Fortescue better bid as debt deals canceled; FullBeauty Brands updates add-on term loan pricing

By Sara Rosenberg

New York, March 18 – Fortescue Resources’ term loan was bid higher in the secondary market on Wednesday in connection with the company’s decision to withdraw its maturity extension proposal and note refinancing plans.

Moving to the primary, FullBeauty Brands set the spread on its loan at the low end of guidance, Royal Adhesives & Sealants and Planet Fitness Holdings LLC released original issue discount talk on their add-on term loans with launch, and Travel Leaders Group LLC joined this week’s new deal calendar.

Fortescue bid rises

Fortescue’s term loan was stronger bid in trading on Wednesday as the company pulled the proposed extension of its $4,888,000,000 senior secured term loan to December 2021 from June 30, 2019 and its notes tender offer, according to a trader.

The term loan was quoted at 90 5/8 bid, 91¼ offered, versus 90¼ bid, 91¼ offered late Tuesday, the trader said.

The extended term loan was talked at Libor plus 450 basis points, compared to current pricing of Libor plus 275 bps. The extended loan was also guided with a 1% Libor floor and 101 soft call protection for one year, and lenders were being offered a 5 bps consent fee and a 20 bps extension fee.

During the negotiation process, the request was changed from extending the loan to 2022 and price talk was adjusted from Libor plus 425 bps to 450 bps with a 1% Libor floor.

Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC were leading the deal.

Fortescue drops bond refi

Along with canceling the term loan extension, Fortescue withdrew its tender offer for its 2017, 2018 and 2019 unsecured notes.

Initially, the company was going to fund the bond refinancing with a new $2.5 billion seven-year term talked at Libor plus 425 bps to 450 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year. The loan, however, was pulled earlier this week as the company decided it was instead going to raise $2.5 billion of senior secured notes due 2022.

On Wednesday, the company officially announced the withdrawal of its bond offering due to unfavorable debt capital markets, although talk of the bonds being pulled had started circulating in the market late Tuesday.

Fortescue is an East Perth, Australia, iron ore producer.

FullBeauty firms spread

Switching to the primary, FullBeauty Brands set pricing on its $160 million add-on first-lien term loan at Libor plus 375 bps, the low end of the Libor plus 375 bps to 400 bps talk, and kept the 1% Libor floor, original issue discount of 99½ and 101 soft call protection for six months intact, according to market sources.

The loan has a step-down to Libor plus 350 bps upon an initial public offering and if leverage less than 4 times, sources said.

Goldman Sachs Bank USA, Jefferies Finance LLC and BMO Capital Markets Corp. are leading the deal that will be used to help fund a dividend.

FullBeauty Brands, previously known as OneStopPlus Group, is a New York-based catalog retailer and online marketplace for plus-size consumers.

Royal Adhesives reveals OID

Royal Adhesives & Sealants held its lender call on Wednesday, launching its fungible $35 million add-on senior secured term loan B (B) due July 31, 2018 with original issue discount talk of 99¾, according to a market source.

The add-on term loan is priced at Libor plus 425 bps with a 1.25% Libor floor and is callable at par.

Commitments are due on Thursday, the source continued.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to help fund the acquisition of Chemical Innovations Ltd.

Royal Adhesives is a South Bend, Ind.-based manufacturer and marketer of high performance adhesives, sealants, encapsulants and specialty polymers. Chemical Innovations is a U.K.-based manufacturer of high-performance bonding agents for industrial applications.

Planet Fitness launches

Planet Fitness approached lenders with a fungible $120 million add-on covenant-light term loan B (B+) due 2021 that is talked at Libor plus 375 bps with a 1% Libor floor and an original issue discount of 99½, a market source remarked.

Also, both the add-on and existing term loan B will get 101 soft call protection for six months, the source continued.

J.P. Morgan Securities LLC, Guggenheim Securities Holdings LLC, Jefferies Finance LLC, BMO Capital Markets Corp. and U.S. Bank are leading the deal that will be used to fund a dividend and for general corporate purposes.

Planet Fitness is an operator of health clubs.

Travel Leaders on deck

Travel Leaders Group set a lender call for 10:30 a.m. ET on Thursday to launch a $78.5 million add-on first-lien term loan that is talked at Libor plus 600 bps with a 1% Libor floor and an original issue discount that is still to be announced, a market source said.

UBS AG is leading the deal.

Travel Leaders, a Plymouth, Minn.-based travel agency company, will use the add-on term loan to fund a dividend.

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