Brand Energy first-lien loan lower on buyout; HUB changes emerge; Belden revises deadline

By Sara Rosenberg

New York, Sept. 16 - Brand Energy & Infrastructure Services Inc.'s first-lien term loan was a little softer in trading on Monday as the company announced plans to be acquired by Clayton, Dubilier & Rice.

Switching to the primary market, HUB International Ltd. upsized its term loan B as its bond offering was downsized, firmed the spread at the low end of guidance and tightened the original issue discount price.

In addition, Belden Inc. moved up the commitment deadline on its term loan B, Hyperion Insurance Group Ltd. released talk with launch, and Sears Holdings Corp., Penton Media Inc. and Prime Healthcare joined this week's calendar.

Brand Energy dips

Brand Energy & Infrastructure Services' first-lien term loan headed lower in the secondary market on Monday with news that the company is being bought out by Clayton, Dubilier & Rice from First Reserve, according to a trader.

The first-lien term loan was quoted at par ½ bid, 101 offered, down from par ¾ bid, 101¼ offered, the trader said.

The trader explained that the coupon on the loan is high (Libor plus 500 basis points with a 1.25% Libor floor) and the buyout won't close till later this year, so the debt has not yet traded all the way down to the par price at which it is expected to be repaid. He anticipates that as the closing date on the buyout gets closer, the loan will move to that par level.

With the acquisition of Brand Energy, Clayton, Dubilier & Rice is also purchasing an infrastructure business from Harsco Corp. and will then merge Brand Energy and the infrastructure business together.

Brand Energy plans financing

To fund the buyout and merger, Brand Energy expects to get new financing led by Morgan Stanley, Citigroup Global Markets Inc., Goldman Sachs Bank USA and UBS Investment Bank, according to an 8-K filed with the Securities and Exchange Commission.

The buyout of Brand Energy is for an undisclosed amount, and the purchase of the infrastructure business is for about $300 million plus Harsco will receive a 29% equity stake in the combined company.

The enterprise value of the combined company is estimated at around $2.5 billion, which includes $1.7 billion in debt financing.

Brand Energy is an Atlanta-based provider of specialized industrial services to the energy and infrastructure sectors.

HUB reworks loan

Over in the primary, HUB International lifted its seven-year term loan B to $1.87 billion from $1,785,000,000, set pricing at Libor plus 375 bps, the tight end of the Libor plus 375 bps to 400 bps talk, and moved the discount to 99½ from 99, according to a market source.

The term B still has a 1% Libor floor and 101 soft call protection for six months.

The company's now $2,145,000,000 credit facility (B1) also includes a $225 million five-year revolver and a C$50 million five-year revolver.

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

Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch and RBC Capital Markets are the joint lead arrangers on the deal and are joint bookrunners with BMO Capital Markets, Macquarie Capital and UBS Securities LLC.

HUB trims notes

In connection with the term loan B upsizing, HUB reduced the size of its senior notes offering to $950 million from $1,035,000,000, the source continued.

Proceeds from the new debt transaction will be used to help fund the buyout of the company by Hellman & Friedman LLC and to refinance existing debt.

HUB is a Chicago-based insurance brokerage.

Belden shuts early

Belden modified the commitment deadline on its $250 million seven-year covenant-light term loan B (Baa2) to 5 p.m. ET on Monday from Sept. 23, according to a market source.

The B loan is talked at Libor plus 275 bps with a 0.75% Libor floor, an original issue discount of 99 to 99½ and 101 soft call protection for six months.

The company's $650 million credit facility also provides for a $400 million ABL revolver.

Wells Fargo Securities LLC and J.P. Morgan Securities LLC are leading the deal that will be used to refinance existing debt.

Belden is a St. Louis-based designer, manufacturer and seller of signal transmission products for industrial automation, data centers, broadcast studios and aerospace markets.

Hyperion talk emerges

Hyperion Insurance held its bank meeting at 10 a.m. ET in New York on Monday and, shortly ahead of the event, talk on its $250 million senior secured term loan B (B1/B) due 2019 came out at Libor plus 425 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

J.P. Morgan Securities LLC is the lead bank on the deal.

Proceeds will be used by the London-based insurance intermediary business to refinance existing debt and fund pipeline acquisitions.

Archroma sets deadline

Archroma also launched with a bank meeting during the session, and investors are being asked to get their commitments in for the $360 million credit facility by Sept. 23, according to a market source.

As previously reported, the deal consists of a euro equivalent $50 million 41/2-year revolver, and a $310 million five-year term loan B talked at Libor plus 825 bps with a 1.25% Libor floor and an original issue discount of 98. The B loan is non-callable for one year, then at 101 in year two.

Jefferies Finance LLC is leading the deal.

Proceeds will be used to help fund SK Capital Partners' acquisition of the textile chemicals, paper specialties and emulsions businesses (to be named Archroma) of Clariant International for about $500 million and the assumption of some pension liabilities.

HealthPort launch

HealthPort (CT Technologies Intermediate Holdings Inc.) was yet another deal to launch with a bank meeting, and commitments for this $390 million transaction are due on Sept. 30, a market source said.

The facility consists of a $25 million five-year revolver (B1/B+), a $250 million six-year first-lien term loan (B1/B+) and a $115 million seven-year second-lien term loan (Caa1/CCC+).

Last week, when the bank meeting was announced, talk on the first-lien term loan was revealed to be Libor plus 425 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, and talk on the second-lien term loan came out at Libor plus 825 bps with a 1.25% Libor floor, a discount of 981/2, and call protection of 103 in year one, 102 in year two and 101 in year three.

Credit Suisse Securities (USA) LLC, Ares Capital and GE Capital Markets are leading the first-lien debt, and Credit Suisse is the lead on the second-lien loan.

Proceeds will be used to refinance existing debt and fund a dividend.

HealthPort is an Alpharetta, Ga.-based provider of release of information services for the health care industry.

Sears coming soon

In more primary news, Sears Holdings set a bank meeting for 10 a.m. ET in New York on Wednesday to launch a $1 billion senior secured term loan due June 2018, according to a market source.

Bank of America Merrill Lynch is leading the deal that will be used to pay down borrowings under the company's existing $3.275 billion asset-based revolver.

Sears is a Hoffman Estates, Ill.-based retailer.

Penton on deck

Penton Media scheduled a bank meeting for 2 p.m. ET in New York on Tuesday to launch a $720 million credit facility that will be used to refinance existing debt, according to a market source.

The facility consists of a $50 million five-year revolver (B2/B), a $520 million six-year first-lien term loan (B2/B) talked at Libor plus 425 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, and a $150 million seven-year second-lien term loan (Caa2/CCC+) talked at Libor plus 775 bps with a 1.25% Libor floor, a discount of 98½ and call protection of 103 in year one, 102 in year two and 101 in year three, the source remarked.

Credit Suisse Securities (USA) LLC, GE Capital Markets, Bank of America Merrill Lynch and Macquarie Capital are leading the deal.

Penton is a New York-base tradeshow and professional information services company.

Prime Healthcare readies deal

Prime Healthcare surfaced with plans to hold a bank meeting in California on Thursday to launch a $475 million five-year credit facility that is being led by Healthcare Finance Group LLC, according to a news release.

The facility consists of a $225 million asset-based revolver talked at Libor plus 325 bps with a 1% Libor floor and a $250 million senior secured term loan talked at Libor plus 450 bps with a 1.25% Libor floor.

Proceeds will be used to complete certain targeted acquisitions and for working capital purposes.

Prime Healthcare is an Ontario, Calif.-based health care system with hospital operations in California, Nevada, Texas, Kansas and Pennsylvania.

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