NCO slides as deal pulled; SuperMedia drop continues; Sinclair reworks tranching, OID

By Sara Rosenberg

New York, Dec. 14 - NCO Group Inc.'s term loan was quoted lower on Wednesday following news that the company decided to remove its proposed credit facility from market as a result of unfavorable conditions, and SuperMedia Inc.'s term loan weakened once again.

In more loan happenings, Sinclair Television Group Inc. came out with changes to its incremental term loans, downsizing the A tranche and, to compensate, upsizing the B tranche, which also saw its original issue discount price tighten.

Also, Phoenix Services LLC's credit facility has been met with good demand, and with the recent firming of ratings, momentum has picked up even more, and the syndication of Liqui-Box's credit facility is going well too.

NCO loan softens

NCO Group's term loan headed down on Wednesday to 98½ bid, 99¾ offered from 99 3/8 bid, 99 7/8 offered as the company canceled plans for a new $870 million credit facility (B1/B), as well as for a $300 million bond deal, according to a trader.

Another source told Prospect News that pulling the deals was due to the company being unhappy with the rates available on the debt.

The credit facility, which had launched on Nov. 30, consisted of a $120 million revolver and a $750 million term loan, both talked at Libor plus 625 bps. The term loan had a 1.25% Libor floor, an original issue discount of 96 to 97 and 101 soft call protection for one year.

Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and RBS Securities Inc. were the lead banks on the deal.

With the cancellation of the financing, the company terminated its cash tender offers for its $200 million of 11 7/8% senior subordinated notes due 2014 and its $165 million of floating-rate senior notes due 2013.

NCO merger on hold

Proceeds from the credit facility and bonds were going to be used to fund the merger of NCO with APAC Customer Services Inc. and to refinance debt at both companies. APAC was acquired by NCO's sponsor, One Equity Partners, earlier this year.

In a news release, the company said that the merger is still being considered, and the entities are looking at options that would be advantageous to stakeholders.

The proposed combined company was expected to be renamed Expert Global Solutions Inc.

NCO is a Horsham, Pa.-based provider of business process outsourcing services. APAC is a Bannockburn, Ill.-based provider of customer care services.

SuperMedia fall progresses

SuperMedia's term loan dropped to 45 bid, 47 offered from 46 bid, 48 offered, continuing its slide from Tuesday, when the company's sub-par buyback offer expired, according to a trader.

The loan had risen as high as 47 bid, 49 offered on Tuesday morning ahead of the term loan tender offer expiration deadline, and earlier in the week, it had been at 46½ bid, 48½ offered. Prior to the launch of the tender on Dec. 7, the debt was seen at 45 bid, 46½ offered.

Under the repurchase offer, the company was proposing a $117 million cash-offer buyback for its term loan debt in a price range of 43 to 50. The tender was successful with the entire cash amount being used to buy back about $235 million of the debt at a price of 493/4.

This was the company's second attempt at a tender. In November, SuperMedia had launched an offer with the same cash size but a price range of 43 to 46. This offer was then pulled because of insufficient interest.

SuperMedia is a Dallas-based directory publisher.

Sinclair shifts funds

Switching to the primary, Sinclair Television moved tranche sizes around in the morning, increasing its incremental term loan B due October 2016 to $372.5 million from $280 million and decreasing its incremental term loan A due March 2016 to $157.5 million from $250 million, according to market sources.

Pricing on the incremental term B was left at Libor plus 300 bps with a 1% Libor floor, but the original issue discount was revised to 99 from 981/2, sources said. The A loan continues to be priced at Libor plus 225 bps.

J.P. Morgan Securities LLC, Wells Fargo Securities LLC and Deutsche Bank Securities Inc., the lead banks on the $530 million deal (Ba1/BB+), asked for recommitments by 5 p.m. ET, with the hope being that allocations will go out on Thursday.

With the news, the company's existing term loan B was unchanged in the secondary market at 98¾ bid, 99¾ offered, a trader added.

Sinclair amending facility

Along with the term loans, Sinclair is looking to amend its existing facility to increase the revolver from $75.4 million, extend the maturity to March 2016 from 2013 and gain flexibility under covenants.

Proceeds from the new term loan borrowings, cash on hand and/or a revolver draw to fund the $385 million purchase of Freedom Communications' broadcast assets and the $200 million acquisition of Four Points Media Group LLC from Cerberus Capital Management LP.

Closing on the Freedom transaction is expected in early January and on the Four Points transaction in late March.

The company had previously stated that for the acquisitions, leverage is anticipated to increase minimally - no more than half a turn - and that the new assets are expected to generate so much free cash flow that leverage should quickly come back down to pre-acquisition levels.

Sinclair is a Hunt Valley, Md.-based television broadcasting company. Freedom is an Irvine, Calif.-based media company operating print publications, broadcast television stations and interactive businesses. Four Points is an owner and operator of seven stations.

Phoenix nets interest

In more primary happenings, Phoenix Services' $245 million credit facility has seen a nice amount of demand in the United States and Europe, and now that Standard & Poor's released its rating on the debt, interest has increased, according to a market source.

The facility, rated Ba3/BB-, consists of a $30 million five-year revolver, a $140 million six-year term loan and a $15 million six-year delayed-draw term loan that is available for three months, all talked at Libor plus 600 bps with a 1.5% Libor floor and an original issue discount of 98, and a $60 million five-year euro equivalent term loan talked at Euribor plus 550 bps with a discount of 98.

BNP Paribas Securities Corp. is leading the deal that will fund the purchase of Gagneraud Industries, a Paris-based provider of metal pre and post production services, and refinance existing debt.

Phoenix Services, a Kennett Square, Pa.-based provider of steel mill services, will have senior leverage of 2.75 times.

Liqui-Box sees orders

Liqui-Box's $105 million credit facility is another deal that is seeing good demand, with lenders still having until Thursday to submit their commitments, according to a market source.

The facility consists of a $20 million five-year revolver and an $85 million six-year term loan B, both talked at Libor plus 575 bps with a 1.5% Libor floor and an original issue discount of 98.

BNP Paribas Securities Corp. and BMO Capital Markets Corp. are leading the deal that will be used, along with roughly $25 million of mezzanine debt, to fund the buyout of the company by the Sterling Group from DuPont.

Liqui-Box, a manufacturer of bag and box flexible packaging for the beverage, dairy and foodservice markets, will have senior leverage of 3.1 times and total leverage of 4.1 times.

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