Cebridge, NPC International break; Electrical Components trims spreads; 24 Hour Fitness tweaks repricing

By Sara Rosenberg

New York, May 2 - Cebridge Connections Inc. and NPC International Inc. freed for trading during Tuesday's market hours, with both companies' first-lien term loan B's seen quoted atop par.

In primary happenings, Electrical Components International Holdings Co. lowered pricing on its credit facility, and 24 Hour Fitness Worldwide Inc.'s recently launched repricing request has been adjusted in the hopes that lenders will find this newest proposal more palatable after a significant amount of push back was felt immediately following the original amendment call.

Cebridge Connections' credit facility broke for trading on Tuesday afternoon, with the $2.1 billion 71/2-year first-lien term loan B (B1/B+) seen at par ¼ bid, par 5/8 offered on the open but then settling down a bit to par bid, par 3/8 offered by the close, according to traders.

The term loan B is priced with an interest rate of Libor plus 225 basis points and contains a step down to Libor plus 200 basis points when leverage is below 6x or the corporate credit rating - currently B2 - improves to B1. During syndication, the term loan B was upsized from $2 billion and the pricing step down was added to the tranche.

Cebridge's $3.255 billion credit facility also contains a $200 million seven-year revolver (B1/B+) with an interest rate of Libor plus 225 basis points and a 50 basis point commitment fee, a $280 million 11/2-year interim term loan and a $675 million eight-year second-lien term loan (Caa1) that is divided into $337.5 million of cash pay debt with an interest rate of Libor plus 450 basis points and $337.5 million of pay-in-kind with an interest rate of Libor plus 600 basis points.

The second-lien term loan was added to the capital structure during syndication as the company decided not to go ahead with a $775 million bond offering that was originally part of its acquisition financing plans.

Pricing on the cash pay portion of the second-lien loan was lowered from original talk of Libor plus 475 basis points during the syndication process.

Call protection on the cash pay portion of the second-lien loan is non-callable for two years, then at 102 in year three and 101 in year four. Originally, the call protection on this paper was expected to be 103 in year one, 102 in year two and 101 in year three, but it too was revised during syndication.

The PIK second-lien debt is non-callable for three years.

Proceeds from the credit facility will be used to fund Cebridge's purchase of Cox Communications Inc.'s cable television systems, with backing by majority investors GS Capital Partners and Oaktree Capital Management LLC.

Goldman Sachs and Credit Suisse are joint lead arrangers on the deal, with Goldman the left lead.

Cebridge is a St. Louis-based provider of cable television and internet access.

NPC trades atop par

Also hitting the secondary on Tuesday was NPC International, with its $300 million term loan B quoted at par 3/8 bid, par 5/8 offered, according to a trader.

The term loan B is priced with an interest rate of Libor plus 175 basis points. During syndication, the tranche was upsized from $275 million, as the company's bond offering was downsized to $175 million from $200 million, and pricing was reverse flexed from Libor plus 225 basis points.

NPC's $375 million credit facility (B1/B+) also contains a $75 million revolver with an interest rate of Libor plus 225 basis points.

JPMorgan and Merrill Lynch are the lead banks on the deal, with JPMorgan the left lead.

Proceeds from the credit facility, along with bond proceeds and $163 million of sponsor equity, will be used to finance Merrill Lynch Global Private Equity's acquisition of the company.

NPC is a Lenexa, Kan., franchisee of Pizza Hut restaurants.

GM trades up

General Motors Corp.'s revolver posted some gains on Tuesday, despite news that April sales were down, according to a trader.

The Detroit-based automaker's revolver closed the day quoted at 95 bid, 95¾ offered, up about a quarter to a half a point from previous levels, the trader said.

On Tuesday, GM announced April numbers that showed U.S. sales of new cars and trucks to be 345,404, down 7% from a year ago.

In addition, in April, total car sales were down 18%, while truck sales were up 2%. Retail sales in April were down 5% compared to year-ago deliveries. Fleet sales were down 10.5%. And, daily rental sales declined by 23% compared to last year.

"Given that the industry came in somewhat below our initial expectations, we are pleased that our retail sales were in line with the targets established in our North America turnaround plan," said Mark LaNeve, GM North America vice president, Vehicle Sales, Service and Marketing, in the release. "Consumers continue to respond very favorably to our new products, particularly the all-new Chevy Tahoe, GMC Yukon and Cadillac Escalade, resulting in a combined 15% sales increase compared to last month."

Electrical Components cuts pricing

As for primary events, Electrical Components lowered pricing on its first-lien term loan B with the addition of a step down, and pricing on the second-lien term loan was reduced as well, according to a market source.

The $155 million seven-year term loan B (B) is now priced with an interest rate of Libor plus 250 basis points, down from original talk at launch of Libor plus 275 basis points, and a step down to Libor plus 225 basis points was added, effective when leverage falls below 4x, the source said.

Meanwhile, the $60 million eight-year second lien term loan (CCC+) is now priced with an interest rate of Libor plus 650 basis points, down from original talk at launch of Libor plus 700 basis points, the source added.

Electrical Components' $250 million senior secured credit facility also contains a $35 million six-year revolver (B).

UBS is the lead arranger on the deal that will be used to fund Francisco Partners' purchase of Electrical Components from Viasystems Group Inc.

Electrical Components is a St. Louis-based manufacturer and marketer of wire harnesses and a provider of value-added assembly services.

24 Hour Fitness revises repricing

24 Hour Fitness modified its term loan B repricing amendment request after being met with lender resistance due to, what some have described as, the aggressive nature of the proposal, according to a market source.

Under the new repricing proposal, the San Ramon, Calif.-based owner and operator of fitness centers is looking to lower the spread on its term loan B to Libor plus 250 basis points as opposed to the originally asked for spread of Libor plus 225 basis points when the repricing was first launched on April 24.

Currently, the term loan B is priced with an interest rate of Libor plus 300 basis points.

After JPMorgan had held the lender call regarding the amendment, some investors voiced concern that a 75 basis point cut in pricing for a company with no physical assets was too aggressive, a different source previously told Prospect News.

At that time, investors were asking for, at the very least, some sort of call protection, while others were anticipating that a repricing could only get done if it was a 50 basis point reduction as opposed to 75 basis points.

Supervalu nets orders

Supervalu Inc.'s $750 million six-year term loan B was "nearly fully subscribed already" by the end of the day Tuesday as commitments were quickly placed by investors after the "very well attended" afternoon retail bank meeting took place, according to a market source.

The term loan B, which is being offered at par, is talked at Libor plus 175 basis points, based on expected rating of Ba3/BB-. Fitch Ratings has already rated the deal at BB.

The company's $4 billion credit facility also includes a $2 billion five-year revolver and a $1.25 billion five-year term loan A, with both those tranches talked at Libor plus 150 basis points.

These pro rata tranches were actually launched in February to agent banks.

During the agent round, nine banks signed on to participate in the deal in top-tier positions - Bank of America, Citigroup Corporate and Investment Banking and Rabobank signed on as co-syndication agents, CoBank and US Bank signed on as co-documentation agents, and Credit Suisse, Merrill Lynch Capital Corp., Sovereign Bank and UBS Investment Bank signed on as senior managing agents.

Royal Bank of Scotland is the sole lead arranger and sole bookrunner on the credit facility.

Proceeds from the credit facility will be used by the Eden Prairie, Minn., supermarket operator to purchase some assets from Albertson's Inc., including the operations of Acme Markets, Bristol Farms, Jewel-Osco, Shaw's Supermarkets, Star Markets, and Albertsons banner stores in the Intermountain, Northwest and Southern California regions.

Supervalu's total consideration is about $12.4 billion in stock, cash and the assumption of about $6.1 billion of Albertson's debt.

Corel closes

Corel Corp. closed on its new $165 million senior secured credit facility (B3/B), according to a company news release, consisting of a $90 million six-year term loan B and a $75 million five-year revolver.

Both the term loan B and the revolver are priced with an interest rate of Libor plus 325 basis points.

Morgan Stanley acted as the lead bank on the deal that was obtained in conjunction with the company's initial public offering of common stock.

Concurrent with the IPO, Corel acquired all of the outstanding securities of WinZip from Vector Capital. The purchase price for the acquisition was about 4.3 million of Corel's common shares.

Proceeds from the credit facility, together with net proceeds of about $69 million from the IPO, were used to repay outstanding debt under the company's existing credit facility, to repay all outstanding debt of WinZip and for general corporate purposes, which may include acquisitions.

Corel is an Ottawa, Ont., packaged software company.

Trizec closes

Trizec Properties Inc. closed on its new $1.3 billion 12-month bridge loan with an interest rate of Libor plus 140 basis points, and two six-month extension options, according to a company news release.

During syndication, pricing on the bridge loan was reduced from Libor plus 170 basis points.

Deutsche Bank acted as the lead bank on the deal.

Proceeds from the bridge loan, along with borrowings under the company's existing unsecured credit facility, cash and the issuance of about 2.5 million common units, were used to fund the acquisition of 13 high-quality Southern California office properties from Arden Realty Inc. for $1.63 billion.

It is anticipated that the outstanding balance on the bridge loan and credit facility will be gradually reduced with proceeds from Trizec's on-going capital recycling program and from permanent mortgage financing on the acquired assets.

Trizec is a Chicago-based real estate investment trust that owns and manages office properties.

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