StandardAero tightens pricing; Civitas Solutions sets talk; loans recoup year-end losses

By Paul A. Harris

Portland, Ore., Jan. 23 – The leveraged loan index has taken back the ground it gave up during the volatile month of December, a trader said on Wednesday.

The index returned 2.39% for 2019 to Tuesday’s close, essentially recouping its 2.31% December decline, the source said.

The index is presently priced at 96.43, not quite two dollars off its low of $94.47, on Jan. 2, the trader added.

The cash flows of the dedicated bank loan funds remain negative, however, the trader said.

The loan funds sustained $330 million of outflows on Tuesday, the most recent session for which data was available at press time.

That left the funds in the red year-to-date to the tune of negative $1.8 billion.

There was activity in the new issue market on Wednesday.

StandardAero Aviation Holdings Inc. (Dynasty Acquisition Co. Inc.) tightened pricing and trimmed the discount on its $2,145,000,000 seven-year covenant-light first-lien term loan.

And Civitas Solutions, Inc. set pricing on an $855 million seven-year first-lien term loan.

StandardAero tightens spread

StandardAero Aviation Holdings tightened pricing and trimmed the discount on its $2,145,000,000 seven-year covenant-light first-lien term loan, according to a market source.

The spread to Libor flexed to 400 basis points to 425 bps. The discount was set at 99.5, from discount talk of 98 to 98.5.

The 0% Libor floor and six month 101 soft call protection remain unchanged.

Commitments were due at Wednesday’s close.

The company’s $2,595,000,000 of credit facilities also include a $150 million revolving credit facility and a $300 million asset-based revolver.

Credit Suisse Securities (USA) LLC, RBC Capital Markets, Macquarie Capital, Barclays, Jefferies LLC, Nomura Securities, Goldman Sachs Bank USA and Mizuho are the lead arrangers on the deal.

Proceeds will be used to help fund the buyout of the company by the Carlyle Group from Veritas Capital.

Other funds for the transaction will come from equity.

Closing is expected this quarter, subject to customary regulatory conditions.

StandardAero is a Scottsdale, Ariz.-based provider of aircraft engine maintenance, repair and overhaul services.

Civitas Solutions talk

Civitas Solutions set pricing on an $855 million seven-year first-lien term loan, according to a market source.

The deal is coming with a 450 bps spread to Libor, with a 0% Libor floor, at 98.5.

There is a 101 soft call for six months.

The deal amortizes at 1% annually; the amortization does not apply to a $50 million letter of credit which is part of the $855 million first-lien portion of the credit facility.

The $1.18 billion of credit facilities also include a $125 million revolver, as well as a $200 million second-lien term loan which is being privately placed.

Goldman Sachs is the left lead. UBS, RBC, KeyBank, BMO and Fifth Third are the joint leads.

Proceeds will be used to help fund the buyout of Civitas by Centerbridge Partners LP.

As reported, Civitas is being bought for $17.75 in cash per share, resulting in an enterprise value of about $1.4 billion.

Civitas is a Boston-based provider of home- and community-based health and human services to must-serve individuals with intellectual, developmental, physical or behavioral disabilities and other special needs.

MHS to launch add-on

MHS, Inc. (Material Handling Systems) plans to announce the original issue discount on a $45 million fungible add-on to its existing Libor plus 500 bps (0% Libor floor) term loan B due May 1, 2024 on a Thursday lender call, according to a market source.

Prior to the add-on, the existing amount of the term loan B is $580 million.

RBC Capital Markets LLC is the bookrunner.

The Mt. Washington, Ky.-based provider of parcel handling solutions plans to use the proceeds to repay borrowings under its revolving credit facility.

LifeMiles lender call

LifeMiles Ltd. plans to launch a $75 million add-on term loan B on a lender call set to get underway at 10 a.m. ET on Thursday, according to a market source.

Morgan Stanley Senior Funding, Inc. is the arranger.

Proceeds from the add-on will be used to pay a dividend to shareholders.

LifeMiles is a Latin American coalition loyalty program and the exclusive operator of Avianca’s frequent flyer program.

FastMed timing

FastMed Urgent Care plans to launch $525 million of term loan debt with a bank meeting set to begin at 1:30 p.m. ET Thursday, according to a market source.

Previously the meeting had been set for Thursday morning, New York time.

The deal features a $400 million seven-year first-lien term loan and a $125 million eight-year second-lien term loan.

Bookrunner Barclays is the agent. SG and Antares are also bookrunners.

The Clayton, NC-based provider of walk-in clinic services plans to use the proceeds to fund the acquisition of NextCare Holdings.

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