CHG Healthcare, Fender Musical, HarbourVest launches delayed; PQ revises term loan

By Sara Rosenberg

New York, Oct. 29 - Hurricane Sandy showed its affects on the primary loan market on Monday, as deals that were scheduled to launch early this week, such as CHG Healthcare Services, Fender Musical Instruments Corp. and HarbourVest Partners LP, all saw their bank meetings/conference calls postponed.

Also on the new issue front, PQ Corp. made some changes to its term loan, including increasing the size and tightening the Libor floor and original issue discount.

CHG updates timing

CHG Healthcare Services delayed the bank meeting for its $765 million credit facility to Thursday from Tuesday, citing the poor weather as the reason behind the change, according to a market source.

The facility consists of a $100 million revolver (B1/B), a $450 million first-lien term loan B (B1/B) and a $215 million second-lien term loan (Caa1/CCC+).

Goldman Sachs & Co., Barclays, Citigroup Global Markets Inc. and Jefferies & Co. are leading the deal that will be used to help fund the buyout of the company by Leonard Green & Partners and Ares Management LLC from J.W. Childs Associates LP. Existing management will retain a significant equity interest in the company.

Closing is expected by the end of the year, subject to customary conditions.

CHG is a Salt Lake City-based health care staffing firm.

Fender pushed off

Fender Musical Instruments cancelled the Tuesday bank meeting for of its $245 million six-year term loan B because of Hurricane Sandy, according to a market source. Details on new timing for the deal are not yet available.

Proceeds from the new debt will be used to refinance an existing term loan.

Wells Fargo Securities LLC and J.P. Morgan Securities LLC are the lead banks on the deal.

Fender is a Scottsdale, Ariz., maker of music instruments.

HarbourVest postpones call

HarbourVest cancelled its 2 p.m. ET Monday conference call that was going to be used to launch a new $350 million five-year first-lien term loan because of the hurricane, according to a market source.

The call is expected to be rescheduled for later this week, the source said.

As previously reported, the term loan is talked at Libor plus 425 basis points with a 1% Libor floor and an original issue discount of 99½ and includes 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC is leading the deal that will refinance existing debt.

HarbourVest is a Boston-based private equity firm.

PQ reworks loan

In more primary news, PQ revised its first-lien term loan, lifting the size to $1.22 billion from $1.1 billion, trimming the Libor floor to 1% from 1.25% and moving the original issue discount to 99¼ from 99, according to a market source.

The spread on the term loan remained at Libor plus 425 bps and there is still 101 soft call protection for one year.

The company's now $1.37 billion 41/2-year credit facility (B2/B+) also includes a $150 million revolver.

With the size and pricing change to the term loan, the maximum net first-lien leverage covenant was adjusted to 5.75 times with step-downs till it hits 3.75 times in the first quarter of 2017, from 5.25 times with step-downs to 3.25 times in the first quarter of 2017, the source continued.

PQ repaying debt

Proceeds from PQ's credit facility will be used to help refinance an existing revolver, first-lien term loan and second-lien term loan.

Other funds for the transaction will come from $600 million of notes that were downsized from $720 million as a result of the term loan upsizing.

Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Barclays, Jefferies & Co., Morgan Stanley Senior Funding Inc. and Mizuho Securities USA Inc. are leading the deal.

Pro forma first-lien leverage is 4.5 times and net first-lien leverage is 4.3 times. Total leverage is 6.7 times, and 6.5 times on a net basis.

PQ is a Malvern, Pa.-based producer of specialty inorganic performance chemicals and catalysts.

OSI closes

OSI Restaurant Partners LLC completed its $1,225,000,000 credit facility (B1/BB) that consists of a $225 million revolver and a $1 billion seven-year term loan B, according to a news release.

Pricing on the B loan is Libor plus 350 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, pricing on the term B was reduced from talk of Libor plus 375 bps to 400 bps.

The revolver has pricing that can range from Libor plus 300 bps to 350 bps.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., J.P. Morgan Securities LLC and Goldman Sachs & Co. led the deal that was used to refinance existing debt.

OSI Restaurant is a Tampa, Fla.-based casual dining restaurant company.

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