Young Broadcasting talk, Diversified Machine OID surface; Entercom, Colfax ready new deals

By Sara Rosenberg

New York, Nov. 7 - Young Broadcasting released price talk on its all pro rata credit facility as the deal was presented to lenders on Monday afternoon, and Diversified Machine Inc. came out with the original issue discount on its term loan after ratings surfaced.

Also in the primary, Entercom Communications Corp. joined this week's new deal calendar, with the company planning to bring a refinancing transaction to market, and Colfax Corp. finalized the bank meeting date for its credit facility.

Meanwhile, in the secondary market, a new bond and loan Bid Wanted In Competition (BWIC) was announced, but otherwise things were relatively quiet, with most things unchanged, including 24 Hour Fitness Worldwide Inc.'s term loan - despite news of an amendment request.

Young Broadcasting sets talk

Young Broadcasting held a bank meeting on Monday afternoon to launch its proposed $175 million five-year senior secured credit facility, and in connection with the event, price talk was announced, according to a market source.

Both the $25 million revolver and the $150 million term loan A are being talked at Libor plus 350 basis points, the source said.

Wells Fargo Securities LLC is leading the deal that will be used for general corporate purposes.

Total and senior leverage is around 3.1 times.

Young Broadcasting is a New York-based owner of television stations.

Diversified Machine discount

Diversified Machine disclosed original issue discount price talk of 98 on its $175 million term loan on the back of receiving ratings from both Standard & Poor's and Moody's Investors Service, according to a market source.

The S&P rating on the term loan came out at B late last week, and Moody's released its B3 rating on Monday. Shortly after the Moody's announcement was made, the discount guidance emerged, the source remarked.

As was already reported, the term loan was launched to lenders with a bank meeting last Thursday with talk of Libor plus 775 basis points with a 1.5% Libor floor.

BMO Capital Markets Corp. and Mizuho Securities USA Inc. are the lead banks on the $235 million credit facility, which also includes a $60 million asset-based revolver.

Proceeds will be used to help fund the buyout of the Howell, Mich.-based precision machining company by Platinum Equity from the Carlyle Group.

Entercom launching soon

Entercom Communications surfaced with new deal plans, setting a bank meeting for Wednesday to launch a proposed $395 million senior secured credit facility, according to a market source.

The facility is comprised of a $50 million five-year revolver and a $345 million seven-year term loan, the source said.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC are leading the deal that will be used to refinance existing debt.

Entercom is a Bala Cynwyd, Pa.-based radio broadcasting company.

Colfax nails down timing

Colfax has gone out with invites for the bank meeting for its $2.1 billion credit facility (Ba2/BB+), with the deal set to launch on Thursday - the same date investors had been expecting since the senior managing agent round was held last week, according to a market source.

The facility consists of a $300 million revolver, a $200 million term A-1 tranche and a $700 million term A-2 tranche, all talked at Libor plus 300 bps, and a $900 million term loan B with official talk still to be determined.

Unofficially, some lenders are anticipating the term loan B to launch in the Libor plus low 400 bps context, based on what was said at the SMA meeting. And, previous filings with the Securities and Exchange Commission put B loan pricing at Libor plus 400 bps with a 1.25% Libor floor.

Colfax buying Charter

Proceeds from Colfax's credit facility will be used to help fund the acquisition of Charter International plc for 910p per share, or roughly $14.45, comprised of 730p in cash and a fixed ratio of 0.1241 of a Colfax common share per share. The total consideration is $2.43 billion.

Other funds for the transaction will come from $805 million of new equity from certain existing shareholders and BDT Capital Partners and the issuance of $480 million of shares to Charter International shareholders.

Closing on the acquisition is expected in the first quarter of 2012, subject to approval of both companies' shareholders, court approval in Jersey and other terms and conditions.

Colfax is a Fulton. Md.-based supplier of fluid-handling products, including pumps, fluid handling systems and controls and specialty valves. Charter International is a Dublin-based owner of ESAB, a welding, cutting and automation business, and Howden, an air and gas handling business.

Fundtech sees interest

In other primary news, chatter is that syndication of Fundtech Ltd.'s $225 million senior secured credit facility (B1/B+) has been going well since it launched in late October, with lenders still having until Tuesday to place their orders, according to a market source.

The facility consists of a $25 million five-year revolver and a $200 million six-year term loan talked at Libor plus 600 bps with a 1.5% Libor floor, an original issue discount in the 97 area and 101 soft call protection for one year.

RBC Capital Markets LLC and BMO Capital Markets Corp. are the joint lead arrangers and bookrunners on the deal that will be used to help fund the buyout of the company by GTCR for $23.33 in cash per ordinary share and merger with GTCR's existing portfolio company, BankServ.

In connection with the transaction, BankServ's debt will be refinanced.

Fundtech mezzanine debt

In addition to the credit facility, Fundtech will get $50 million of eight-year senior subordinated mezzanine financing from Newstone Capital Partners to help fund its buyout, and $175 million of equity will be used. When combined with BankServ, it will result in close to $350 million of total equity.

Senior leverage is around 4.0 times and total leverage is just above 5.0 times.

Closing is expected in the fourth quarter, subject to satisfaction of certain conditions. Shareholder approval has already been obtained.

Fundtech is a provider of software services that facilitate payments processing, financial messaging and cash management for financial institutions, and BankServ is a Las Vegas-based software-as-a-service provider of financial services and banking technology. The combined company, Fundtech Inc., would be based in Jersey City, N.J.

BWIC emerges

Moving to the secondary, a new roughly $148.6 million BWIC came to market on Monday morning, and guys are being asked to place their bids by 11 a.m. ET on Tuesday, according to a trader.

The portfolio includes $8.75 million in bonds from seven companies - Avis Budget Holdings LLC, Constellation Brands Inc., Edison Mission, MGM Mirage, Nova Chemicals Corp., Qwest Corp. and Universal Hospital Services.

The remainder of the debt being offered is loans, with some of the larger pieces being Community Health Systems Inc.'s non-extended term loan, CSC Holdings Inc.'s incremental extended term loan B-3, Harland Clarke Holdings Corp. term loan B and UPC Financing Partnership's facility N.

24 Hour holds steady

24 Hour Fitness Worldwide's term loan was flat on Monday even with the company's launch of an amendment that would loosen covenants and increase pricing, according to traders.

One trader had the loan quoted at 97 bid, 98 offered, and a second trader had it quoted at 96½ bid, 98 offered.

Under the amendment, the company is asking to revise the leverage and interest coverage ratios, as well as the capital expenditures requirement, and, in return, pricing will increase to Libor plus 550 bps from Libor plus 475 bps and a 25 bps consent fee will be paid.

J.P. Morgan Securities LLC is leading the amendment.

24 Hour Fitness is a San Ramon, Calif., fitness center company.

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