Entain, Heritage Grocers, Ineos Enterprises, Nord Anglia term loans free to trade

By Sara Rosenberg

New York, June 23 – Entain plc increased the size of its U.S. and euro add-on term loans, set amounts on the tranches and tightened the original issue discount on both pieces, and then the debt made its way into the secondary market on Friday.

Other deals to break for trading during the session included Heritage Grocers Group, Ineos Enterprises Holdings Ltd. and Nord Anglia Education (Fugue Finance LLC).

Entain revised

Entain lifted its total amount of U.S. and euro senior secured covenant-lite term loans (Ba1/BB/BB+) to £500 million equivalent from £400 million equivalent and finalized the split as a fungible $385 million add-on term loan B-2 due October 2029 and a fungible €230 million add-on term loan B due June 2028, from a previous description of to be determined, according to a market source.

In addition, the original issue discount on the U.S. add-on term loan was tightened to 99 from talk in the range of 98 to 98.5, and the discount on the euro add-on term loan was modified to 99 from revised talk in the range of 98 to 98.5 and initial talk in the range of 97.5 to 98, the source said.

Like the existing loan, the U.S. add-on is priced at SOFR+10 basis points CSA plus 350 bps with a 0.5% floor and has 101 soft call protection until October 2023, and the euro add-on is priced at Euribor plus 375 bps with a 0% floor and has 101 soft call protection until January 2024.

Entain hits secondary

Recommitments for Entain’s term loans were due at 10 a.m. ET on Friday, and the U.S. add-on term loan B-2 freed to trade in the afternoon, with levels quoted at 99¼ bid, par offered, a trader added.

Morgan Stanley Senior Funding Inc. is the sole physical bookrunner on the U.S. loan, and Morgan Stanley and NatWest are joint physical bookrunners on the euro loan. BofA Securities Inc., Bank of Ireland, Barclays, Deutsche Bank Securities Inc., Lloyds Bank, Mediobanca and Santander are joint bookrunners on the loans. Wilmonton is the agent.

The term loans will be used to repay notes at Ladbrokes, to pay related fees and expenses, and, as a result of the upsizing, for general corporate purposes.

Entain is a Douglas, Isle of Man-based sports-betting, gaming and interactive entertainment group.

Heritage frees up

Heritage Grocers Group’s fungible $460 million add-on term loan B (B2/B) due Aug. 1, 2029 broke for trading too, with levels quoted at 98¼ bid, 99 1/8 offered, a trader said.

Pricing on the add-on term loan is SOFR+10 bps CSA plus 675 bps with a 0.75% floor, in line with pricing on the company’s existing $432 million term loan B due Aug. 1, 2029. The add-on term loan was sold at an original issue discount of 97.5 and has 101 soft call protection for six months that will start on Aug. 1 when the existing 101 hard call protection expires.

During syndication, the discount on the add-on term loan was revised from 97 and the soft call protection was added.

RBC Capital Markets, Wells Fargo Securities LLC, Rabobank, Natixis, BMO Capital Markets, Deutsche Bank Securities Inc., Jefferies LLC and Nomura are leading the deal that will be used to help fund the acquisition of El Rancho Supermercado, an Addison, Tex.-based Hispanic-focused specialty grocer.

Heritage Grocers is an Ontario, Calif.-based Hispanic-focused specialty grocer that was formed through the merger of Tony’s Fresh Market and Cardenas Market.

Ineos tops OID

Another deal to make its way into the secondary market during the session was Ineos Enterprises’ $550 million seven-year senior secured term loan B, with levels quoted at 98¾ bid, 99¼ offered, according to a market source.

Pricing on the U.S. term loan is SOFR+10 bps CSA plus 375 bps with a 0% floor and it was sold at an original issue discount of 98.5.

The company is also getting a €650 million seven-year senior secured term loan B priced at Euribor plus 400 bps with a 0% floor and a discount of 98.5. The size of this tranche was set on Friday.

During syndication, the U.S. term loan was upsized from revised talk of minimum $500 million and pricing was lowered from guidance in the range of SOFR plus 400 bps to 425 bps. Additionally, the euro term loan was upsized twice, first from revised talk of minimum €300 million and then from minimum €500 million, and the spread was set at the low end of the Euribor plus 400 bps to 425 bps talk. Furthermore, the discount on both loans firmed at the tight end of the 98 to 98.5 talk and cashless roll was offered on the company’s U.S. and euro term loan B’s due 2026. At launch, the total deal size was described as €650 million equivalent U.S and euro term loan B.

Ineos lead banks

Barclays is the global coordinator on Ineos’ U.S. loan, and Barclays, MUFG and NatWest are the joint global coordinators and physical bookrunners on the euro loan. ABN Amro, Banco Santander, Fifth Third and JPMorgan are mandated lead arrangers. Barclays is the administrative agent.

The term loans will be used to refinance the company’s initial U.S. term loan B, to pay transaction fees and expenses, for working capital and for general corporate purposes, including acquisitions and the repayment of existing debt, and funds from the recent upsizings will repay existing debt.

Ineos Enterprises is a London-based specialty and commodity chemical producer.

Nord Anglia breaks

Nord Anglia Education’s fungible $300 million add-on term loan B due January 2028 began trading as well, with levels quoted at 99 5/8 bid, par 1/8 offered, a market source remarked.

Pricing on the add-on term loan is SOFR plus 450 bps with a 0.5% floor, in line with pricing on the company’s existing $608 million term loan B due January 2028. The add-on term loan was sold at an original issue discount of 99.5 and has 101 soft call protection through Aug. 8.

During syndication, the add-on term loan was upsized from $250 million and the discount was modified from talk in the range of 98.75 to 99.

Deutsche Bank Securities Inc. and JPMorgan Chase Bank are joint physical bookrunners on the deal, and HSBC is a passive bookrunner. Citigroup Global Markets Inc., DBS, Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., Standard Chartered, BofA Securities Inc. and E. Sun are joint bookrunners. HSBC is the administrative agent. JPMorgan is the fronting bank.

Proceeds will be used by the London-based K-12 schools platform to repay revolver borrowings and for general corporate purposes, including acquisitions.

BPEA EQT and CPP Investments are the sponsors.

Fund flows

In other news, actively managed loan fund flows on Thursday were negative $38 million and loan ETFs were positive $104 million, market sources said.

Loan funds reported weekly outflows totaling $152 million, including negative $10 million ETFs, sources continued. This was the twenty third weekly outflow over the past 25 weeks, but outflows over the last two weeks are the year’s two smallest and compare to an average weekly outflow of $669 million across the other 22 weeks.

Year to date, outflows for loan funds total $18.3 billion, with negative $1.4 billion ETFs, sources added.

Loan indices rise

IHS Markit’s iBoxx loan indices were stronger on Thursday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.03% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.02%.

Month to date, the MiLLi is up 1.62% and year to date it is up 5.58%, and the LLLi is up 1.7% month to date and up 5.61% year to date.

Average secondary market bids in the U.S. on Thursday were 91.38, up 0.01% from the previous day and down 0.54% year to date.

According to the IHS Markit data, some of the top advancers on Thursday were Sound Physicians’ June 2018 term loan at 61.67, up from 58.02, Packers Sanitation Services/PSSI’s March 2021 covenant-lite term loan at 67.25, up from 65.43, and Jo-Ann Stores’ July 2021 covenant-lite term loan B at 51.86, up from 51.

Some top decliners on Thursday were Air Methods’ April 2017 covenant-lite term loan B at 35.29, down from 36.08, Optiv’s April 2023 covenant-lite term loan at 95.06, down from 96.63, and Petmate/Doskocil’s October 2021 incremental covenant-lite term loan B at 63.04, down from 63.88.

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