AkzoNobel breaks; Ciena, 8th Avenue, U.S. Lumber, Garrett, PCI Pharma revisions emerge

By Sara Rosenberg

New York, Sept. 20 – AkzoNobel Specialty Chemicals’ credit facilities made their way into the secondary market on Thursday, with the U.S. term loan B quoted above its original issue discount.

Moving to the primary market, Ciena Corp. lowered pricing on its term loan B and tightened the original issue discount, and 8th Avenue Food & Provisions Inc. shifted some funds between its first-and second-lien term loans, updated spreads and modified issue prices.

Also, U.S. Lumber Group LLC lifted pricing on its term loan, raised pricing, widened the original issue discount and sweetened the call protection, Garrett Motion Inc. updated its U.S. and euro term loan B sizes and trimmed spreads, and PCI Pharma Services (Packaging Coordinators Midco Inc.) revised the issue price on its incremental first-lien term loan.

In addition, R.R. Donnelley & Sons Co., Bomgar Corp., Tortoise Investments LLC, Liquidnet Holdings Inc. and DigiCert Holdings Inc. released price talk with launch, and Distributed Power and Numotion joined the near-term primary calendar.

AkzoNobel frees up

AkzoNobel Specialty Chemicals’ credit facilities broke for trading on Thursday, and the €3.71 billion equivalent U.S. dollar seven-year covenant-light term loan B was quoted at par 3/8 bid, par 5/8 offered, according to a trader.

Pricing on the U.S. term loan is Libor plus 325 basis points with a 0% Libor floor and it was sold at an original issue discount of 99.5. The debt has 101 soft call protection for six months.

The company’s €6.25 billion equivalent of credit facilities also include a €750 million equivalent U.S. dollar six-year revolver and a €1.79 billion seven-year covenant-light term loan B.

The euro term loan is priced at Euribor plus 375 bps with a 0% floor and was issued at par. This tranche has 101 soft call protection for six months too.

During syndication, the U.S. term loan was upsized from €3,325,000,000, pricing was trimmed from initial talk in the range of Libor plus 400 bps to 425 bps and the discount firmed at the tight end of the 99 to 99.5 talk. Also, pricing on the euro term loan was revised from initial talk of Euribor plus 425 bps and the issue price was changed from initial talk in the range of 99 to 99.5.

AkzoNobel being acquired

Proceeds from AkzoNobel Specialty Chemicals’ credit facilities will be used to help fund its buyout by the Carlyle Group and GIC from AkzoNobel for an enterprise value of €10.1 billion.

The company is also issuing $605 million and €485 million in notes for transaction. The total bond offering amount was downsized by €385 million with the recent U.S. term loan upsizing.

J.P. Morgan Securities LLC, Barclays and HSBC are the joint global coordinators on the loans. Credit Suisse, Deutsche Bank, Morgan Stanley, RBC, Citigroup, Nomura, UBS, BNP Paribas, Credit Agricole, Mizuho, MUFG, RBS, Societe Generale and Bank of China are the bookrunners. ABN Amro, Commerzbank, Rabobank, SEB, Bank of Ireland, Standard Chartered, ING and AIB are the mandated lead arrangers. JPMorgan is the administrative agent.

Closing is expected before year-end, subject to regulatory approvals and other customary conditions.

AkzoNobel Specialty is a specialty chemicals company.

Ciena trims pricing

Switching to the primary market, Ciena cut the spread on its $700 million seven-year covenant-light term loan B (Ba1/BB) to Libor plus 200 bps from Libor plus 225 bps and moved the original issue discount to 99.875 from talk in the range of 99.5 to 99.75, according to a market source.

As before, the term loan has a 0% Libor floor and 101 soft call protection for six months.

Recommitments were due at 5 p.m. ET on Thursday and allocations are targeted for Friday, the source added.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are leading the deal that will be used to refinance the company’s existing term loan B and some of its convertible notes.

Ciena is a Linthicum, Md.-based supplier of communications networking equipment and software.

8th Avenue reworked

8th Avenue Food & Provisions lifted its seven-year first-lien term loan to $525 million from $500 million, lowered pricing to Libor plus 375 bps from talk in the range of Libor plus 400 bps to 425 bps, added a 25 bps step-down at 4.25 times first-lien leverage and changed the original issue discount to 99.75 from talk in the range of 99 to 99.5, while leaving the 0% Libor floor and 101 soft call protection for six months intact, a market source said.

Regarding the eight-year second-lien term loan, it was scaled back to $100 million from $125 million, the spread finalized at Libor plus 775 bps, the low end of the Libor plus 775 bps to 800 bps talk, and the discount was modified to 99.25 from 98.5, the source continued. This tranche still has a 0% Libor floor and call protection of 102 in year one and 101 in year two.

Final commitments were due at 5 p.m. ET on Thursday, the source added.

8th Avenue lead banks

Barclays, Goldman Sachs Bank USA, BMO Capital Markets, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are leading 8th Avenue Food’s $625 million of term loans.

The new debt will be used to support the capitalization of the company as a stand-alone entity from St. Louis-based Post Holdings Inc., with a new investment from Thomas H. Lee Partners.

Under the agreement, Post is anticipated to receive total proceeds of $875 million. Post will retain 60.5% of the common equity in 8th Avenue. Thomas H. Lee will receive 8th Avenue preferred stock with an 11% PIK-equivalent, cumulative, quarterly compounding dividend and 39.5% of the common equity in the company.

Closing is expected in October, subject to regulatory approval and other customary conditions.

8th Avenue Food is a manufacturer of nut butters, healthy snacks, granola and pasta.

U.S. Lumber revised

U.S. Lumber raised pricing on its $500 million seven-year covenant-light term loan (B3/B) to Libor plus 575 bps from talk in the range of Libor plus 525 bps to 550 bps, changed the original issue discount to 98.5 from 99, extended the 101 soft call protection to one year from six months, and removed the MFN sunset and carve-outs, according to a market source.

Furthermore, the excess cash flow sweep was increased to 75% with step-downs to 50%, 25% and 0% at first-lien net leverage of 4.5 times, 4 times and 3.5 times, the free and clear accordion was reduced to the greater of $50 million and 0.5 times LTM EBITDA, the first-lien incremental debt incurrence was reduced to 4.5 times, the inside maturity basket was removed and EBITDA addbacks were capped at 25%, the source said.

The term loan still has a 0% Libor floor.

Commitments are due at noon ET on Friday, the source added. The original deadline had been Thursday.

U.S. Lumber getting revolver

In addition to the term loan, U.S. Lumber’s $600 million of credit facilities include a $100 million five-year ABL revolver.

SunTrust Robinson Humphrey Inc., Bank of America Merrill Lynch and Nomura are leading the deal that will be used to fund the acquisition of Alexandria Moulding and to refinance existing debt.

Closing is expected in October, subject to customary conditions.

U.S. Lumber, a Madison Dearborn Partners portfolio company, is an Atlanta-based two-step distributor of specialty building products. Alexandria Moulding is an Alexandria, Ont.-based provider of mouldings and millwork to the residential and commercial markets.

Garrett changes surface

Garrett Motion set its seven-year U.S. term loan B size at $425 million and its seven-year euro term loan B size at €375 million, versus initial talk of a total term loan B of $750 million equivalent, cut pricing on the U.S. tranche to Libor plus 250 bps from talk in the range of Libor plus 275 bps to 300 bps and lowered pricing on the euro tranche to Euribor plus 275 bps from the Euribor plus 300 bps area, according to a market source.

The term loans still have a 0% floor, an original issue discount of 99.5 and 101 soft call protection for six months.

J.P. Morgan Securities LLC is leading the deal that will be used with notes, which were downsized with the term loan B upsizing, to help fund the spin-off of the company from Honeywell International Inc.

Garrett is a Switzerland-based manufacturer of turbocharger and electric-boosting technologies for light and commercial vehicle original equipment manufacturers and the aftermarket.

PCI tweaks deal

PCI Pharma Services adjusted the issue price on its fungible $50 million incremental first-lien term loan due July 1, 2023 to par from 99.5, a market source remarked.

Thee incremental first-lien term loan is priced at Libor plus 400 bps with a 1% Libor floor, in line with existing term loan pricing, and has 101 soft call protection for six months.

Commitments continued to due at noon ET on Thursday, the source added.

Jefferies LLC is leading the deal that will be used with a pre placed $25 million incremental second-lien term loan to fund the acquisition of Sherpa Clinical Packaging.

PCI is a Philadelphia-based pharmaceutical services provider. Sherpa is a San Diego-based provider of clinical trial material management services for clinical studies phases I-IV.

R.R. Donnelley sets talk

Also in the primary market, R.R. Donnelley held its bank meeting on Thursday and announced talk of Libor plus 500 bps with a 0% Libor floor and an original issue discount of 99 on its $400 million covenant-light term loan B (B1/B+) due January 2024, according to a market source.

The term loan has 101 soft call protection for six months.

Commitments are due at 5 p.m. ET on Oct. 2, the source said.

Bank of America Merrill Lynch is the left lead on the deal that will be used to repay debt and for general corporate purposes.

R.R. Donnelley is a Chicago-based communications provider enabling organizations to create, manage, deliver and optimize their multichannel marketing and business communications.

Bomgar reveals guidance

Bomgar came out with talk of Libor plus 400 bps with a 0% Libor floor and an original issue discount of 99.5 on its $315 million incremental first-lien term loan due April 17, 2025 that launched with a bank meeting in the morning, a market source said. The debt has 101 soft call protection until Oct. 19.

The company is also getting a $15 million incremental revolver, bringing the total revolver size to $40 million, and a privately placed $124 million incremental second-lien term loan due April 19, 2026 that has call protection of 102 until April 19, 2019 and 101 until April 19, 2020.

Commitments are due on Oct. 1, the source added.

There is also a separate amendment for which consents are due at noon ET on Sept. 27.

Jefferies LLC, RBC Capital Markets, Golub, Antares Capital, ING and Barings are leading the deal that will be used to fund the acquisition of BeyondTrust from Veritas Capital.

Closing is expected in October.

Bomgar, a Francisco Partners portfolio company, is an Atlanta-based provider of remote support and privileged access management solutions to enterprise customers. BeyondTrust is a Phoenix-based privilege-centric security company. The combined company will be based in Atlanta and will be called BeyondTrust.

Tortoise holds call

Tortoise Investments launched with an afternoon call a fungible $30 million add-on first-lien term loan and repricing of its existing $261.8 million first-lien term loan at talk of Libor plus 350 bps with a 1% Libor floor and 101 soft call protection for six months, according to a market source.

The add-on is talked with an original issue discount of 99.75 and the repricing is offered at par, the source said.

Commitments are due at noon ET on Sept. 27.

UBS Investment Bank and Credit Suisse Securities (USA) LLC are leading the deal.

The add-on will be used for strategic initiatives and the repricing will take the existing term loan down from Libor plus 400 bps with a 1% Libor floor.

Tortoise is a Leawood, Kan.-based provider of investment solutions and market insights.

Liquidnet repricing

Liquidnet held its call in the afternoon, launching a $190 million first-lien term loan talked at Libor plus 325 bps with a 1% Libor floor, a par issue price and 101 soft call protection for six months, according to a market source.

Commitments/consents are due at 11 a.m. ET on Wednesday, the source said.

Jefferies LLC is leading the deal that will be used to reprice an existing term loan down from Libor plus 375 bps with a 1% Libor floor.

Liquidnet is a New York-based regulated agency securities broker.

DigiCert launches

DigiCert held a call in the morning, launching a $100 million add-on first-lien term loan due 2024 and a repricing of its existing first-lien term loan due 2024 with talk of Libor plus 375 bps to 400 bps with a 0% Libor floor and a par issue price, a market source remarked.

Commitments are due on Sept. 26, the source added.

UBS Investment Bank is leading the deal.

The add-on term loan will be used to repay some second-lien term loan borrowings and the repricing will take the existing term loan down from Libor plus 475 bps with a 1% Libor floor.

DigiCert is a Lehi, Utah-based provider of scalable security solutions.

Distributed Power on deck

Distributed Power set a bank meeting in London for Monday and a bank meeting at 10 a.m. ET in New York for Tuesday to launch a $400 million seven-year first-lien term loan B and a $1,085,000,000 equivalent euro seven-year first-lien term loan B, according to a market source.

Bank of America Merrill Lynch, BNP Paribas Securities Corp., Citigroup Global Markets Inc. and Jefferies LLC are the physical bookrunners and mandated lead arrangers on the $1,485,000,000 equivalent of term loans. Credit Agricole, Deutsche Bank Securities Inc., Erste Bank and Unicredit are mandated lead arrangers as well.

Commitments are due at noon ET on Oct. 5, the source said.

The new loans will be used to fund the buyout of General Electric’s Distributed Power business for $3.25 billion by Advent International.

Closing is expected in the fourth quarter, subject to customary conditions and regulatory approvals.

Distributed Power is a provider of reciprocating gas engines, power equipment and services focused on power generation and gas compression at or near the point of use.

Numotion readies deal

Numotion scheduled a bank meeting in New York for Oct. 9 to launch $445 million of first-lien credit facilities, a market source remarked.

The debt consists of a $50 million five-year revolver, a $325 million seven-year covenant light first-lien term loan and a $70 million first-lien delayed-draw term loan with two-year availability, the source added.

Antares Capital, Nomura and Ares are leading the first-lien financing.

The company is also getting.

Proceeds will be used with a privately placed $130 million second-lien term loan and a privately placed $30 million second-lien delayed-draw term loan to help fund the buyout of the company by AEA Investors LP.

Numotion is a Nashville, Tenn.-based provider of complex rehabilitation technology mobility solutions to individuals with permanent ambulatory disability.

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