Kraton sets changes, frees to trade; Vivid Seats updates deal; Solera book filling well

By Sara Rosenberg

New York, Feb. 18 – Kraton Polymers LLC increased the size of its term loan B and widened the original issue discount, and then the debt made its way into the secondary market on Thursday, with levels bid right around the issue price.

In more happenings, Vivid Seats Ltd. came out with changes to maturity, amortization, incremental allowance and excess cash flow on its first-lien term loan.

Also, syndication of Solera Holdings Inc.’s term loan B is heard to be progressing well in advance of next week’s commitment deadline.

Kraton tweaked, breaks

Kraton Polymers lifted its senior secured term loan B (Ba3/B+) due Jan. 6, 2022 to $953 million from $878 million after modifying the original issue discount to 90 from 92, according to a market source.

The term loan, which has already been funded, is priced at Libor plus 500 basis points with a 1% Libor floor, and has 101 soft call protection through Jan. 6, 2017.

Last year, the loan was brought to market at talk of Libor plus 475 bps to 500 bps with a 1% Libor floor and a discount of 98, and then pricing was revised to Libor plus 500 bps with a 1% Libor floor and an original issue discount of 92 before syndication was pulled in late December due to poor primary conditions.

Now, with the syndication wrapping at the revised terms, the term loan B was able to free up for trading on Thursday, and levels were seen at 90 bid, 91 offered, a trader added.

Kraton lead banks

Credit Suisse Securities (USA) LLC, Nomura Securities International Inc. and Deutsche Bank Securities Inc. acted as the leads on Kraton’s term loan B.

Proceeds are being used to back the already completed $1.37 billion acquisition of Arizona Chemical Holdings Corp. from American Securities LLC and refinanced existing debt.

Kraton is a Houston-based producer of engineered polymers and styrenic block copolymers. Arizona Chemical is a biorefiner of pine chemicals with executive offices in Jacksonville, Fla., and Almere, the Netherlands.

Vivid modifies loan

Vivid Seats revised the maturity of its $240 million first-lien term loan (B2/B) to six years from seven years, increased the amortization to 5% per annum from 1% per annum and reduced the incremental freebie allowance to $30 million from $35 million, a market source remarked.

In addition, the excess cash flow sweep on the term loan was sweetened to 75% with step-downs from 50% with step-downs and the starter basket for available amount was removed, the source continued.

At launch, price talk on the term loan was announced as Libor plus 550 bps to 575 bps with a 1% Libor floor and an original issue discount of 98. There is currently no update on pricing.

The loan includes 101 soft call protection for six months.

Commitments/recommitments are due at the close of business on Tuesday, the source added.

RBC Capital Markets and SG Americas Securities LLC are leading the deal that is being obtained in connection with the company’s strategic partnership with Vista Equity Partners.

Vivid is a Chicago-based secondary ticket marketplace for live sports, concerts and theater events.

Solera nets interest

Solera’s $1.9 billion seven-year covenant-light term loan B has attracted attention from investors at the price talk that was disclosed at launch, with one source hearing that the deal was already almost done by the end of last week and another source hearing that it’s more than two thirds full.

Commitments for the term loan are not due until Tuesday, sources added.

As previously reported, the term loan is talked at Libor plus 450 bps to 475 bps with a 1% Libor floor, an original issue discount of 98 and 101 soft call protection for six months.

The company’s $2.2 billion senior secured credit facility (Ba3/B) also includes a $300 million revolver.

Goldman Sachs Bank USA, Citigroup Global Markets Inc., Jefferies Finance LLC, Macquarie Capital (USA) Inc., Nomura Securities International Inc. and UBS AG are leading the deal.

Solera being acquired

Proceeds from Solera’s credit facility will be used to help fund its buyout by Vista Equity Partners for $55.85 per share. The transaction is valued at $6.5 billion, which includes Solera’s existing net debt.

Other funds for the buyout are expected to come from $2.03 billion of senior notes, over $3 billion in equity and cash on hand.

Closing is expected during the week of Feb. 29.

Solera is a Westlake, Texas-based provider of software and services to the automobile insurance claims processing industry.

Select Medical leads emerge

Select Medical Holdings Corp. revealed in an 8-K filed with the Securities and Exchange Commission that, in addition to left-lead J.P. Morgan Securities LLC, bookrunners on its $625 million five-year term loan F (Ba2/B+) include Wells Fargo Securities LLC, Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Goldman Sachs Lending Partners LLC, Morgan Stanley Senior Funding Inc. and RBC Capital Markets.

As already reported, price talk on the term loan F is Libor plus 475 bps to 500 bps with a 1% Libor floor and an original issue discount of 98 to 98.5, and the debt has 101 soft call protection for six months.

The incremental allowance is $400 million subject to 3.5 times secured leverage, with a $50 million free and clear basket and 50 bps MFN.

Covenants are 5.75 times total net leverage and $125 million of maximum capital expenditures annually.

Amortization is 1% per annum.

Commitments are due on March 2 and closing is targeted for March 4.

Proceeds will be used by the Mechanicsburg, Pa.-based health care company to fund the $400 million acquisition of Physiotherapy Associates Holdings Inc. and to refinance an existing term loan D.

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