Compass Group, UPC deals allocate; BarrierSafe tightens price talk; synthetics seen higher

By Paul A. Harris

Portland, Ore., Oct. 21 - A comparatively busy Friday in the leveraged loan market saw the LCDX trading at 92¾ bid, 93¼ offered, up 5/8 points on the day, according to a fund manager who spoke by telephone in the middle of the New York afternoon.

Compass Group Diversified Holdings LLC's priced its upsized $515 million first-lien secured credit facility on top of upwardly revised price talk, and the deal broke higher in the secondary market.

Also, UPC Financing Partnership moved up timing on its bank deal, pricing its $500 million Libor plus 350 basis points six-year term loan tranche AB (expected ratings Ba3/B+) at 97.

And BarrierSafe Solutions International Inc. upsized its five-year credit facility to $175 million from $150 million with the addition of a $25 million delayed draw term loan tranche and tightened price talk on the deal.

The freshly minted Kinetic Concepts Inc. $1.63 billion 6.5-year term loan B at Libor plus 575 basis points, which priced on Thursday at 96.50, was 99 7/8 bid, par 3/8 offered, was unchanged on the day.

However, the deal ran three points on the break, according to the investor who said that loan allocations were about a quarter to a third of the orders accounts submitted.

Compass allocates, goes up

Compass Group upsized its first-lien secured credit facility to $515 million from $500 million and priced and allocated the deal.

The oversubscribed $225 million six-year last-out term loan B priced with a 600 basis points Libor spread with a 1.5% Libor floor at 96 and broke to 97 bid.

Pricing came on top of revised talk.

Previous talk was Libor plus 525 bps to 550 bps with a 1.5% Libor floor at 97 to 98.

The five-year revolver, which was also oversubscribed, was upsized to $290 million from $275 million. It opened at Libor plus 350 basis points on top of spread talk.

TD Securities (USA) LLC is the bookrunner on the deal and a joint lead arranger with BMO Capital Markets Corp. and SunTrust Robinson Humphrey Inc.

Proceeds will be used to refinance existing debt and to make acquisitions as well as for working capital and general corporate purposes.

Current corporate ratings for the company are Ba3 from Moody's Investors Service and BB- from Standard & Poor's.

UPC moves up timing

UPC moved up timing on its bank deal, pricing the $500 million Libor plus 350 basis points six-year term loan tranche AB (expected ratings Ba3/B+) at 97.

Allocations were under way, according to the source who spoke by telephone after the Friday close. The deal, however, had not yet begun to trade.

The order book had previously been expected to remain open into the week ahead.

The deal, which features a 1.25% Libor floor, came on top of spread talk and price talk.

There is a 101 soft call for one year.

Citigroup Global Markets Inc. and Goldman Sachs & Co. were the joint bookrunners.

Proceeds will be used to repay the company's current revolver drawings.

BarrierSafe upsizes

BarrierSafe Solutions upsized its five-year credit facility to $175 million from $150 million with the addition of a $25 million delayed draw term loan tranche, an informed source said on Friday.

Also, talk on the deal tightened, the source added.

The Libor spread tightened to 525 basis points from 550 bps. The Libor floor remains unchanged at 1.5%.

Discount talk tightened to 99 from 981/2.

In addition to the newly added $25 million delayed-draw tranche, the facility is comprised of a $30 million revolver and a $120 million term loan.

CIT Group and SunTrust Robinson Humphrey Inc. are the lead banks on the deal.

Proceeds will be used to fund the purchase of the company by Odyssey Investment Partners LLC from Linden LLC.

"Because there is not a big calendar right now, middle-market deals are getting a good audience," a source close to the BarrierSafe deal remarked, adding that the deal is oversubscribed.

Sequa sets lender call

Sequa Corp. will host a Tuesday morning lender call for a $200 million incremental senior secured term loan, according to an informed source.

Barclays Capital Inc. is the lead left bookrunner. Credit Suisse Securities (USA) LLC is the joint lead manager.

No further details on the loan were available at press time.

Proceeds, along with $55 million of cash on hand, will be used to fund the $245 million acquisition of Roll Coater Inc.

Sequa is a Tampa, Fla.-based company, which manufactures auto parts and services jet engines.

Valeant closes loan

Valeant Pharmaceuticals International Inc. announced in a Friday press release that it has closed on $2 billion of 41/2-year pro rata credit facilities.

The deal, which garnered a BBB- rating from Standard & Poor's, was upsized from $1.7 billion, as previously reported.

It featured a revolver, which was upsized to $275 million from $200 million, and a funded term loan A, which was upsized to $1.225 billion from $1 billion.

The deal also included a $500 million delayed-draw term loan A.

Initial pricing on the facility was Libor plus 275 basis points. The spread can range from Libor plus 250 bps to 300 bps, based on leverage.

Specifically, if leverage is 3.25 times or less, pricing is Libor plus 250 bps, if leverage is more than 3.25 times but less than or equal to 4.0 times, pricing is Libor plus 275 bps, and if leverage is greater than 4.0 times, pricing is Libor plus 300 bps.

The delayed-draw loan has a 50 bps unused fee.

All tranches were sold as a strip.

With the closing of the facilities, Valeant's weighted average borrowing cost is 5.84%, down from 6.91% previously, the company announced on Friday.

Goldman Sachs & Co. and J.P. Morgan Securities LLC are the lead banks on the deal.

Proceeds will be used to refinance existing senior secured credit facility debt. As a result of the upsizing, the company will put a little more cash on its balance sheet.

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