Hub, Dunkin' add-ons break; Avis slides; Sabre non-extended rises; Homeward tweaks deal

By Sara Rosenberg

New York, Aug. 6 - Hub International quickly announced and priced an incremental term loan during Monday's session, and the debt freed up for trading late in the day right around its original issue discount.

Also in trading, Dunkin' Brands Inc.'s add-on loan began trading, Avis Budget Car Rental LLC's term loans weakened as the company launched incremental debt to take out some of the higher priced existing borrowings, and Sabre Inc.'s non-extended term loan rose on refinancing news.

Moving to the primary, Homeward Residential Inc. lowered the coupon on its well-received term loan and tightened the original issue discount as well, and Husky International Ltd. finalized the spread on its repriced loan at the high end of guidance.

In addition, MModal Inc. came out with price talk on its credit facility with launch, Capsugel released details on the reason behind its lender call, and Ceridian Corp. came to market with a new loan.

Hub hits secondary

Hub International launched on Monday morning an add-on to its extended senior secured term loan due June 13, 2017, upsized it, firmed the original issue discount and then it broke for trading in the afternoon at 99½ bid, 99¾ offered, according to a market source.

The existing term loan due in 2017, which is fungible with the add-on, was quoted at 99¾ bid, on Friday, the source said.

The $75 million add-on, increased from $50 million, is priced at Libor plus 450 basis points with no Libor floor, same as the existing term loan, and was sold at an original issue discount of 991/2, the low end of the 99 to 99½ talk. There is 101 soft call protection through April 24, 2013.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used by the Chicago-based insurance company for general corporate purposes, including future acquisitions.

Dunkin' frees up

Dunkin' Brands' $400 million add-on senior secured term loan B-2 (B2/B+) due Nov. 23, 2017 made its way into the secondary market too, with levels quoted at 99 bid, 99½ offered, according to a market source.

The existing term loan B was quoted at 99¼ bid, 99¾ offered, the source said, adding that the two tranches will be fungible when the add-on funds.

Pricing on the add-on is Libor plus 300 bps with a 1% Libor floor, in line with existing term loan B pricing, and it was sold at an original issue discount of 99.

During syndication, the discount finalized at the tight end of the 98½ to 99 guidance with a delayed-draw option so that it will fund onto the balance sheet.

Barclays Capital Inc., J.P. Morgan Securities LLC and Morgan Stanley Funding Inc. are leading the deal that will be used to return capital to shareholders and for general corporate purposes.

Dunkin' Brands is a Canton, Mass.-based franchisor of quick-service restaurants.

Avis softens

Meanwhile, Avis' term loans headed lower in trading with news of an afternoon lender call that was used to launch a $200 million add-on to its term loan C due 2019, according to a trader.

The existing term loan C was quoted at 99 bid, par offered, down from 99½ bid, par ¼ offered, and the existing term loan B was quoted at 99¾ bid, par ¾ offered, down from par bid, 101 offered, the trader said.

The term loan B, which is priced at Libor plus 500 bps with a 1.25% Libor floor and totaled about $264 million at March 31, will be refinanced with proceeds from the add-on debt.

Price talk on the add-on term loan C is Libor plus 325 bps with a 1% Libor floor (same as existing), with an original issue discount of 98½ to 99, a source remarked.

J.P. Morgan Securities LLC, Barclays, Bank of America Merrill Lynch and Deutsche Bank Securities Inc. are leading the deal for the Parsippany, N.J.-based vehicle rental operator.

Sabre non-extended gains

Sabre's non-extended term loan moved up to 99 bid, 99¾ offered, from 98¼ bid, 98¾ offered, as it was revealed that the debt will be paid down with proceeds from a $250 million incremental term loan, according to a trader.

The incremental term loan was launched with a call in the afternoon with talk of Libor plus 600 bps to 625 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, sources said.

Commitments are due at noon ET on Thursday, sources added.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., Goldman Sachs & Co., Barclays, Natixis and Mizuho are leading the deal.

Sabre is a Southlake, Texas-based online travel company.

Homeward flexes

Switching to the primary, Homeward Residential revised its $300 million term loan, trimming the spread to Libor plus 675 bps from Libor plus 700 basis points and moving the original issue discount to 97½ from 96, according to market sources.

As before, the loan has a 1.5% Libor floor and hard call protection of 102 in year one and 101 in year two.

Barclays Capital Inc., Bank of America Merrill Lynch and Citigroup Global Markets Inc. are leading the $375 million credit facility (B1), which also includes a $75 million revolver.

Recommitments are due at noon ET on Tuesday and allocations are expected either later that afternoon or on Wednesday, sources added.

Homeward Residential, a Coppell, Texas-based non-bank mortgage servicing and finance company, will use the new credit facility to redeem preferred shares held by WL Ross & Co.

Husky firms pricing

Husky International set the coupon on its $866 million term loan B at Libor plus 450 bps, the high side of the Libor plus 425 bps to 450 bps talk, according to a market source.

Proceeds are being used to reprice the existing term loan B from Libor plus 525 bps.

With the repricing, the 1.25% Libor floor is being left intact and 101 soft call protection is being extended for one year.

Goldman Sachs & Co. and Morgan Stanley Senior Funding Inc. are leading the deal.

Husky is a Bolton, Ont.-based supplier of injection molding equipment and services to the plastics industry.

MModal sets talk

MModal held a bank meeting on Monday afternoon to kickoff syndication on its $515 million senior secured credit facility (Ba3/BB-), and with the launch, price talk was announced, according to a market source.

The $440 million seven-year term loan is being talked at Libor plus 500 bps to 525 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, and the $75 million five-year revolver is expected to have the same coupon as the term loan, the source remarked.

By comparison, filings with the Securities and Exchange Commission had pricing on the tranches expected at Libor plus 525 bps, with the term loan having a 1.25% floor.

In addition, the revolver was initially anticipated to be sized at $60 million, but was then increased to $65 million and was later upsized again as a result of additional commitments.

Commitments are due on Aug. 13, the source added.

MModal lead banks

Bank of America Merrill Lynch and RBC Capital Markets LLC are the joint lead arrangers and bookrunners on MModal's credit facility, and SunTrust Robinson Humphrey Inc. is a bookrunner, too.

Proceeds, along with $447 million in equity and $250 million of senior unsecured notes, will fund the purchase of the company by One Equity Partners for $14 per share in an all-cash transaction, valued at about $1.1 billion, and to refinance existing debt.

The notes are backed by a $250 million one-year senior unsecured bridge loan that, according to regulatory filings, is priced at Libor plus 875 bps, stepping up by 50 bps after three months and every three months thereafter, up to a cap. There is a 1.25% Libor floor.

Closing is expected this quarter, subject to a majority of shares being tendered in an offer that expires on Aug. 13, or shareholder approval.

MModal is a Franklin, Tenn.-based provider of clinical documentation services and speech understanding services.

Capsugel repricing

Also on the primary side, details on the purpose of Capsugel's previously announced morning lender call emerged, with the company launching a repricing of its $150 million revolver and $875 million term loan, according to sources.

The revolver and term loan are talked at Libor plus 350 bps, versus current pricing of Libor plus 400 bps, with the term loan expected to maintain its 1.25% Libor floor, sources said.

Also, the term loan will see the addition of 101 soft call protection for one year.

Lead bank, UBS Securities LLC, is seeking lender consents by Thursday.

At April 1, total leverage was 5.1 times LTM adjusted EBITDA. Last year, when the company was acquired by Kohlberg Kravis Roberts & Co LP from Pfizer Inc., total leverage was 6 times pro forma adjusted EBITDA

Capsugel is a Morristown, N.J.-based manufacturer of hard capsules and drug-delivery systems.

Ceridian seeks refinancing

Ceridian held a call as well, launching a $342 million term loan due May 2017 to refinance its existing $342 million of non-extended term loan debt, according to a market source.

The new loan is talked at Libor plus 575 bps with an original issue discount of 98 and 101 soft call protection for one year, the source said. Pricing and maturity are in line with the company's existing extended term loan.

Commitments are due at 3 p.m. ET on Tuesday, the source continued.

With the new debt, the company is looking to amend its existing credit facility to allow for fungibility of the new term loan and is asking for consents by Thursday, the source added.

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC and Bank of America Merrill Lynch are leading the deal for the Minneapolis-based provider of human resources, transportation and retail information management services.

Navistar launches

Navistar Inc. launched its $1 billion five-year covenant-light term loan B on Monday at previously outlined talk of Libor plus 650 bps to 700 bps with a 1.5% Libor floor, an original issue discount of 98 and hard call protection of 101 in year one, 102 in year two and 101 in year three, according to a market source.

Of the total term loan B amount, $750 million will be drawn at close and $250 million will be delayed-draw for 90 days.

J.P. Morgan Securities and Goldman Sachs Lending Partners LLC are the lead arrangers on the deal, and Bank of America Merrill Lynch and Credit Suisse Securities (USA) LLC are involved as well.

Proceeds will be used for general corporate purposes and repaying ABL credit facility borrowings.

Navistar is a Lisle, Ill.-based manufacturer of commercial and military trucks, buses, RVs and diesel engines.

Wilton coming soon

In other news, Wilton Brands Inc. has set a bank meeting for Tuesday to launch a proposed credit facility that will include an ABL revolver and a term loan, according to a market source.

Sizes on the tranches are not yet available, the source said.

Deutsche Bank Securities Inc. and UBS Securities LLC are leading the financing, will be used to repay existing debt.

Commitments will be due on Aug. 16, the source concluded.

Wilton is a Woodridge, Ill.-based craft and celebration company.

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