XPO breaks; Rite Aid rises on acquisition chatter; Computer Sciences Government tweaks deal

By Sara Rosenberg

New York, Oct. 27 – XPO Logistics Inc. reduced the size of its term loan B, widened the spread and original issue discount, and then freed up the debt for trading on Tuesday, and Rite Aid Corp.’s term loans were stronger in response to buzz of a potential acquisition by Walgreens Boots Alliance Inc.

In more happenings, Computer Sciences Government Services Inc. downsized its term loan B and shifted those funds into its pro rata tranches, and accelerated the commitment deadline.

Furthermore, Match Group Inc. released official price talk on its term loan with its bank meeting, and Platform Specialty Products Corp. and PolyOne Corp. and New Albertson’s Inc. set launches for this week.

XPO reworked, trades

XPO Logistics cut its six-year senior secured covenant-light term loan B to $1.6 billion from $1.75 billion, raised pricing to Libor plus 450 basis points from talk of Libor plus 400 bps to 425 bps and changed the original issue discount to 98 from 98.5, according to a market source, who said the debt has MFN for life.

The 1% Libor floor and 101 soft call protection for one year included in the term loan B were unchanged.

With final terms in place, the B loan hit the secondary market on Tuesday, with levels quoted at 98¾ bid, 99¼ offered on the break. It was seen shortly after at 98½ bid, 99 offered, a trader said.

Morgan Stanley Senior Funding Inc., J.P. Morgan Securities LLC, Barclays, Deutsche Bank Securities Inc., HSBC Securities Inc. and Credit Agricole Securities Inc. are leading the deal that will be used to help fund the acquisition of Con-way Inc. for $47.60 per share, to refinance existing Con-way debt and for general corporate purposes. The total transaction value is about $3 billion, including $290 million of net debt.

Closing is expected on Friday, subject to completion of a tender offer for Con-way’s shares.

XPO is a Greenwich, Conn.-based provider of supply chain solutions. Con-way is an Ann Arbor, Mich.-based transportation and logistics company.

Rite Aid gains

Also in trading, Rite Aid’s term loans moved higher on chatter that the company might be closing in on a deal to be acquired by Walgreens, a trader remarked.

The term loan T-1 was quoted at par ¾ bid, 101½ offered, up from par ¼ bid, 101 offered, and the term loan T-2 was quoted at par ¼ bid, par ¾ offered, up from 99¾ bid, par ¼ offered, the trader continued.

Rite Aid is a Camp Hill, Pa.-based drugstore chain.

Computer Sciences retranching

Computer Sciences Government Services is trimming its seven-year covenant-light term loan B to a maximum size of $1 billion from $1.25 billion, according to a market source.

As before, talk on the term loan B is Libor plus 300 bps to 325 bps with a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

The funds that are being taken out of the term loan B will be moved into the company’s pro rata tranches that met with strong demand, the source said.

New tranche sizes are not yet available. Sizes will be finalized prior to the deal allocating.

At launch, the pro rata debt consisted of a $500 million five-year revolver talked at Libor plus 175 bps, a $500 million three-year term loan A-1 talked at Libor plus 162.5 bps and a $1.25 billion five-year term loan A-2 talked at Libor plus 175 bps.

Computer Sciences shutting early

Also due to demand, Computer Sciences Government Services moved up the commitment deadline on its bank debt to 5 p.m. ET on Wednesday from Thursday, with allocations expected to follow shortly after, the source added.

RBC Capital Markets LLC, Mitsubishi UFJ Financial Group, Bank of America Merrill Lynch and Scotiabank are leading the $3.5 billion senior secured credit facility (Ba2/BB+/BBB), with RBC left lead on the term loan B and Mitsubishi left lead on the revolver and term A debt.

Proceeds will be used to fund the $10.50 per share special cash dividend being paid in the spinoff of Computer Sciences Government Services from Computer Sciences Corp., to finance the $390 million acquisition of SRA by Computer Sciences Government Services from Providence Equity Partners, SRA’s founder, Ernst Volgenau, and members of management, and to refinance SRA’s existing $1 billion of net debt.

Computer Sciences Government Services is a Falls Church, Va., provider of IT services to the U.S. federal government. SRA is a Fairfax, Va.-based provider of IT and professional services to the U.S. federal government.

Match sets talk

Match Group held its bank meeting on Tuesday, launching its incremental $800 million seven-year senior secured term loan B (Ba2/BB+) with talk of Libor plus 375 bps to 400 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source said.

Prior to launch, the loan was heard by sources to be unofficially whispered at Libor plus 400 bps with a 1% Libor floor and a discount of 99.

J.P. Morgan Securities LLC is leading the deal that will be used with $500 million of notes and proceeds from an initial public offering of stock to fund a distribution to IAC/InterActiveCorp in connection with Match’s spinoff from IAC and for general corporate purposes.

Match Group is a Dallas-based provider of dating products.

Platform readies deal

Platform Specialty Products will hold a bank meeting at 2 p.m. ET in New York on Wednesday and a bank meeting in London in Thursday to launch a $1,145,000,000 term loan B due June 7, 2020 and a €300 million term loan B due June 7, 2020, according to a market source.

Both term loans are talked at Libor plus 475 bps with a 1% Libor floor, an original issue discount of 98 and 101 soft call protection for one year, the source said.

Commitments are due on Nov. 6.

Credit Suisse Securities (USA) LLC and Barclays are leading the deal that will be used to help fund the acquisition of Alent plc for 503 pence per share in cash. The transaction is valued at about $2.1 billion and, including net debt, the total transaction value is around $2.3 billion.

Closing is expected in late 2015 or early 2016, subject to certain conditions, including Alent shareholder approval and regulatory approvals in certain jurisdictions.

Platform is a Miami-based specialty chemicals company. Alent is a U.K.-based supplier of specialty chemicals and engineered materials used primarily in electronics, automotive and industrial applications.

PolyOne coming soon

PolyOne set a bank meeting for 10:30 a.m. in New York on Wednesday to launch a $550 million senior secured term loan B due 2022, according to a market source.

Citigroup Global Markets Inc. is leading the deal that will be used to refinance $317 million of senior notes due 2020 and other outstanding debt.

The company said in a news release that the goal of the refinancing is to set favorable terms, extended maturities and improve liquidity.

PolyOne is an Avon Lake, Ohio-based provider of specialized polymer materials, services and solutions.

New Albertson’s on deck

New Albertson’s scheduled a lender call for 11 a.m. ET on Wednesday to launch a new term loan, a market source remarked.

Citigroup Global Markets Inc., Bank of America Merrill Lynch and RBC Capital Markets are leading the deal.

Details on structure and use of proceeds are not yet available, the source added.

New Albertson’s is a grocery store chain operating differentiated banners across the Mid-Atlantic and Northeast regions of the U.S., including Acme, Jewel-Osco, Shaw’s and Safeway’s Eastern Division.

Realogy closes

In other news, Realogy Holdings Corp. completed its $1.25 billion five-year senior secured credit facility that consists of an $815 million revolver and a $435 million term loan A, according to a news release.

Proceeds were used to refinance existing debt.

Realogy is a Madison, N.J.-based provider of residential real estate services.

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