CRGT tack-on loan breaks; Navistar retreats; PetroChoice tweaks first-lien issue price

By Sara Rosenberg

New York, Sept. 2 – CRGT Inc.’s tack-on first-lien term loan made its way into the secondary market on Wednesday wrapped around its original issue discount, and Navistar International Corp.’s term loan weakened as the company disclosed a potential enforcement action by the Securities and Exchange Commission.

In more happenings, PetroChoice Holdings Inc. came out with a modified original issue discount on its first-lien term loan, and Idera Inc. surfaced with plans to come to market around mid-September with a new credit facility.

CRGT frees up

CRGT’s $80 million tack-on first-lien term loan due Dec. 19, 2020 began trading, with levels quoted at 99½ bid, 100½ offered, a trader remarked.

The tack-on term loan is priced at Libor plus 650 basis points with a 1% Libor floor, in line with the existing first-lien term loan, and was issued at an original issue discount of 99.75. The debt has 101 soft call protection through December.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to help fund the merger of CRGT with Salient Federal Solutions Inc. to form Salient CRGT.

Closing is expected early in the fourth quarter.

CRGT is a Reston, Va.-based provider of custom software development and data analytics to federal government agencies. Salient is a Fairfax, Va.-based provider of information technology and engineering services.

Navistar softens

Also in trading, Navistar’s term loan fell to 98 bid, 98¾ offered from 99 bid, 99½ offered as news emerged that the company has received “Wells Notices” from the Securities and Exchange Commission regarding various accounting and disclosure issues, a trader said.

The notices say that a preliminary determination has been made to recommend that the SEC file an enforcement action against the company and its former chief executive officer, Daniel Ustian.

The issues being looked into are regarding three applications in 2011 and 2012 by Navistar to the EPA for certification of heavy-duty diesel engines emitting 0.2g of NOx, and disclosures related to the circumstances of Ustian’s departure from the company in August 2012.

Navistar said in a 10-Q filing on Wednesday that if the SEC were to authorize an action against it, the remedies pursued might include an injunction, a cease-and-desist order, and/or civil money penalties.

Navistar is a Lisle, Ill.-based manufacturer and seller of commercial and military trucks, buses, and diesel engines and a provider of service parts for trucks and trailers.

PetroChoice revised again

Over in the primary, PetroChoice changed the original issue discount on its $235 million seven-year covenant-light first-lien term loan (B1/B+) to 97.5 from revised talk of 98.5 and initial talk of 99, a market source said.

As before, pricing on the first-lien term loan is Libor plus 500 basis points with a 1% Libor floor, and there is 101 soft call protection for one year.

The company’s $365 million credit facility also includes a $40 million five-year revolver (B1/B+) and a $90 million eight-year covenant-light second-lien term loan (Caa1/CCC+).

Pricing on the second-lien term loan is Libor plus 875 bps with a 1% Libor floor and an original issue discount of 98, and this tranche has call protection of 102 in year one and 101 in year two.

Earlier in syndication, the spread on the first-lien term loan was raised from talk of Libor plus 375 bps to 400 bps and the soft call protection was extended from six months, pricing on the second-lien term loan was increased from talk of Libor plus 775 bps to 800 bps, and the discount was modified from 98.5, and the incremental allowance was modified.

PetroChoice shuts books

When the newly revised first-lien term loan issue price was announced, lenders were told that final first-lien term loan commitments were due by 2 p.m. ET on Wednesday, the source said.

The second-lien term loan already allocated on Aug. 26, the source added.

Barclays, Angel Island and Jefferies Finance LLC are leading the deal that will be used to help fund the buyout of the company by Golden Gate Capital.

First-lien leverage is 4.5 times, and total leverage is 6.2 times.

PetroChoice is a Ft. Washington, Pa.-based distributor of consumable lubricants.

Idera on deck

Idera is planning on holding a bank meeting during the week of Sept. 14 to launch a $425 million credit facility, according to a market source.

The facility consists of a $25 million revolver, a $300 million first-lien term loan and a $100 million second-lien term loan, the source remarked.

Jefferies Finance LLC is the sole lead arranger on the entire deal, and a joint bookrunner with Fifth Street on the second-lien loan.

Proceeds will be used to help fund the acquisition of Embarcadero Technologies Inc., a San Francisco-based provider of professional grade database management tools for designing, developing and managing databases, from Thoma Bravo.

Idera is a Houston-based provider of IT performance monitoring solutions. Embarcadero, a portfolio company.

DTZ closes

In other news, DTZ (DTZ U.S. Borrower LLC and DTZ Aus HoldCo Pty Ltd.) completed its acquisition of Cushman & Wakefield, according to a news release.

To fund the transaction and to reprice an existing first-lien term loan from Libor plus 450 bps with a 1% Libor floor, the company got a $1,805,000,000 first-lien term loan due Nov. 4, 2021 priced at Libor plus 325 bps with a 1% Libor floor. Included in the loan is 101 soft call protection for six months.

The $1,055,000,000 of incremental term loan debt for the acquisition was issued at a discount of 99.5, and the repricing was issued at 99.75.

During syndication, pricing on the term loan was lowered from Libor plus 375 bps, and the issue price on the repricing widened from par.

UBS AG, J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., Credit Agricole Securities (USA) Inc., Mizuho Securities USA Inc. and HSBC Securities (USA) Inc. led the deal.

DTZ is a Chicago-based property services company. Cushman & Wakefield is a New York-based real estate services company. The combined company will operate under the Cushman & Wakefield brand.

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