NDCHealth deal seen as lightly priced for service company

By Sara Rosenberg

New York, Nov. 4 - NDCHealth Corp.'s bank meeting on Monday regarding its new $200 million credit facility (Ba3/BB-) met with some investor skepticism, mainly due to the company being a service business, according to a market source. Merrill Lynch and Credit Suisse First Boston are the lead banks on the deal.

One fund manager was unfavorably impressed with the new offering because as a service business it has little collateral. Secondly, pricing is light for an all-service business, the fund manager explained.

The loan consists of a $75 million five-year revolver with an interest rate of Libor plus 300 basis points and a $125 million term loan B with an interest rate of Libor plus 350 basis points.

Upfront fees for the term loan B are 25 basis points.

Proceeds will be used to help redeem convertibles, replace the existing revolver and for general corporate purposes.

NDCHealth is an Atlanta, Ga. healthcare information services provider.

Some new names that are expected to hit the market this week include Therma-Tru Corp. and DigitalNet, according to market sources.

Therma-Tru Corp. is expected to hold a bank meeting on Friday in Cleveland for a pricing refinancing on its credit facility (Ba3/BB-), according to the fund manager. The loan consists of a $75 million five-year revolver with an interest rate of Libor plus 275 basis points and a $230 million seven-year term loan B with an interest rate of Libor plus 325 basis points.

The loan was originally closed and funded in June of 2000, according to the fund manager, with the term loan B priced at Libor plus 325 basis points. However, the company fell short on its performance and amended its facility, changing the interest rate on the term B to Libor plus 375 basis points. Now that performance is back on track, the company is looking to obtain the original pricing on the loan again, the fund manager explained.

The Maumee, Ohio fiberglass door manufacturer has senior and total leverage of 2.69 times.

CIBC World Markets is the lead bank on the deal. Deutsche Bank led the original deal.

"I think it's an interesting time in the market to come with a pricing refi," the fund manager said, adding that the deal better be pretty good in order for it to get done.

DigitalNet is scheduled to hold a bank meeting on Wednesday regarding a $125 million senior secured credit facility, according to market sources. Bank of America is the lead bank on the deal.

Proceeds from the loan will be used to help fund the acquisition of Getronics Government Solutions (GGS) from a subsidiary of Getronics NV.

DigitalNet is a private enterprise network solutions company backed by GTCR Golder Rauner, LLC.

Patriot Media and Communications LLC is scheduled to hold a bank meeting on Nov. 7 in New York regarding a $165 million credit facility. Bank of New York is the lead bank on the deal.

The New Jersey cable system company's loan consists of a $100 million term loan B with an interest rate of Libor plus 400 basis points and a $65 million pro rata portion at Libor plus 375 basis points.

Proceeds will be used to help fund the spin off from RCN Corp. with Spectrum Equity Investors as equity sponsor.

"I suspect we're going to play in Patriot," one bank loan investor told Prospect News on Friday. "It makes some sense because you have a telecom company in the form of RCN selling its cable properties. And it's fabulous demographics; there are lots of wealthy people in that area."

Meanwhile, in secondary activity, Nextel Communications Inc. was said to be "the only real mover in the Street" as the loan moved up and down on market technicals, according to a trader.

The loan was quoted around 89 bid, 90 offer at the end of the day, but traded as high as 91 during the morning.

"Dealers are pushing it around a little bit," the trader said.

On Friday, the Reston, Va. communications co. loan was quoted around 89½ bid, 90 offer, the trader added.

In follow up news, Penn National Gaming Inc.'s $800 million credit facility is not expected to hit the institutional loan market until late December, according to the fund manager. Currently the lead banks are said to be looking for co-agents, possibly to limit the underwriting risk, the fund manager added.

Bear Stearns and Merrill Lynch are joint lead arrangers, joint bookrunners and syndication agents.

The loan consists of a $600 million term loan B and a $200 million pro rata portion, which are secured by assets and stock.

Proceeds will be used to help fund the acquisition of Hollywood Casino Corp. and refinance debt.

Penn National Gaming is a Wyomissing, Pa. owner and operator of gaming properties.

Ball Corp.'s $350 million term loan B has approximately $200 million in commitments from existing lenders, according to a syndicate source. The tranche was priced with an interest rate of Libor plus 250 basis points.

The term B is part of a larger $1.4 billion multi-currency, euro/sterling credit facility that was recently launched via Deutsche Bank and Bank of America.

Proceeds are being used to help fund the acquisition of Schmalbach-Lubeca AG.

Ball is a Broomfield, Colo. supplier of metal and plastic packaging to beverage and food industries.

GCI Holdings Inc. closed on a new $225 million credit facility, which was used to refinance approximately $180 million of debt. Credit Lyonnais was the lead bank on the deal.

The new loan has a term of two-years and an interest rate of Libor plus 650 basis points.

"We are very pleased to complete the refinancing of our senior debt," said Ron Duncan, president, in a news release. "Closing this facility in the face of both challenging telecom and credit markets is a significant accomplishment.

"The facility provides the company with approximately $40 million of additional liquidity and should allow us to make capital expenditures of approximately $55 million next year. This level of investment will be sufficient to execute the company's business plan and maintain our growth."

GCI is an Anchorage, Alaska provider of voice, video and data communication services.

© 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.