J.G. Wentworth, RCN, Callon set talk; Sabre tweaks deal; Berry flexes; Masterplan breaks; ACS falls

By Sara Rosenberg

New York, March 20 - J.G. Wentworth LLC, RCN Corp. and Callon Petroleum Co. came out with price talk on their credit facilities as all three deals were launched during Tuesday's market hours.

In other primary news, Sabre Holdings Corp. reworked its credit facility structure by eliminating the second-lien term loan, upsizing the first-lien term loan B and adding a step down in pricing to the term loan B tranche, and Berry Plastics Group Inc. increased price talk on its term loan B.

In secondary happenings, Masterplan Inc.'s credit facility freed up for trading, with the first-lien term loan quoted atop par, and Affiliated Computer Services, Inc.'s (ACS) term loan B softened on paydown fears after a buyout bid for the company surfaced.

J.G. Wentworth released price talk on its proposed $425 million first- and second-lien credit facility as the transaction was presented to lenders with a bank meeting in the morning, according to a market source.

The $325 million first-lien term loan (B2/B) was launched with talk of Libor plus 225 basis points to 250 bps, and the $100 million second-lien term loan (Caa1/B-) was launched with talk of Libor plus 525 bps to 550 bps, the source said.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

Deutsche Bank, Bear Stearns and Goldman Sachs are the lead banks on the deal, with Deutsche the left lead.

Proceeds will be used to repay the company's second-lien term loan and to pay a dividend.

J.G. Wentworth is a Bryn Mawr, Pa., company that provides services to individuals who need to access the capital markets by exchanging some or all of their structured settlement or annuity for immediate cash payment.

RCN price talk

RCN also held a bank meeting on Tuesday to kick off syndication on its $595 million credit facility, at which time price talk on this deal emerged as well, according to a market source.

The company's $75 million revolver was launched with talk of Libor plus 175 bps to 200 bps and its $520 million covenant-light term loan B was launched with talk of Libor plus 200 bps to 225 bps, the source said.

Deutsche Bank, Citigroup and SocGen are the bookrunners on the deal, with Deutsche acting as sole lead arranger.

Proceeds will be used to refinance existing first-lien debt, to tender for second-lien convertibles and to pay a special dividend to shareholders.

RCN is a Herndon, Va.-based provider of video, data and voice services.

Callon spread guidance

Also on the price talk front, Callon Petroleum released guidance in the Libor plus 600 bps area on its $200 million seven-year synthetic revolving credit facility as a conference call was held to launch the deal, according to a market source.

The synthetic revolver carries call protection of 102 in year one and 101 in year two, the source added.

Merrill Lynch is the lead bank on the deal.

Proceeds will be used to help fund the acquisition of BP Exploration and Production Co.'s 80% working interest in the Entrada Field. Callon will pay an initial price of $150 million for Entrada and an additional $40 million after the field produces 12.5 million barrels of oil equivalent.

In connection with this new deal, Callon is amending its existing credit facility, increasing fees and interest rates and lowering the borrowing base to $50 million from $75 million.

The transaction is expected to close on or before April 16.

Callon is a Natchez, Miss., explorer, developer, acquirer and operator of oil and gas properties.

Sabre reworks deal

Sabre made some changes to its $3.515 billion senior secured credit facility on Tuesday, including moving all second-lien term loan funds into the first-lien term loan B and adding a pricing step down to the upsized term loan B, according to a market source.

The 71/2-year first-lien term loan B (B1/B+) is now sized at $3.015 billion, up from $2.715 billion, and while pricing firmed up in line with initial talk at Libor plus 225 bps, a step down was added under which the spread can drop to Libor plus 200 bps when secured leverage is less than 4.0 times, the source said.

In connection with the first-lien term loan B upsizing, the company eliminated its $300 million second-lien term loan (B3/B-), which was being talked at Libor plus 500 bps with call protection of 102 in year one and 101 in year two, the source continued.

Furthermore, pricing on the company's $500 million six-year revolving credit facility (B1/B+) - size unchanged - firmed up in line with initial talk at Libor plus 225 bps, the source added.

Deutsche Bank, Merrill Lynch, Goldman Sachs and Morgan Stanley are the lead banks on the deal, with Deutsche the left lead.

Proceeds will be used to help fund the leveraged buyout of Sabre Holdings Corp. by Silver Lake Partners and Texas Pacific Group, to refinance certain debt and for general corporate purposes.

Under the leveraged buyout agreement, Silver Lake and Texas Pacific will acquire the company for $32.75 per share in cash. The transaction is valued at about $5 billion, including the assumption of about $550 million in net debt.

Sabre is a Southlake, Texas, retailer of travel products and provider of distribution and technology services for the travel industry.

Berry Plastics raises price talk

Berry Plastics increased price talk on its $1.2 billion senior secured term loan B to Libor plus 200 bps from original talk at launch of Libor plus 175 bps following the release of Ba3/B+ ratings, according to a market source.

The company's $1.6 billion credit facility also includes a $400 million asset-based revolver.

Credit Suisse and Deutsche Bank are the joint lead arrangers on the term loan, with Credit Suisse as administrative agent, Deutsche Bank as syndication agent and Bank of America, Goldman Sachs, Citigroup, JPMorgan and Lehman as co-documentation agents.

Bank of America and Goldman Sachs are the joint lead arrangers on the asset-based revolver, with Bank of American as administrative agent, Goldman Sachs as syndication agent and Credit Suisse, Deutsche Bank, Citigroup, JPMorgan and Lehman as co-documentation agents.

The new deal is being obtained in connection with the company's stock-for-stock merger with Covalence Specialty Materials Holding Corp.

Proceeds from the facility will be used to refinance the outstanding credit facilities at Covalence and Berry.

Closing of the merger is expected to occur in April, subject to the receipt of required regulatory approvals.

Berry is an Evansville, Ind., plastic packaging company.

US Airways ups spread

US Airways Group Inc. increased pricing on its $1.6 billion term loan (B2/B/BB-) again, this time bumping it to Libor plus 250 bps from most recent talk of Libor plus 225 bps, according to a market source.

Just last week, pricing had been flexed up to Libor plus 225 bps from original talk at launch of Libor plus 200 bps as a result of weaker-than-anticipated ratings.

Citigroup and Morgan Stanley are the joint lead arrangers on the deal, with Citigroup the administrative agent, Morgan Stanley the syndication agent and GE Commercial Finance the documentation agent.

Proceeds will be used to refinance $1.25 billion of the company's existing senior secured credit facility, to refinance $325 million of unsecured debt and to raise incremental liquidity.

US Airways is a Tempe, Ariz.-based airline.

Masterplan frees to trade

Moving to the secondary market, Masterplan's credit facility allocated and broke for trading, with the $140 million first-lien term loan (B1/B) quoted at par 3/8 bid, par ¾ offered, according to a market source.

The first-lien term loan is priced at Libor plus 250 bps with a step down to Libor plus 225 bps at 4.5 times leverage. During syndication, the tranche was upsized from $130 million, the pricing step down was added and the covenant package was changed so that there is a debt incurrence test rather than leverage and interest coverage ratios.

Masterplan's $192 million credit facility also includes a $20 million revolver (B1/B) priced at Libor plus 250 bps and a $32 million second-lien term loan that was placed with Ares. During syndication, the second-lien loan was downsized from $42 million following the first-lien term loan upsizing.

The revolver has a senior secured leverage covenant, but only if it is drawn.

Bear Stearns is the lead bank on the deal.

Proceeds are being used to help fund Berkshire Partners LLC's acquisition of Masterplan and ReMedPar, Inc. from Three Cities Research and Camden Partners Holdings.

Leverage at close will be 6.1 times.

Masterplan is a Chatsworth, Calif., provider of service, maintenance and asset management for medical equipment to hospitals, integrated health systems and patient facilities. ReMedPar is a Goodlettsville, Tenn., provider of sourced and refurbished medical equipment parts.

Affiliated Computer drops on buyout bid

Affiliated Computer's term loan B fell by about half a point during trading hours as investors became nervous over a potential par takedown following the emergence of a public-to-private bid for the company, according to a trader.

The term loan B ended the session at par ¼ bid, par 5/8 offered, down from previous levels of par ¾ bid, 101 ¼ offered, the trader said.

On Tuesday, Darwin Deason, founder and chairman of Affiliated Computer, and Cerberus Capital Management LP announced that they would like to purchase the company for $59.25 per share, or approximately $8.2 billion, including debt that would either be refinanced or remain outstanding.

The proposal is subject to the negotiation of mutually satisfactory definitive transaction agreements.

To back the buyout bid, the investor group has engaged Citigroup to arrange the potential financing, which would include an up to $4.05 billion senior secured credit facility and up to $2.515 billion of high-yield notes.

Affiliated Computer is a Dallas-based provider of business process outsourcing and information technology services.

Transeastern trades higher

Transeastern's bank debt was stronger on Tuesday, pushed up by recent positively viewed remarks that have come out of parent company, Technical Olympic USA Inc., according to a trader.

The bank debt ended the session at 99 bid, par offered, up from 97 bid, 98 offered, the trader said.

"[Technical Olympic] said that they reserved money for the liability. They gave a low number and a high number and people liked the numbers," the trader explained.

Technical Olympic said that they have accrued $275 million in connection with a potential restructuring of the Transeastern. That amount reflects its estimate of the low end of the range of a potential loss as determined by taking the difference between the estimated fair market value of the consideration the company expects to pay in connection with the global settlement less the estimated fair market value of the business the company would acquire pursuant to its proposal. The estimate of the high end of the range is $388 million, assuming full repayment of the outstanding debt.

As was previously reported, Technical Olympic has received demand letters from the administrative agent for Transeastern's debt demanding payment under completion and carve out guarantees.

The demand letters also allege that potential defaults and events of default have occurred under the credit facility.

Furthermore, the administrative agent on the senior debt has recently demanded the accrual of a 50 bps forbearance fee, the accrual of default interest and a 25 bps increase in the interest rate and letter-of- credit fees on the senior debt.

Although Technical Olympic is disputing the allegations, it is involved in settlement discussion that include a proposed structure in which Transeastern would become its wholly or majority owned subsidiary. This proposal also contemplates paying Transeastern's $400 million of senior debt in full through the incurrence of additional debt.

Transeastern is a homebuilding joint venture of Technical Olympic and Falcone Group.

Fedders closes

Fedders Corp. closed on its new $90 million senior secured financing, according to a company news release.

Goldman Sachs acted as the lead bank on the deal.

Proceeds are being used to refinance the company's existing $50 million senior credit facility, for ongoing working capital requirements and for general corporate purposes.

Fedders is a Liberty Corner, N.J., producer and marketer of air treatment products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.