PQ, Delos Finance, Lumileds term loans break above par; Internet Brands releases price talk

By Sara Rosenberg

New York, Aug. 4 – PQ Corp.’s U.S. term loan freed up for trading on Friday with levels quoted above its issue price, and Delos Finance Sarl and Lumileds (Bright Bidco BV) made their way into the secondary market as well.

Over in the primary market, Internet Brands Inc. came out with price talk on its in-market term loans as ratings were received by Moody’s Investors Service, and ClubCorp, Engility Corp. and Gardner Denver Inc. joined the near-term primary calendar.

PQ hits secondary

PQ’s $920.8 million senior secured covenant-light term loan (B2/B+) due Nov. 4, 2022 emerged in the secondary market on Friday, with levels seen at 100¾ bid, 101¼ offered, a trader said.

Pricing on the term loan is Libor plus 325 basis points with a 0% Libor floor, and it was issued at par. The loan had 101 soft call protection for six months.

The company is also getting a €281.2 million senior secured covenant-light term loan (B2/B+) due Nov. 4, 2022 priced at Euribor plus 325 bps with a 0.75% floor and issued at par. This tranche has 101 soft call protection for six months too.

On Wednesday, pricing on the U.S. term loan was lowered from Libor plus 350 bps, and the Libor floor was cut from 1%, the floor on the euro loan was reduced from 1%, and both tranches saw the removal of a 25 bps step-down at 4.75 times total net leverage.

Citigroup Global Markets Inc. is leading the deal that will be used to reprice an existing U.S. term loan down from Libor plus 425 bps with a 1% Libor floor and an existing euro term loan down from Euribor plus 400 bps with a 1% floor.

Closing is expected during the week of Aug. 7.

PQ is a Malvern, Pa.-based producer of specialty inorganic performance chemicals and catalysts.

Delos Finance breaks

Delos Finance’s $1.5 billion term loan B due October 2023 began trading too, with levels quoted at 100½ bid, 100¾ offered, according to a trader.

Pricing on the term loan is Libor plus 200 bps with a 0% Libor floor, and it was issued at par. The debt has 101 soft call protection for six months.

Deutsche Bank Securities Inc. and RBC Capital Markets LLC are leading the deal that will be used to reprice an existing term loan B down from Libor plus 225 bps with a 0.75% Libor floor.

Closing is expected during the week of Aug. 7.

Delos is a subsidiary of AerCap Holdings NV, a Dublin-based commercial aircraft leasing company.

Lumileds starts trading

Lumileds’ $240 million add-on covenant-light first-lien term loan B (Ba3/B+) due June 2024 also broke, with levels seen at 100¾ bid, 101¼ offered, a market source said.

Pricing on the add-on term loan is Libor plus 450 bps with a 1% Libor floor, in line with existing term loan B pricing, and the new debt was sold at an issue price of 100.25. The debt has 101 soft call protection until December 2017.

During syndication, the issue price on the term loan was tightened from talk of 99.75 to par.

Deutsche Bank Securities and Credit Suisse Securities (USA) LLC are leading the deal that will be used to fund a $235 million distribution to equity holders.

An amendment was sought after in connection with the add-on loan and dividend payment, and lenders were offered a 25-bps consent fee.

Apollo is the sponsor.

Closing is expected mid-to-late next week.

Lumileds is a supplier of LED components and automotive lighting.

Internet Brands sets guidance

Switching to the primary market, Internet Brands announced on Friday morning price talk on its $1.04 billion seven-year covenant-light first-lien term loan (B2) and $650 million eight-year covenant-light second-lien term loan (Caa2) that launched to investors with a bank meeting this past Tuesday, according to a market source. The company had been waiting on ratings before releasing the talk.

The first-lien term loan is talked at Libor plus 350 bps to 375 bps with a 0% Libor floor and an original issue discount of 99.5, and the second-lien term loan is talked at Libor plus 750 bps to 775 bps with a 0% Libor floor and a discount of 99, the source said.

As previously reported, the first-lien term loan has 101 soft call protection for six months, and the second-lien term loan has call protection of 102 in year one and 101 in year two.

Commitments are due at 5 p.m. ET on Aug. 15.

Along with the new term loan debt, the company is seeking an amendment and extension of its existing first-lien term loan to make it fungible with the new tranche, and this amended and extended loan is talked with an original issue discount of 99.5, the source added.

Internet Brands leads

Credit Suisse Securities, RBC Capital Markets, Citigroup Global Markets, Bank of America Merrill Lynch, KKR Capital Markets LLC, Macquarie Capital (USA) Inc. and Mizuho Bank Ltd. are leading Internet Brands’ $1.69 billion of term loans, with Credit Suisse the left lead on the first-lien loan and RBC the left lead on the second-lien loan.

The new term loans will be used with equity to fund the acquisition of WebMD Health Corp. for $66.50 per share, or about $2.8 billion.

Closing is expected in the fourth quarter, subject to customary conditions.

The borrowers are MH Sub I LLC and Micro Holding Corp.

Internet Brands, a KKR portfolio company, is an El Segundo, Calif.-based provider of vertically focused online media and software services. WebMD is a New York-based provider of health information services.

ClubCorp timing emerges

ClubCorp scheduled a bank meeting for 10 a.m. ET in New York on Monday to launch the new credit facilities for its buyout by Apollo Global Management LLC for $17.12 per share in cash, or about $1.1 billion, a market source said.

According to filing with the Securities and Exchange Commission, the senior secured credit facilities total $1.3 billion, split between a $175 million revolver and a $1,125,000,000 term loan.

Other funds for the transaction are expected to come from $475 million of senior unsecured notes, backed by a commitment for a $475 million senior unsecured bridge facility, and up to about $675 million of equity.

Citigroup Global Markets, RBC Capital Markets, Barclays, Credit Suisse Securities, Deutsche Bank Securities and Goldman Sachs Bank USA are leading the debt.

Closing is expected in the fourth quarter, subject to shareholder approval and other customary conditions.

ClubCorp is a Dallas-based owner and operator of private golf and country clubs and business, sports and alumni clubs.

Engility readies deal

Engility surfaced with plans to hold a lender call at 1 p.m. ET on Monday to launch a repricing of its $185 million term loan B-1 and its $579 million term loan B-2, a market source remarked.

Morgan Stanley Senior Funding Inc., KKR Capital Markets, Barclays, SunTrust Robinson Humphrey Inc., Regions Capital Markets, Deutsche Bank Securities and J.P. Morgan Securities LLC are leading the $764 million of senior secured term loans.

Engility is a Chantilly, Va.-based provider of integrated services for the U.S. government.

Gardner joins calendar

Gardner Denver set a call for 9 a.m. ET on Monday to launch a new loan deal, according to a market source.

UBS Investment Bank and KKR Capital Markets are leading the deal that will be used to refinance existing debt.

Gardner Denver is a Milwaukee-based provider of mission-critical flow control and compression equipment and associated aftermarket parts, consumables and services.

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