Panda Hummel frees up; Valeant softens; handful of companies ready launches for this week

By Sara Rosenberg

New York, Oct. 26 – Panda Hummel’s credit facility emerged in the secondary market on Monday, with the funded term loan B quoted above its original issue discount.

Also in trading, Valeant Pharmaceuticals International Inc.’s term loan E and F slid lower, and Interactive Data Corp.’s first-lien term loan saw levels tighten with news that the company is being acquired by Intercontinental Exchange.

Moving to the primary market, Belk Inc., T-Mobile USA Inc., Envision Healthcare Corp. and Shearer’s Foods LLC joined this week’s new issue calendar.

Panda Hummel breaks

Panda Hummel’s credit facility freed to trade on Monday, with the $340 million funded seven-year term loan B seen at 96½ bid, 98½ offered, according to a trader.

The funded term loan B, as well as a $120 million delayed-draw seven-year term loan, is priced at Libor plus 600 basis points with a 1% Libor floor, and the debt was sold at an original issue discount of 96. The term loans are non-callable for three years, then at 102 in year four and 101 in year five.

During syndication, the funded term loan B was downsized from $380 million, the delayed-draw loan was upsized from $75 million, pricing on the tranches was raised from talk of Libor plus 550 bps to 575 bps and the discount widened from 99.

Goldman Sachs Bank USA is leading the funded and delayed-draw loans.

Additionally, the company is getting a $250 million 6.5-year term loan A priced at Libor plus 375 bps with no Libor floor that is being led by ICBC and Investec.

Proceeds will be used to fund the development of the Panda Hummel power project, a 1,000 megawatt natural gas-fueled, combined-cycle power facility in Snyder County, Pa.

Valeant weakens

Valeant Pharmaceuticals’ term loan E and F dropped to 93½ bid, 94½ offered from 94 3/8 bid, 95 1/8 offered during the trading session, according to a trader.

In the morning, the company held a call to address last week’s Citron Research report that accused the company of creating phantom captive pharmacies and invoices to deceive the auditors and book revenue and bringing in to question dealings with Philidor Rx Services LLC.

The Citron report caused the debt to trade off dramatically last week. Prior to the report, the term loan F was quoted in the area of 97¾ bid, 98½ offered.

On Monday’s investor call, Robert Ingram, lead outside director of Valeant, stated that the “audit and risk committee of the board and the full board have reviewed the company’s accounting for the Philidor relationship and have confirmed the appropriateness of the company’s revenue recognition and accounting treatment.”

However, the Laval, Quebec-based specialty pharmaceutical company also said that the board of directors has decided to form an ad hoc committee of the board to review allegations related to the company’s business relationship with Philidor and related matters and that the committee will be chaired by Ingram.

Interactive Data tightens

Interactive Data’s first-lien term loan moved to par bid, par 3/8 offered from 99¾ bid, par ½ offered after the company announced that it is being purchased by Intercontinental Exchange from Silver Lake and Warburg Pincus, according to a trader.

The acquisition is valued at about $5.2 billion, including $3.65 billion of cash and $1.55 billion of Intercontinental Exchange common stock.

Closing is expected by year’s end, subject to applicable regulatory approvals.

Interactive Data is a Bedford, Mass.-based provider of financial data serving the mutual fund, bank, asset management, hedge fund, securities and financial instrument processing and administration sectors. Intercontinental Exchange is an Atlanta-based network of exchanges and clearing houses.

Belk coming soon

Switching to the primary market, Belk scheduled a bank meeting for 2 p.m. ET in New York on Wednesday to launch a $1.6 billion first-lien term loan, a market source remarked.

Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch, Jefferies Finance LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Nomura Securities International Inc., RBC Capital Markets and MCS Capital Markets are leading the deal, which will help fund the buyout of the company by Sycamore Partners for $68.00 per share, or about $3 billion.

Closing is expected in the fourth quarter, subject to customary conditions, including the receipt of regulatory and stockholder approval.

Belk is a Charlotte, N.C.-based department store company.

T-Mobile on deck

T-Mobile set a bank meeting for noon ET in New York on Wednesday to launch a $1 billion seven-year covenant-light term loan B, a market source said.

Commitments are due at noon ET on Nov. 5, the source added.

Deutsche Bank, Barclays, Citigroup Global Markets Inc., Goldman Sachs Bank USA and J.P. Morgan Securities LLC are leading the deal. Proceeds will be used for general corporate purposes, which may include the acquisition of additional spectrum.

T-Mobile is a Bellevue, Wash.-based provider of wireless communications.

Envision sets meeting

Envision Healthcare scheduled a bank meeting for 10 a.m. ET on Wednesday to launch a $750 million seven-year senior secured term loan B, according to a market source.

Barclays, Goldman Sachs, Deutsche Bank, Bank of America Merrill Lynch and JPMorgan are leading the loan, which will be used to fund the acquisition of Rural/Metro Corp. for about $620 million of cash by Envision’s medical transportation segment American Medical Response, to repay outstanding ABL revolver borrowings and for general corporate purposes.

Closing is expected in the fourth quarter, subject to regulatory approval and customary conditions.

Envision is a Greenwood Village, Colo.-based provider of health care-related services. Rural/Metro is a Scottsdale, Ariz.-based provider of emergency and non-emergency ambulance transportation as well as specialty fire protection services.

Shearer’s readies loan

Shearer’s Foods surfaced with plans to hold a bank meeting in New York on Thursday to launch a $225 million incremental first-lien term loan, according to a market source.

Antares Capital and Golub Capital are leading the deal that will be used to fund the acquisition of Barrel O’ Fun Snack Foods Corp.

As part of the acquisition financing, Ontario Teachers’ Pension Plan, the current owner of about 85% of Shearer’s, will be investing around $175 million of new equity into the company.

Shearer’s Foods is Massillon, Ohio-based private label supplier and contract manufacturer of salty snacks, cookies and crackers. Barrel O’ Fun is a Perham, Minn.-based supplier and contract manufacturer of salty snacks.

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