Axcan, Interactive Data, CPI break; Clear Channel drops; RehabCare down with acquisition

By Sara Rosenberg

New York, Feb. 8 - Axcan Holdings Inc.'s credit facility freed up for trading on Monday, with the multi-draw term loan quoted above its original issue discount price, and Interactive Data Corp. and CPI International Inc. broke as well.

Also in trading, Clear Channel Communications Inc.'s term loan B continued to bounce around and RehabCare Group Inc.'s term loan headed lower after the company revealed that it is being acquired by Kindred Healthcare Inc.

In the primary, General Nutrition Centers Inc., Edwards Ltd. and NBTY Inc. released guidance as their bank deals were presented to lenders during the session, and Pinnacle Security revealed original issue discount talk.

In addition, Carestream Health Inc., Knology Inc. and Spitzer Industries Inc. began circulating pricing on their credit facilities in preparation for their upcoming launches, and Joe's Crab Shack disclosed plans to come to market with a new deal.

Furthermore, Scitor Corp. came out with some changes to its term loan, including lowering pricing, tightening the original issue discount price and adding call protection.

Axcan starts trading

Axcan's credit facility hit the secondary market in the morning, with the $750 million multi-draw six-year term loan quoted at par ¾ bid, 101 offered on the open, according to a trader. The debt then traded as high as 101 bid, 101½ offered before settling in at par 7/8 bid, 101 3/8 offered.

Pricing on the term loan is Libor plus 400 basis points with a 1.5% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

During syndication, the term loan was upsized first from $225 million to $450 million when plans for a $225 million secured notes offering were terminated and then from $450 million to the final size. Also, pricing was reduced from initial talk of Libor plus 475 bps.

The company's $865 million senior secured credit facility also includes a $115 million amended and restated revolver that is basically extending the revolver maturity to 2016 from Feb. 25, 2014.

Axcan buying Eurand

Proceeds from Axcan's term loan, equity and cash on hand will be used to fund the acquisition of Eurand NV for $12.00 per share, or $586.5 million total on a fully diluted basis, to repay Eurand's debt and to repay Axcan's outstanding term loan.

The multi-draw term loan will also be used to redeem or repurchase Axcan's existing 9¼% senior secured notes due March 1, 2015.

Bank of America, RBC Capital Markets, HSBC Securities and Barclays Capital are the joint lead arrangers and bookrunners on the deal.

Axcan is a Mont-Saint-Hilaire, Quebec-based pharmaceutical company focused on the treatment of gastrointestinal disorders. Eurand is an Amsterdam-based specialty pharmaceutical company.

Interactive Data frees up

Interactive Data's roughly $1.3 billion seven-year term loan also began trading on Tuesday, with levels quoted at par 3/8 bid, par 7/8 offered on the open, and then it moved up to par 5/8 bid, 101 1/8 offered, according to a trader.

Pricing on the term loan is Libor plus 350 bps with a 1.25% Libor floor, which was reduced from 1.5% during syndication, and it was issued at a price of par.

Bank of America, Barclays, Credit Suisse and UBS are the lead banks on the deal that is being used to reprice/refinance an existing term loan that was obtained in July 2010 for the company's buyout by Silver Lake and Warburg Pincus.

The existing term loan, which was sized at $1.33 billion at closed and had been paid down to $1.313 billion by Sept. 30, is priced at Libor plus 500 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 97.

Interactive Data is a Bedford, Mass.-based provider of financial market data.

CPI breaks

Another deal to break for trading during the session was CPI International, with its $150 million six-year term loan quoted at par ¼ bid, par ¾ offered on the break, and then it moved up to par ½ bid, 101¼ offered, according to a trader.

Pricing on the term loan is Libor plus 400 bps with a 1% Libor floor, and it was sold at an original issue discount of 991/2.

During syndication, pricing on the loan was trimmed from Libor plus 450 bps, the floor came in from 1.75% and the discount tightened from 99.

UBS Investment Bank is the lead bank on the $180 million senior secured credit facility (B+) that also includes a $30 million five-year revolver priced at Libor plus 450 bps with a 1% Libor floor, and KKR Capital Markets LLC signed on as syndication agent.

CPI funding buyout

Proceeds from CPI's credit facility will be used to help fund the acquisition of the company by Veritas Capital for $19.50 per share in cash and refinance existing debt. The transaction is valued at roughly $525 million.

Other funds for the transaction will come from $215 million of senior notes that priced on Thursday at par to yield 8%, and from $220 million of equity.

Closing is subject to stockholder approval and a number of customary regulatory and other conditions. The transaction is not subject to any financing conditions.

A stockholder meeting to vote on the transaction has been set for Thursday, and closing is targeted for Friday.

CPI is a Palo Alto, Calif.-based provider of microwave, radio frequency, power and control services for critical defense, communications, medical, scientific and other applications.

Clear Channel volatile

Clear Channel's term loan B was all over the place on Tuesday, opening the day at 92¾ bid, 93¼ offered, then dropping all the way down to 91½ bid, 92 offered by evening after spending a lot of time seesawing, according to a trader. On Monday, the paper closed the day at 92½ bid, 93¼ offered.

The trader explained that the paper has been active and jumping around on the company's bond and amendment news. He said that investors had been hoping for a larger paydown on the bank debt and that the disappointment with what is being offered put some pressure on trading levels.

The company is looking to amend its facilities to allow for future extension of senior secured maturities and the incurrence of new debt to repay senior secured loans, reduce the receivables-based revolver to $625 million and allow notes to be incurred instead of loans under the loan accordion feature.

A conference call to launch the amendment took place at 3 p.m. ET on Tuesday, and Citigroup is leading the transaction.

Clear Channel paydown

As a condition to the amendment, Clear Channel must repay $500 million of its senior secured bank debt, which will be funded from a proposed $750 million notes offering.

Remaining funds from the notes will be used to repay at maturity $250 million of the company's 6¼% senior notes due 2011.

The company previously said that amendment requires the consent of a majority of the outstanding commitments under the senior secured and receivables-based facilities, which was already obtained through private negotiations with a number of lenders.

Clear Channel is a San Antonio-based media and entertainment company specializing in mobile and on-demand entertainment and information services.

RehabCare slides

RehabCare's term loan slipped to par ¼ bid, 101 offered from par ¾ bid, 101¼ offered, following an announcement that the company is being purchased by Kindred Healthcare, according to a trader.

While investors are expecting to be paid down at par, the debt will still be around for a little while longer since the acquisition isn't expected to close until around June 30, and the loan has a "pretty thick coupon," which is why it is hovering slightly above par on the news, the trader explained.

Under the agreement, each stockholder of RehabCare common stock will receive $26.00 per share in cash and 0.471 of a share of Kindred common stock. The transaction is valued at around $1.3 billion, including about $400 million of existing debt.

Kindred plans debt

To fund the RehabCare transaction and the refinancing of debt, Kindred has received a $1.85 billion debt commitment from JPMorgan, Morgan Stanley and Citigroup of which $1.6 billion will be funded and about $250 million will be undrawn revolver capacity.

Adjusted leverage of the combined company is expected to be around 4.5 times at the end of 2011.

Closing on the acquisition is subject to approvals by the stockholders of both companies, completion of financing, clearance under the provisions of the Hart-Scott-Rodino Act of 1976, and the receipt of certain licensure and regulatory approvals.

RehabCare is a St. Louis-based provider of post-acute care. Kindred is a Louisville, Ky.-based health-care services company.

General Nutrition sets talk

In more loan happenings, General Nutrition Centers held a bank meeting on Tuesday to kick off syndication on its proposed $1.18 billion credit facility, and in connection with the launch, price talk was announced, according to sources.

The $80 million five-year revolver and the $1.1 billion seven-year term loan B are both being talked at Libor plus 350 bps; however, the revolver has no Libor floor and is being offered at an original issue discount of 99, and the term loan B has a 1.25% Libor floor and is being offered at an original issue discount of 991/2, sources said.

JPMorgan and Goldman Sachs are the lead banks on the deal that will be used to refinance existing debt.

General Nutrition Centers is a Pittsburgh-based specialty retailer of nutritional products, including vitamin, mineral, herbal and other specialty supplements and sports nutrition, diet and energy products.

Edwards guidance surfaces

Edwards also held a bank meeting during the session, launching its approximately $700 million term loan due May 2016 with talk of Libor plus 425 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

Deutsche Bank and JPMorgan are the lead banks on the deal that will be used to refinance existing debt, including a term loan that is basically being amended and extended through this new deal, and to fund a dividend payment.

Corporate ratings are expected at B2/B+.

Edwards is a Crawley, England-based supplier of vacuum and abatement equipment and services.

NBTY details revealed

Structure and price talk came out on NBTY on Tuesday, as it held a conference call in the afternoon to launch its repricing/refinancing deal, according to a market source.

The $1.9 billion credit facility - comprised of a $150 million revolver due Oct. 1, 2015 and a $1.75 billion covenant-light term loan due Oct. 1, 2017 - is talked at Libor plus 325 bps with a 1.5% Libor floor, the source said.

Upfront fees on the revolver are 50 bps for commitments of $20 million or more, and 37.5 bps for commitments of less than $20 million, while the term loan is being offered at par.

And, the term loan includes 101 soft call protection for six months, the source added.

NBTY lead banks

Barclays, Bank of America and Credit Suisse are the lead banks on NBTY's deal that will be used to replace an existing facility obtained in October 2010 with the company's buyout by the Carlyle Group.

The existing deal consists of a $250 million revolver and a $250 million term loan A, both priced at Libor plus 425 bps with a 1.75% Libor floor, and a $1.5 billion B loan priced at Libor plus 450 bps with a 1.75% Libor floor that was sold at a discount of 99.

Commitments toward the new facility are due on Feb. 18.

NBTY is a Ronkonkoma, N.Y.-based manufacturer and marketer of nutritional supplements.

Pinnacle Security OID

Pinnacle Security is offering its $130 million term loan with an original issue discount of 99, according to a market source. Price talk had come out prior to the Tuesday bank meeting at Libor plus 650 bps with a 1.5% Libor floor.

Bank of America is the lead bank on the deal that will be used to refinance existing debt.

Pinnacle Security is an Orem, Utah-based provider of residential and commercial security systems.

Carestream floats talk

Carestream Health started telling lenders price talk on its proposed $2 billion credit facility as the deal is getting ready to launch with a bank meeting on Thursday afternoon, according to sources.

Both the $150 million five-year revolver and the $1.85 billion six-year term loan B are being talked at Libor plus 350 bps with a 1.5% Libor floor and an original issue discount of 991/2, sources said.

Credit Suisse, Goldman Sachs and Bank of America are the lead banks on the deal that will be used to refinance existing first- and second-lien term loans and pay a dividend.

Covenants in the new deal will be similar to covenants in the existing facility, sources added.

Following completion of the deal, Carestream, a Rochester, N.Y.-based provider of medical and dental imaging products and services, will have first-lien and total leverage of 3.9 times.

Knology guidance

Knology also began circulating price talk on its new bank deal ahead of the Wednesday call that will officially kick start syndication, according to a market source.

The debt consists of a $545 million term loan B due August 2017 that is talked at Libor plus 300 bps with a 1.5% Libor floor, and a $175 million term loan A due February 2016 that is talked at Libor plus 325 bps with no floor, the source said. Both tranches are being offered at par, and the term loan B includes 101 soft call protection for one year.

Credit Suisse is the lead bank on the $720 million deal that will be used to refinance existing term loan B and term loan A debt priced at Libor plus 400 bps. The existing B loan has a 1.5% Libor floor and was sold at a discount of 99 when it was obtained in October 2010 to fund the acquisition of Sunflower Broadband and to refinance existing debt.

Knology is a West Point, Ga.-based provider of interactive communications and entertainment services.

Spitzer coming soon

Spitzer Industries is scheduled to launch a $120 million six-year term loan on Thursday, and price talk on the deal emerged at Libor plus 425 bps with a 1.5% Libor floor and an original issue discount of 991/2, according to a market source, who said there's also 101 soft call protection for one year.

Credit Suisse is the lead bank on the deal that will be used to refinance existing debt and fund a dividend payment.

Spitzer is a Houston-based fabricator of specialized equipment and systems, pressure vessels and other custom weldments that serve the oil and gas industry.

Joe's readies deal

Joe's Crab Shack has set a bank meeting for Feb. 16 to launch a new credit facility, according to a market source, who said that details on the financing on not yet available.

GE Capital and Golub Capital are leading the deal that will be used for a recapitalization.

Joe's Crab Shack is a Sugar Land, Texas-based chain of beach-themed seafood casual dining restaurants.

Scitor revises loan

Regarding in-market deals, Scitor reworked its $275 million term loan, lowering pricing and the original issue discount and adding 101 soft call protection for one year, according to a market source.

Pricing on the term loan is now Libor plus 350 bps with a step to Libor plus 325 bps when senior secured leverage is less than 3.75 times, compared to initial talk of Libor plus 400 bps, the source said.

And, while the 1.5% Libor floor was left unchanged, the original issue discount tightened to 99½ from 99, the source continued.

The company's $305 million credit facility (B2/B) also provides for a $30 million revolver.

JPMorgan, Jefferies, GE Capital and RBC are the lead banks on the deal that will be used for a recapitalization, and are asking for recommitments by 5 p.m. ET on Wednesday.

Scitor is a provider of systems engineering, financial and management consulting, information services, and other services for corporate customers and government programs.

SourceMedia closes

In other news, SourceMedia Inc. said in a news release on Tuesday that it completed its debt refinancing that provides additional growth capital.

The refinancing was funded with a new $170 million credit facility (B1/B+) consisting of a $25 million revolver and a $145 million term loan, with both tranches priced at Libor plus 500 bps with a 1.5% Libor floor and issued at an original issue discount of 99. The term loan has 101 soft call protection for one year.

During syndication, pricing on the facility was reduced from Libor plus 525 bps, the discount tightened from 98½ and the call protection was added to the term loan.

Citigroup, GE Capital and BMO acted as the lead banks on the deal for the New York-based provider of news, analysis, research, data and insights for members of the financial services community and related fields in professional services and technology.

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