TGI Friday’s breaks; Staples, Kloeckner revised; Horizon Pharma, Intrawest, Talbots set talk

By Sara Rosenberg

New York, April 20 – TGI Friday’s Inc.’s tack-on first-lien term loan hit the secondary market on Monday, with levels quoted above its original issue discount, and Websense’s term loan was seen trading close to par with acquisition news.

Switching to the primary market, Staples Inc. reduced price talk on its term loan B and modified the original issue discount, and Kloeckner Pentaplast increased its U.S. and euro term loan sizes while decreasing spreads and tightening offer prices.

In addition, Horizon Pharma plc, Intrawest Operations Group LLC and Talbots Inc. released pricing guidance with launch, and J. Jill and Telenet Group Holding NV joined this week’s calendar.

TGI Friday’s frees up

TGI Friday’s saw its fungible $206.5 million tack-on first-lien term loan (B2) due July 15, 2020 begin trading on Monday, with levels quoted at par bid, par ½ offered, according to a trader.

Pricing on the term loan is Libor plus 425 basis points with a 1% Libor floor, and it was sold at an original issue discount of 99¾. The debt has 101 soft call protection for one year.

Last week, the spread on the tack-on loan was reduced from Libor plus 450 bps, and the discount was revised from 99. Also, the company eliminated plans to reprice its existing $118 million first-lien term loan to Libor plus 450 bps with a 1% Libor floor from Libor plus 425 bps with a 1% Libor floor.

Credit Suisse Securities (USA) LLC, Jefferies Finance LLC, Goldman Sachs Bank USA and GE Capital Markets are leading the deal that will be used to refinance second-lien term loan debt and seller preferred paper.

With the tack-on, the company is amending its existing first-lien term loan to reset maximum total net leverage ratio levels, and existing lenders were offered a 25 bps amendment fee.

TGI Friday’s is a casual dining restaurant and bar chain.

Websense around par

Also in trading, Websense’s term loan was quoted at par bid, par 1/8 offered after news emerged that the Vista Equity Partners portfolio company is being combined with Raytheon Co. business unit Raytheon Cyber Products, according to a trader. On Friday, the loan was seen at an offer of par ¼.

As part of the joint venture formation, Raytheon will contribute $1.9 billion to acquire San Diego-based Websense, of which $600 million will be in the form of an intercompany loan. Raytheon will also contribute the assets of Raytheon Cyber Products and related intellectual property, which is valued at $400 million.

The cash, along with the value for Raytheon Cyber Products, results in an enterprise value for the venture of $2.3 billion, with capitalization of $1.7 billion in equity and $600 million in intercompany debt. Vista Equity will subsequently invest about $335 million for a 19.7% equity stake in the new company.

Closing is expected this quarter, subject to regulatory approvals and other conditions.

Websense and Raytheon Cyber are cybersecurity companies.

BWICs announced

Two Bid-Wanted-In-Competition portfolios emerged – one sized at roughly $377.8 million that is due at 12:30 p.m. ET on Wednesday and one sized at roughly $155.5 million that is due at 11 a.m. ET on Tuesday.

Most of the debt in the $377.8 million portfolio is second-lien debt, including loans from Access CIG, Applied Systems, BJ’s Wholesale Club, Compuware Corp., IAP Worldwide, Kronos, Mitchell International, Sedgwick, and TransFirst Inc., a trader said.

There are about 49 issuers in the $377.8 million portfolio.

Meanwhile, some of the debt in the $155.5 million portfolio includes Acosta Holdco’s first-lien term loan, Asurion’s term loan B-1, DE Master Blend’s term loan, Formula One’s term loan, Hyperion Insurance’s term loan B, Laureate’s term loan B, National Financial’s term loan B, PetSmart Inc.’s term loan B, Safe-Guard’s term loan, Smile Brands’ term loan, Travel Leaders’ term loan and WME IMG Worldwide’s term loan.

There are about 175 issuers in the $155.5 million portfolio, the trader added.

Staples updates pricing

Moving to the primary market, Staples trimmed price talk on its $2.75 billion six-year senior secured covenant-light term loan B (Baa2/BBB) to Libor plus 275 bps to 300 bps from Libor plus 350 bps and moved the original issue discount to 99½ from 99, according to a market source.

As before, the term loan has a 0.75% Libor floor, 101 soft call protection for six months and a ticking fee of half the margin starting May 1 and the full margin plus the floor starting June 1.

The company’s $5.75 billion credit facility also includes a $3 billion five-year asset-based revolver.

Commitments are due at 5 p.m. ET on Tuesday.

Barclays, Bank of America Merrill Lynch, Wells Fargo Securities LLC and HSBC Securities (USA) Inc. are leading the deal.

Staples buying Office Depot

Proceeds from Staples’ credit facility, $2.1 billion of stock, $500 million of cash on Staples’ balance sheet and $500 million of Office Depot Inc. debt and capital leases that will be rolled over will be used to fund the acquisition of Office Depot for $6.3 billion and to refinance some of the debt of both companies.

The agreement calls for the receipt by Office Depot shareholders of $7.25 in cash and 0.2188 of a share in Staples stock at closing per Office Depot share.

Closing is expected by year-end, subject to customary conditions, including antitrust regulatory approval and Office Depot shareholder approval.

Synergy excluded, secured leverage is 2.1 times, and total leverage is 2.6 times. Synergy included, secured leverage is 1.4 times, and total leverage is 1.8 times, the source added.

Staples is a Framingham, Mass.-based retailer of office supplies. Office Depot is a Boca Raton, Fla.-based provider of products, services and solutions for the workplace.

Kloeckner reworks loans

Kloeckner Pentaplast lifted its five-year U.S. equivalent first-lien covenant-light term loan to €668 million from €631 million and its euro five-year first-lien covenant-light term loan to €213 million from €200 million, cut pricing on the tranches to Libor/Euribor plus 400 bps from talk of Libor/Euribor plus 450 bps to 475 bps, and modified original issue discounts to 99¾ from 99, a source remarked.

The term loans still have a 1% floor and 101 soft call protection for six months.

The company’s now €981 million credit facility also includes a €100 million 4.75-year revolver.

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

Credit Suisse Securities, Barclays, Deutsche Bank Securities and Jefferies are leading the deal that will be used to refinance existing debt and fund a shareholder dividend.

Kloeckner is a Montabaur, Germany-based provider of rigid plastic film.

Horizon Pharma reveals talk

In more primary news, Horizon Pharma hosted a bank meeting on Monday morning, launching a $500 million six-year senior secured covenant-light term loan B (Ba2) with talk of Libor plus 400 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, according to a market source.

Commitments are due on Friday, the source said.

Citigroup Global Markets Inc. and Jefferies Finance are leading the deal that will be used with $300 million of senior notes due 2023 and cash on the balance sheet to fund the acquisition of Hyperion Therapeutics Inc. for $46.00 per share in cash, or about $1.1 billion on a fully diluted basis, and to refinance existing debt.

Closing is expected this quarter, subject to customary conditions, including the tender of a majority of the outstanding Hyperion Therapeutics shares and expiration or termination of the Hart-Scott-Rodino waiting period.

Horizon Pharma is a Dublin-based specialty biopharmaceutical company. Hyperion Therapeutics is a Brisbane, Calif.-based commercial-stage biopharmaceutical company.

Intrawest holds call

Intrawest Operations held its lender call, launching a repricing of its existing $592.8 million term loan due Dec. 9, 2020 with talk of Libor plus 350 bps to 375 bps with a 1% Libor floor, a par offer price and 101 soft call protection for six months, according to sources.

The repricing will take the term loan down from Libor plus 450 bps with a 1% Libor floor.

Consents are due by noon ET on Friday, and closing is expected on or around May 1.

Bank of America Merrill Lynch is leading the deal.

Intrawest is a Denver-based mountain resort and adventure company.

Talbots details surface

Another company to hold a call was Talbots, at which time lenders were presented with $205 million in add-on term loans that will be used to fund a distribution to shareholders, according to a market source.

The debt includes a $160 million add-on first-lien term loan talked at Libor plus 450 bps with a 1% Libor floor and an original issue discount of 99 to 99½, and a $45 million add-on second-lien term loan talked at Libor plus 850 bps with a 1% Libor floor and a discount of 98, the source said.

Bank of America Merrill Lynch is leading the deal.

Talbots is a Hingham, Mass.-based specialty retailer and direct marketer of women's apparel, shoes and accessories.

DJO call protection

DJO Finance LLC came out with soft call protection of 101 for six months on its $1,005,000,000 first-lien term loan (Ba3) that launched with a bank meeting during the session, a source remarked.

As previously reported, the term loan and a $20 million delayed-draw term loan (Ba3) are being talked at Libor plus 350 bps to 375 bps with a 1% Libor floor and an original issue discount of 99½.

The term debt is due on June 2020 and has a springing maturity 91 days inside the company’s third-lien notes if more than $50 million of notes remain outstanding, the source continued.

Covenants include a net first-lien leverage ratio of no greater than 5.25 times.

The company’s $1,175,000,000 credit facility also provides for a $150 million asset-based revolver.

Commitments are due on Thursday, and allocations are targeted for late this week.

DJO leads

Macquarie Capital (USA) Inc. and Natixis are leading DJO Finance’s credit facility that will be used with $1,045,000,000 of second-lien senior notes to refinance existing debt.

The company is also offering to exchange its existing $300 million of senior subordinated notes for $300 million of new third-lien senior notes, and a significant percentage of holders of the existing senior subordinated notes have already committed to participate in the exchange offer.

DJO is a Vista, Calif.-based provider of medical device solutions for musculoskeletal health, vascular health and pain management.

J. Jill on deck

J. Jill surfaced with plans to hold a bank meeting on Wednesday morning to launch a $290 million credit facility that will be used to help fund its previously announced buyout by TowerBrook Capital Partners LP from Arcapita and Golden Gate Capital, according to a market source.

The facility consists of a $40 million asset-based revolver and a $250 million seven-year term loan B, the source said.

Jefferies Finance and Macquarie Capital are leading the deal.

Other funds for the buyout will come from around $169 million in equity.

Closing is expected this quarter.

J. Jill is a Quincy, Mass.-based multi-channel fashion retailer of women’s apparel, accessories and footwear.

Telenet readies deal

Telenet Group set a bank meeting in London for Tuesday to launch a €1 billion credit facility, a market source said.

The facility consists of a €200 million revolver, and an €800 million eight-year term loan B talked at Euribor plus 350 bps, the source continued.

Scotiabank and Goldman Sachs are leading the deal that will be used with existing liquidity to fund the acquisition of BASE Co. NV for €1,325,000,000.

Pro forma for the transaction, leverage would have been about 4.45 times at Dec. 31, 2014.

Closing is subject to customary conditions, including merger approval from the relevant competition authorities.

Telenet is a Mechelen, Belgium-based provider of media and telecommunication services. BASE is a mobile network operator in Belgium.

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