Bally Technologies sets Aug. 6 bank meeting for $1.3B M&A loan

Wells Fargo, J.P. Morgan, Bank of America Merrill Lynch, Goldman Sachs, and Union Bank have set an Aug. 6 bank meeting to launch their $1.3 billion B term loan backing Bally Technologies’ $1.3 billion purchase of casino games maker SHFL Entertainment, sources said.

Bally will fund the acquisition with the loan’s proceeds, a roughly $138 million drawdown on its existing revolver, and $40.8 million of cash on hand. Closing isn’t likely until mid-2014. Although price talk and ticking fees haven’t been outlined yet, an investor presentation filed with the SEC references $28 million of ticking fees tied to a June 28, 2014 closing.

Leverage at closing will be roughly 4x. Bally’s $364.5 million TLA will remain outstanding, and the RC tap will bring the outstanding balance under that facility to $384.4 million.

Las Vegas-based Bally has agreed to acquire all outstanding shares of SHFL for $23.25 per share in cash. The transaction has a total enterprise value of approximately $1.3 billion, including debt of $8 million and cash of $41 million as of April 30.

Based on the respective trailing 12-month periods ended March 31, 2013 for Bally and April 30, 2013 for SHFL, the combined company generated approximately $1.3 billion in revenues, $644 million of which are recurring in nature, and adjusted EBITDA of $415 million. The combined company is expected to achieve synergies of at least $30 million. – Chris Donnelly


TransDigm investors give amendment nod as $700M term loan fills

Investors today approved an amendment that paves the way for TransDigm’s dividend recapitalization deal, sources said. Meanwhile, the company’s $700 million incremental C term loan shopped by a Credit Suisse-led arranger group has been oversubscribed in advance of the deadline on Tuesday, June 25, sources said.

The add-on debt is offered at 98-98.5 and would be fungible with the issuer’s existing covenant-lite C term loan maturing in 2020, which is priced at L+300, with a 0.75% LIBOR floor. At the proposed guidance, the loan would yield 4.08-4.17% to maturity.

Credit Suisse, UBS, Barclays, Citi, Morgan Stanley, and RBC Capital Markets are arranging the loan, proceeds of which, along with $700 million of bonds, would be used to fund a shareholder dividend. UBS will be left lead on the adjoining bond deal, sources noted.

TransDigm said this morning that it would be seeking an amendment to its existing loan to allow for the proposed transaction. The contemplated dividend would total $1-1.8 billion, according to the company. Pro forma leverage would increase to roughly 6x. The amendment will also shift the revolver to a springing covenant and widen certain incurrence tests to allow for the deal.

Lenders to the new and existing C term loans will be offered one year of 101 soft call protection, sources noted.

TransDigm last tapped the loan market in February for a covenant-lite refinancing via Credit Suisse that was split between the $2.2 billion TLC due 2020 as well as a $500 million TLB due 2017 (L+275, 0.75% floor). The TLC, which is currently covered by a 101 soft call premium that rolls off in February 2014, had been pegged in a 100.5/101 context prior to news of the proposed debt-financed dividend, sources said. The issuer is currently rated B+/B1.

TransDigm supplies engineered aircraft components for commercial and military aircraft. The company trades on the New York Stock Exchange under the ticker TDG and has a market capitalization of nearly $8.4 billion. – Chris Donnelly/Kerry Kantin


First Data wraps repricing of $2.436B in term loans

The $2.436 billion repriced term loan for First Data allocated today, opening at 99.75/100.125, from issuance at 99.625, according to sources. The loan, which matures in March 2017, is priced at L+400, with no LIBOR floor and no call protection.

At 99.625, the loan yields about 4.46% to maturity; the yield narrows to 4.37% at the midpoint of the opening market.

Credit Suisse and KKR Capital Markets arranged the transaction. The loan was issued tight to original guidance of 99.25-99.5.

As noted earlier, First Data is reducing the spread on its dollar- and euro-denominated term loans maturing in March 2017 by 100 bps, to L/E+400. The issuer has $2.436 billion and €179.3 million outstanding under its dollar- and euro-denominated term loans due 2017.

The repricing brings the spread of the 2017 term loans in line with the company’s $4.225 billion term loan maturing in March 2018, which is quoted at 99.625/100 this afternoon.

First Data last tapped the market in January for a $258 million add-on to its term loan maturing in September 2018 (L+500), the proceeds of which were used to refinance borrowings under its non-extended term loan due 2014. That loan is quoted at 100.375/100.875.

KKR acquired the credit-card processing firm in 2007. Corporate ratings are B/B3, while the term loans are rated B+/B1, with a 2 recovery rating from S&P. – Kerry Kantin/Chris Donnelly


Ineos firms pricing on upsized $3.025B cross-border loan

Arrangers this afternoon finalized Ineos Finance’s secured cross-border loan package at $3.025 billion, and the transaction is likely to allocate tomorrow. The accompanying bond deal, which has been scaled back to $775 million, will price imminently.

The final structure includes a $2 billion, six-year U.S.-dollar term loan at L+525, with a 1.25% LIBOR floor and a 98.5 offer price. The six-year euro carve-out now totals €500 million and is priced at E+550, with a 1.25% floor, also at 98.5.

These levels represent the tight end of a range of L+525-550, with a 1.25% floor and a 98-98.5 OID on the dollar term loan, with the spread on the euro-denominated piece discussed 25 bps wider, sources said.

The accompanying three-year term loan, originally targeted at roughly $300 million, now totals $375 million and will be entirely denominated in U.S. dollars. It will price through the tight end of talk, at L+425, with a 1.25% floor at 99. The spread was initially discussed in a L+450-475 context, sources noted.

The entire covenant-lite-term loan package is subject to 102, 101 call premiums.

Barclays and J.P. Morgan are bookrunners and joint global coordinators, while Goldman Sachs and UBS are MLAs and bookrunners.

As noted earlier, Ineos canceled the euro tranche of its bond deal and set the size of the dollar-denominated tranche at $775 million, rather than the $2.2 billion cross-border package initially outlined. The size of the bond leg of the financing has been downsized in lieu of an increased loan, as reported, but the overall financing has been upsized by $100 million to fund general corporate purposes and the OID, according to sources.

J.P. Morgan (B&D) and Barclays are global coordinators on the bonds, with Goldman Sachs and UBS as underwriters, according to sources. – Staff reports


D’Addario joins Phoenix Star to head CLO business

Dick D’Addario last week joined Phoenix Star Capital as a senior portfolio manager, according to sources. In his new role, D’Addario will head the firm’s CLO business.

New York-based Phoenix Star was launched this spring by founders Alfred Eckert, Russ Gerson and Oliver Reeve. Phoenix Star will invest across the leveraged loan and high-yield bond markets, with an initial focus on structuring, managing and investing in CLOs and BDCs, the firm said in a statement in late May.

At the time, the firm said it was aiming to issue its first CLO in the early part of 2014. D’Addario will lead the effort to build out the CLO business, sources added.

The firm eventually plans to branch out into investing distressed debt and providing consulting to the financial-services industry.

D’Addario previously built out the CLO business at Avenue Capital, while he also worked for Franklin Templeton as a portfolio manager. – Kerry Kantin