Ascend Learning breaks; Pinnacle Foods dips; Otter Products, Choice Cable revisions surface

By Sara Rosenberg

New York, May 27 - Ascend Learning's second-lien term loan made its way into the secondary market on Tuesday, and Pinnacle Foods Inc.'s term loans were a bit weaker as a buyout bid was made for the Hillshire Brands Co. that would involve Hillshire dropping its purchase of Pinnacle.

Over in the primary, Otter Products LLC reduced the size of its term loan B and added a term loan A to its credit facility, and Choice Cable upsized its second-lien term loan.

In addition, Peak 10 Inc., ConvergeOne Holdings Corp., Extended Stay America Inc., Ameriforge Group Inc. and Polymer Group Inc. joined this week's calendar.

Ascend starts trading

Ascend Learning's $125 million second-lien term loan (Caa2/CCC+) freed up for trading on Wednesday with levels seen at par bid, 101 offered, a trader remarked.

Pricing on the loan is Libor plus 850 basis points with a 1% Libor floor and it was sold at an original issue discount of 99. There is call protection of 103 in year one, 102 in year two and 101 in year three.

During syndication, the spread was increased from talk in the Libor plus 775 bps area and the call protection was revised from 102 in year one and 101 in year two.

Bank of America Merrill Lynch, GE Capital Markets and Barclays are leading the deal that will be used to fund a dividend.

Burlington, Mass., and Leawood, Kan.-based Ascend Learning is a provider of technology-based learning services focused on student training and testing results in health care and other vocational fields.

Pinnacle Foods softens

Also in the secondary, Pinnacle Foods' term loan G and term loan H were lower after Pilgrim's Pride Corp. announced that it would like to purchase Hillshire Brands, but only if Hillshire will terminate its acquisition agreement with Pinnacle, according to traders.

The Parsippany, N.J.-based branded food products company's term loan G and H were quoted by one trader at 99 5/8 bid, par offered, down from 99 7/8 bid, par 1/8 offered, and by a second trader at 99½ bid, 99¾ offered, down from 99¾ bid, par offered.

In the morning, Pilgrim's Pride said that it is offering to buy Hillshire for $45.00 per share in cash, in a transaction valued at $6.4 billion, and expects to be able to close the transaction in the third quarter, subject to customary conditions and the termination of Hillshire's merger agreement with Pinnacle Foods.

Pilgrim's Pride, a Greeley, Colo.-based poultry processor, would use new debt financing and cash on hand to fund the acquisition, bringing leverage to about 4 times consolidated 2014 estimated EBITDA.

Hillshire responds to Pilgrim's

Following Pilgrim's Pride's public acquisition bid for Hillshire, a release emerged from Hillshire saying that the company believes "in the strategic merits and value creation potential provided by the proposed transaction with Pinnacle Foods. Consistent with its fiduciary duties, and in consultation with its independent financial and legal advisors, Hillshire Brands' Board will thoroughly review the Pilgrim's Pride proposal."

Hillshire recently entered into an agreement to purchase Pinnacle Foods for $18.00 in cash and 0.50 of a share of Hillshire common stock. The total enterprise value of the transaction is about $6.6 billion, including the refinancing of all of Pinnacle Foods' outstanding net debt, which reflects an adjusted EBITDA multiple of 9.6 times.

For the Pinnacle transaction, Hillshire has received a commitment from Goldman Sachs Bank USA for a $500 million five-year revolver and $4.8 billion seven-year covenant-light term loan B, but may replace a portion of the term loan with the issuance of senior unsecured notes.

Pro forma for the Pinnacle acquisition, Hillshire, a Chicago-based convenient foods company, would have debt to EBITDA of around 5 times, including expected synergies.

Otter Products restructures

Moving to the primary, Otter Products LLC trimmed its six-year term loan B to $500 million from $625 million and left talk at Libor plus 450 bps to 475 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, a market source said.

Also, amortization on the term loan was reduced to 1% per annum from 2%.

With the term loan B downsizing, a $125 million five-year term loan A was added to the capital structure, and talk on the new tranche emerged at Libor plus 375 bps with no Libor floor, an original issue discount of 99½ and amortization of 10% per annum, the source remarked.

Commitments for the $725 million credit facility (B1/B+), which also includes a $100 million revolver, are due by 5 p.m. ET on Thursday.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc. and KeyBanc Capital Markets are leading the deal that will refinance existing debt and fund a dividend.

Otter Products is a Fort Collins, Colo.-based provider of protective cases for mobile devices.

Choice Cable tweaks size

Choice Cable lifted its five-year second-lien term loan to $41.5 million from $33.5 million as a result of strong demand and left pricing at Libor plus 850 bps with a 1% Libor floor and an original issue discount of 981/2, according to a market source.

As before, the second-lien loan has call protection of 102 in year one and 101 in year two.

Leverage is 5.45 times, up from 5.25 times under the original plan, the source remarked.

SunTrust Robinson Humphrey Inc. is leading the deal that will be used to fund a dividend.

In connection with this transaction, the Puerto Rico-based cable operator is seeking an amendment to its existing credit facility to allow for the new second-lien term loan and to revise covenants, and due to the upsizing, first-lien lenders are being asked to reapprove the amendment by the end of the day on Wednesday.

First-lien lenders are being offered a 25 bps amendment fee, the source added.

Peak 10 coming soon

Peak 10 set a bank meeting for 10 a.m. ET in New York on Thursday to launch a $525 million credit facility and commitments will be due on June 12, according to a market source.

The facility consists of a $65 million revolver, a $330 million seven-year first-lien covenant-light term loan with 101 soft call protection for six months, and a $130 million eight-year second-lien covenant-light term loan with call protection of 102 in year one and 101 in year two, the source said.

Credit Suisse Securities (USA) LLC, RBC Capital Markets and Jefferies Finance LLC are leading the deal, with Credit Suisse left lead on the first-lien and RBC left lead on the second-lien.

Proceeds will help fund the buyout of the Charlotte, N.C.-based IT infrastructure and cloud provider by GI Partners from Welsh, Carson, Anderson & Stowe.

Closing is expected this quarter, subject to regulatory approvals and customary conditions.

ConvergeOne on deck

ConvergeOne scheduled a bank meeting for 1:30 p.m. ET in New York on Thursday to launch a $295 million credit facility, according to a market source.

The facility consists of a $25 million revolver, a $190 million six-year first-lien term loan with 101 soft call protection for six months, and an $80 million seven-year second-lien term loan with call protection of 103 in year one, 102 in year two and 101 in year three, the source said.

Commitments are due on June 12.

Credit Suisse Securities (USA) LLC and BMO Capital Markets are leading the deal that will be used to help fund the buyout of the company by Clearlake Capital Group LP.

ConvergeOne is an Eagan, Minn.-based provider of data, communications, collaboration and customer interaction and managed services.

Extended Stay readies deal

Extended Stay America surfaced with plans to hold a bank meeting at 2 p.m. ET on Wednesday to launch a $375 million senior secured term loan (B+), according to a market source.

Goldman Sachs Bank USA, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are leading the deal that will be used to refinance $365 million of mezzanine debt and pay related transaction fees and expenses.

Closing is subject to a number of factors, including market interest and other conditions.

Extended Stay America is a Charlotte, N.C.-based owner and operator of company-branded hotels.

Ameriforge joins calendar

Ameriforge set a call for 10 a.m. ET on Thursday to launch $100 million in add-on term loans, according to a market source.

The debt consists of a $65 million add-on first-lien covenant-light term loan due Dec. 19, 2019 and a $35 million add-on second-lien covenant-light term loan due Dec. 19, 2020, the source said.

Deutsche Bank Securities Inc., Goldman Sachs Bank USA, RBC Capital Markets LLC, UBS AG and BNP Paribas Securities Corp. are leading the deal that will be used to fund the acquisition of VerdErg, a UK-based supplier of diverless connector systems.

Ameriforge is a Houston-based manufacturer of highly engineered products, subassemblies and integrated systems for the oil and gas, midstream, downstream, power generation, aerospace, transportation and industrial markets.

Polymer sets call

Polymer Group scheduled a conference call for 3 p.m. ET on Wednesday for prospective loan lenders, according to a market source.

Citigroup Global Markets Inc. is leading the deal.

Polymer Group is a Charlotte, N.C.-based producer of engineered materials with a focus on nonwoven products.

© 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.