Staples, PGT downsize term loans; Vivid Seats to launch $240 million bank debt Wednesday

By Paul A. Harris

Portland, Ore., Jan. 28 – Bank loans were generically ¼ to 3/8 of a point higher amid decent two-way flow in a relatively quiet market on Thursday, according to a trader.

In the primary market Staples Inc. and PGT Inc. downsized their term loans.

And Vivid Seats Ltd. set a Wednesday lender meeting to launch $240 million of first-lien senior bank debt.

Staples downsizes, ups pricing

Staples downsized its term loan B to $2.5 billion from $2.75 billion, electing to draw the $250 million difference from its ABL facility, a move that will render a cheaper cost of capital, a market source said.

Pricing was increased to Libor plus 400 basis points from 350 bps.

Discount talk remains unchanged at 99.

The Libor 0.75% Libor floor also remains unchanged.

As reported, Staples revised its plans to fund its term loan B into escrow so that lenders are now offered an increase in pricing. Initial pricing was Libor plus 275 bps with a 0.75% Libor floor and a discount of 99.5.

The escrow proposal is a result of the company extending the termination date for its pending merger with Office Depot Inc. to May 16 from Feb. 4 to allow for the completion of ongoing federal district court litigation with the Federal Trade Commission.

The company intends to fund the loan into escrow on Feb. 2 and the funds can stay in escrow until Sept. 10, with a two-month extension option if the merger has not closed by then, subject to payment of a 25-bps extension fee.

If the merger is terminated, lenders will be paid out at par.

Currently, lenders are being paid the full margin plus the floor on the term loan B because of a ticking fee that was part of the deal at the time of syndication.

Barclays is the administrative agent on the debt.

NorthStar raises pricing

NorthStar Asset Management Group Inc. (NSAM LP) raised pricing and deepened the discount on its restructured its $500 million seven-year senior secured term loan B (Ba2/BBB-) on Thursday, according to a market source.

The spread increased to 387.5 bps from 375 bps.

The discount deepened to 96.5 from previous discount talk of 98.5 to 99.

The Libor floor remains unchanged at 0.75%.

Commitments are due on Friday.

As reported, the deal now includes a financial maintenance covenant set at three-times gross total leverage.

The 101 soft call protection was extended to 12 months from six months.

Other changes include a scaling back of the free and clear incremental facility to $190 million and the elimination of the 100% of the last 12 months consolidated EBITDA grower component.

The excess cash flow sweeps will be decreased.

And the share purchase restricted payments carve-out amount for 2016 through 2017 is reduced to $100 million.

The most favored nation sunset provision is removed.

Morgan Stanley Senior Funding Inc. is the lead bank on the deal.

Proceeds will be used to fund the acquisition of a roughly 85% interest in the Townsend Group, a manager and adviser of real assets, for about $380 million and to refinance a short-term bridge facility.

The acquisition is expected to close early this year.

Vivid Seats sets meeting

Vivid Seats plans to launch $240 million of first-lien senior bank debt on Wednesday, according to a market source.

Commitments are due on Feb. 17.

RBC Capital Markets and SG Americas Securities LLC are the leads on the deal.

The debt is being obtained in connection with the company’s strategic partnership with Vista Equity Partners, the source said.

PGT downsizes, ups talk

PGT downsized its term loan B (B2/B+) to $270 million from $310 million and decreased the maturity to six years from seven years, according to a market source.

Spread talk increased to Libor plus 575 bps from earlier talk of 500 to 525 bps. Discount talk deepened to 97 from 98.5. The 1% Libor floor remains unchanged.

The 101 soft call protection was extended to 12 months from six months.

There were also covenant changes.

Deutsche Bank Securities Inc. and SunTrust Robinson Humphrey Inc. are the bookrunners on the deal.

Recommitments are due on Friday.

Proceeds will be used to fund the acquisition of WinDoor Inc. in a transaction valued at about $102 million and to refinance existing debt.

Central Security moves up deal

Central Security Group, Inc. moved up timing on its $50 million incremental first-lien term loan due Oct. 6, 2020 (B2/B-), according to a market source.

Commitments are now due on Friday. The previous deadline was Monday, Feb. 1.

As reported, the deal via Credit Suisse Securities (USA) LLC is an add-on to its existing term loan due Oct. 6, 2020 and will be fungible with the existing loan.

As with the existing loan, pricing features a 562.5-bps spread to Libor with a 1% Libor floor at 97.00.

There is soft call protection for six months at 101.

The Tulsa, Okla.-based provider of alarm monitoring services plans to use the proceeds to repay a draw on its revolving credit facility.

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