Vizient term loan shows improvement; GCA Services reveals first-lien term loan guidance

By Sara Rosenberg

New York, Feb. 10 – Vizient Inc.’s term loan inched its way higher in the secondary market on Wednesday from where it broke for trading during the previous session.

Meanwhile, over in the primary market, GCA Services Group Inc. came out with price talk on its first-lien term loan in connection with its bank meeting.

Vizient strengthens

Vizient’s $1,275,000,000 seven-year secured term loan was a touch stronger in its second day of trading, with levels on Wednesday afternoon seen at 98¼ bid, 98 7/8 offered, versus late Tuesday levels of 98 bid, 98¾ offered and breaking levels of 97¾ bid, 98¾ offered earlier that day, according to a trader.

The term loan is priced at Libor plus 525 basis points with a 1% Libor floor, and it was sold at an original issue discount of 97. The debt has 101 soft call protection for one year.

The loan underwent a number of changes during syndication, including a reduction in size from a revised amount of $1,375,000,000 and a launch size of $1,475,000,000, pricing increasing from Libor plus 500 bps, the original issue discount widening from 98, the call protection term sweetening from six months and the removal of the 12 months MFN sunset.

Also during syndication, a net senior secured leverage ratio starting at 5 times was added so that the term loan was no longer covenant-light, and the incremental allowance was modified to $90 million, subject to total leverage of 5.75 times, plus an unlimited amount subject to a senior secured leverage ratio of 3.75 times, from an unlimited amount subject to senior secured leverage of 4.5 times.

Vizient funding acquisition

Proceeds from Vizient’s term loan will be used to help fund the purchase of the Spend and Clinical Resource Management and Sg2 businesses from MedAssets Inc.

Other funds for the transaction will come from a $600 million bond offering that was upsized from a revised amount of $500 million and an initial amount of $400 million, in conjunction with the term loan downsizings.

As part of its $1,375,000,000 credit facility, the company is also getting a $100 million five-year unfunded revolver that was increased during syndication from $75 million.

Barclays is leading the credit facility.

Closing on the acquisition is expected this quarter.

Vizient is an Irving, Texas-based network of not-for-profit health care organizations.

GCA sets talk

Switching to the primary market, GCA Services held its bank meeting on Wednesday afternoon, and with the event, talk on its $515 million seven-year covenant-light first-lien term loan (B1/B) emerged at Libor plus 475 bps with a 1% Libor floor, an original issue discount of 98 to 98.5 and 101 soft call protection for six months, a market source said.

Commitments are due at noon ET on Feb. 19, the source added.

The company’s proposed credit facility also includes a $100 million five-year revolver (B1/B) and a $180 million pre-placed eight-year second-lien term loan (Caa1/CCC+).

Goldman Sachs Bank USA, Barclays, UBS AG, ING and Macquarie Capital (USA) Inc. are leading the deal that will be used to help fund the buyout of the company by the Merchant Banking Division of Goldman Sachs and Thomas H. Lee Partners LP from Blackstone.

Closing is expected this quarter, subject to customary conditions.

GCA is a Cleveland-based provider of facility services, such as janitorial/custodial services, contamination control for cleanroom manufacturing, facilities operations and maintenance services, grounds and athletic field management services and diversified staffing.

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