Reynolds Group better with amendment request; Lattice Semiconductor, Vogue release talk

By Sara Rosenberg

New York, Feb. 18 –Reynolds Group Holdings Inc.’s U.S. term loan was a bit stronger in the secondary market on Wednesday as the company launched an amendment that would result in higher pricing in return for waiving a paydown.

Switching to the primary market, Lattice Semiconductor Corp. and Vogue International disclosed price talk with launch, and National Mentor Holdings Inc. (Civitas Solutions Inc.) joined this week’s calendar.

Reynolds Group rises

Reynolds Group’s U.S. term loan moved up in trading to par bid, par ½ offered from 99 7/8 bid, par 3/8 offered with an amendment proposal that was launched with a morning call, according to one trader. A second trader had the loan at par bid, par 3/8 offered, up on the bid side from 99 7/8, but unchanged on the offer side.

Under the proposal, the company asked senior secured term loan lenders to waive their right to be prepaid with a pro rata portion of the proceeds from the sale of SIG Combibloc to Onex Corp., and from the sale of its Evergreen and/or Closures businesses if definitive agreements are signed prior to March 31, 2016.

Consenting lenders are being offered the right to exchange their current term loan debt into new term loans due Dec. 1, 2018 priced at Libor/Euribor plus 350 basis points with a 1% floor, a market source said.

The existing term loans mature on Dec. 1, 2018 and are split between a $2.19 billion tranche priced at Libor plus 300 bps with a 1% Libor floor and a €294 million tranche priced at Euribor plus 325 bps with a 1% floor.

Additionally, the exchanging lenders will get 101 soft call protection for six months on their new term loans and a 25 bps amendment fee.

Reynolds tenders for notes

Reynolds Group is seeking the term loan amendment because it would like to use asset sale proceeds for the repayment of bonds.

To that end, the company began cash tender offers that expire on March 16 for its 7 1/8% senior secured notes due 2019, 7 7/8% senior secured notes due 2019, 5¾% senior secured notes due 2020, 6 7/8% senior secured notes due 2021, 9% senior notes due 2019, 8½% senior notes due 2018, 9 7/8% senior notes due 2019, 8¼% senior notes due 2021, and 5 5/8% senior notes due 2016.

Consents for the loan amendment are due at 5 p.m. ET on Tuesday.

Once a 50% vote is achieved, the term loan exchange will be cancelled and all existing term loans will be amended to have the new pricing, call protection and waiver of asset sale prepayments, the source added.

Credit Suisse Securities (USA) LLC is leading the loan transaction.

Reynolds is an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products.

Lattice reveals talk

Over in the primary, Lattice Semiconductor held its bank meeting on Wednesday, launching its $350 million six-year senior secured covenant-light term loan with talk of Libor plus 425 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source said.

By comparison, prior filings with the Securities and Exchange Commission had the loan expected at Libor plus 400 bps with a 1% Libor floor and have 101 soft call protection for six months.

Commitments are due on March 4, the source remarked.

Jefferies Finance LLC and HSBC Securities USA Inc. are leading the deal.

Lattice funding acquisition

Proceeds from Lattice Semiconductor’s term loan and about $250 million of cash on the balance sheet will be used to finance the purchase of Silicon Image Inc. in an all-cash tender offer of $7.30 per share, representing an equity value of about $600 million.

Closing is expected by the end of March, subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and the tender of a majority of Silicon Image’s common stock.

Pro forma net leverage will be around 1.4 times.

Lattice Semiconductor is a Portland, Ore.-based provider of programmable connectivity services. Silicon Image is a Sunnyvale, Calif.-based provider of wired and wireless connectivity services.

Vogue sets guidance

Vogue International came out with talk of Libor plus 475 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year on its $205 million add-on term loan that launched with a call during the session, a source remarked.

Commitments are due on Feb. 26, the source added.

Goldman Sachs Bank USA and Bank of America Merrill Lynch are leading the deal.

Proceeds will be used to fund a dividend.

Vogue is a Tampa Bay, Fla.-based manufacturer and distributor of salon-heritage hair care and other personal care products.

National Mentor coming soon

National Mentor set a lender call for 11 a.m. ET on Thursday to launch a $55 million incremental term loan B, according to a market source.

Barclays, Bank of America Merrill Lynch and UBS AG are leading the deal that will be used to redeem 12½% senior notes, the source said.

The company’s existing $595.5 million term loan B due Jan. 31, 2021 is priced at Libor plus 325 bps with a 1% Libor floor.

National Mentor is a Boston-based provider of home and community-based health and human services.

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