Schaeffler up with refi; Albertson’s dips on add-on; Micro Focus, American Airlines revised

By Sara Rosenberg

New York, Oct. 6 – Schaeffler’s U.S. term loan E was stronger in trading on Monday on refinancing news, and Albertson’s Holdings LLC (Safeway Acquisition Merger Sub Inc.) term loan B-4 weakened as an add-on was launched.

Moving to the primary, Micro Focus moved some funds out of its term loan B and into its revolver and widened offer prices for a second time on its term loan B and term loan C tranches, and American Airlines Inc. firmed pricing on its term loan B at the high end of guidance, added a step-down and tightened the original issue discount.

Also, Styrolution (Styrolution Group GmbH and Styrolution US Holding LLC), Level 3 Financing Inc. and Magnum Hunter Resources Corp. released price talk with launch, and Pabst Brewing Co. (Blue Ribbon LLC), DTZ (DTZ U.S. Borrower LLC and DTZ Aus HoldCo Pty Ltd.), Crown Holdings Inc. and TOMS joined the near-term calendar.

Schaeffler gains ground

Schaeffler’s U.S. term loan E strengthened in the secondary market on Monday to 99½ bid, par offered from 99 bid, 99½ offered as investors were told that the company would be launching a refinancing of its term loans, according to a trader.

Funds for the refinancing will come from a €1.8 billion equivalent term loan B (Ba2) due May 15, 2020 with a 0.75% floor, a source remarked.

The new term loan, which will include U.S. dollar and euro tranches (sizes to be determined), will launch with a conference call at noon ET on Tuesday.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and HSBC Securities are the global coordinators on the new deal, with Citigroup the left lead on the U.S. debt and Deutsche the left lead on the euro debt. Other bookrunners include Commerzbank, J.P. Morgan Securities LLC and UniCredit.

Schaeffler is a Herzogenaurach, Germany-based manufacturer of bearings for autos & industrial OEMs.

Albertson’s softens

Albertson’s saw its first-lien covenant-light term loan B-4 due August 2021 slip to 99½ bid, 99 7/8 offered from 99 5/8 bid, par offered as the company approached lenders with a $250 million add-on to the tranche, a market source said.

The add-on is talked at Libor plus 450 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection through August 2015, another source said. Spread, floor and call protection match the existing term loan B-4.

Commitments are due at 3 p.m. ET on Tuesday, the source added.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., Barclays, Deutsche Bank Securities Inc., PNC Capital Markets LLC, US Bank and SunTrust Robinson Humphrey Inc. are leading the deal that will help fund the acquisition of Safeway Inc.

With the add-on loan, the company’s bond offering was cut by $250 million to $1,375,000,000.

Albertson’s is a Spokane, Wash.-based supermarket chain. Safeway is a Pleasanton, Calif.-based food and drug retailer.

Micro Focus restructures

Over in the primary, Micro Focus cut its seven-year covenant-light term loan B to $1,275,000,000 from $1.35 billion and moved the original issue discount to 95½ from revised talk of 97½ and initial talk of 99, according to market sources. This tranche is still priced at Libor plus 425 basis points with a 1% Libor floor, has 101 soft call protection for one year and amortizes at a rate of 1% per annum.

As a result of the term B downsizing, the five-year revolver was lifted to $225 million from $150 million.

Furthermore, the company widened the discount on its $500 million five-year covenant-light term loan C to 95 from revised talk of 97 and initial talk of 99½, sources said. Pricing on this loan is Libor plus 375 bps with a 0.75% Libor floor, and the debt includes 101 soft call protection for one year and amortization of 10% per annum.

Previously in syndication, pricing on the term loan B was flexed up from Libor plus 325 bps, pricing on the term loan C was revised from Libor plus 300 bps, the call protection on both term loans was extended from six months, the pricing step-downs in the term loan C were removed, the 18-month MFN sunset provision was eliminated, and the incremental allowance and excess cash flow sweep were modified.

Micro Focus merging

Proceeds from Micro Focus’ $2 billion senior secured credit facility (B1/BB-) will be used to help fund its merger with the Attachmate Group in which Micro Focus will acquire the entire issued share capital of Attachmate, in exchange for the issue of about 86.6 million ordinary shares to Attachmate’s parent company, Wizard Parent LLC. The enterprise value of the transaction is $2,349,800,000 before costs.

Bank of America Merrill Lynch, HSBC Securities (USA) Inc., RBC Capital Markets LLC, Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC and Guggenheim are leading the credit facility.

Recommitments were due at 5 p.m. ET on Monday, sources added.

Closing on the merger is expected on Nov. 3, subject to customary conditions, including Micro Focus shareholder approvals and regulatory approvals under the Hart-Scott-Rodino Act.

Micro Focus is a software provider with U.S. headquarters in Rockville, Md., and U.K. headquarters in Newbury, Berkshire. Attachmate, currently owned by Francisco Partners, Golden Gate Capital, Elliott Management and Thoma Bravo, is a Houston-based software holding company.

American Airlines updated

American Airlines firmed pricing on its $750 billion seven-year term loan B at Libor plus 350 bps, the high end of the Libor plus 325 bps to 350 bps talk, added a 25 bps step-down if the corporate rating is Ba3/BB- or better and moved the original issue discount to 99¼ from 99, according to a market source.

As before, the term loan B has a 0.75% Libor floor and 101 soft call protection for six months.

The company’s $1.15 billion secured credit facility (Ba2/BB-/BB+) also includes a $400 million five-year revolver.

Recommitments are due at noon ET on Tuesday, the source said.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Barclays, BNP Paribas Securities Corp., Credit Agricole CIB, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, J.P. Morgan Securities LLC and Morgan Stanley Senior Funding Inc. are leading the deal that will be used for general corporate purposes.

American Airlines is a Fort Worth-based airline company.

Styrolution discloses guidance

Also in the primary, Styrolution held its New York bank meeting on Monday, launching its €1.05 billion equivalent five-year covenant-light term loan B (B2) with talk of Libor/Euribor plus 450 bps to 475 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, a market source remarked.

The loan will have U.S. and euro tranches, but the split is still to be determined.

A bank meeting for European investors will take place in London on Tuesday.

Barclays and J.P. Morgan Securities LLC are leading the deal, for which commitments are due on Oct. 21, with Barclays the left lead on the U.S. piece and JPMorgan the left lead on the euro piece.

Proceeds will be used with additional second-lien debt and cash on hand to help fund Ineos’ acquisition of BASF SE’s 50% share in Styrolution so that it becomes a wholly owned stand-alone company within Ineos, and to redeem Styrolution’s existing 7 5/8% senior secured notes due 2016.

Styrolution is a Frankfurt-based styrenics supplier.

Level 3 releases talk

Level 3 came out with talk of Libor plus 350 bps with a 1% Libor floor, an original issue discount of 98½ to 99 and 101 soft call protection for six months on its $1.5 billion senior secured term loan B (NA/NA/BB+) due in 2022 that launched with a conference call at 11 a.m. ET, according to a market source.

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

Bank of America Merrill Lynch, Citigroup Global Markets Inc. Morgan Stanley Senior Funding Inc., Barclays, Goldman Sachs Bank USA, Jefferies Finance LLC and J.P. Morgan Securities LLC are leading the deal that will be used to help fund the purchase of tw telecom for $10.00 cash and 0.7 shares of Level 3 common stock for each share of tw telecom common stock that is owned at closing. The stock-and-cash transaction is valued at $40.86 per share, or about $7.3 billion, including the assumption of roughly $1.6 billion of net debt as of March 31.

Closing is expected in the fourth quarter, subject to regulatory approvals, stockholder approvals at both companies and customary conditions.

Level 3 is a Broomfield, Colo.-based fiber-based communications services. tw telecom is a Littleton, Colo.-based provider of managed data, internet and voice networking services to businesses and large organizations.

Magnum Hunter holds call

Magnum Hunter emerged with plans in the morning to hold a call at 3 p.m. ET to launch a $340 million five-year second-lien term loan that is talked at Libor plus 500 bps with a 1% Libor floor and an original issue discount of 98½, a market source said.

The term loan is callable at par for 18 months, then at 102 for one year and at 101 for the following year, the source continued.

Commitments are due on Oct. 15 and closing is expected this month.

Along with the term loan, the company is planning on getting a $50 million four-year senior secured first lien reserve-based revolver.

Credit Suisse Securities (USA) LLC and BMO Capital Markets are leading the deal that will be used to refinance existing debt and for general corporate purposes.

Magnum is a Houston-based oil and gas exploration and development company.

Pabst readies launch

Pabst Brewing scheduled a bank meeting for Oct. 16 to launch a $600 million credit facility, according to a market source.

The facility consists of a $75 million revolver, a $395 million seven-year first-lien term loan and a $130 million eight-year second-lien term loan, the source said, adding that the term loans will have a 1% Libor floor.

UBS AG is leading the deal, which will be used to help fund the acquisition of the company by Oasis Beverages from Evan, Daren and Dean Metropoulos, and, as part of the transaction, TSG Consumer Partners will acquire a minority stake in Pabst.

Pabst is a brewing company that is currently and will remain based in Los Angeles. Oasis is a Russian beer and soft drinks company.

DTZ on deck

DTZ plans to hold a bank meeting at 10:30 a.m. ET on Thursday to launch a $1.11 billion credit facility for which commitments will be due on Oct. 23, according to a market source.

The facility consists of a $150 million revolver, a $470 million seven-year first-lien term loan with a 1% Libor floor, a $280 million delayed-draw term loan with a 1% Libor floor and a $210 million eight-year second-lien term loan with a 1% Libor floor, the source said.

UBS AG, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Mizuho Securities USA Inc. and HSBC Securities (USA) Inc. are leading the deal that will be used to help fund the buyout of DTZ, a Chicago-based property services company, from UGL Ltd. and the buyout of Cassidy Turley, a commercial real estate services provider, by TPG Capital, PAG Asia Capital and Ontario Teachers’ Pension Plan.

DTZ and Cassidy Turley will then be combined to create a full-service commercial real estate services company. The DTZ acquisition is expected to close around Oct. 31, and the Cassidy Turley acquisition is expected to close on Dec. 31, after which the revolver may be sized at up to $200 million, the source added.

Crown plans loan

Crown Holdings scheduled a bank meeting for 10:30 a.m. ET in New York on Wednesday to launch a $675 million senior secured term loan B, a market source said.

Citigroup Global Markets Inc. is leading the deal that will be used with cash on hand, additional borrowings under the company’s senior secured credit agreement or through other means to fund the acquisition of Empaque from Heineken NV for $1,225,000,000.

Closing is expected by year-end, subject to customary conditions, including competition authority approval.

Crown is a Philadelphia-based consumer packaging company. Empaque is a Monterrey, Mexico-based manufacturer of aluminum cans and ends, bottle caps and glass bottles for the beverage industry.

TOMS coming soon

TOMS is set to hold a bank meeting at 1:30 p.m. ET on Thursday to launch a $300 million six-year term loan B, according to a market source.

Jefferies Finance LLC is leading the deal that will help fund the purchase of a 50% interest in TOMS by Bain Capital. The company’s founder and chief shoe giver, Blake Mycoskie, will remain a 50% owner.

Along with the term loan B, the company is getting a $60 million ABL facility, the source said.

Pro forma leverage is about 4.2 times and net leverage is about 4 times.

Los Angeles-based TOMS is a shoe, eyewear and coffee company that matches every purchase with a charitable donation.

Berlin Packaging closes

In other news, the buyout of Berlin Packaging LLC by Oak Hill Capital Partners from Investcorp has been completed, according to a news release.

For the transaction, Berlin Packaging got a new $840 million credit facility that provides for a $75 million five-year revolver (B2/B), a $545 million seven-year first-lien covenant-light term loan (B2/B) and a $220 million eight-year second-lien covenant-light term loan (Caa2/CCC+).

Pricing on the first-lien term loan is Libor plus 350 basis points with a 1% Libor floor and it was sold at an original issue discount of 99½. There is 101 soft call protection for six months.

The second-lien term loan is priced at Libor plus 675 bps with a 1% Libor floor and was issued at 99¼. This debt has call protection of 102 in year one and 101 in year two.

Berlin lead banks

Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch and Barclays were the bookrunners on Berlin Packaging’s credit facility, with Deutsche Bank the left lead on the first-lien debt and Morgan Stanley the left lead on the second-lien debt.

During syndication, pricing on the first-lien term loan firmed at the tight end of revised talk of Libor plus 350 bps to 375 bps and down from initial talk of in the Libor plus 400 bps area and the discount finalized at the low end of initial talk of 99 to 99½,

Also during syndication, the spread on the second-lien term loan came at the low end of revised talk of Libor plus 675 bps to 700 bps and down from initial talk in the Libor plus 725 bps area, and the discount firmed at the midpoint of revised talk of 99 to 99½ and tighter than earlier talk of 99.

Berlin Packaging is a Chicago-based supplier of rigid packaging products and services.

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