Tekni-Plex incremental term loan frees to trade; Cornerstone Building changes surface

By Sara Rosenberg

New York, July 19 – Tekni-Plex Inc. (Trident TPI Holdings Inc.) tightened the original issue discount on its incremental first-lien term loan, and then the debt made its way into the secondary market on Tuesday afternoon.

In more happenings, Cornerstone Building Brands Inc. reduced the size of its first-lien term loan while increasing the amount of its bond offering, widened original issue discount guidance and made some revisions to documentation.

Tekni-Plex tweaked, breaks

Tekni-Plex adjusted the original issue discount on its non-fungible $125 million incremental first-lien term loan (B2/B-) due Sept. 17, 2028 to 93 from 92, a market source remarked.

As before, the incremental term loan is priced at SOFR plus 525 basis points with a 0.5% floor and has 101 soft call protection for six months.

Commitments were due at noon ET on Tuesday, accelerated from 5 p.m. ET on Tuesday, and the incremental term loan freed up in the afternoon, with levels quoted at 93½ bid, 94½ offered, another source added.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to fund a tuck-in acquisition.

Tekni-Plex is a Wayne, Pa.-based provider of specialty packaging solutions.

Cornerstone reworked

Cornerstone Building trimmed its six-year covenant-lite first-lien term loan to $300 million from $410 million and changed original issue discount talk to a range of 90 to 91 from 93, a market source said.

In addition, the company removed the available amount starter restricted payment basket, tightened the ratio for dividends to 5x from 5.25x consolidated total leverage, extended the non-redemption period on the HoldCo PIK notes to 24 months from 18 months, and reduced the secured net leverage ratio for pari secured incurrence to 4x (except for acquisitions) from 4.5x with a step-up at 24 months to 4.5x, the source continued.

The term loan is still priced at SOFR plus 562.5 bps with a 0.5% floor, and is non-callable for two years, then at 75% of the coupon in year three and 37.5% of the coupon in year four.

Commitments were due at 5 p.m. ET on Tuesday, extended from 10 a.m. ET on Tuesday, and pricing is targeted for Wednesday, the source added.

Cornerstone lead banks

Deutsche Bank Securities Inc., UBS Investment Bank, Barclays, BNP Paribas Securities Corp., RBC Capital Markets, Societe Generale, Goldman Sachs Bank USA, Natixis and Jefferies LLC are leading Cornerstone’s term loan, with Deutsche Bank and UBS acting as co-left leads.

The term loan will be used to help fund the acquisition of 51% of shares outstanding in the company by Clayton, Dubilier & Rice, who currently owns about 49% of the company. Cornerstone shareholders will receive $24.65 in cash per share and the transaction has an enterprise value of about $5.8 billion.

Other funds for the transaction will come from $710 million of senior secured notes, which were upsized from $600 million with the term loan downsizing, and $464 million of PIK HoldCo debt.

Cornerstone is a Cary, N.C.-based manufacturer of exterior building products.

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