Butler Schein breaks; Boyd Gaming rises as amendment gets done; Citadel levels tighten

By Sara Rosenberg

New York, Dec. 22 - Butler Schein Animal Health's credit facility allocated and freed up for trading on Tuesday, with the term loan B quoted above its original issue discount price, and Boyd Gaming Corp.'s revolver was stronger on the back of the company's announcement that it completed an amendment.

In other news, the bid on Citadel Broadcasting Corp.'s term loan B inched higher while the offer came in a little, and TRW Automotive Holdings Corp.'s new term loans were steady in trading as the company revealed that the debt closed and funded.

Butler Schein frees to trade

Butler Schein Animal Health's credit facility hit the secondary market on Tuesday, with the term loan B quoted at par bid on the break, according to a market source.

Then by late afternoon, the term loan had edged its way a little higher with levels quoted at par ¼ bid, par ¾ offered, a second source added.

The $320 million term loan B is priced at Libor plus 350 basis points with a step-down to Libor plus 325 bps when leverage is less than 2.5 times.

In addition, the term loan B has a 2% Libor floor and was sold at an original issue discount of 991/2.

During syndication, the term loan B was upsized from $300 million and the original issue discount was tightened from 99.

Butler Schein also getting revolver

In addition to the term loan B, Butler Schein's $350 million credit facility (B1/BB) also includes a $30 million revolver that is priced at Libor plus 350 bps.

JPMorgan is the lead bank on the deal that will be used to help fund the combination of Henry Schein Inc.'s U.S. animal health businesses and Butler Animal Health Supply, and to refinance debt.

The new company will be 50.1% owned by Henry Schein and 49.9% owned by the owners of Butler Animal Health Supply, including Oak Hill Capital Partners and the Ashkin Family Group.

Closing on the transaction is expected by year-end.

Butler Schein Animal Health is a Dublin, Ohio-based companion animal health distribution company with combined revenues for the last 12 months of about $850 million.

Boyd Gaming gains ground

Boyd Gaming's revolver moved higher on Tuesday on the heels of the company's late Monday announcement that the facility was successfully amended to reduce the size and change covenants, according to a trader.

The revolver was quoted at 89 bid, 92 offered, up from 88 bid, 91 offered, the trader said.

Under the amendment, the size of the facility was lowered to $3 billion from $4 billion.

Also, the maximum funded debt ratio was changed to 7.00 times from 6.50 times for the four quarters ending on March 31, 2011, 6.75 times from 5.25 times for the four quarters ending on June 30, 2011, 6.50 times from 5.25 times for the four quarters ending on Sept. 30, 2011, 6.00 times from 5.25 times for the four quarters ending on Dec. 31, 2011 and 5.50 times from 5.25 times for the four quarters ending on March 31, 2012.

And, the maximum leverage ratio was decreased to 7.25 from 7.50 for the calendar quarter ending Dec. 31, 2010. It was, however, left unchanged through Sept. 30, 2010, ranging from 6.50 to 7.25.

Boyd Gaming is a Las Vegas-based owner and operator of gaming entertainment properties.

Citadel bid up

Citadel Broadcasting saw levels on its term loan B tighten as investors had some time to process the company's Chapter 11 filing and financial restructuring plan, according to a trader.

The term loan B was quoted at 74 bid, 75 offered, compared to Monday's closing levels of 73¾ bid, 75¼ offered, the trader said.

Under the company's proposed restructuring, its $2.1 billion secured credit facility will be converted into a new $762.5 million term loan.

Holders of senior secured claims will receive a pro rata share of the new term loan and 90% of the new common stock in the reorganized company.

In addition, the plan proposes that holders of unsecured claims, including the secured lenders' deficiency claim of about $900 million, unsecured notes and general unsecured claims will have the option to receive either a pro rata share of cash in an amount equal to 5% of the unsecured claim capped at $2 million or 10% of the new common stock.

Citadel restructuring net support

Upon announcing its restructuring plan, Citadel revealed that the proposal was already agreed upon by over 60% of its senior secured lenders.

To fund its restructuring, the company will have access to more than $36 million of cash on hand, as well as all cash flow from operations.

And, as a result of the restructuring, about $1.4 billion of the company's debt would be extinguished.

Citadel is a Las Vegas-based radio broadcasting company.

TRW holds firm

TRW Automotive's news term loans were flat in the secondary market following the company's announcement that the debt closed and funded on Monday, according to a trader.

The term loan A-2 was quoted at par bid, par ½ offered, and the term loan B-3 was quoted at par ¼ bid, par ¾ offered, with both tranches unchanged from previous levels, the trader said.

The $225 million term loan A-2 due May 30, 2015 has pricing that can range from Libor plus 475 basis points to 600 bps based on leverage, and the $175 million term loan B-3 due May 30, 2016 has pricing that can range from Libor plus 450 bps to 600 bps based on leverage.

Proceeds from the term loans, along with cash on hand, were used to repay the company's existing term loans.

TRW amends and extends

On top of getting the new term loans, TRW Automotive amended its revolving credit facility, extending $845 million in commitments to Nov. 30, 2014 from May 9, 2012.

The company has an additional $411 million in revolver commitments until May 9, 2012.

Pricing on the extended revolver can range from Libor plus 375 bps to 600 bps and the commitment fee can range from 50 bps to 75 bps, based on leverage. However, the two lowest spreads on the pricing grid are only available once the company delivers financial statements for the first quarter in 2010.

JPMorgan and Bank of America acted as the lead arrangers on the deal, with JPMorgan the administrative agent.

TRW Automotive is a Livonia, Mich.-based automotive supplier.

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