NextGen breaks; Hillman weaker on buyout; US Ecology, Post, 24 Hour Fitness tweak deals

By Sara Rosenberg

New York, May 19 - NextGen Finance LLC widened the spread and original issue discount on its term loan B, extended the call protection and then freed up for trading on Monday, and the Hillman Cos. Inc.'s term loan was softer with buyout news.

In more happenings, US Ecology Inc. lowered pricing on its term loan and tightened the offer price, Post Holdings Inc. increased the size of its term loan and accelerated the commitment deadline, and 24 Hour Fitness Worldwide Inc. trimmed the spread on its term loan B, set the discount at the wide end of talk and extended the call protection.

Furthermore, Tallgrass Operations LLC released pricing guidance with launch, Long Term Care Group Inc. began circulating price talk on its upcoming deal, and Vantiv Inc. disclosed timing and guidance on its transaction.

NextGen revised, trades

NextGen lifted its seven-year first-lien covenant-light senior secured term loan B to $375 million from $370 million, raised pricing to Libor plus 400 basis points from Libor plus 350 bps, moved the original issue discount to 99 from 99½ and extended the call protection to one year from six months, according to a market source.

In addition, the company eliminated the MFN sunset provision, lowered the incremental allowance to $65 million from $85 million and capped EBITDA add-backs at 15%, down from 20%, the source said.

The term loan still has a 1% Libor floor.

With final terms in place, the term loan B allocated and broke for trading on Monday with levels quoted at 99½ bid, par ½ offered, a trader remarked.

NextGen tweaks revolver

NextGen's credit facility (Ba3) also includes a A$50 million five-year revolver that is priced at Libor plus 375 bps, subject to a grid, with no Libor floor.

The revolver size was reduced from A$75 million and the spread was widened from Libor plus 325 bps, the source continued.

Morgan Stanley Senior Funding Inc. and HSBC Securities (USA) Inc. are leading the deal that will be used to refinance existing debt, including an intercompany loan, and for general corporate purposes.

Closing is expected on May 29, the source added.

NextGen is a supplier of network connectivity, Data Centre facilities and cloud services.

Hillman dips

Also in trading, Hillman's term loan fell to par 1/8 bid, par 5/8 offered from par ½ bid, 101 offered as news surfaced that the company is being bought by CCMP Capital Advisors LLC from Oak Hill Capital Partners, according to a trader.

Funds for the $1,475,000,000 buyout will come from debt and equity commitments.

As part of the transaction, Hillman will repay its secured credit facility, under which about $384 million is outstanding, and its 10 7/8% senior notes due 2018.

Closing is expected this quarter or next quarter, subject to regulatory approvals and customary conditions, and post close, Oak Hill Capital will retain a significant minority interest in the company.

Hillman is a Cincinnati-based distributor of fasteners, key duplication systems, engraved tags and related hardware items.

US Ecology flexes down

Back in the primary, US Ecology cut pricing on its $415 million seven-year term loan to Libor plus 300 bps from Libor plus 325 bps and changed the original issue discount to 99¾ from 991/2, according to a market source.

As before, the term loan has a 0.75% Libor floor and 101 soft call protection for six months.

The company's $540 million credit facility (Ba3/BB+) also includes a $125 million five-year revolver.

Wells Fargo Securities LLC and Credit Suisse Securities (USA) LLC are leading the deal that will be used to help fund the $465 million acquisition of EQ-The Environmental Quality Co. from Kinderhook Industries LLC.

Closing is expected this quarter or next quarter, subject to customary conditions, and a purchase price adjustment based on working capital.

Leverage will be around 3.3 times 2013 pro forma combined company EBITDA.

US Ecology is a Boise, Idaho-based provider of radioactive, hazardous, PCB and non-hazardous industrial waste management and recycling services. EQ is a Wayne, Mich.-based fully integrated environmental services and waste management company.

Post upsizes

Post Holdings lifted its seven-year senior secured term loan to $735 million from $635 million, and kept talk at Libor plus 325 bps with a 1% Libor floor, a discount of 99½ and 101 soft call protection for six months, a market source said.

In addition, the commitment deadline for the loan was moved up to noon ET on Thursday from May 28, the source continued.

Barclays, Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, Goldman Sachs Bank USA, BMO Capital Markets and Nomura are leading the deal.

Senior secured leverage is 1.3 times, up from 1.1 times under the original structure, and net total leverage is 6.4 times, up from 6.2 times, the source added.

Post buying Michael Foods

Proceeds from Post's term loan, $630 million of senior notes, $200 million of equity notes, $211.3 million of common stock and $787.4 million of cash on hand will be used to fund the $2.45 billion acquisition of Michael Foods from GS Capital Partners, Thomas H. Lee Partners and other owners.

In earlier filings with the Securities and Exchange Commission, the company said it would use $630 million of senior debt securities and around $500 million of common and/or equity-linked securities for the transaction.

Closing is expected this quarter, subject to the expiration of waiting periods required under antitrust laws.

Post is a St. Louis-based consumer packaged goods holding company. Michael Foods is a Minnetonka, Minn.-based producer and distributor of food products to the foodservice, retail and food-ingredient markets.

24 Hour Fitness modified

24 Hour Fitness lowered pricing on its $850 million seven-year covenant-light term loan B to Libor plus 375 bps from Libor plus 400 bps, set the original issue discount at 99, the wide end of the 99 to 99½ talk, pushed out the 101 soft call protection to one year from six months, eliminated the MFN sunset provision and reduced the incremental allowance to $250 million from $300 million, a market source said.

As before, the term loan has a 1% Libor floor.

The company's $1 billion credit facility (Ba3/B+) also includes a $150 million revolver.

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

J.P. Morgan Securities LLC is leading the deal that will be used with $500 million of senior notes to fund the buyout of the company by AEA Investors and Ontario Teachers' Pension Plan from Forstmann Little & Co.

24 Hour Fitness is a San Ramon, Calif.-based fitness-club operator.

Tallgrass reveals guidance

In more primary happenings, Tallgrass Operations held its call on Monday, launching its $1,124,400,000 credit facility with talk of Libor plus 300 bps and a par offer price, according to a market source.

Included in the facility is a $200 million revolver due Nov. 13, 2017, a $718.4 million term loan B due Nov. 13, 2018 and a $206 million delayed-draw term loan due Nov. 13, 2017.

The term loan B is talked with a 1% Libor floor and the delayed-draw term loan is talked with a 0.75% Libor floor, and both tranches have 101 soft call protection for six months, the source remarked.

Commitments are due by noon ET on Thursday, the source added.

Barclays is leading the deal that will be used to reprice the existing revolver from Libor plus 400 bps, the existing term loan B from Libor plus 325 bps with a 1% Libor floor and the existing delayed-draw term loan from Libor plus 400 bps with a 0.75% Libor floor.

Tallgrass is an Overland Park, Kan.-based owner, operator, acquirer and developer of midstream energy assets.

Long Term Care talk

Long Term Care Group started going out with talk of Libor plus 525 bps to 550 bps with a 1% Libor floor, an original issue discount of 99½ and 101 soft call protection for one year on its $175 million term loan B due 2020 in preparation for the debt's launch with a 2 p.m. ET bank meeting on Tuesday, a market source said.

The company's $195 million senior secured credit facility also includes a $20 million revolver.

RBC Capital Markets and MCS Capital Markets are leading the deal that will be used to help fund the buyout of the company by Stone Point Capital from Univita Health.

Long Term Care Group is an Eden Prairie, Minn.-based business process outsourcing company for the long-term care insurance industry.

Vantiv timing emerges

Vantiv, a Symmes Township, Ohio-based payment processor, set a bank meeting for Thursday to launch its $1,919,000,000 of new bank debt, according to a market source.

The debt consists of a $250 million add-on five-year revolver and a $669 million add-on five-year term loan A, both talked at Libor plus 200 bps, and a $1 billion seven-year term loan B talked at Libor plus 300 bps to 325 bps with a 0.75% Libor floor, a discount of 99½ and 101 soft call protection for six months, the source said.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Credit Suisse Securities (USA) LLC are leading the deal that will be used to fund the $1.65 billion acquisition of Mercury Payment Systems LLC, a Durango, Colo.-based payment technology company, from Silver Lake.

In addition, the company intends to amend its existing credit facility to extend the maturity on its current $1,781,000,000 term loan A and $250 million revolver to five years, and revise pricing and term A amortization.

Pro forma leverage will be around 4.6 times at close, which is expected this quarter, subject to U.S. antitrust clearance and other customary conditions.

Zayo closes

In other news, Zayo Group LLC completed its fungible $275 million incremental term loan B due July 2, 2019 a news release said.

Pricing on the incremental loan matches the company's existing roughly $1.74 billion term loan B at Libor plus 300 bps with a 1% Libor floor, and there is 101 soft call protection that expires on May 26. The incremental debt was sold at a discount of 991/2, after firming last week at the tight end of the 99¼ to 99½ talk.

Barclays, RBC Capital Markets and Morgan Stanley Senior Funding Inc. led the deal that was used to repay $150 million of revolver borrowings, which was drawn to help fund the acquisition of Geo Networks Ltd, a London-based dark fiber provider, and will be used to fund the acquisition of Neo Telecoms Group and for general corporate purposes.

Zayo is a Boulder, Colo.-based provider of fiber-based bandwidth infrastructure and network-neutral colocation and interconnection services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.