Rhode Island State Energy breaks; Petco rises with buyout news; Hawaiian Telcom pulls deal

By Sara Rosenberg

New York, Nov. 23 – Rhode Island State Energy Center LP’s credit facility freed up for trading during Monday’s session, and Petco Animal Supplies Inc.’s term loan gained some ground following news that the company is being acquired by CVC Capital Partners and Canada Pension Plan Investment Board.

Moving to the primary, Hawaiian Telcom withdrew its term loan B from market due to unreceptive market conditions, and ViaWest Inc. came out with price talk on its add-on term loan in connection with its lender call.

Rhode Island starts trading

Rhode Island State Energy Center’s credit facility hit the secondary market on Monday, with the $325 million seven-year term loan B quoted at 99½ bid, par offered, according to a trader.

Pricing on the term loan B is Libor plus 475 basis points, after finalizing at the wide end of the Libor plus 450 bps to 475 bps talk, a source remarked. The loan has a 1% Libor floor and 101 soft call protection for one year and was sold at an original issue discount of 98.5.

The company’s $375 million senior secured credit facility (Ba3/BB) also includes a $50 million revolver.

Morgan Stanley Senior Funding Inc. and GE Capital Markets are leading the deal that will be used with equity to fund the $490 million acquisition of Rhode Island State Energy Center by The Carlyle Group from Entergy Corp.

Closing is subject to customary conditions.

Rhode Island State Energy Center is a 583 MW natural-gas fired power plant located in Johnston, R.I.

Petco strengthens

Also in trading, Petco’s term loan was better after it was announced that CVC Capital Partners and Canada Pension Plan Investment Board are buying the company from TPG and Leonard Green & Partners, a trader remarked.

The term loan was quoted at 99 7/8 bid, 100 1/8 offered, up from 99½ bid, par offered, the trader said.

To help fund the roughly $4.6 billion buyout, the company has received a commitment for debt financing from Barclays, Citigroup Global Markets Inc., RBC Capital Markets LLC, Credit Suisse Securities (USA) LLC, Nomura and Macquarie Capital (USA) Inc.

Closing on the transaction is expected in early 2016, subject to customary conditions.

Petco is a San Diego-based specialty retailer of pet food, supplies and services.

Lannett holds steady

Lannett Co. Inc.’s $275 million five-year term loan A was quoted at 93 bid, 94 offered and its $635 million seven-year term loan B was quoted at 91 bid, 92 offered, in line with where the debt broke for trading late in the day Friday, a trader said.

Pricing on the term loan A is Libor plus 475 bps with a 1% Libor floor, and it was sold at an original issue discount of 92.5, and pricing on the term loan B is Libor plus 537.5 bps with a 1% Libor floor, and it was issued at a discount of 90. Both term loans have 101 soft call protection for one year.

The company’s $1,035,000,000 senior secured credit facility (B1/BB-) also includes a $125 million five-year revolver priced at Libor plus 475 bps with a 50 bps undrawn fee.

During syndication, the term loan B was downsized from $1.16 billion, pricing was increased from talk of Libor plus 425 bps to 450 bps, the discount widened from 98.5, and the call protection was extended from six months. Also, the term loan A was added to the capital structure, and revolver pricing was lifted from talk of Libor plus 425 bps to 450 bps.

Lannett lead banks

Morgan Stanley Senior Funding Inc., RBC Capital Markets LLC and Citigroup Global Markets Inc. are the joint lead arrangers and bookrunners on Lannett’s credit facility.

Proceeds will be used to help fund the acquisition of Kremers Urban Pharmaceuticals Inc., the U.S. specialty generic pharmaceuticals subsidiary of biopharmaceuticals company UCB SA, for $1.23 billion plus potential contingency payments.

With the term loan B downsizing, the company reallocated funds to about $250 million of senior unsecured notes, with $200 million to be held by UCB SA and UCB Manufacturing Inc., the sellers.

Closing on the acquisition is expected this quarter.

Lannett is a Philadelphia-based manufacturer of generic pharmaceutical products.

Hawaiian shelves loan

Switching to the primary market, Hawaiian Telcom pulled its $320 million seven-year term loan B (B1/B) because of unfavorable market conditions, according to an informed source.

The UBS AG-led term loan was talked at Libor plus 400 bps with a 1% Libor floor. The portion of the loan that was going to refinance an existing term loan due June 6, 2019 was offered at an original issue discount of 99.5, and the new money portion was going to add cash to the balance sheet was offered at a discount of 99.

As of Sept. 30, the company had $293.9 million outstanding under its existing term loan at pricing of Libor plus 400 bps with a 1% Libor floor.

Hawaiian Telcom is a Honolulu-based provider of integrated communications services.

ViaWest talk emerges

ViaWest held its call on Monday afternoon, launching its $170 million add-on term loan B with talk of Libor plus 350 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source said.

Commitments are due on Dec. 8, the source added.

RBC Capital Markets, TD Securities (USA) LLC and Citigroup Global Markets Inc. are leading the deal that will be used to fund the acquisition of INetU Inc. from BV Investment Partners and other shareholders for $162.5 million.

Closing is expected by year-end, subject to customary conditions.

ViaWest is a Greenwood Village, Colo.-based IT infrastructure solutions company. INetU is an Allentown, Pa.-based customer-centric cloud company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.