Harbor Freight, CDW, Boyd Gaming, Ascend Performance, Grosvenor, Chesapeake Energy break

By Sara Rosenberg

New York, Aug. 16 – In the secondary market on Tuesday, deals from Harbor Freight Tools USA Inc., CDW LLC, Boyd Gaming Corp., Ascend Performance Materials LLC and Grosvenor Capital Management Holdings LLLP all freed up for trading.

Also, Chesapeake Energy Corp. came out with price talk on its term loan in the morning; then in the afternoon, the size of the loan was increased, the spread finalized at the low end of guidance, and the issue price was revised; and by late day, the debt had made its way into the secondary market.

Continuing on the topic of changes, ESH Hospitality Inc. finalized the spread on its term loan B at the low end of talk, added a step-down and tightened the original issue discount, and XPO Logistics Inc. modified the issue price on its add-on term loan B-2 and adjusted the closing date.

Furthermore, Diamond Resorts International Inc. downsized its term loan B and widened the original issue discount for a second time and extended the call protection.

Harbor Freight starts trading

Harbor Freight Tools’ credit facility freed up for trading on Tuesday, with the $2.2 billion seven-year covenant-light first-lien term loan (Ba3/BB-) quoted at par bid, 100 3/8 offered, according to a trader.

Pricing on the term loan is Libor plus 325 basis points with a 25-bps step-down at 3 times total net leverage and a 0.75% Libor floor, and it was sold at an original issue discount of 99.5. The debt has 101 soft call protection for one year.

Last week, pricing on the term loan was reduced from talk of Libor plus 350 bps to 375 bps, the step-down was added, the Libor floor was trimmed from 1%, the call protection was extended from six months, and the MFN sunset was eliminated.

The company’s $2.9 billion credit facility also includes a $700 million ABL revolver.

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

Harbor Freight is a Camarillo, Calif.-based provider of tools and equipment.

CDW frees up

CDW’s $1.49 billion seven-year term loan B (Ba1) also hit the secondary market, with levels seen at 99¾ bid, 100¼ offered, a trader said.

The term loan B is priced at Libor plus 225 bps with a 0.75% Libor floor, and it was sold with an original issue discount on new money of 99.5 and an amendment fee of 50 bps. Included in the debt is 101 soft call protection for six months.

Barclays, Morgan Stanley Senior Funding Inc., J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Wells Fargo Securities LLC, RBC Capital Markets, MUFG and HSBC Securities (USA) Inc. are leading the deal that will be used to extend the company’s existing $1.49 billion term loan B from 2020 and revise pricing from Libor plus 225 bps with a 1% Libor floor.

Net secured leverage is 1.3 times, and net total leverage is 2.9 times.

CDW is a Lincolnshire, Ill.-based technology solutions provider to business, government, education and health care organizations.

Boyd tops OID

Another deal to surface in the secondary market was Boyd Gaming’s $1 billion seven-year covenant-light term loan B, with levels quoted at 100 1/8 bid, 100 5/8 offered, according to a trader.

Pricing on the loan is Libor plus 300 bps with no Libor floor, and it was sold at an original issue discount of 99.875.

During syndication, the term loan B was upsized from $700 million, pricing was cut from Libor plus 325 bps, the Libor floor was reduced from 0.75%, and the discount firmed at the tight end of revised talk of 99.75 to 99.875 and tight of initial talk of 99.5.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading the deal that will be used with cash proceeds from the Borgata sale to refinance existing Peninsula debt and for general corporate purposes.

As part of the transaction, the Peninsula entity, which is currently an unrestricted subsidiary, will be consolidated into the Boyd capital structure.

Boyd is a Las Vegas-based operator of gaming entertainment properties.

Ascend Performance breaks

Ascend Performance Materials’ $500 million six-year covenant-light term loan began trading as well, with levels quoted at 98½ bid, 99½ offered, a trader remarked.

Pricing on the loan is Libor plus 550 bps with a step-down to Libor plus 525 bps when total leverage is 3.5 times and a 1% Libor floor. The debt was sold at an original issue discount of 98.5 and is non-callable for one year, then at 102 in year two and 101 in year three.

Bank of America Merrill Lynch and Wells Fargo Securities LLC are leading the deal that will be used to repay ABL revolver borrowings and an existing term loan B.

Ascend Performance Materials is a Houston-based provider of chemicals, fibers and plastics.

Grosvenor hits secondary

Grosvenor Capital Management’s $281,636,065 extended term loan B due August 2023 broke too, with levels quoted at par bid, 101 offered, according to a market source.

Pricing on the extended term loan B is Libor plus 300 bps with a 1% Libor floor, and it was sold with an upfront fee of 25 bps on extended or new money. The debt has 101 soft call protection for six months.

The company’s $132,988,502 non-extended term loan B due 2021 was quoted at 99¼ bid, 100¼ offered on Tuesday, the source added.

The non-extended term loan B is priced at Libor plus 275 bps with a 1% Libor floor.

In addition to the term loan B extension, the company is extending its $50 million revolver to August 2021 from 2019.

Goldman Sachs Bank USA is leading the deal.

Grosvenor Capital is a Chicago-based independent alternative asset management firm.

Chesapeake reworked

Chesapeake Energy raised its five-year first-lien last-out term loan (Caa1/B-) to $1.5 billion from $1 billion, set the spread at Libor plus 750 bps, the tight end of the Libor plus 750 bps to 775 bps talk that was first announced in the morning, and modified the issue price to par from 99, a market source remarked.

The loan has a 1% Libor floor and is non-callable for two years, then at par plus 50% of the coupon in year three and at par plus 25% of the coupon in year four.

As a result of the changes, the un-swapped equivalent all-in yield is 8.5%, compared to about 8¾% to 9% based at the initial price talk, the source continued.

Goldman Sachs Bank USA, Citigroup Global Markets Inc. and MUFG are leading the deal that launched with a lender call on Monday.

Chesapeake trades

Books on Chesapeake Energy’s term loan closed at 2:30 p.m. ET on Tuesday, and with final terms in place, the debt freed up for trading late in the session with levels quoted at 100 5/8 bid, 101 1/8 offered, the source added.

Proceeds from the new term loan will be used to fund tender offers expiring on Sept. 12 for convertible notes and senior notes.

Closing on the term loan is expected early next week.

Chesapeake Energy is an Oklahoma City-based producer of natural gas, oil and natural gas liquids.

ESH updated

Back in the primary market, ESH Hospitality firmed pricing on its $1.3 billion seven-year covenant-light term loan B at Libor plus 300 bps, the tight end of the Libor plus 300 bps to 325 bps talk, added a step-down to Libor plus 275 bps upon receipt of a minimum of Ba3/BB- corporate ratings and revised the original issue discount to 99.5 from 99, a source said.

As before, the term loan has a 0.75% Libor floor and 101 soft call protection for six months.

Commitments were due at noon ET on Tuesday, the source continued.

The company’s $1.65 billion credit facility (B1/BB+) also includes a $350 million revolver.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Goldman Sachs Bank USA, Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., Barclays, Credit Suisse Securities (USA) LLC and Macquarie Capital (USA) Inc. are leading the deal that will be used with cash on hand to refinance the remainder of the company’s roughly $1.5 billion CMBS loan.

ESH is a subsidiary of Extended Stay America Inc., a Charlotte, N.C.-based owner/operator of company-branded hotels.

XPO tweaks deal

XPO Logistics changed the issue price on its fungible $1,592,000,000 first-lien term loan B-2 due Oct. 30, 2021 to par from 99.5 and left pricing at Libor plus 325 bps with a 1% Libor floor, according to a market source.

Recommitments were due at 5 p.m. ET on Tuesday, the source said.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to refinance an existing term loan B due October 2021.

With the pricing revision, the closing date on the B-2 loan was changed to Aug. 25 from Nov. 1, and, as a result, existing lenders will get paid down at the 101 soft call protection with the refinancing, the source added.

The total term loan B-2 (BB-) size is $1,992,000,000, including a $400 million term loan B-2 that allocated earlier this month at pricing of Libor plus 325 bps with a 1% Libor floor and an original issue discount of 99.5, and will be used with $535 million of senior notes to fund the repurchase of 7 7/8% senior notes due 2019.

XPO Logistics is a Greenwich, Conn.-based provider of supply chain solutions.

Diamond revised again

Diamond Resorts trimmed its seven-year covenant-light term loan B to $700 million from a most recent size of $800 million and an initial size of $1.2 billion and moved the original issue discount to 97.5 from modified talk of 98 and initial talk of 99, according to a market source.

Additionally, the 101 soft call protection was extended to one year from six months, the MFN sunset was removed, and the excess cash flow sweep was set at 75%, with step-downs to 50% and 25%, from opening at 50%, the source said.

As before, pricing on the term loan B is Libor plus 600 bps with a 1% Libor floor; however, the spread was lifted earlier in syndication from Libor plus 500 bps.

The company’s now $800 million senior secured credit facility also includes a $100 million five-year revolver.

Barclays, RBC Capital Markets LLC, Jefferies Finance LLC and Natixis are leading the deal.

Diamond being acquired

Proceeds from Diamond Resorts’ credit facility, $600 million of senior unsecured notes, $500 million of senior secured notes and about $1.06 billion of equity will be used to fund its buyout by Apollo Global Management LLC for $30.25 per share or about $2.2 billion.

When the first downsizing was made to the term loan B, the senior secured notes offering was added to the transaction, and with this latest downsizing, the secured notes were upsized from $400 million, the source added.

Closing is subject to more than 50% of the company’s common shares being tendered, the receipt of certain regulatory approvals and other customary conditions.

Diamond Resorts is a Las Vegas-based hospitality and vacation ownership company.

Cavium closes

In other news, Cavium Inc. closed on its $700 million six-year term loan B (Ba3/BB-), according to an 8-K filed with the Securities and Exchange Commission.

The term loan B is priced at Libor plus 300 bps with a 0.75% Libor floor and was sold at an original issue discount of 99. The debt has 101 soft call protection for six months.

During syndication, pricing on the loan was lowered from Libor plus 350 bps, and the discount widened from 99.5.

J.P. Morgan Securities LLC led the deal that was used with cash on hand to fund the acquisition of QLogic Corp. for about $15.50 per share, comprised of $11.00 per share in cash and 0.098 of a share of Cavium common stock for each share of QLogic common stock.

Cavium is a San Jose, Calif.-based provider of highly integrated semiconductor products. QLogic is an Aliso Viejo, Calif.-based maker of server and storage networking connectivity products.

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