Clarios, 84 Lumber, Petco break; Horizon Therapeutics, Renaissance, Barrette changes emerge

By Sara Rosenberg

New York, Feb. 25 – Clarios Global LP firmed up its U.S. and euro term loan B sizes and pricing, and 84 Lumber Co. increased the size of its add-on term loan B and lowered the spread on its term loan B debt, and then these deals broke for trading on Thursday, and Petco Health and Wellness Co. Inc.’s term loan B freed up as well.

In other news, Horizon Therapeutics USA Inc. lifted its first-lien term loan B size, set pricing at the low end of guidance and tightened the issue price, and Renaissance Learning (Renaissance Holding Corp.) lowered the spread on its incremental first-lien term loan and updated the original issue discount on the tranche as well as on its incremental second-lien term loan.

Also, Barrette (LEB Holdings (USA) Inc.) upsized its incremental first-lien term loan and modified the original issue discount, and Applied Systems Inc. accelerated the commitment deadline for its incremental first-lien term loan and repricing of its existing first-and second-lien term debt.

Furthermore, Harsco Corp., Liquid Tech Solutions LLC, Vertiv Group Corp. and Concord (Alchemy Copyrights LLC) disclosed price talk with launch, and Atotech Ltd. joined the near-term primary calendar.

Clarios updated, frees up

Clarios set its U.S. term loan B (B1/B/B+) due April 30, 2026 size at $3.972 billion and its euro term loan B (B1/B/B+) due April 30, 2026 size at €1.89 billion, firmed the spread on its U.S. loan at Libor plus 325 bps, the high end of the Libor plus 300 bps to 325 bps talk, and set pricing on its euro loan at Euribor plus 325 bps, the low end of the Euribor plus 325 bps to 350 bps talk, a market source remarked.

As before, the U.S. term loan has a 0% Libor floor and a par issue price, the euro term loan has a 0% floor and an original issue discount of 99.75, and both loans have 101 soft call protection for six months.

On Thursday, the U.S. term loan B made its way into the secondary market, with levels quoted at par bid, par 3/8 offered, another source added.

J.P. Morgan Securities LLC and Barclays are leading the deal, with JPMorgan the left lead on the U.S. loan and Barclays the left lead on the euro loan.

Proceeds will be used to reprice an existing $4.072 billion term loan, which is being paid down in connection with this transaction, and an existing €1.89 billion term loan.

Clarios is a Milwaukee-based supplier of low voltage automotive batteries.

84 Lumber reworked, trades

84 Lumber raised its fungible covenant-lite add-on term loan B due Nov. 13, 2026 to $350 million from $300 million, and cut pricing on the add-on term loan as well as on the repricing/refinancing of its existing roughly $307 million covenant-lite term loan B due Nov. 13, 2026 to Libor plus 300 bps from Libor plus 350 bps, according to a market source.

The term loan debt (B2/BB-) still has a 0.75% Libor floor, an original issue discount of 99.75 and 101 soft call protection for six months.

Recommitments were due at 1 p.m. ET on Thursday and the term loan began trading later in the day, with levels quoted at par ¼ bid, par ¾ offered, another source added.

Wells Fargo Securities LLC and PNC Capital Markets are leading the deal.

The add-on loan will be used to repay existing ABL borrowings, fund a $50 million dividend, and pay transaction-related fees and expenses, and the repricing will take the existing term loan down from Libor plus 425 bps with a 1% Libor floor. The ABL paydown amount is being increased with the add-on loan upsizing.

84 Lumber is an Eighty Four, Pa.-based supplier of building materials, manufactured components and services for single and multi-family residences and commercial buildings.

Petco hits secondary

Petco’s $1.7 billion seven-year senior secured covenant-lite first-lien term loan B (B2/B) broke for trading, with levels quoted at 99 7/ 8bid, par ¼ offered, a market source said.

Pricing on the term loan is Libor plus 325 bps with a 0.75% Libor floor and it was sold at an original issue discount of 99.75. The debt has 101 soft call protection for six months.

During syndication, the term loan was upsized from $1.2 billion as plans were terminated to sell other secured debt, the spread firmed at the low end of the Libor plus 325 bps to 350 bps talk and the discount tightened from 99.5.

Citigroup Global Markets Inc., Goldman Sachs Bank USA, Wells Fargo Securities LLC, BofA Securities Inc., Credit Suisse Securities (USA) LLC and UBS Investment Bank are leading the deal that will be used with an up to $500 million ABL facility to refinance the company’s existing capital structure.

Closing is expected on Wednesday.

Petco is a San Diego-based specialty retailer of pet food, supplies and services.

Horizon tweaks deal

Back in the primary market, Horizon Therapeutics upsized its seven-year senior secured covenant-lite term loan B (Ba1/BB+) to $1.6 billion from $1.3 billion, set pricing at Libor plus 200 bps, the low end of the Libor plus 200 bps to 225 bps talk, and moved the original issue discount to 99.75 from 99.5, according to a market source.

As before, the term loan has a 25 bps step-down at 2x total net leverage with cash netting capped at $50 million, a 0.5% Libor floor and 101 soft call protection for six months.

Recommitments were due at 5 p.m. ET on Thursday, the source added.

Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc. and J.P. Morgan Securities LLC are leading the deal that will be used with balance sheet cash to fund the acquisition of Viela Bio Inc. for $53.00 per share in cash, which represents a fully diluted equity value of $3.05 billion, or around $2.67 billion net of Viela Bio’s cash and cash equivalents. The extra funds raised from the term loan upsizing will be put as cash on the balance sheet for general corporate purposes.

Closing is expected in mid-March.

Horizon is a Dublin-based researcher and developer of medicines that address critical needs for people impacted by rare and rheumatic diseases. Viela Bio is a Gaithersburg, Md.-based biotechnology company.

Renaissance modified

Renaissance Learning lowered pricing on its $358 million incremental first-lien term loan (B2/B-) to Libor plus 325 bps from Libor plus 375 bps, adjusted the original issue discount to 99.03 from 99 and changed the tranche to fungible from non-fungible, a market source remarked.

The incremental first-lien term loan still has a 0% Libor floor and 101 soft call protection for six months.

Also, the company revised the original issue discount on its fungible $135 million incremental second-lien term loan (Caa2/CCC) to 99.25 from 99, the source continued.

Pricing on the incremental second-lien term loan remained at Libor plus 700 bps with a 0% Libor floor.

Commitments were due at 5 p.m. ET on Thursday, the source added.

Barclays, Jefferies LLC, Nomura Securities, Macquarie Capital (USA) Inc., BMO Capital Markets and Madison are leading the deal that will fund the acquisition of Nearpod, a provider of an instructional platform.

Renaissance Learning is a Wisconsin Rapids, Wis.-based provider of software solutions for assessment, teaching and learning to K-12 schools and districts.

Barrette revised

Barrette lifted its fungible incremental covenant-lite first-lien term loan (B2/B) due November 2027 to $175 million from $125 million and changed the original issue discount to 99.875 from talk in the range of 99.5 to 99.75, a market source said.

Like the existing term loan, the incremental term loan is priced at Libor plus 400 bps with a 25 bps step-down at 3.65x first-lien net leverage and a 0.75% Libor floor, and has 101 soft call protection through May 2.

Commitments were due at 5 p.m. ET on Thursday, moved up from 5 p.m. ET on Tuesday, the source added.

Credit Suisse Securities (USA) LLC is leading the deal that will be used for general corporate purposes, including mergers and acquisitions.

Barrette is a manufacturer and distributor of wood alternative fence, railing and other outdoor living products.

Applied accelerated

Applied Systems moved up the commitment deadline for its fungible $470 million incremental covenant-lite first-lien term loan due September 2024 and repricing of its existing $1.35 billion covenant-lite first-lien term loan due September 2024 and its existing $615 million covenant-lite second-lien term loan due September 2025 to noon ET on Monday from noon ET on Tuesday, a market source remarked.

Talk on the first-lien term loan debt is Libor plus 300 bps with a step-up to Libor plus 325 bps at more than 4.75x first-lien net leverage, a 0.5% Libor floor, a par issue price and 101 soft call protection for six months. Upon delivering Dec. 31, 2020 financials, the spread will be subject to the grid.

The second-lien term loan is talked at Libor plus 550 bps to 575 bps with a 0.75% Libor floor, a par issue price and 101 hard call protection for one year.

Previously in syndication, the incremental first-lien term loan was upsized from $420 million and the Libor floor was lowered from 1%, and the first-and second-lien term loan repricings were added.

Applied buying EZLynx

Proceeds from Applied Systems’ incremental term loan will be used to fund the acquisition of EZLynx, raise cash for general corporate purposes and pay fees and expenses.

The repricing of the first-lien term loan will leave the spread unchanged but reduce the Libor floor from 1% and the second-lien term loan repricing will take pricing down from Libor plus 700 bps with a 1% Libor floor.

Nomura Securities is the left lead on the deal.

Applied Systems is a University Park, Ill.-based cloud software provider to the property & casualty and benefits insurance industry. EZLynx is a Lewisville, Tex.-based provider of insurance software.

Harsco guidance

Harsco held its lender call on Thursday and announced price talk on its $500 million seven-year first-lien term loan B (Ba2/BB) at Libor plus 250 bps to 275 bps with a 0.5% Libor floor and an original issue discount of 99.5, according to a market source.

Commitments are due at noon ET on March 5, the source added.

Goldman Sachs Bank USA, BMO Capital Markets, BofA Securities Inc., PNC Bank, RBC Capital Markets, Fifth Third, Citigroup Global Markets Inc. and HSBC Securities (USA) Inc. are leading the deal that will be used to refinance the company’s existing term loan A and term loan B.

Harsco is a Camp Hill, Pa.-based industrial company providing engineered products and industrial services to the steel, rail and energy industries.

Liquid Tech talk

Liquid Tech Solutions came out with talk of Libor plus 475 bps with a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for six months on its $300 million covenant-lite first-lien term loan (B3) that launched with a call in the afternoon, a market source remarked.

Commitments are due on March 11, the source added.

Citizens, Credit Suisse Securities (USA) LLC and BNP Paribas Securities Corp. are leading the deal, which will be used to refinance existing debt.

Lindsay Goldberg is the sponsor.

Liquid Tech is a tech-enabled provider of route-based, on-site mobile refueling solutions.

Vertiv proposed terms

Vertiv Group launched on a 1 p.m. ET call a $2.184 billion senior secured covenant-lite term loan B due March 2027 talked at Libor plus 275 bps with a 0% Libor floor, a par issue price and 101 soft call protection for six months, according to a market source.

Commitments from existing lenders are due at 5 p.m. ET on March 3 and commitments from new lenders are due at noon ET on March 4, the source added.

Citigroup Global Markets Inc. is leading the deal that will be used to reprice an existing term loan down from Libor plus 300 bps with a 0% Libor floor.

Vertiv is a Columbus, Ohio-based provider of critical digital infrastructure and continuity solutions.

Concord holds call

Concord hosted a lender call at 2 p.m. ET to launch a $678 million seven-year first-lien term loan talked at Libor plus 300 bps with a 0.5% Libor floor, an original issue discount of 99.875 to par and 101 soft call protection for six months, a market source said.

Commitments are due at 5 p.m. ET on March 4, the source added.

J.P. Morgan Securities LLC is leading the deal that will be used to reprice/refinance an existing term loan due August 2027 priced at Libor plus 325 bps with a 0.75% Libor floor.

Concord is a Nashville-based music content provider.

Atotech on deck

Atotech set a lender call for 10 a.m. ET on Monday to launch a $1.35 billion first-lien term loan B (B+) and a €200 million first-lien term loan B (B1/B+), according to a market source.

Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Barclays, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Unicredit, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Standard Chartered and TCG are leading the deal.

The new debt will be used to refinance an existing revolver and term loan B, add cash to balance sheet and pay related fees and expenses.

Atotech is a Berlin-based specialty chemicals technology company.

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