EnergySolutions frees to trade; Interline downsizes; Sourcecorp, National Mentor price talk emerges

By Sara Rosenberg and Paul A. Harris

New York, June 9 - EnergySolutions LLC hit the secondary on Friday, with the strip of term loan B and synthetic letter-of-credit facility debt trading in the upper-par context.

In the primary, Interline Brands Inc. reduced the size of its credit facility as it increased the size of its bond offering. Also, price talk on Sourcecorp Inc. and National Mentor Holdings Inc. surfaced now that both deals are in the syndication process.

EnergySolutions freed for trading on Friday, with the strip of term loan B and synthetic letter-of-credit facility debt quoted at par ½ bid, 101 offered throughout the trading session, according to a trader.

The $25 million synthetic letter-of-credit facility and the $770 million term loan B are priced with an interest rate of Libor plus 225 basis points.

During syndication, the term loan B was upsized from $600 million as the company decided to repay its existing $170 million second-lien term loan C tranche in full, as opposed to just amending it to allow for the transaction.

EnergySolutions' $870 million credit facility (Ba3/BB-) also contains a $75 million revolver with an interest rate of Libor plus 225 basis points.

Citigroup acted as the lead bank on the deal.

In addition to repaying the second-lien loan, proceeds were used to fund the $396 million acquisition of Duratek Inc., which was actually completed this past Wednesday, and to refinance existing first-lien debt.

EnergySolutions is a Salt Lake City-based national energy services company. Duratek is a provider of radioactive materials disposition and nuclear facility operations for commercial and government customers.

Interline Brands cuts size

Interline Brands reduced the size of its credit facility by $25 million as it to chose to increase its bond offering by the equivalent amount, according to a market source.

The bank debt reduction came out of the company's seven-year term loan B, resulting in a new size of $230 million as compared to an original size of $255 million, the source said.

There was no word prior to press time on whether the Libor plus 175 basis points price talk that the term loan B was launched with was affected by the size shift.

As for the 8 1/8% eight-year senior subordinated notes offering, that was increased to $200 million from $175 million and priced on Friday at 99.283 to yield 8¼%.

Interline Brands' $330 million credit facility (Ba3/BB) also contains a $100 million six-year revolver that was launched with opening price talk of Libor plus 175 basis points as well.

JPMorgan and Lehman are the lead banks on the credit facility, with JPMorgan the left lead.

Proceeds from the credit facility and the notes will be used to refinance the company's existing credit facility, to repurchase its outstanding 11½% senior subordinated notes due 2011 and to finance the $127.5 million acquisition of American Sanitary Inc.

Interline is a Jacksonville, Fla., distributor and direct marketer of specialty maintenance, repair and operations products.

Sourcecorp price talk

Price talk on Sourcecorp's $400 million senior secured credit facility came out as the deal was officially launched into syndication through a bank meeting that took place this past Thursday, according to a market source.

The $75 million revolver (B1/B+) and the $200 million first-lien term loan B (B1/B+) were launched with opening price talk of Libor plus 225 to 250 basis points, and the $125 million second-lien term loan (B3/B-) was launched with opening talk of Libor plus 600 to 625 basis points, the source said.

Credit Suisse and UBS Securities are the lead banks on the deals.

Proceeds from the credit facility will be used to help fund the leveraged buyout of Sourcecorp by Apollo Management LP for $25 in cash for each share of common stock.

Under the original LBO financing commitment letter, the facility was expected to be sized at $250 million consisting of a $75 million revolver and a $175 million term loan. In addition, the company was expected to issue $175 million in senior subordinated bonds.

However, since the original commitment was obtained, the company entered into a letter of agreement which supplemented the terms of the commitment letter. Under the letter, the company said that it intended to get a $425 million credit facility consisting of a $200 million term loan, a $150 million second-lien term loan - $25 million more than is actually coming to market - and a $75 million revolver. The updated letter implied that if the second-lien loan was obtained, the senior subordinated bonds would not be necessary.

Completion of the acquisition is subject to customary closing conditions, including approval by stockholders, expiration of the antitrust waiting period and the receipt of the committed financing.

Sourcecorp is a Dallas-based provider of business process outsourcing solutions and specialized consulting services.

National Mentor talk surfaces

Also on the price talk front, National Mentor announced that both tranches contained its $425 million credit facility (B1/B) are being talked at Libor plus 250 basis points, an informed source told Prospect News.

The facility, which launched with a bank meeting on Thursday afternoon, consists of a $125 million revolver and a $300 million term loan.

JPMorgan, UBS Securities and Bank of America are the lead banks on the deal, with JPMorgan the left lead.

Proceeds from the credit facility, along with a proposed $215 million bond offering, will be used to fund the buyout of National Mentor by management and Vestar Capital Partners, to refinance the company's existing term loan B and revolving credit facility, and to fund a tender offer for its 9 5/8% senior subordinated notes due 2012.

Management and Vestar Capital are buying National Mentor from Madison Dearborn Partners and other stockholders. Vestar has committed to provide $258 million in equity for the transaction.

National Mentor is a Boston-based provider of home and community-based human services for individuals with developmental disabilities and acquired brain injuries, as well as for at-risk youth.

Packaging Dynamics closes

Kohlberg & Co.'s wholly owned subsidiary, Thilmany LLC, completed its acquisition of Packaging Dynamics Corp. for $14 per share in cash, according to a news release.

To help fund the transaction, Packaging Dynamics got a new $255 million credit facility consisting of a $130 million covenant-light term loan (Ba3/BB-) with an interest rate of Libor plus 200 basis points and a $125 million asset-backed revolver with an interest rate of Libor plus 150 basis points.

Deutsche Bank and Jefferies acted as the lead banks on the deal, with Deutsche the left lead.

Packaging Dynamics is a Chicago-based flexible packaging company.

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