Oversubscribed Envision deal could tighten, accelerate; Encino prices wide

By Paul A. Harris

Portland, Ore., Sept. 24 – In Monday's leveraged loan market Envision Healthcare Corp.'s $5.05 billion term loan was heard to be oversubscribed, holding out the possibility that the deal's timeline could shorten and pricing could tighten.

And Encino Acquisition Partners Holdings LLC priced its $550 million seven-year senior secured second-lien term loan (//BB-) with a 675 bps spread to Libor at 99, 50 bps wide of spread talk.

Envision oversubscribed

Envision Healthcare's $5.05 billion seven-year covenant-light first-lien term loan B (B1/B+) is somewhat less than two-times oversubscribed, sparking expectations that pricing could tighten, and its time in the market could be foreshortened, a market source said.

The deal launched last week with price talk of Libor plus 400 basis points with a 0% Libor floor and an original issue discount of 99 to 99.5.

At the time of launch, commitments were due at 5 p.m. ET on Oct. 1.

Meanwhile a $1,625,000,000 offering of eight-year senior notes kicked off Monday with initial price talk in the high 8% area.

Proceeds from the loan and bonds will be used to help fund the buyout of the company by KKR for $46.00 per share in cash, or about $9.9 billion including the assumption or repayment of debt.

Encino prices wide

Encino Acquisition Partners Holdings LLC priced its $550 million seven-year senior secured second-lien term loan (//BB-) with a 675 basis points spread to Libor at 99, according to a market source.

The spread came 50 bps wide of the Libor plus 625 bps spread talk.

The reoffer price was 99, atop original discount talk. The 1% Libor floor is also unchanged.

The term loan is non-callable for one year, then at 102 in year two and 101 in year three.

Jefferies LLC, Citigroup Global Markets Inc. and BMO Capital Markets are the lead arrangers on the deal.

Proceeds will be used to help fund the acquisition of the Ohio Utica Assets from Chesapeake Energy Corp. for about $2 billion.

Closing is expected in the fourth quarter, subject to customary conditions, including the receipt of third-party consents.

Encino Acquisition is a Houston-based oil and gas company. The company was formed in 2017 through a partnership with Canada Pension Plan Investment Board.

Altra Industrial tightens coupon, OID

Altra Industrial Motion Corp. reduced the coupon and narrowed the original issue discount on its $1.34 billion first-lien covenant light term loan (Ba3/BB-).

The coupon is now talked at Libor plus 200 basis points to 225 bps, down from Libor plus 275 bps to 300 bps.

The loan is now being offered at 99.75 instead of 99.5. The Libor floor remains at 0%.

Commitments are due at 12 p.m. ET on Sept. 25.

Proceeds will be used to help fund the combination of Altra with four operating companies from Fortive’s Automation and Specialty platform.

NorthRiver cuts coupon

NorthRiver Midstream Finance LP reduced the coupon on its $1 billion seven-year senior secured covenant-light term loan B (Ba3/BB+) to Libor plus 325 basis points from talk of Libor plus 375 bps.

The MFN sunset was extended to 18 months from six months, and the threshold of 3.5 times total net leverage included in the requirement for mandatory prepayments after asset sales has been removed.

The loan continues to have a 0% Libor floor and is still offered at an original issue discount of 99.5.

Recommitments were due by 5 p.m. ET on Monday, extended from 12 p.m. ET on Friday.

Proceeds will be used to help fund the acquisition of Enbridge Inc.’s Western Canadian midstream business by Brookfield Infrastructure.

EG Group lender call

EG Group set a lender call for 2:30 p.m. ET on Wednesday to kick off a $310 million equivalent add-on to the EG America LLC and EG Finco Ltd. senior secured first lien term loan B due February 2025, to be issued in dollar and euro denominations.

Commitments are due at 5 p.m. ET on Oct. 1.

Pricing remains to be determined.

Barclays is leading the deal.

The Blackburn, United Kingdom-based operator of filling stations and convenience stores plans to use the proceeds to fund the acquisition of Minit Mart from TravelCenters of America LLC.

Coinmach lender call

CSC ServiceWorks, the parent of Coinmach, will participate in a lender call beginning at 11 a.m. ET on Tuesday.

The Plainview, N.Y.-based laundry equipment service provider is bringing a $150 million incremental term loan B in addition to an amendment to its existing first lien term loan.

Morgan Stanley is the lead.

Proceeds will be used to fund acquisitions, repay debt under the revolving credit facility and for general corporate purposes.

Friday inflows

The dedicated bank loan funds saw $45 million of inflows on Friday, the most recent session for which data was available at press time, a trader said.

Of that $45 million, the bank loan ETFs saw $2 million of inflows.

Loan funds were positive-$15.2 billion for 2018 to Friday's close, the source added.

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