Novolex, Total Merchant Services free to trade; Bright Horizons Family tweaks loan size

By Sara Rosenberg

New York, Dec. 4 – Novolex’s credit facility made its way into the secondary market on Thursday with both the first- and second-lien term loans trading above their original issue discounts, and Total Merchant Services Inc. freed up as well.

Meanwhile, over in the primary, Bright Horizons Family Solutions Inc. increased the size of its incremental term loan and accelerated the commitment deadline.

Novolex starts trading

Novolex’s credit facility broke for trading on Thursday with the $880 million seven-year first-lien covenant-light term loan quoted at 99¼ bid, 99¾ offered and the $230 million 7½-year second-lien covenant-light term loan quoted at 97¾ bid, 98¾ offered, according to traders.

Pricing on the first-lien term loan is Libor plus 500 basis points with a 1% Libor floor and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

The second-lien term loan is priced at Libor plus 875 bps with a 1% Libor floor and was issued at 97½. This debt has hard call protection of 102 in year one and 101 in year two.

During syndication, the first-lien term loan was upsized from $840 million, the spread was increased from Libor plus 450 bps, the call protection was extended from six months and the incremental incurrence test was set at 3.5 times first-lien leverage, and the second-lien term loan was downsized from $275 million, pricing was lifted from talk of Libor plus 825 bps to 850 bps and the discount widened from 99.

Other changes to both term loans during syndication included eliminating the MFN sunset provision and reducing the incremental facility fixed dollar amount shared between the tranches to $100 million.

Novolex getting revolver

In addition to the term loans, Novolex’s $1,235,000,000 credit facility includes a $125 million revolver priced at Libor plus 500 bps with no Libor floor and an original issue discount of 99½.

Closing is targeted for Friday.

GE Capital Markets, Deutsche Bank Securities Inc., BMO Capital Markets Corp. and Macquarie Capital (USA) Inc. are leading the deal, with GE left lead on the first-lien and Deutsche left lead on the second-lien.

Proceeds will be used to fund the acquisition of Packaging Dynamics and repay existing first-lien term loan and mezzanine debt.

First-lien leverage is 4.2 times and total leverage is 5.27 times.

Novolex, formerly Hilex Poly, is a Hartsville, S.C.-based manufacturer of plastic bags and film products.

Total Merchant breaks

Total Merchant Services’ credit facility hit the secondary too, with the $160 million six-year first-lien term loan seen at 99 bid, par offered, a trader remarked.

The term loan is priced at Libor plus 550 bps with a 1% Libor floor and was sold at an original issue discount of 99. There is 101 soft call protection for one year.

Recently, pricing on the term loan was raised from Libor plus 500 bps, the maturity was shortened from seven years and a leverage test of 2.5 times was added for restricted payments.

The company’s $175 million credit facility (B2/B+) also includes a $15 million revolver.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance existing debt and fund a dividend.

Total Merchant Services is a merchant acquirer for payment processing.

Bright Horizons upsizes

Moving to the primary, Bright Horizons Family Solutions lifted the size of its non-fungible incremental term loan due January 2020 to $165 million from $150 million and moved up the commitment deadline to noon ET on Friday from Monday, a market source said.

Talk on the loan is still Libor plus 325 bps with a 1% Libor floor and an original issue discount of 99.

Goldman Sachs Bank USA is leading the deal that will be used for general corporate purposes.

Bright Horizons is a Watertown, Mass.-based leading provider of employer-sponsored child care, back-up care, early education, educational advisory services and other work/life services.

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