Milano Acquisition frees to trade atop OID; Pike shops new term loan B

By Sara Rosenberg

New York, Aug. 17 – Milano Acquisition Corp. finalized the original issue discount on its first-lien term loan B at the tight side of revised guidance and then the debt made its way into the secondary market on Monday.

In other happenings, Pike Corp. came to market with a new term loan B for refinancing purposes.

Milano updated

Milano Acquisition, an affiliate of Veritas Capital, set the original issue discount on its $2.4 billion seven-year covenant-lite first-lien term loan B (B2/B+) at 99, versus revised talk in the range of 98.5 to 99 and initial talk of 98, a market source remarked.

As before, the first-lien term loan is priced at Libor plus 400 basis points with a 0.75% Libor floor and has 101 soft call protection for six months.

Previously in syndication, the spread on the first-lien term loan was reduced from talk in the range of Libor plus 425 bps to 450 bps and a 25 bps step-down was removed.

J.P. Morgan Securities LLC is the left lead bank on the deal.

Milano breaks

After terms firmed up on Monday, Milano Acquisition’s first-lien term loan B began trading and levels were quoted at 99¼ bid, 99½ offered, the source added.

The first-lien term loan B will be used with an $800 million privately placed second-lien term loan and equity to fund the acquisition of DXC Technology’s U.S. State and Local Health and Human Services business (State & Local HHS) for $5 billion.

Closing is expected no later than December, subject to customary conditions, including the receipt of certain third-party consents and regulatory approvals.

U.S. State and Local Health and Human Services is an end-to-end provider of technology enabled, mission critical solutions that are fundamental to the administration and operations of health programs.

Pike holds call

Pike emerged in the morning with plans to host a lender call at 1 p.m. ET to launch a $336 million covenant-lite first-lien term loan B due July 24, 2026 talked at Libor plus 325 bps with a 0% Libor floor, an original issue discount of 99 to 99.5 and 101 soft call protection for six months, according to a market source.

Commitments are due at 2 p.m. ET on Wednesday, the source added.

Proceeds will be used to refinance existing debt and pay related fees and expenses.

In addition, the company plans to issue $500 million of senior unsecured notes offering that will be used to repay outstanding term loan B borrowings and related transaction fees and expenses.

Pike is a Mount Airy, N.C.-based specialty construction and engineering firm.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.