SunGard sets launch, investors expecting pricing at high end of guidance; EnviroSolutions breaks in 101s

By Sara Rosenberg

New York, July 5 - SunGard Data Systems Inc. has officially scheduled its retail bank meeting and has even talked to investors about pricing guidance, with the insinuation being that the spread will most likely fall on the higher end of talk.

Meanwhile, EnviroSolutions Holdings Inc. allocated its credit facility on Tuesday, with the term loan freeing up for trading in the 101 context in an otherwise sleepy post long holiday weekend secondary loan market.

SunGard has firmed up timing for the retail launch of its $5 billion credit facility as a bank meeting has been scheduled for Thursday - a move that has some investors scratching their heads in confusion since it is a massive deal and many market players are expected to be on extended fourth of July vacation this week.

However, the syndicate has been said to be talking to some institutional investors ahead of the launch, with speculation being that the "big guys" were the ones who were approached, to get a feel for market appetite, a market source told Prospect News.

The deal will be launched as expected, with a $1 billion six-year revolver tranche and a $4 billion 71/2-year term loan tranche that has a $500 million carve-out for European investors, the market source said.

The term loan is being talked at Libor plus 250 to 275 basis points, but institutional investors are being told to expect pricing to come at the higher end of guidance, the source continued.

The revolver is being talked around Libor plus 275 basis points, the source added.

Both tranches were expected to carry an initial interest rate of Libor plus 250 basis points, according to a commitment letter previously filed with the Securities and Exchange Commission, but there is and always was a 25 basis points potential flex up built in to the commitment.

The deal was originally anticipated to launch during the week of June 20, although once that week came and went, expectations shifted to a July launch, with specific timing unavailable until now.

JPMorgan and Citigroup are joint lead arrangers on the deal, and JPMorgan, Citigroup and Deutsche Bank are joint bookrunners. JPMorgan is also acting as administrative agent, and Deutsche and Citi are acting as co-syndication agents.

SunGard has already gotten commitments from around seven or eight banks, "in addition to the five banks leading the deal", through the senior managing agents process that began with a launch in May, the market source added.

Proceeds from the credit facility will be used to help fund Solar Capital Corp.'s leveraged buyout of SunGard.

In addition to the credit facility, the company is looking to issue $3 billion of senior unsecured and/or senior subordinated notes in a Rule 144A offering or get a $3 billion bridge loan, a $500 million six-year receivables facility and $3.5 billion in equity financing.

SunGard's $250 million 3.75% senior notes due 2009 and $250 4.875% senior notes due 2014, which were issued under a single indenture in January 2004, will remain outstanding after completion of the leveraged buyout.

The seven private equity investment firms that joined together to form Solar Capital to execute the purchase include Silver Lake Partners, Bain Capital, The Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. LP, Providence Equity Partners and Texas Pacific Group.

Under the acquisition agreement, the consortium agreed to purchase SunGard in a transaction valued at approximately $11.3 billion. SunGard stockholders will receive $36 in cash for each share of common stock.

Sungard is a Wayne, Pa., provider of integrated software and processing solutions, primarily for financial services.

EnviroSolutions breaks

EnviroSolutions' $185 million term loan opened for trading around 101 bid, 101¼ offered and then proceeded to move up to the 101¼ bid, 101½ offered context by the end of the day, according to a trader.

The term loan, which was upsized from an original size at launch of $175 million, is priced with an interest rate of Libor plus 350 basis points. Pricing on the term loan came in from initial price talk of Libor plus 375 to 400 basis points during syndication as the deal was oversubscribed.

EnviroSolutions' $225 million senior secured credit facility (B2/B-) also contains a $40 million revolver with an interest rate of Libor plus 350 basis points. This tranche was left unchanged in terms of pricing and size throughout syndication.

Deutsche Bank and Lehman Brothers are the lead banks on the credit facility, with Deutsche left lead.

Proceeds will be used to refinance existing debt.

EnviroSolutions is a Chantilly, Va., integrated solid waste management company.

Silgan closes

Silgan Holdings Inc. closed on its new $1 billion credit facility (Ba3/BB) consisting of a $425 million term loan A due June 30, 2011 with an interest rate of Libor plus 112.5 basis points, a $450 million revolver due June 30, 2011 with an interest rate of Libor plus 112.5 basis points and a $125 million term loan B due June 30, 2012 with an interest rate of Libor plus 125 basis points.

The term loan B was originally sized at $225 million and the term loan A was originally sized at $325 million, but the syndicate opted to shift $100 million from the B into the A during syndication.

In addition, pricing on the term loan B was reverse flexed from Libor plus 150 basis points during syndication as well.

Deutsche Bank Securities Inc. and Banc of America Securities LLC acted as the lead banks on the deal, with Deutsche left lead.

Proceeds from the new facility were used to refinance the company's existing senior secured credit facility. Prior to the refinancing, the interest rate for term loan A and revolving loans was Libor plus 150 basis points and the interest rate for term B loans was Libor plus 175 basis points.

The new credit facility also provides the company with an incremental uncommitted term loan facility of up to an additional $350 million, which may be used to finance acquisitions and for other permitted purposes.

Silgan is a Stamford, Conn., supplier of consumer goods packaging products.

Building Materials closes

Building Materials Holding Corp. closed on its new $500 million credit facility that essentially upsized and repriced its existing $325 million credit facility, with the extra liquidity available for future acquisitions.

The facility contains a $125 million term loan B that is basically the company's existing $125 million term loan B rolled into this new deal with lower pricing. Existing lenders were asked to recommit to the B loan at pricing of Libor plus 175 basis points, down from previous pricing of Libor plus 200 basis points.

The facility also contains a $300 million revolver and a $75 million term loan A, with pricing on both pro rata tranches based on a grid that can range from Libor plus 75 to 200 basis points. Initial pricing on the tranches falls at the low end of the pricing grid.

This $300 million revolver replaced the company's existing $200 million revolver and the term loan A is basically a new tranche that was added into the credit structure.

Wells Fargo acted as sole lead bank on the deal.

With this transaction, total leverage is now around 1.3x.

Building Material Holding Corp. is a San Francisco-based provider of building products and construction services.

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