Hargray Communications breaks; Ocwen, Walter Investment improve; DTZ flexes pricing higher

By Sara Rosenberg

New York, Oct. 23 – Hargray Communications’ term loan hit the secondary market on Thursday, and Ocwen Financial Corp. and Walter Investment Management Corp. both saw their term loans gain back some of their recent losses that resulted from an investigation into Ocwen’s dating of letters to mortgage borrowers.

Switching to the primary, DTZ (DTZ U.S. Borrower LLC and DTZ Aus HoldCo Pty Ltd.) widened spreads and original issue discounts on its first- and second-lien term loans.

Furthermore, TransFirst Inc., AMAG Pharmaceuticals Inc., Block Communications Inc. and Emcore Photovoltaics disclosed price talk with launch, Ability Network Inc. released original issue discounts on its incremental loans, and Media General Inc. and Novetta Solutions joined the near-term calendar.

Hargray frees up

Hargray Communications’ fungible $53 million first-lien tack-on term loan due June 2019 broke for trading on Thursday, with levels quoted at 99½ bid, par ½ offered, according to a trader.

Pricing on the tack-on term loan is Libor plus 425 basis points with a 1% Libor floor and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

With the tack-on, the company is lifting pricing on its existing $301 million first-lien term loan to Libor plus 425 bps with a 1% Libor floor from Libor plus 375 bps with a 1% Libor floor, and the existing term loan is getting the same 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC is leading the deal.

Proceeds from the tack-on will be used to fund a dividend to shareholders.

Hargray is a Hilton Head Island, S.C.-based provider of triple-play data, video and voice services.

Ocwen bouncing back

Also in the secondary, Ocwen’s term loan B moved up to 94½ bid, 95½ offered from 93½ bid, 94½ offered, although it is still down from the 98½ bid, 99 offered levels that were seen early this week prior to news of an investigation into backdating borrower correspondence, according to a trader.

As previously reported, on Tuesday the Department of Financial Services sent a letter to Ocwen saying that potentially hundreds of thousands of letters to borrowers may have been incorrectly dated, which likely caused those borrowers great harm.

In response, Ocwen said in a news release that that software errors in its correspondence systems inadvertently caused improperly dated letters to be sent to some borrowers and that it plans to fully cooperate with the Department of Financial Services to address their concerns.

Ocwen is an Atlanta-based servicer and originator of mortgage loans.

Walter Investment gains

Walter Investment’s term loan has been grinding lower this week as well in sympathy with Ocwen, but levels started to rebound during the session, a trader remarked.

The debt was quoted at 93¾ bid, 94¾ offered up from 93½ bid, 94½ offered on Wednesday, the trader said. On Tuesday, the loan had closed out the day at 94 bid, 95 offered.

Walter Investment is a Tampa, Fla.-based asset manager, mortgage servicer and mortgage portfolio.

DTZ reworks deal

Over in the primary, DTZ raised pricing on its $470 million seven-year first-lien term loan (B1/B+) and $280 million delayed-draw term loan (B1/B+) to Libor plus 450 bps from talk of Libor plus 400 bps to 425 bps, and moved the original issue discount98½ from 99, according to a market source. The loans still have a 1% Libor floor.

In addition, pricing on the $210 million eight-year second-lien term loan (B3/B-) was increased to Libor plus 825 bps from talk of Libor plus 725 bps to 750 bps and the discount talk was adjusted to 98 to 98½ from 99, while the 1% Libor floor was left intact, the source said.

The company’s $1.11 billion credit facility also includes a $150 million revolver (B1/B+).

Recommitments were due at 5 p.m. ET on Thursday, the source added.

UBS AG, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Mizuho Securities USA Inc. and HSBC Securities (USA) Inc. are leading the deal that will be used to help fund the buyout of DTZ, a Chicago-based property services company, from UGL Ltd. and the buyout of Cassidy Turley, a commercial real estate services provider, by TPG Capital, PAG Asia Capital and Ontario Teachers’ Pension Plan, to create a full-service commercial real estate services company.

TransFirst sets guidance

TransFirst held its bank meeting on Thursday morning, and with the event, price talk on its first- and second-lien term loans was announced, according to a market source.

The $665 million seven-year covenant-light first-lien term loan (B) is talked at Libor plus 450 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and the $335 million eight-year covenant-light second-lien term loan (CCC+) is talked at Libor plus 800 bps with a 1% Libor floor, a discount of 99 and hard call protection of 102 in year one and 101 in year two, the source said.

The company’s $1.05 billion credit facility also includes a $50 million five-year revolver (B).

Commitments are due on Nov. 6, the source added.

Jefferies Finance LLC, Guggenheim and Nomura are leading the deal that will be used with $566 million of equity to fund the buyout of the company by Vista Equity Partners, which is expected to close later this year.

First-lien net leverage is 4.6 times, and total net leverage is 7 times.

TransFirst is a Hauppauge, N.Y.-based provider of secure payment processing.

AMAG holds meeting

AMAG Pharmaceuticals had its bank meeting as well, launching its $340 million six-year senior secured first-lien term loan B with talk of Libor plus 550 bps with a 1% Libor floor, an original issue discount of 99 and 101 hard call protection for one year, a market source said.

By comparison, filings with the Securities and Exchange Commission had previously outlined expected pricing at Libor plus 500 bps with a 1% Libor floor and an original issue discount of 99.

Commitments are due on Nov. 4, the source added.

Jefferies Finance LLC is leading the deal that will be used to help fund the acquisition of Lumara Health Inc. for $675 million, split between $600 million in cash and $75 million in stock, and additional contingent consideration of up to $350 million based on achievement of certain sales milestones.

Closing is expected in the fourth quarter, following termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and completion of financing.

AMAG is a Waltham, Mass.-based specialty pharmaceutical company. Lumara is a Chesterfield, Mo.-based pharmaceutical company specializing in women’s health.

Block talk emerges

Block Communications came out with talk of Libor plus 375 bps with a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for six months on its $225 million seven-year covenant-light term loan B (Ba1/BB+) that launched with a morning bank meeting, a market source said.

Commitments are due at noon ET on Oct. 31, the source added.

Bank of America Merrill Lynch and J.P. Morgan Securities LLC are leading the deal that will be used to fund the acquisitions of MetroCast and Line Systems Inc.

Block Communications is a Toledo, Ohio-based diversified media company.

Emcore launches

Emcore Photovoltaics set talk on its $57.5 million term loan at Libor plus 450 bps to 475 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months in connection with its afternoon bank meeting, according to a market source.

The company’s $72.5 million credit facility also includes a $15 million revolver.

Commitments are due on Nov. 6, the source said.

Citizens Financial Group is leading the deal that will be used to help fund the $150 million buyout of the company by Veritas Capital from Emcore Corp.

Closing is expected in December or January, subject to Emcore shareholder approval and other customary conditions.

Emcore Photovoltaics is an Albuquerque, N.M.-based provider of products for space power applications.

Ability Network OIDs

Ability Network held its call during the session, launching its $92.5 million incremental first-lien term loan (B) due May 2021 at an original issue discount of 99 and its $23.6 million incremental second-lien term loan (CCC+) due May 2022 at a discount of 98, according to a market source.

As reported earlier, pricing on the incremental loans matches the existing term debt, with the first-lien loan at Libor plus 500 bps with a 1% Libor floor and the second-lien loan at Libor plus 825 bps with a 1% Libor floor.

Commitments are due on Nov. 4, the source said.

Macquarie Capital (USA) Inc. is leading the $116.1 million in incremental term loans that will be used to fund the acquisition of MD On-Line Inc.

Ability is a Minneapolis-based developer of workflow technology for hospitals, home health agencies and other care settings. MD On-Line is a Parsippany, N.J.-based maker of electronic data interchange and revenue cycle tools for payers and providers.

Media General readies launch

Media General, a Richmond, Va.-based local television broadcasting and digital media company, surfaced with plans to hold a conference call at 9:30 a.m. ET on Friday to launch $1,015,000,000 in new bank debt to support its merger with LIN Media LLC, an Austin, Texas-based local multimedia company, according to a market source.

RBC Capital Markets, Deutsche Bank Securities Inc., SunTrust Robinson Humphrey Inc., U.S. Bank and Capital One are leading the deal that consists of an incremental $90 million revolver, a $600 million five-year term loan A and a $325 million term loan B due July 2020, the source said.

Under the agreement, shareholders of LIN Media will receive $25.97 in cash or 1.4714 shares of the new holding company, subject to proration, and Media General shareholders will receive one share of the new holding company for each share of Media General that they own upon closing.

The maximum cash amount of $763 million to be paid in the merger will be funded with the new loans and a $300 million senior unsecured notes offering, and remaining proceeds will be used to refinance some LIN debt.

Closing is subject to regulatory approvals and certain third-party consents.

Novetta on deck

Novetta Solutions set a bank meeting for Friday to launch a $165 million credit facility, according to a market source.

The facility consists of a $25 million revolver and a $140 million first-lien term loan, the source said.

Societe Generale is leading the deal that will be used to refinance existing debt and to fund two tuck-in acquisitions.

Senior and total leverage is about 3.75 times, the source added.

Novetta Solutions is a McLean, Va.-based advanced analytics technology 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.