.

The company's $2.275 billion senior secured credit facility (Ba3/BB) also includes a $275 million revolver that is being talked at Libor plus 350 bps to 375 bps with a 1.75% Libor floor and an original issue discount of 98.

In addition to Goldman Sachs, Bank of America, Barclays, HSBC and RBC are involved in the transaction as well.

Allocations on the deal are targeted to go out during the week of Feb. 15.

IMS being acquired

Proceeds from IMS Health's credit facility will be used to help fund its buyout by TPG Capital and the CPP Investment Board for $22 in cash per share of common stock. The transaction is valued at $5.2 billion, including the assumption of debt.

The buyout is also expected to be funded with $2.793 billion in equity and $1 billion of senior unsecured notes that are backed by a commitment for a $1 billion senior unsecured term loan.

The notes will not be sold in the high-yield market since Goldman Sach's mezzanine fund has decided to invest in them.

IMS is a Norwalk, Conn.-based provider of market intelligence to the pharmaceutical and health care industries.

Dole comes at low end

Dole Food firmed pricing on its $850 million seven-year term loan (Ba2/BB-) on Friday at the tight side of talk as a result of the deal being so well received by the market, according to an informed source.

The term loan ended up pricing at Libor plus 325 bps, compared to initial talk at launch of Libor plus 325 bps to 350 bps, the source said.

As was the case since launch, the term loan includes a 1.75% Libor floor and was sold to investors at an original issue discount of 99, the source continued.

Dole frees to trade

After setting pricing on the term loan, Dole Food's freed the deal up for trading, with levels seen above the discount price at which it was sold during syndication, traders said.

The term loan was quoted by one trader at 99¾ bid, par ¼ offered on the break.

A second trader had the term loan quoted at 99½ bid, par offered on the break. He went on to say that by late afternoon, the term loan had inched its way up to 99 7/8 bid, par 3/8 offered.

Deutsche Bank, Bank of America and Wells Fargo are the lead banks on the deal.

Dole also getting revolver

Dole Food's $1.2 billion credit facility also includes a $350 million four-year ABL revolver that is talked at Libor plus 400 bps with no Libor floor.

Proceeds will be used to refinance existing term loan and ABL revolver debt and the remaining $70 million of senior notes that mature in 2011.

The refinancing, which is expected to closed on Feb. 23, will reduce the company's interest expense and extend maturities, putting Dole's nearest debt maturity in 2013.

Dole is a Westlake Village, Calif.-based fruit and vegetables company.

Bucyrus breaks

Bucyrus' credit facility began trading during Friday's market hours, with the term loan quoted at par 1/8 bid, par 5/8 offered, according to a trader.

The $1 billion term loan - comprised of an $875 million U.S. dollar tranche and a $125 million Australian dollar tranche - is priced at Libor plus 300 bps with a step-down to Libor plus 275 bps when leverage is less than 2.0 times.

There is a 1.5% Libor floor, 101 soft call protection for one year and the paper was sold at an original issue discount of 991/2.

During syndication, the term loan was downsized from $1.2 billion, pricing was flexed down from Libor plus 325 bps, the Libor floor was lowered from 2%, the original issue discount tightened from 99, and the soft call was added.

Bucyrus acquiring business

Proceeds from Bucyrus' term loan will be used to fund the acquisition of Terex Corp.'s mining equipment business for $1.3 billion.

Although the loan was launched at up to $1.2 billion, the market was expecting it to be downsized after a definitive agreement was reached to issue roughly 5.8 million shares of equity to Terex in place of $300 million in cash, which is exactly what ended up happening.

JPMorgan, Bank of America and Macquarie are the lead banks on the deal (Ba2/BB).

In connection with the acquisition, Bucyrus is also planning to get a $50 million revolver add-on and an amendment and extension of its existing credit facility.

Bucyrus is a Milwaukee, Wis.-based designer and manufacturer of high-productivity mining equipment for surface and underground mining.

U.S. TelePacific starts trading

Also breaking for trading on Friday was U.S. TelePacific's credit facility, with the $370 million 51/2-year first-lien term loan quoted at 98½ bid, 99½ offered, and then moving up to par bid, par ½ offered, according to a market source.

The term loan is priced at Libor plus 725 bps with a 2% Libor floor and 101 soft call protection for one year, and was sold at an original issue discount of 98.

During syndication, the term loan was upsized from $360 million and pricing was reduced from Libor plus 750 bps.

The $395 million credit facility (B2/CCC+) also provides for a $25 million revolver.

Credit Suisse, Deutsche Bank and Bank of America are the lead banks on the facility that will be used to refinance existing bank debt and add some cash to the balance sheet. The extra funds raised from the term loan upsizing will be used for general corporate purposes and for additional liquidity, one source remarked.

U.S. TelePacific is a Los Angeles-based competitive local exchange carrier.

SkillSoft getting new loan

SkillSoft revealed on Friday that it expects to get a new $365 million senior secured credit facility to help fund its acquisition by Berkshire Partners, Advent and Bain Capital, according to an 8-K filed with the Securities and Exchange Commission.

The credit facility is comprised of a $40 million revolver and a $325 million term loan.

Morgan Stanley and Barclays are the lead banks on the deal.

In addition to the credit facility, the company has also received a commitment for a $240 million senior unsecured bridge loan, and equity from the investor group will round out the buyout financing.

The transaction is valued at $1.1 billion as the company is being acquired for $10.80 per security in cash.

SkillSoft process to take months\par SkillSoft said in its 8-K filing that the whole buyout process is expected to take several months. However, if the transaction is not completed by July 16, the agreement will lapse unless the parties agree on extending that date.

The buyout will be done by means of a scheme of arrangement under Irish law. To become effective, the scheme of arrangement requires the approval of a majority of SkillSoft shareholders, the expiration of the applicable waiting period under the Hart-Scott-Rodino Act and the approval of the High Court in Ireland.

"SkillSoft is pleased to announce this transaction, which is being unanimously recommended by the board of directors," said Chuck Moran, chief executive officer, in a news release.

"We believe the transaction is good for our shareholders as the offer represents an attractive premium relative to our trading history and, as an all cash offer, provides liquidity for shareholders," Moran added.

SkillSoft is a Dublin, Ireland-based provider of on-demand e-learning and performance support services for global enterprises, government, education and small to medium-sized businesses.

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