SiteOne latest casualty of frosty primary; Integro modifies deal; XPO, Talen set launches

By Sara Rosenberg

New York, Oct. 8 – In the primary on Thursday, news emerged that SiteOne Holding LLC (formerly JDA Holding LLC) pulled its term loan from market as the opportunistic transaction was met with unfavorable conditions.

Additionally, Integro Ltd. revised its first- and second-lien term loan sizes, spreads, original issue discounts and call premiums, and XPO Logistics Inc. and Talen Energy Corp. joined the near-term new issue calendar.

SiteOne shelves deal

SiteOne withdrew its $350 million six-year first-lien term loan B (B3/B) from the primary due to poor market conditions, a market source remarked.

Talk on the term loan was Libor plus 500 basis points with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

UBS Securities LLC was leading the deal that was going to refinance existing debt and fund a dividend.

Other dividend recapitalization deals pulled recently include ABB/Con-Cise Optical Group LLC and Apple Leisure Group, and Xerium Technologies Inc. withdrew earlier this month a refinancing transaction from market.

SiteOne is an Alpharetta, Ga.-based wholesale distributor of landscape supplies for green industry professionals, including irrigation supplies.

Integro restructures

Integro reduced its seven-year funded first-lien term loan to $195 million from $220 million and its delayed-draw seven-year first-lien term loan to $75 million from $90 million, lifted pricing to Libor plus 575 bps from talk of Libor plus 475 bps to 500 bps, widened the original issue discount to 96 from 99, extended the 101 soft call protection to one year from six months, and modified the delayed-draw loan so that it will fully funded at close into escrow as opposed to having a ticking fee of half the coupon from days 31 to 60 and the full coupon plus the floor thereafter, according to a market source.

Also, the eight-year second-lien term loan was increased to $105 million from $80 million, a new $15 million delayed-draw eight-year second-lien term loan was added, pricing was changed to Libor plus 925 bps from talk of Libor plus 875 bps to 900 bps, the discount was adjusted to 98 from 98.5, and the call protection was revised to non-callable for one year, then at 103 in year two and 101 in year three from 102 in year one and 101 in year two, the source said.

Both term loans still have a 1% Libor floor.

Integro documentation changes

Further modifications to Integro’s credit facility included increasing the excess cash flow sweep to 75% with step-downs to 50%, 25% and 0% from 50% with step-downs to 25% and 0%, reducing the unlimited first-lien incremental to 3.75 times first-lien leverage from 4.25 times, revising the incremental freebie to $35 million from the greater of LTM EBITDA and $50 million, removing the 18-month MFN sunset and revising the permitted acquisition definition, the source continued.

Along with the first-and second-lien term loans, Integro’s $440 million credit facility includes a $50 million five-year revolver.

Goldman Sachs Bank USA and Jefferies Finance LLC are leading the deal that will help fund the buyout of the New York-based insurance brokerage and risk management firm by Odyssey Investment Partners LLC.

First-lien leverage is 3.7 times, down from 4.2 times under the original structure, and second-lien leverage is 5.7 times, the source added.

Closing is expected in the fourth quarter, subject to customary conditions, including antitrust regulatory approval and approval of the U.K. Financial Conduct Authority.

HelpSystems deadline passes

Recommitments were due on Thursday for HelpSystems LLC’s credit facility which underwent changes to term loan pricing, original issue discounts and call protection, a market source said.

The $300 million first-lien term loan (B2/B) saw a pricing increase to Libor plus 525 bps from Libor plus 475 bps, the original issue discount move to 98 from 99, the 101 call protection extended to one year from six months and the maturity shortened to six years from seven years, and the $130 million second-lien term loan (Caa2/CCC+) saw pricing lifted to Libor plus 950 bps from Libor plus 875 bps, the discount widen to 97 from 98.5, the call protection modified to 103 in year one, 102 in year two and 101 in year three from 102 in year one and 101 in year two, and the maturity shortened to seven years from eight years, the source continued.

As before, both term loans have a 1% Libor floor.

The $465 million credit facility also includes a $35 million revolver (B2/B).

Credit Suisse Securities (USA) LLC and Antares Capital are leading the deal that will help fund H.I.G. Capital’s buyout from Summit Partners of HelpSystems, an Eden Prairie, Minn.-based provider of system & network management, business intelligence, and security & compliance solutions.

XPO readies loan

In more happenings, XPO Logistics set a bank meeting for 2 p.m. ET in New York on Tuesday to launch a $1.75 billion senior secured term loan B, according to a market source.

Morgan Stanley Senior Funding Inc., Barclays, Credit Agricole Securities Inc., Deutsche Bank Securities Inc., HSBC Securities Inc. and J.P. Morgan Securities LLC are leading the deal that will be used to help fund the acquisition of Con-way Inc. for $47.60 per share, to refinance existing Con-way debt and for general corporate purposes. The total transaction value is about $3 billion, including $290 million of net debt.

Closing is expected this month, subject to completion of a tender offer for Con-way’s shares and customary conditions, including regulatory approvals.

XPO bridge loan

Previously, XPO said that it had received a commitment for a $2,025,000,000 364-day senior secured second-lien bridge loan priced at Libor plus 350 bps with a 1% Libor floor and 50 bps step-ups every three months to back the Con-way transaction.

The company also said that it expected to issue senior notes and/or issue equity or equity linked securities and/or incur term loans to replace the bridge loan.

Morgan Stanley provided the bridge commitment.

XPO is a Greenwich, Conn.-based provider of supply chain solutions. Con-way is an Ann Arbor, Mich.-based transportation and logistics company.

Talen on deck

Talen Energy scheduled a bank meeting for 11 a.m. ET in New York on Tuesday to launch a $400 million senior secured term loan B, according to a market source.

Citigroup Global Markets Inc. is leading the deal that will be used to help fund the acquisition of MACH Gen LLC for $1,175,000,000 inclusive of any assumed debt, subject to customary purchase price adjustments.

Closing is expected by year-end, subject to regulatory approvals.

Talen is an Allentown, Pa.-based energy and power generation company. MACH Gen is an Athens, N.Y.-based operator of gas-fired generation plants.

CSGov reveals call protection

Computer Sciences Government Services Inc.’s (CSGov) proposed $1.25 billion seven-year term loan B is talked with 101 soft call protection for six months post-close, a market source remarked.

Also, the bank meeting for the term loan B, which was previously said to be targeted for Oct. 15, has firmed up for that date, the source continued.

The company’s $3.5 billion senior secured credit facility (Ba2/BB+/BBB) also includes a $500 million five-year revolver, a $500 million three-year term loan A-1 and a $1.25 billion five-year term loan A-2, all of which launched with a meeting for bank investors this past Tuesday.

Price talk on the revolver and term loan A-2 is Libor plus 175 bps, and talk on the term loan A-1 is Libor plus 162.5 bps. Term loan B price talk is not yet available.

CSGov lead banks

RBC Capital Markets, Mitsubishi UFJ Financial Group (MUFG), Bank of America Merrill Lynch and Scotiabank are the bookrunners on Computer Sciences Government’s credit facility, with RBC left lead on the term loan B and MUFG left lead on the revolver and term A debt.

Proceeds will be used to fund the $10.50 per share special cash dividend being paid in the spin-off of Computer Sciences Government Services from Computer Sciences Corp., to finance the $390 million acquisition of SRA by Computer Sciences Government from Providence Equity Partners and SRA’s founder, Dr. Ernst Volgenau, as well as members of its management team, and to refinance SRA’s existing $1 billion of net debt.

Computer Sciences Government is a Falls Church, Va., provider of IT services to the U.S. federal government. SRA is a Fairfax, Va.-based provider of IT and professional services to the U.S. federal government.

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