Peabody Energy, Envision finalize pricing; Caesars talks $3 billion loan; funds see inflows

By Paul A. Harris

Portland, Ore., Sept. 20 - The LCDX 20 index of bank loan credit default swaps finished the Friday session at 104 3/8 bid, 104 7/8 offered, unchanged on the day.

Cash continues to gush into the bank loan funds, a market source said.

The loan funds saw $1.327 billion of inflows for the week to Wednesday, the source said, citing information contained in a weekly report from Lipper-AMG..

In the primary market, Peabody Energy Corp. and Envision Pharmaceutical Holdings Inc. finalized pricing on their term loans.

And Caesars Entertainment Resort Properties set talk on its $3 billion seven-year first-lien term loan.

Peabody at Libor plus 325 bps

Peabody Energy finalized pricing on its $1.2 seven-year covenant-light term loan B at Libor plus 325 basis points, an increase from earlier talk of Libor plus 275 bps, according to a market source.

The B loan still has a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

Amortization on the term B is 1% per annum.

The deal will close and fund on Tuesday.

The senior secured credit facility (Ba1/BB+/BB+) also includes a $1.65 billion five-year revolver.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., HSBC Securities (USA) Inc., Morgan Stanley Senior Funding Inc., PNC Capital Markets LLC and RBS Securities Inc. are the lead banks on the deal.

Proceeds will be used to repay term loan borrowings.

Peabody is a St. Louis-based coal producer.

Envision finalizes pricing

Envision Pharmaceutical (Envision Acquisition Co. LLC) set final pricing for $580 million of term loans, a market source said on Friday.

A $405 million seven-year first-lien term loan (B2/B) is priced at Libor plus 475 basis points, increased from the 400 bps to 425 bps spread talk. The 1% Libor floor and 99 OID are unchanged. The 101 soft call protection increases to one year from six months.

A $175 million eight-year second-lien term loan (Caa2/CCC+) is priced at Libor plus 875 bps, versus price talk of Libor plus 800 bps to 825 bps. The 1% Libor floor remains unchanged.

The deal is discounted to 98, versus the 98.5 OID talk. The second-lien tranche has hard calls at 103 in the first year and 102 in the second year; those premiums increased from 102 and 101, respectively.

The $645 million credit facility also has a $65 million five-year revolver.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Credit Suisse Securities (USA) LLC are the lead banks on the financing.

Proceeds will be used to help fund the buyout of the company by TPG..

Closing is expected in the fourth quarter, subject to customary conditions and regulatory clearances.

As part of the transaction, management and other senior executives will take a significant minority stake in the company.

Envision is a Twinsburg, Ohio-based full-service pharmacy benefit management company.

Air Canada sets pricing

Air Canada finalized pricing on its six-year term loan B (B2/B+/BB) at Libor plus 450 basis points with a 1% Libor floor and an original issue discount of 99, a market source said on Friday.

Soft call protection is 102 in year one and 101 in year two, revised earlier from just 101 for six months, sources said.

The deal was downsized from $700 million and added a new $400 million senior first-lien bond tranche to its notes offering, according to sources.

The company's now $400 million senior secured credit facility, down from $800 million, also includes a $100 million four-year revolver.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc. and TD Securities (USA) LLC are the bookrunners on the deal.

Proceeds will be used to refinance existing debt, including 9¼% senior secured notes due 2015, 10 1/8% senior secured notes due 2015 and 12% senior second-lien notes due 2016.

The borrower is a Montreal-based airline.

Albertson's finalizes pricing

Albertson's LLC finalized pricing for its $300 million incremental senior secured covenant-light term loan B-2 due March 21, 2019 at Libor plus 375 basis points with a 1% Libor.

The spread and floor came on top of talk.

The deal came discounted to 99.5, richer than the 99 OID talk that was circulated.

Included in the term loan is a ticking fee of half the spread from days 31 to 60 and the full spread thereafter.

The loan has the same call protection as the existing term loan, and that call protection expires on May 9, 2014, the source said.

Amortization is 1% per annum.

The deal is expected to close and fund in October.

Citigroup Global Markets Inc., Bank of America Merrill Lynch and Goldman Sachs Bank USA are the lead arrangers and joint bookrunners on the deal.

Proceeds will be used to fund the acquisition of Lubbock, Texas-based United Supermarkets LLC.

In connection with this transaction, the company is seeking an amendment to its existing credit facility to allow for the acquisition and waive the 4 times total secured net leverage ratio, the source added.

Albertson's is an Idaho-based food and drug retailer.

Caesars talks $3 billion

Caesars Entertainment talked its $3 billion seven-year senior secured first-lien term loan (B2/B) with a Libor spread of 550 basis points and a 1% Libor floor, with an original issue discount of 99, a market source said on Friday.

The loan is callable after one year at 102 and after two years at 101. It amortizes at 1% annually.

Commitments are due on Sept. 27.

Joint lead arranger Citigroup is the administrative agent. BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., JP Morgan Securities LLC, Goldman Sachs & Co, Macquarie, Morgan Stanley & Co. and UBS Investment Bank are also joint lead arrangers.

The $3,269,500,000 senior secured credit facility also has $269.5 million revolver.

Proceeds will be used to help refinance about $4.4 billion of CMBS debt and the $450 million senior secured credit facility entered into by Octavius Linq Holding Co. LLC, an indirect subsidiary of Caesars.

Concurrently with the closing of the new financing, Caesars intends to transfer the equity interests in the subsidiaries of Octavius/Linq Holdings that own the assets comprising Octavius Tower at Caesars Palace Las Vegas and Project Linq to Rio Properties, LLC, an indirect subsidiary of Caesars, which will be a borrower and issuer under the new financing.

Caesars is a Las Vegas-based diversified casino-entertainment company.

Mitchell sets talk

Mitchell International talked its $490 million seven-year first-lien term loan at Libor plus 375 to 400 basis points with a 1% Libor floor at 99, according to a market source.

The first-lien loan has a 101 soft call for six months.

Meanwhile, a $245 million eight-year second-lien term loan is talked at a Libor spread of 775 to 800 bps with a 1% Libor floor at 99.

Commitments are due Oct. 1.

Bank of America Merrill Lynch, Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., Mizuho Securities USA Inc., KKR Capital Markets, RBC Capital Markets LLC and SMBC are the leads on the deal, with Bank of America the left lead on the first-lien debt and Goldman the left lead on the second-lien debt.

The facility also has a $50 million five-year revolver.

Proceeds will be used to help fund the buyout of the company by KKR from Aurora Capital Group.

Closing is expected in the fourth quarter, subject to customary conditions, including regulatory approval.

Mitchell is a San Diego-based provider of technology, connectivity and information solutions to the property & casualty claims and collision repair industries.

e-Rewards talks $275 million

e-Rewards Inc. talked a $275 million seven-year term loan B at Libor plus 375 to 400 basis points with a 1% Libor floor at 99 to 99.5, a market source said on Friday.

The loan amortizes at an annual rate of 1%.

The term loan is part of an overall $315 million senior secured credit facility.

Morgan Stanley Senior Funding Inc. is the lead bank on the deal.

e-Rewards is a Plano, Texas-based permission-based digital data collection and reporting company.

Learfield sets bank meeting

Learfield Communications, Inc. plans to participate in a Wednesday bank meeting to discuss a proposed $300 million credit facility with lenders.

The deal is comprised of a $215 million seven-year first-lien term loan and an $85 million eight-year second-lien term loan.

Deutsche Bank Securities Inc. is the left lead. GE Capital Markets is the joint lead.

Proceeds will be used to fund the LBO by Providence Equity.

The borrower is a college sports multimedia rights marketing company.

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