LEVERAGED FINANCE NEWS

MARKET

BUZZ

Hilton Talks Price on $5.8B in Loans

LOAN NEWS
Price talk has emerged on $5.8 billion of loans Hilton
Worldwide is seeking as part of a larger debt refinancing
package. Lead bank Deutsche Bank is talking an $850 million,
five-year term loan B at an interest rate of Libor plus 350 basis
points and $5 billion, seven-year term loan B is being talked
at Libor plus 325-350 basis points, according to KDP Advisor.
At that price, the issuer would be willing to accept an original
issue discount to 99 cents on the dollar. The proposed facility
also includes a $1 billion revolving line of credit, according
to a prsale report from Standard & Poor's. In addition, S&P
said, Hilton will issue $1.25 billion of senior secured notes due
2021 and $2 billion senior unsecured notes due 2021 and 2023.
S&P has assigned a preliminary BB- corporate credit rating to
Hilton, a BB issue-level rating to the loans and a B issue-level
rating to the senior unsecured notes. Proceeds from the loans
and notes, along with $3.5 billion of commercial mortgage
backed securities and a $525 mfllion bank loan secured by the
Waldorf Astoria New York, will be used to repay Hilton's existing debt. Hilton, which was taken private by the Blackstone
Group in 2007, is refinancing its debt in preparation for an
initial public stock offering.

Leveraged Finance News

Sears Holdings wants to take out a term loan to pay down

its revolving line of credit. The retailer said it plans to obtain
a senior secured term loan facility of up to $1.0 billion. Proceeds would be used to refinance part of its existing, a $3.275
billion asset-based revolver. The new term loan would mature in 2018, while the revolver expires in April 2016. As of
Aug. 3, Sears had $2.18 billion drawn on it, including $1.5
billion of borrowings and $680 million of letters of credit,
according to a regulatory filing. Sears is rated CCC+ by
Standard & Poor's and B3 by Moody's Investors Service.
The incremental term loan is subject to obtaining lender
commitments, as well as market and other conditions. It is
expected to be secured by a first lien on the same collateral
as the revolving facility, guaranteed by the same subsidiaries of the company that guarantee the revolving facility and
to include other terms customary for similar term loans.
Garrison Capital, a lender to middle market companies,
has securitized some additional loans on its balance sheet.
Proceeds will refinance an existing credit facility, in the
process both increasing the company's leverage and reduc-

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LEVERAGED FINANCE NEWS

ing its costs of funds. The collateralized loan obligation, called

Garrison Funding 2013-2, issued a total of $350 million of
notes. There was a single, $50 million "revolver" class priced
at 190 basis points over the cost of funds that was rated 'AAA'
by Standard & Poor's. There were also three term tranches: a
$111.2 million, 'AAA'-rated tranche priced at 190 basis points
over three-month Libor; a $24.2 million, 'AA'-rated tranche
priced at Libor plus 340 basis points and a $24 million, 'A'rated tranche priced at Libor plus 465 basis points. The deal's
$139.6 million of subordinated notes will be retained by Garrison. The business development company will also retain
$22.0 million of term 'AAA'-rated notes. As of June 30, Garrison held investments in 83 portfolio companies with a fair
value of $418.1 million. The CLO's reinvestment period ends
in September 2016; the notes are scheduled to mature in September 2023. Proceeds of the private placement will be used to
refinance Garrison's existing credit facility. The transaction
increase the company's leverage from $175.0 million to $188.4
million and its leverage ratio will increase to from 0.69x to
0.75x. It will also reduce its cost of funds from approximately
3.3% to 2.4%.
Penton Media, the publisher and trade show operator, is refinancing its capital structure with $720 million of new loans.
The proposed facility will consist of a $50 million revolving
credit facility due 2018, a $520 million first-lien term loan
due 2019, and a $150 million second-lien term loan due 2020,
according to a prsale report by Standard & Poor's. S&P upgraded its corporate credit rating on Penton by one notch, to B
from B-, citing the elimination of near-term refinancing risk.
It also assigned a B rating to the first-lien and a CCC+ rating
to the second-lien. Credit Suisse is talking the first-lien loan
at Libor plus 425 basis points and an original issue discount
of 99 cents on the dollar, according to KDP Advisor. The second-lien loan is being talked at Libor plus 775 basis points
with an original issue discount of 98.5 cents.

BOND NEWS
Air Canada priced $700 million in a two-part junk bond
offering Sept. 19 after cutting the size of its term loan and creating a new tranche of bonds. The airline sold $400 million in
6.75% senior notes due 2019 and $300 million in 8.75% senior
notes due 2020. Both tranches priced at par and in line with
price talk. The company cut the size of its proposed first-lien
term loan to $300 million from $700 million and offered $400
million in senior notes due 2019. The new tranche of bonds
is in addition to the other offerings of $300 million in senior
second-lien notes due 2020. Price talk on its offering of C$300
million ($285 million) in senior secured notes due 2020 indicates a yield between 7.5% and 7.75%. The airline also seeks
a four-year, $100 million first-lien revolver. Proceeds from
the transaction will be used to pay down the carrier's existing $900 million of first-lien and $200 million of second-lien
high yield notes scheduled to mature in 2015 and 2016, respectively, according to a Fitch Ratings prsale report. Air Canada
Copying without permission from SourceMedia LLC is unlawful.

announced a tender offer for the existing 9.25%, 10.125%,

and 12.0% senior notes on Sept. 5. The tender period runs
through Oct. 2. Proceeds remaining after funding the tender will be used for general corporate purposes. Moody's
Investors Service rated the first-lien notes due 2019 B2. Fitch
said it expected to rate the first-lien loan, the revolver and
the senior secured notes BB and said it expects to rate the
second-lien notes BB-. Standard & Poor's rated company's
first-lien debt B+ and its second-lien debt CCC+.
Springleaf Finance Corp. priced a two-part high yield
bond offering totaling $950 million Sept. 17 as part of a
refinancing effort. The Evansville, Ind.-based lending and
financial services company plans to issued $650 million
in 7.75% senior notes due 2021 and $300 million in 8.25%
senior notes due 2023. Both tranches priced at par and in
line with price talk. It issued the notes both in a private
placement sale and in an exchange for existing notes. It
will use the proceeds in an exchange for $700 million of its
outstanding 6.9% medium term notes. Series J, due 2017.
Springleaf is also launching a term loan B sized between
$250 million and $500 million. Price talk on the loan is Libor plus 350 bps with a 1.25% Libor floor and a par offering price. The company will use the proceeds to refinance
the 2017 notes and for general corporate purposes, which
may include additional refinancing efforts. Springleaf was
on the bond market this past May and priced an offering
of $300 million (upsized from $250 million) in 6% senior
notes due 2020 on May 21. The company had $11.3 billion in total long-term debt as of June 30, according to a
regulatory filing. It reported a net loss of approximately
$221 million for 2012. Moody's Investors Service rated the
bonds Caal and rates the company Caal and Standard &
Poor's rates Springleaf B-.
Dell came to the junk bond market with a two-part offering of $3.25 billion to help finance its $24.9 billion buyout.
The company is selling $2 billion in first-lien senior notes
due 2020 and $1.25 billion in second-lien senior notes due
2021. The bonds will be offered in a private sale and each
tranche wl have a three-year non-call period. Credit Suisse, Barclays, Bank of America Merrill Lynch, RBC and
UBS are the bookrunners. The banks launched a roadshow
Sept. 17. The company is also on the market with $5.5 billion
in loans to back the deal. Price talk on the $4 billion term
loan B due 2020 are at Libor plus 375 bps with a 1% Libor
floor and a discounted offering price of 99% of par. The $1.5
billion term loan C is talked at Libor plus between 275 bps
and 300bps with a 1% Libor floor and a discounted offering
price of 99.5% of par. The covenant-lite loans will be backed
by a $2 billion asset-based revolver. Bank of America, Credit
Suisse, Barclays and RBC are arranging the loans. Commitments are due Sept. 23. The Round Rock, Texas-based computer manufacturer and technology services provider agreed
to be purchased by a consortium led by Silver Lake Part(See MARKET BUZZ on page 6)
September 23,2013

LEVERAGED FINANCE NEWS

CAESARS

continued from page 1

notes and $L35 billion of second-lien
notes.
All of the new debt will be guaranteed and secured by the Rio, Flamingo,
Paris and Harrah's casino resorts in
Las Vegas, Harrah's in Laughlin, Nev.,
and Harrah's in Atlantic City, N.J., all
of which are owned by the PropCo.
The debt will also be guaranteed by
the Octavius Tower and Project Linq
assets, which are currently owned by
the OpCo.
The PropCo will use the proceeds
from the proposed financing to repurchase approximately $4.4 billion in outstanding debt issued by the OpCo and
to refinance the $450 million term loan
used to fund Linq/Octavius. Much of
this debt was issued in 2007 in the expectation that it would be securitized,
but as a result of the financial crisis, a
CMBS was not issued.
Caesars will pay 99% of par for $3.67
billion in outstanding CEOC mortgage
notes and 90% of par for $719 million
in outstanding mezzanine notes. The
repurchases are conditioned upon the
acceptance by lenders holding at least
65% of the outstanding aggregate principal amount of the mortgage loans and
85% of the outstanding aggregate principal amount of the mezzanine loans. As
of Sept. 17, 63% of lenders holding the
mortgage loans and 84% of lenders holding the mezzanine loans had accepted.

It's good for Caesars because it eliminates a near term maturity that could
spark the need for a restructuring in the
near-term and its private equity backers
can avoid putting any more cash into the
casino giant or any of its subsidiaries.
"Notably, the refinancing plan would
allow the sponsors to avoid an additional
capital infusion and to avoid any concessions to the CMBS lenders on the CMBS
entity equity," CreditSights analysts
Chris Snow and James Dunn wrote in
a Sept. 18 report.
"The transaction represents yet another effort by the company to lock in
optionaUty and liquidity, at the expense
of near-and medium-term cash flow,"
said the CreditSights analysts.
Fitch Ratings has assigned an initial
B- issuer default rating to CERP/PropCo
and a preliminary B+ rating to the proposed secured credit facility. Fitch seems
to have a slightly more benign view of
the proposed transaction. In a report issued Sept. 18, the rating agency said the
transaction is "neutral" for the OpCo.
On the plus side, Caesars managed
to avoid contributing even more assets
in order to pull off the refinancing of
PropCo debt. Fitch had been concerned
that the parent company might have to
sweeten the deal by kicking in some of
its interactive assets, such as Slotomania,
Bingo Blitz or the World Series of Poker
brand. These assets are held by another
subsidiary, Caesars Growth Partners.
Selling them would have mean there was
less collateral available to OpCo credi-

tors in the event of a default.

On the negative side, the PropCo debt
refinancing is likely to leave the parent
company with less flexibility to extracting cash out of the PropCo assets in the
event that the OpCo needed support, according to Fitch.
Moody's Investors Service assigned
Caesars Entertainment Resort Properties (CERP) B3 corporate ratings and
gave the proposed $3 billion senior secured first-lien term loan and the $269.5
million first-lien revolver B2 ratings. It
assigned a Caa2 rating to the proposed
$L35 billion senior secured second-lien
notes and a B2 rating to the $500 million proposed first-lien notes. The ratings outlook is stable. Standard Poor's
assigned CERP a CCC+ corporate credit
rating and gave the senior secured credit
facility a B rating. It assigned the proposed first-lien notes a B rating and rated the second-lien notes CCG+.
The latest asset shuffle comes after
Caesar's private equity owners, Apollo
Management and TPG, made a capital
infusion earlier this year; together with
some new investors, they brought a minority stake in Caesars Growth Partners,
which then acquired some of the group's
more valuable assets.
Caesars Entertainment generated
$8.58 billion in revenues in 2012 and
had $20.9 billion in long-term debt as
of June 30,2013, according to an Aug. 9
regulatory filing. The Las Vegas-based
company owns or operates about 50
casinos. MS

MARKET BUZZ

continued from page 3

ners and company founder Michael Dell in a deal valued
at $24.4 billion back in February. The company had to
sweeten the deal in the face of shareholder opposition to
$24.9 billion from $24.4 billion. Moody's Investors Service assigned Ba2 ratings to the loans and first-lien notes
and a Ba3 rating to the second-lien notes. It also assigned
the company Ba3 corporate family and probability of default ratings and said it would downgrade the company's
unsecured notes to Bl from Baal upon the closing of the
debt financing. Standard & Poor's assigned a BB+ rating
to the loans and secured first-lien bonds and a BB rating
to the second-lien notes. It lowered the company's corporate credit rating to BB- from BBB.
Hub International sold $950 million in new junk bonds
September 23,2013

on Sept. 17 after decreasing its offering by $85 million and

adding it to its leveraged loan deal. The Chicago-based insurance provider sold $950 million in 7.875% senior notes
due 2021. The bonds priced at par and in line with price
talk. The company had decreased the size of its bond offering from $1,035 billion to $950 million and increased its
term loan B offering to $L87 billion from $1.78 billion. Bank
of America Merrill Lynch, Morgan Stanley, RBC, Macquarie, BMO and UBS were the bookrunners on the bond offering. The company plans to use the proceeds to help finance its $4.4 billion buyout by Hellman & Friedman and
refinance existing debt. Morgan Stanley is the lead bank on
the loan offering and is joined by Bank of America Merrill
Lynch and RBC. Price talk on the term loan B also tightened to Libor plus 375 bps from between Libor plus 375 bps
Copying without permission from SourceMedia LLC is unlawfuL

LEVERAGED FINANCE NEWS

LEVERAGED LOAN FORWARD CALENDAR

Announce
Date
Issuer
9/18/13
9/18/13
9/18/13
9/17/13
9/17/13
9/17/13
9/16/13
9/13/13
9/13/13
9/13/13
9/13/13
9/13/13
9/13/13
9/13/13
9/12/13
9/12/13
9/10/13
9/10/13
9/10/13
9/10/13
9/10/13
9/10/13
9/6/13
9/6/13
9/5/13
9/5/13
9/5/13
9/5/13
9/4/13
9/4/13
9/4/13
9/4/13
9/4/13
9/4/13
9/4/13
9/4/13
9/3/13
9/3/13

Caesars Entertainment
Aptalis Pharma
e-Rewards
Mitchell International
Mitchell International
Springleaf Finance
Sears Roebuck Accept
Penton Media
Penton Media
Hilton Worldwide
Hilton Worldwide
Information Resource
HealthPort
HealthPort
Archroma Global Service
Cole Haan
Sabre Holdings
Albertsons
Quikrete Holdings
Quikrete Holdings
Dell International
Dell International
Air Canada
Louisiana-Pacific
Nine Entertainment
Capsugel
Spotless Holdings
Spotless Holdings
Fieldwood Energy
Fieldwood Energy
Peabody Energy
CPG International
Pitney Bowes
Pitney Bowes
ProPetro Services
NES Global Talent
Envision Acquisition
Envision Acquisition

Amt Commit
Issue ($mm) Date
TL
TLB
TLB
1st Lien
2nd Lien
TLB2
1st Lien
1st Lien
2nd Lien
TLBl
TLB2
TLB
1st Lien
2nd Lien
TLB
TLI
TLB2
TLB2
1st Lien
2nd Lien
TLB
TLC
TLB
TLB
1st Lien
Add-On TL
1st Lien
2nd Lien
1st Lien
2nd Lien
TLB
TL
1st Lien
2nd Lien
TLB
1st Lien
1st Lien
2nd Lien

3000
1400
275
490
245
250
1000
520
150
850
5000
618
250
115
310
350
350
300
1230
190
4000
1500
700
430
A$200
100
900
250
900
1725
1200
625
215
100
220
200
405
175

Price Talk

Banks

Use of
Proceeds

Industry

Refinance

BAML

MS
BAML
BAML

9/25/13
9/27/13

9/26/13
9/26/13
9/24/13

9/23/13
9/18/13
9/18/13
9/17/13

9/23/13
9/23/13
9/172013
9/13/13

L+350@100
L+450-475 @ 99
L+425 @ 99
L+775 @ 99.5
L+350 @ 99
L+325-350 @ 99
L+400@99
L+425 @ 99
L+825 @ 98
L+825@98
L+400 @ 99.75
L+350 @ 100
L+375 @ 99.75
L+325 @ 99
L+700@98
L+375 @ 99
L+275-300@99.5
L+450 @ 99
L+450 @ 98
L+ 325 99.5

L+275@99
L+400 @ 99
L+550-575 @ 99
L+950-975 @ 98

* As of 9/19/13

and Libor plus 400 bps. The size of the original issue discount price also tightened to 99.5% of par from 99% of par.
It has a 1% Libor floor. Hub launched a tender offer for its
$740 million in 8.125% senior notes due 2018. Bondholders
who tender by Sept. 20 will receive $1117.18 per $1,000 tendered with a $30 consent payment. Bondholders who tender
after Sept. 20 will receive $1.087.18 per $1,000 tendered. The
tender offer expires Oct. 4. Last September Hub priced its
$740 million in 8.125% senior notes due 2018; it is now trying to refinance those bonds in its tender offer. Standard &
Poor's assigned a B rating to its senior secured facility and a
CCC-i- rating to its unsecured facility. S&P also affirmed the
company's B corporate credit rating and removed it from
CreditWatch Negative. Moody's Investors Service rates the
company B3.
Copying without permission from SourceMedia LLC is unlawful.

BAML
BAML

CSS
CSS
DB
DB
BAML

CSS
CSS
JEFF
JEFF
BAML

C
WFS
WFS
BAML
BAML

C
GS
UBS
UBS
DB
DB
C
JPM
C
BARC

CS
CS
DB
CS
JPM

JPM

Gaming
Healthcare/Hospitals
Diversified Services
Technology
Technology
Refinance
Financial Services
Refinance
Retail
Publishing
Publishing
Refinance
Lodging/Leisure
Refinance
Lodging/Leisure
Acquisition
Technology
Dividend Recap
Diversified Services
Dividend Recap
Diversified Services
Apparel/Textiles
Retail
Working Capital
Technology
Grocery
Acquisition
Construction
Acquisition
Construction
Buyout
Technology
Buyout
Technology
Refinance
Passenger Airline
Acquisition
Building Materials
Acquisition
Entertainment
Acquisition
Healthcare
Refinance
Consumer Products
Refinance
Consumer Products
Acquisition
Energy Services
Acquisition
Energy Services
Refinance
Metals/Mining
Buyout
Diversified Manufacturing
Buyout
Technology
Buyout
Technology
Refinance
Oil & Gas
Refinance
Oil & Gas
Buyout
Healthcare/Hospitals
Buyout
Healthcare/Hospitals
Source: Leveraged Finance News

Student loan provider SLM Corp. drove by the bond market Sept. 17 to price a $L25B bond offering. The company,
also known as Sallie Mae, plans to use the proceeds for general corporate purposes which will likely include refinancing some of the $1.245 billion in debt coming due in October, according to KDP Investment Advisor. The company
issued $L25B in 5.5% senior notes due 2019. The bonds were
issued at a price of 98.88% of par to yield 5.75%, which was
in line with price talk. Barclays, Bank of America Merrill
Lynch, Deutsche Bank and JPMorgan were the bookrunners. Moody's Investors Service rated the bonds Bal. SLM
is a split-rated company. It is rated Bal by Moody's, BBBby Standard & Poor's and BB-H by Fitch Ratings. Sallie Mae
reported core earnings for 2012 were $1.06 billion.
September 23,2013

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