Vivint rises on acquisition; Guggenheim updated; Axalta, American Axle, BRP accelerated

By Sara Rosenberg

New York, Dec. 6 – Vivint Smart Home Inc.’s term loan headed higher by a few points in the secondary market on Tuesday following news that the company is being acquired by NRG Energy Inc.

In more happenings, Guggenheim Partners Investment Management Holdings finalized the spread on its term loan B at the low end of guidance and tightened the original issue discount.

Also, Axalta Coating Systems Ltd., American Axle & Manufacturing Inc. and BRP Inc. (Bombardier Recreational Products Inc.) moved up the commitment deadlines for their term loans.

Furthermore, Summit Materials, First Brands Group LLC and Hayward Industries Inc. all approached lenders during the session with term loan transactions, and Dealer Tire joined this week’s primary calendar.

Vivint strengthens

Vivint’s term loan rose to 99¼ bid, par offered on Tuesday from 95¾ bid, 96½ offered on Monday after it was announced that the company is being bought by NRG Energy for $12 per share, or $2.8 billion, a market source remarked.

Upon closing, NRG expects to leave Vivint’s existing debt in place given its attractive terms and pricing. The Vivint debt consists of the $1.32 billion term loan due 2028, $600 million of 6¾% senior secured notes due 2027, $800 million of 5¾% senior notes due 2029 and $25 million of other debt.

To fund the transaction, NRG plans to use $900 million of NRG existing and increased revolving credit facilities borrowings, $1.39 billion of new NRG debt/preferred equity and $600 million of cash on hand.

The new NRG debt is expected to be an additional bond raised in the capital markets, company officials said in a call.

Backstopping the financing is a bridge loan commitment provided by Goldman Sachs Bank USA.

Closing is expected in the first quarter of 2023, subject to customary conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Vivint put on CreditWatch

Following the acquisition news, S&P Global Ratings placed its ratings on Vivint on CreditWatch with positive implications, including the B- issuer credit rating, B senior secured debt rating and CCC senior unsecured debt rating, to reflect the view that Vivint’s credit position will be enhanced through the purchase by a higher-rated entity.

The CreditWatch placement reflects the strong likelihood that S&P will raise its ratings on Vivint to BB- from B- after the acquisition.

The rating agency said that it believes Vivint will be strategically important to NRG, therefore NRG will likely provide extraordinary support in the event of a stress scenario at Vivint. The expectation for support in most foreseeable circumstances results in a three-notch uplift to Vivint’s rating compared with its stand-alone credit profile.

Vivint is a Provo, Utah-based smart home company. NRG is a Houston-based provider of energy solutions and natural gas.

Guggenheim revised

Guggenheim Partners firmed pricing on its $785 million seven-year term loan B at SOFR plus 325 basis points, the low end of the SOFR plus 325 bps to 350 bps talk, and changed the original issue discount to 98.25 from 98, a market source said.

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

Recommitments were due at 3 p.m. ET on Tuesday, the source added.

BofA Securities Inc. is leading the deal that will be used to refinance the company’s existing $685 million term loan B due July 2023 and add cash to the balance sheet.

Guggenheim Partners is a financial services firm.

Axalta tweaks timing

Axalta Coating Systems accelerated the commitment deadline for its $2 billion seven-year senior secured term loan B (Ba1) to 5 p.m. ET on Wednesday from noon ET on Friday, according to a market source.

Talk on the term loan B is SOFR plus 325 bps with no CSA, a 0.5% floor, an original issue discount of 97.5 to 98.5 and 101 soft call protection for six months.

Barclays is the left lead bookrunner on the deal that will be used with cash from the balance sheet to refinance the company’s existing $2.021 billion term loan B due June 2024 and to pay related fees and expenses.

The borrowers are Axalta Coating Systems U.S. Holdings Inc. and Axalta Coating Systems Dutch Holding BBV.

Axalta is a Glen Mills, Pa.-based coatings company focused on providing customers with innovative, colorful and sustainable solutions.

American Axle accelerated

American Axle moved up the commitment deadline for its $650 million seven-year term loan B to noon ET on Wednesday from 5 p.m. ET on Thursday, a market source remarked.

Talk on the term loan B is SOFR+10 bps CSA plus 375 bps with a 0.5% floor, an original issue discount of 96 and 101 soft call protection for six months.

JPMorgan Chase Bank, Barclays, BMO Capital Markets, BofA Securities Inc., Citigroup Global Markets Inc., Mizuho and RBC Capital Markets are leading the deal that will be used to refinance an existing term loan B.

American Axle is a Detroit-based producer of driveline and drivetrain systems and related components and chassis modules for the automotive industry.

BRP deadline changed

BRP accelerated the commitment for its non-fungible $400 million seven-year incremental term loan B (Ba2/BB) to 5 p.m. ET on Wednesday from 5 p.m. ET on Thursday, according to a market source.

The incremental term loan is talked at SOFR plus 375 bps with a 0.5% floor, an original issue discount of 97 and 101 soft call protection for six months.

RBC Capital Markets and Citigroup Global Markets Inc. are the joint lead arrangers on the deal. BMO Capital Markets and TD Securities (USA) LLC are joint bookrunners.

Proceeds will be used to repay outstanding borrowings under the company’s existing revolver, to repay a $100 million term loan B-2 due 2024, for general corporate purposes and to pay related fees and expenses.

BRP is a Valcourt, Quebec-based designer, manufacturer, distributor and marketer of motorized recreational vehicles and powersports engines.

Summit refinancing

Summit Materials came out in the morning with plans to hold a lender call at noon ET on Tuesday to launch a $510 million five-year term loan B talked at SOFR+10 bps CSA plus 325 bps with a 0% floor, an original issue discount of 97 to 97.5 and 101 soft call protection for six months, a market source said.

Commitments are due at noon ET on Friday, the source added.

BofA Securities Inc. is the left lead on the deal that will be used to refinance an existing term loan B due 2024 priced at Libor plus 225 bps with a 0% floor.

Summit Materials is a Denver-based construction materials company.

First Brands launches

First Brands Group launched in the morning a non-fungible $300 million incremental senior secured first-lien term loan (B+) due March 30, 2027 talked at SOFR+CSA plus 500 bps with a 1% floor, an original issue discount of 93 to 94 and 101 soft call protection for six months, according to a market source.

CSA is 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

Commitments are due at noon ET on Monday, the source added.

Jefferies LLC is leading the deal that will be used to fund cash to the balance sheet for liquidity to support bids for new business, potential future acquisitions and other growth initiatives.

First Brands is an automotive aftermarket platform offering comprehensive solutions for consumable maintenance and mission-critical repair parts.

Hayward holds call

Hayward Industries emerged in the morning with plans to hold a lender call at 2 p.m. ET to launch a non-fungible $125 million incremental senior secured term loan (B2/BB) due May 2028 talked at SOFR+10 bps CSA plus 325 bps to 350 bps with a 0.5% floor, an original issue discount of 96 and 101 soft call protection for six months, a market source remarked.

Commitments are due at noon ET on Friday, the source added.

BofA Securities Inc. and Truist are leading the deal that will be used to repay asset-based revolver borrowings and for general corporate purposes.

Hayward is a Berkeley Heights, N.J.-based manufacturer of residential and commercial pool and spa equipment as well as industrial flow control products.

Dealer Tire on deck

Dealer Tire scheduled a lender call for 11 a.m. ET on Wednesday to launch a $1.35 billion extended term loan B (B1) due 2027, according to a market source.

Talk on the extended term loan is SOFR plus 450 bps with no CSA, a 0.5% floor, an original issue discount of 97.5 and 101 soft call protection for six months, the source added.

Commitments are due at noon ET on Friday.

JPMorgan Chase Bank is leading the deal that will be used to amend and extend an existing term loan B from 2025, which is currently priced at Libor plus 425 bps with a 0% floor.

Dealer Tire is a Cleveland-based manager of replacement tire and parts programs for automotive OEMs.

Fund flows

In other news, actively managed loan fund flows on Monday were negative $97 million and loan ETFs were positive $23 million, market sources said.

Outflows for loan funds week-to-date total an estimated $186 million, following outflows in the prior week of $880 million, sources added.

Loan indices rise

IHS Markit’s iBoxx loan indices were stronger on Monday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.01% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.5%.

Month to date, the MiLLi is up 0.10% and year to date its down 1.54%. The LLLi is up 0.24% month to date and down 2.25% year to date.

Average secondary market bids in the U.S. on Monday were 92.25, down 0.01% from the previous day and down 4.75% year to date.

According to the IHS Markit data, some of the top advancers on Monday were Isagenix’s June 2018 term loan at 23.67, up from 21.88, TPF/Eastern Power’s September 2014 term loan at 85.63, up from 83.42, and Transcendia/Transilwrap’s November 2017 covenant-lite term loan B at 72, up from 70.33.

Some top decliners on Monday were Naked Juice/Tropicana’s January 2022 covenant-lite term loan at 88.04, down from 93.92, Pretium Packaging’s October 2021 covenant-lite term loan at 80.67, down from 83.61, and Cineworld’s February 2018 U.S. covenant-lite term loan at 19.93, down from 20.53.

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