Lago Resort breaks; Neiman Marcus under pressure with sector concerns; GCA updates surface

By Sara Rosenberg

New York, Feb. 19 – Lago Resort & Casino LLC’s bank debt made its way into the secondary market on Friday, with the downsized first-lien term loan and the second-lien term loan bid in line with their original issue discounts.

In more trading happenings, Neiman Marcus Group LLC’s term loan softened by a few points after Nordstrom Inc. released disappointing earnings results that created some investor nervousness regarding the retail sector.

Moving to the primary market, GCA Services Group Inc. firmed the issue price on its first-lien term loan at the wide end of guidance, and Imagine! Print Solutions LLC joined the near-term new issue calendar.

Lago starts trading

Lago Resort & Casino’s term loans broke for trading on Friday, with the $225 million six-year first-lien term loan (B2/B+) quoted at 98 bid, 99 offered and the $85 million 6.5-year second-lien term loan (Caa2/CCC+) quoted at 97¼ bid, 98¼ offered, according to a market source.

Pricing on the first-lien term loan is Libor plus 950 basis points with a 1% Libor floor, and it was sold at an original issue discount of 98. The debt is non-callable for two years, then at 102 in year three and 101 in year four.

The second-lien term loan is priced at a fixed-rate of 14% and was issued at a discount of 97.25. This tranche is non-callable for two years, then at 104 in year three and 102 in year four.

During syndication, the first-lien term loan was scaled back from $240 million and the spread finalized at the wide end of the Libor plus 900 bps to 950 bps talk.

Credit Suisse Securities (USA) LLC is leading the term loans that will be used to fund the development of the Lago Resort & Casino, located in Tyre, Seneca County, between Rochester and Syracuse, New York.

Neiman retreats

Neiman Marcus’ term loan dropped during the trading session to 82¾ bid, 83¾ offered from 85¼ bid, 86¼ offered as fellow retailer Nordstrom came out with poor quarterly results, a trader said.

For the fourth quarter ended Jan. 30, Nordstrom reported net earnings of $180 million, or $1 per diluted share, compared to net earnings of $255 million, or $1.32 per diluted share in the prior year’s fourth quarter.

And, total revenues for the quarter were about $4.2 billion, versus about $4.04 billion in the previous year.

Neiman Marcus is a Dallas-based luxury retailer. Nordstrom is a Seattle-based fashion specialty retailer.

GCA sets OID

Switching to the primary market, GCA Services Group firmed the original issue discount on its $515 million seven-year covenant-light first-lien term loan (B1/B) at 98, the wide end of the 98 to 98.5 talk, a market source remarked.

As before, the first-lien term loan is priced at Libor plus 475 bps with a 1% Libor floor and has 101 soft call protection for six months.

The company’s $795 million credit facility also includes a $100 million five-year revolver (B1/B) and a $180 million pre-placed eight-year second-lien term loan (Caa1/CCC+).

Goldman Sachs Bank USA, Barclays, UBS AG, ING and Macquarie Capital (USA) Inc. are leading the deal that will be used to help fund the buyout of the company by the Merchant Banking Division of Goldman Sachs and Thomas H. Lee Partners LP from Blackstone.

Closing is expected this quarter, subject to customary conditions.

GCA is a Cleveland-based provider of facility services.

Imagine! on deck

Imagine! Print Solutions set a bank meeting for 10 a.m. ET on Wednesday to launch a $360 million credit facility (B2/B), according to a market source.

The facility consists of a $40 million five-year revolver and a $320 million six-year term loan B, the source said.

RBC Capital Markets and Societe Generale leading the deal that will be used with equity to fund the buyout of the company by Oak Hill Capital Partners from its founder, Bob Lothenbach, who will retain a significant minority ownership position.

Closing is expected this quarter, subject to HSR approval and other customary conditions.

Imagine! is a Minneapolis-based provider of printed in-store marketing solutions.

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