Team Health, U.S. Renal free to trade; Shearer’s sets changes; Veritas suspends syndication

By Sara Rosenberg

New York, Nov. 17 – Team Health Inc.’s term loan B made its way into the secondary market on Tuesday and the debt was seen trading above its original issue discount, and U.S. Renal Care Inc.’s credit facility broke for trading as well.

Meanwhile, over in the primary, Shearer’s Foods LLC raised pricing on its incremental term loan and extended the call protection, and Veritas Technologies Corp. opted to delay its debt financing transactions as a result of unhospitable market conditions.

Also, Cable & Wireless Communications plc (Sable International Finance Ltd.) disclosed price talk with launch, and Access CIG LLC came out with original issue discount guidance, and Equinix Inc. joined this week’s new issue calendar.

Team Health breaks

Team Health’s $1,315,000,000 seven-year senior secured term loan B freed up for trading on Tuesday, with levels quoted at 99¼ bid, 99¾ offered in the morning and then it moved up to 99½ bid, par offered by late afternoon, according to traders.

Pricing on the term loan is Libor plus 375 basis points with a 0.75% Libor floor, and it was sold at an original issue discount of 99. The debt has 101 soft call protection for six months.

During syndication, the loan was upsized from $965 million, pricing firmed at the low end of the Libor plus 375 bps to 400 bps talk, and the MFN sunset was removed, resulting in 50 bps of MFN for the life of the deal.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Barclays, Goldman Sachs Bank USA and Citizens Bank are leading the loan.

Team Health buying IPC

Proceeds from Team Health’s term loan, along with $545 million of senior unsecured notes, will be used to fund the acquisition of IPC Healthcare Inc. in an all-cash transaction with an enterprise value of about $1.6 billion, or $80.25 per share.

The funds from the term loan B upsizing will repay revolver borrowings expected at closing, which is expected late this month, subject to regulatory approval and customary conditions.

Team Health is a Knoxville, Tenn.-based provider of outsourced physician staffing solutions for hospitals. IPC is a North Hollywood, Calif.-based national acute hospitalist and post-acute provider organization.

U.S. Renal hits secondary

Another deal to begin trading was U.S. Renal, with its $1.75 billion seven-year first-lien covenant-light term loan (B1/B) quoted at 99 3/8 bid, 99 7/8 offered and its $265 million eight-year second-lien covenant-light term loan (Caa1/CCC+) quoted at 98½ bid, a trader remarked.

Pricing on the first-lien term loan is Libor plus 425 bps with a 1% Libor floor, and it was sold at an original issue discount of 99. The debt has 101 soft call protection for one year.

The second-lien term loan is priced at Libor plus 800 bps with a 1% Libor floor and was issued at a discount of 98. This tranche has call protection of 102 in year one and 101 in year two.

The company’s $2,165,000,000 credit facility also includes a $150 million five-year revolver (B1/B).

Barclays, J.P. Morgan Securities LLC, RBC Capital Markets LLC, Deutsche Bank Securities Inc. and Jefferies Finance LLC are leading the deal.

U.S. Renal merging

Proceeds from U.S. Renal’s credit facility will be used to refinance existing debt in connection with its merger with DSI Renal.

Recently, the spread on the first-lien term loan firmed at the high end of the Libor plus 400 bps to 425 bps talk and the call protection was extended from six months, the 12-month MFN sunset provision was removed, a ticking fee of the full margin plus the floor starting on Jan. 1 was added, and the fixed dollar incremental basket was reduced to $300 million from $350 million.

Also during syndication, the unlimited restricted payment threshold was lowered to 4.5 times from 4.75 times, and the excess cash flow sweep was modified to 50% if leverage is greater than 4.75 times, from 5.25 times, 25% if leverage is less than 4.75 times and more than 4.25 times, from less than 5.25 times and more than 4.75 times, and 0% if leverage is less than 4.25 times, from less than 4.75 times.

Closing is expected by the end of this quarter, subject to regulatory and certificate of need approval.

Nashville-based DSI Renal and Plano, Texas-based U.S. Renal are providers of dialysis services.

Shearer’s revised

Moving to the primary market, Shearer’s Foods lifted pricing on its $225 million incremental first-lien term loan (B1/B) to Libor plus 425 bps from Libor plus 375 bps, extended the 101 soft call protection to one year from six months and removed the MFN sunset, a market source said.

As before, the term loan has a 1% Libor floor and an original issue discount of 99.

Antares Capital and Golub Capital are leading the deal that allocated on Tuesday and is expected to close on Monday.

Proceeds will be used with about $175 million of new equity to fund the acquisition of Barrel O’ Fun Snack Foods Corp.

Shearer’s Foods is Massillon, Ohio-based private label supplier and contract manufacturer of salty snacks, cookies and crackers. Barrel O’ Fun is a Perham, Minn.-based supplier and contract manufacturer of salty snacks.

Veritas delayed

Veritas Technologies chose to postpone its credit facility and notes offerings as a result of poor market conditions, according to a market source, who said that the debt may return to market in the first quarter of 2016.

At launch, early this month, the credit facility consisted of a $300 million five-year revolver, a $2.45 billion seven-year covenant-light term loan and a €760 million seven-year covenant-light term loan, with both term loans talked at Libor/Euribor plus 450 bps to 475 bps with a 1% floor, an original issue discount of 98 to 99 and 101 soft call protection for six months.

Last week, the U.S. term loan B was downsized to $1.5 billion from $2.45 billion, a separate $700 million senior secured term loan B held by the underwriters was added, price talk on the U.S. and euro term debt was increased to Libor/Euribor plus 500 bps and the discount on the term loans widened to 95.

Also, as a result of the term loan B downsizing, the company’s senior secured notes offering had been upsized to $750 million from $500 million, while the planned unsecured notes offering was left sized at $1,775,000,000.

Veritas lead banks

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., UBS AG, Jefferies Finance LLC, Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Goldman Sachs Bank USA were leading Veritas’ credit facility.

Proceeds from the bank debt and bonds, as well as funds from $2.65 billion in sponsor equity, were going to be used to fund the $8 billion buyout of the company by the Carlyle Group from Symantec Corp.

Veritas is a Mountain View, Calif.-based provider of storage and server management software solutions.

Cable & Wireless sets talk

Cable & Wireless Communications held its lender call on Tuesday, launching its $800 million seven-year covenant-light term loan B strip with talk of Libor plus 400 bps to 425 bps with a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source remarked.

The strip is split between a $440 million term loan B-1 and a $360 million term loan B-2.

Commitments are due at noon ET on Nov. 24, the source added.

Bank of America Merrill Lynch, Goldman Sachs Bank USA and Scotiabank are the joint global coordinators on the deal and bookrunners with BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, ING and RBC Capital Markets.

Cable being acquired

Cable & Wireless’ term debt is being done in connection with its acquisition by Liberty Global plc for a total equity value of about £3.5 billion ($5.3 billion), or an implied price of 78.04 pence per share.

Proceeds from the term loan B-1 will be used to refinance $400 million of 8.75% senior secured notes due 2020 and the term loan B-2 will be used to fund a $360 million special dividend payable to Cable & Wireless shareholders.

In addition, the company plans on getting a $570 million revolver to refinance existing revolving credit facilities, Liberty Global said in an 8-K filed with the Securities and Exchange Commission on Tuesday.

Closing is subject to Liberty Global and Cable & Wireless shareholder approvals, certain regulatory approvals and court sanction of the scheme of arrangement.

Cable & Wireless is a London-based telecommunications company. Liberty Global is a London-based cable company.

Access CIG reveals OID

Access CIG released original issue discount talk of 99 on its $60 million add-on first-lien covenant-light term loan due October 2021 that launched with a call during the session, according to a market source.

As previously reported, pricing on the loan is Libor plus 500 bps with a 1% Libor floor, and the debt has 101 soft call protection for six months.

Commitments are due on Nov. 24, the source added.

Deutsche Bank Securities Inc., Goldman Sachs Bank USA and Bank of America Merrill Lynch are leading the deal that will be used for acquisition financing.

Access CIG is a Livermore, Calif.-based provider of records and information management services.

Equinix coming soon

Equinix set a lender call for Friday to launch a $700 million equivalent seven-year covenant-light term loan B that is split between U.S. dollar and sterling tranches, according to a market source.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., RBC Capital Markets and TD Securities (USA) LLC are leading the deal.

Proceeds will be used to help fund the acquisition of TelecityGroup plc, which is expected to close early in the first half of 2016.

Equinix is a Redwood City, Calif.-based interconnection and data center company. Telecity is a London-based carrier-neutral data center and colocation center provider.

Genex wraps at terms

In other news, Genex Holdings Inc. completed syndication of its fungible $25 million add-on first-lien term loan at initial talk of Libor plus 425 bps with a 1% Libor floor and an original issue discount of 99, a market source said.

The spread and floor on the add-on matches existing first-lien term loan pricing.

RBC Capital Markets and SunTrust Robinson Humphrey Inc. leading the debt that allocated late Monday.

Proceeds will be used to fund an acquisition.

Genex is a Wayne, Pa.-based provider of integrated managed care services, focused on controlling health-care costs and reducing disability expenses.

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