Avis, NewPage break; BJ's revises structure, pricing; Web.com, Renaissance talk surfaces

By Sara Rosenberg

New York, Sept. 21 - Avis Budget Group Inc.'s new term loan B allocated and freed up for trading on Wednesday, with levels quoted above its original issue discount price, and NewPage Corp.'s debtor-in-possession facility emerged in the secondary market as well.

Over in the primary, BJ's Wholesale Club Inc. came out with some changes to its credit facility, including downsizing the deal since additional cash was generated and updating pricing on both its first- and second-lien term loans.

Also, Web.com and Renaissance Learning Inc. released price talk on their credit facilities as both transactions were presented to lenders during the session, and DigitalGlobe announced new deal plans.

Avis starts trading

Avis' $420 million seven-year term loan B (Ba1) made its way into the secondary market on Wednesday, with levels quoted by one trader at 99 bid, par offered on the open, and he then saw it move up to 99 5/8 bid, par 1/8 offered. A second trader was quoting the loan at 99½ bid, par offered.

Pricing on the B loan is Libor plus 500 basis points with a 1.25% Libor floor, and it was sold at an original issue discount of 98. There is 101 soft call protection for one year

During syndication, the Parsippany, N.J.-based vehicle rental company's loan was upsized from $400 million, pricing was reduced from most recent talk of Libor plus 525 bps but increased from original talk of Libor plus 350 bps, the floor moved from 1.25% to 1.5% and then went back to 1.25%, and the discount came at the tight end of revised talk of 97 to 98, but wider than original talk of 99.

Morgan Stanley & Co., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Scotia Capital (USA) Inc. and RBS Securities Inc. are the lead banks on the deal.

Avis buying Avis Europe

Proceeds from Avis' term loan B will be used to help fund the acquisition of Bracknell, England-based Avis Europe plc for £3.15 in cash per share, which is expected to close in October. The transaction is valued at £635 million.

Other funds for the transaction will come from a $20 million tranche A term loan and a $200 million revolver add-on, both priced at Libor plus 275 bps to 325 bps based on ratings, and $250 million of senior notes.

This is different from original plans, which called for a $200 million A loan and a $300 million revolver add-on, both of which were guided at Libor plus 300 bps, subject to a ratings-based grid.

Furthermore, Avis plans to use cash of $955 million, borrow an additional $140 million under certain of its existing fleet debt financing arrangements, assume Avis Europe's existing vehicle finance leases of roughly $440 million, assume about $50 million of existing Avis Europe corporate debt and enter into a financing arrangement secured by certain of Avis Europe's vehicle assets.

NewPage tops OID

NewPage's $250 million debtor-in-possession second-out term loan also broke for trading, with levels quoted at 99¾ bid, par ½ offered, according to a trader.

Pricing on the term loan is Libor plus 650 bps, after flexing down earlier from Libor plus 700 bps. There is a 1.5% Libor floor and the debt was sold at an original issue discount of 99.

Talk that the deal was going well had been around since launch based on the fact that at the bank meeting, price talk came out lower-than-expected. Prior to launch, talk on the loan had been circulating at Libor plus 750 bps with a 1.5% Libor floor and a discount that was still to be determined.

The company's $600 million 18-month debtor-in-possession facility also includes a $350 million first-out ABL revolver that is priced in line with talk at Libor plus 325 bps with no Libor floor.

J.P. Morgan Securities LLC and Barclays Capital Inc. are the lead banks on the term loan and the revolver. Wells Fargo Securities LLC is a lead on the revolver as well.

NewPage repaying debt

Proceeds from NewPage's debtor-in-possession deal will be used to repay outstanding revolver debt and for general corporate purposes during the company's Chapter 11 process.

The company announced its bankruptcy filing early this month, saying that the goal is to facilitate a debt restructuring and position the overall business for long-term success.

Investors weren't surprised by the bankruptcy news since the company had already warned that this step may have to be taken back in mid-August. At that time, it was revealed in a filing with the SEC that there are issues with the maturity of the company's revolver due to its floating-rate and 10% second-lien senior secured notes not being refinanced.

NewPage is a Miamisburg, Ohio-based producer of printing and specialty papers.

BJ's reworks deal

Moving to the primary, BJ's Wholesale Club announced revisions to its credit facility on Wednesday and is now asking investors to commit to the deal by 3 p.m. ET on Friday instead of on Thursday, according to market sources.

Under the changes, the seven-year first-lien term loan was reduced to $1.075 billion from $1.125 billion, and pricing is Libor plus 575 bps with a 1.25% Libor floor and an original issue discount of 96, compared to initial talk in the Libor plus 525 bps area with a 1.25% Libor floor and an original issue discount of 971/2, sources said. The 101 soft call protections for one year was left unchanged.

Also, the $200 million 71/2-year second-lien term loan is now talked at Libor plus 875 bps with a 1.25% Libor floor and an original issue discount of 95, versus prior guidance of Libor plus 850 bps to 875 bps with a 1.25% Libor floor and an original issue discount of 97, sources remarked. The tranche is non-callable for one year, then at 102 in year two and 101 in year three, instead of having call protection of 103 in year one, 102 in year two and 101 in year three.

BJ's ABL facility

BJ's now $2.175 billion senior secured credit facility, down from $2.225 billion, still includes an $850 million five-year ABL revolver talked at Libor plus 200 bps, subject to a grid, and a $50 million last-out ABL term loan talked at Libor plus 350 bps.

Before launching, the facility structure had been described as a $900 million asset-based facility and about $1.3 billion of first- and second-lien term loans, with specific tranche sizes unavailable.

And prior to that, the company had said in filings with the Securities and Exchange Commission that it would be getting a $900 million ABL facility, a $1.25 billion first-lien term loan and a $425 million second-lien term loan.

However, the decision was made to reduce the amount of term loan borrowings by $350 million as a result of sale and leaseback proceeds that are expected to come at closing, sources previously explained to Prospect News.

BJ's being acquired

Proceeds from BJ's credit facility, along with a little over $600 million of equity, will be used to fund the buyout of the company by Leonard Green & Partners LP and CVC Capital Partners for $51.25 per share in cash. The all-cash transaction is valued at $2.8 billion.

Closing is expected on or about Sept. 30, subject to approval of BJ's shareholders, which was already obtained, customary conditions and regulatory approvals.

Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Barclays Capital Inc., Jefferies & Co., GE Capital Markets and Wells Fargo Securities LLC are the lead banks on the credit facility.

BJ's is a Westborough, Mass.-based operator of warehouse clubs.

Web.com sets talk

Also on the new deal front, Web.com held a bank meeting at 11 a.m. ET on Wednesday to kick off syndication on its proposed $750 million of first- and second-lien senior secured term loans, and shortly before the event, price talk was announced, according to a market source.

The $600 million seven-year first-lien term loan B (Ba3) is being talked at Libor plus 550 bps and the $150 million eight-year second-lien term loan (B3) is being talked at Libor plus 950 bps, with both tranches having a 1.5% Libor floor and an original issue discount of 96½ to 97, the source remarked.

The first-lien term B has 101 soft call protection for one year, while the second-lien loan is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

By comparison, filings with the SEC had the first-lien term loan B expected at Libor plus 425 bps with a 1.25% Libor floor, and the second-lien term loan expected at Libor plus 800 bps with a 1.25% Libor floor and call protection of 102 in year one and 101 in year two.

Web.com lead banks

J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. and SunTrust Robinson Humphrey Inc. are leading Web.com's $800 million credit facility, which also includes a $50 million five-year revolver (Ba3).

Proceeds will be used to fund the acquisition of a majority stake in Network Solutions from General Atlantic LLC for $405 million in cash and 18 million shares of common stock, refinance existing debt and for general corporate purposes.

Completion of the acquisition is expected in the fourth quarter, subject to shareholder and regulatory approvals, and customary conditions.

Leverage is 4.0 times through the first-lien and 5.0 times through the second-lien.

Web.com is a Jacksonville, Fla.-based provider of internet services and online marketing solutions. Network Solutions is a Herndon, Va.-based provider of website services, online marketing and domain name registration.

Renaissance guidance

Another company to hold a bank meeting on Wednesday was Renaissance Learning, at which time its $175 million first-lien term loan (B1/BB-) was launched at Libor plus 600 bps to 625 bps with a 1.5% Libor floor, an original issue discount of 96 to 97 and 101 soft call protection for one year, according to a market source.

The company's $270 million credit facility also includes a $20 million revolver (B1/BB-) and a $75 million second-lien term loan, and price talk on the second-lien loan is expected to come out in the next few days, the source remarked.

RBC Capital Markets LLC and BMO Capital Markets Corp. are leading the deal that will be used, along with up to $196.7 million of equity, to fund the buyout of the company by Permira Funds for $14.85 per share in cash, or roughly $440 million.

Closing is expected in the fourth quarter, subject shareholder and regulatory approval.

Renaissance Learning is a Wisconsin Rapids, Wis.-based provider of technology-based school improvement and student assessment programs for K-12 schools.

DigitalGlobe readies deal

Regarding the forward calendar, DigitalGlobe has set a bank meeting for Friday morning to launch a proposed $600 million senior secured credit facility, according to a market source.

The facility consists of a $100 million revolver and a $500 million term loan B, the source said, adding that price talk is expected to come out at the meeting.

Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are the lead banks on the deal that will be used to fund a tender offer for the company's $355 million of 10½% senior secured notes due 2014 and for general corporate purposes, including stock repurchases and acquisitions.

The tender offer expires on Oct. 19, and is subject to completion of the new debt financing and a majority of notes being tendered.

DigitalGlobe is a Longmont, Colo.-based content provider of high-resolution earth imagery products and services.

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