U.S. Foods, Forterra, SRS break; Alorica, Bob’s Discount, Chefs’ Warehouse update deals

By Sara Rosenberg

New York, June 15 – U.S. Foods Inc.’s term loan B hit the secondary market on Wednesday above its original issue discount, and Forterra (Stardust Finance Holdings Inc.) and SRS Distribution Inc. freed up for trading as well.

Switching to the primary market, Alorica Inc. reduced the size of its term loan B and increased the size of its term loan A, and Bob’s Discount Furniture Inc. downsized its add-on term loan and extended the call protection.

Also, Chefs’ Warehouse Inc. increased the size of its funded term loan while finalizing the spread at the low end of guidance and Vertafore (VF Holding Corp.) moved up the commitment deadline on its first-lien term loan.

In addition, Dynegy Inc., Arbor Pharmaceuticals LLC, Advanced Integration Technology LP and MTS Systems Corp. released price talk with launch, and First Eagle Investment Management and Global Brass and Copper Holdings Inc. emerged with new deal plans.

U.S. Foods starts trading

U.S. Foods’ $2.2 billion seven-year senior secured covenant-light term loan B freed up for trading on Wednesday, with levels quoted at 99 7/8 bid, par ¼ offered, according to a trader.

Pricing on the term loan is Libor plus 325 basis points with a step-down to Libor plus 300 bps when net secured leverage is less than 3.25 times and a 0.75% Libor floor. The debt has 101 soft call protection for six months and was sold at an original issue discount of 99.75.

The other day, the term loan was downsized from $2.3 billion, the spread was set at the low end of the Libor plus 325 bps to 350 bps talk, the step-down was added and the discount was revised from 99.25.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Bank of America Merrill Lynch, BMO Capital Markets, Natixis, Wells Fargo Securities LLC, ING, J.P. Morgan Securities LLC and Morgan Stanley Senior Funding Inc. are leading the loan that will be used with $600 million of senior notes, upsized recently from $500 million, to refinance a $2.04 billion term B, $258 million of senior notes and a $472 million CMBS facility.

Closing is expected on or before June 30.

U.S. Foods is a Chicago-based broadline foodservice distributor.

Forterra hits secondary

Forterra’s fungible $345 million incremental covenant-light first-lien term loan due March 13, 2022 also broke for trading, with levels quoted at 99½ bid, par offered, according to a market source.

Pricing on the term loan is Libor plus 550 bps with a 1% Libor floor and it was sold at an original issue discount of 99. The spread and floor on the incremental term loan matches existing term loan pricing and all of the first-lien term debt is getting 101 soft call protection for six months.

During syndication the incremental loan was upsized from $270 million.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to fund a distribution to shareholders.

Forterra, formerly known as Hanson Building Products, is an Irving, Texas-based manufacturer of drainage and water transmission pipe and products.

SRS frees up

SRS Distribution’s term loans made their way into the secondary market as well, with the $147 million incremental first-lien covenant-light term loan due Aug. 25, 2022 quoted at par bid, par 3/8 offered and the $130 million second-lien covenant-light term loan due Feb. 25, 2023 quoted at par ¼ bid, a trader said.

Pricing on the first-lien term loan is Libor plus 425 bps with a 1% Libor floor, and new loans only were issued at an original issue discount of 99.5. The loan has 101 soft call protection for one year.

The second-lien term loan is priced at Libor plus 875 bps with a 1% Libor floor, and was sold at a discount of 98. This tranche has call protection of 103 in year one, 102 in year two and 101 in year three.

Proceeds will be used to fund a dividend to existing shareholders.

SRS lead banks

Barclays and UBS Investment Bank are the bookrunners on SRS Distribution’s term loans, with Barclays the left lead on the first-lien term loan and UBS left lead on the second-lien term loan.

During syndication, the first-lien term loan was upsized from $127 million, pricing firmed at the low end of the Libor plus 425 bps to 450 bps talk and the discount tightened from 99. Also, pricing on the second-lien term loan was cut from Libor plus 900 bps and the discount was set at the tight end of the 97 to 98 talk.

Along with the size and pricing updates, the company revised the first-lien incremental ratio basket, the second-lien incremental ratio basket, dividends under restricted payments, junior debt prepayments under restricted debt payments, the investments ratio basket and costs to achieve synergies under consolidated EBITDA.

SRS is a McKinney, Texas-based roofing distributor.

Alorica retranches

Moving to the primary market, Alorica trimmed its six-year first-lien term loan B to $350 million from $450 million and lifted its term loan A to $545 million from $445 million, according to a market source.

As before, the term loan B is talked at Libor plus 500 bps with a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

Commitments for the term B are due at 5 p.m. ET on Friday, accelerated from June 21, the source said.

The company’s $1.12 billion credit facility (B1/BB) also includes a $225 million revolver.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Bank of the West, BNP Paribas Securities Corp. and Wells Fargo Securities LLC are leading the deal that will be used to fund the acquisition of Expert Global Solutions from One Equity Partners.

Closing is expected in the third quarter, subject to customary conditions, including regulatory requirements.

Alorica is an Irvine, Calif.-based provider of services, including customer relationship management and back office support. Expert Global Solutions is a Plano, Texas-based customer service organization.

Bob’s downsizes

Bob’s Discount Furniture trimmed its fungible add-on first-lien term loan due February 2021 to $85 million from $190 million and pushed out the 101 soft call protection to one year from six months, a market source said.

The add-on term loan is still priced at Libor plus 475 bps with a 1% Libor floor and an original issue discount of 99.

Recommitments are due at noon ET on Thursday, the source said.

RBC Capital Markets is leading the deal that will be used to repay an $80 million second-lien term loan. Proceeds will no longer be used to fund a distribution to shareholders due to the add-on loan downsizing.

With the add-on term loan, the company is seeking the ability to issue up to $100 million in term loans as long as it is within a specified leverage test.

A 25 bps amendment fee is being offered to lenders, the source added.

Bob’s is a Manchester, Conn.-based retailer of furniture and bedding.

Chefs’ Warehouse upsizes

Chefs’ Warehouse raised its funded six-year term loan to $305 million from $280 million and set the spread on the tranche, as well as on its $50 million delayed-draw term loan, at Libor plus 475 bps, the low end of the Libor plus 475 bps to 500 bps talk, according to a market source.

The term debt still has a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

The company’s now $430 million credit facility also includes a $75 million ABL revolver.

Jefferies Finance LLC, BMO Capital Markets Corp., J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading the deal that will be used to refinance existing credit facility debt, to retire outstanding senior secured notes, for general corporate purposes and for potential acquisitions.

Chefs’ Warehouse is a Ridgefield, Conn.-based distributor of specialty food products.

Vertafore shutting early

Vertafore accelerated the commitment deadline on its $1.1 billion seven-year covenant-light first-lien term loan to noon ET on Thursday from June 22, a market source remarked.

The term loan is talked at Libor plus 400 bps to 425 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

The company’s $1.2 billion credit facility (B2/B-) also includes a $100 million five-year revolver.

Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc. and Mizuho are leading the deal that will be used to help fund the buyout of the company by Bain Capital Private Equity and Vista Equity Partners from TPG Capital.

Closing is expected in the third quarter.

Vertafore is a Bothell, Wash.-based provider of software and information to the insurance distribution channel.

Dynegy deal surfaces

Dynegy came out in the morning with plans to hold a lenders’ presentation at 1:30 p.m. ET to launch a $2 billion seven-year senior secured incremental first-lien covenant-light term loan (Ba3/BB), a market source said.

With the launch, talk on the loan was announced as Libor plus 350 bps to 375 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, the source continued.

Commitments are due on June 21.

Morgan Stanley Senior Funding Inc., Deutsche Bank Securities Inc., Goldman Sachs Bank USA, RBC Capital Markets, MUFG, BNP Paribas Securities Corp., Credit Agricole Corporate and Investment Bank and SunTrust Robinson Humphrey Inc. are leading the deal that will be used with a $400 million offering of tangible equity units, the proceeds of Energy Capital Partners’ purchase of $150 million of the company’s common stock and cash-on-hand to fund the acquisition of Engie’s U.S. fossil portfolio.

In addition to the term loan, the Houston-based energy company said that it plans on getting a $75 million incremental revolver and a $50 million letter of credit facility.

Closing on the acquisition is expected in the fourth quarter.

Arbor talk emerges

Arbor Pharmaceuticals held its bank meeting on Wednesday, launching its $500 million seven-year covenant-light term loan B with talk of Libor plus 425 bps to 450 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.

The company’s $575 million credit facility also includes a $75 million five-year revolver.

Commitments are due at noon ET on June 29, the source said.

Deutsche Bank Securities Inc., Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co., RBC Capital Markets, Mizuho and KKR Capital Markets are leading the deal that will be used to help fund the acquisition of XenoPort Inc. for $7.03 per share in cash, or a total equity value of about $467 million.

Closing is expected in the third quarter, subject to certain customary conditions, including the tender of more than 50% of all outstanding shares of XenoPort and regulatory review.

Arbor Pharmaceuticals is an Atlanta-based pharmaceutical company currently focused on the cardiovascular, hospital and pediatric markets. XenoPort is a Santa Clara, Calif.-based biopharmaceutical company.

Advanced Integration details

Advanced Integration Technology launched to investors at its bank meeting a $375 million credit facility, consisting of a $60 million revolver and a $315 million seven-year first-lien term loan, according to a market source.

The term loan is talked at Libor plus 500 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, the source said.

Commitments are due on June 29.

UBS Investments Bank, Citigroup Global Markets Inc. and SunTrust Robinson Humphrey Inc. are leading the deal that will be used for a recapitalization.

Advanced Integration is a Plano, Texas-based industrial automation and tooling company delivering turnkey factory integration to the aerospace industry.

MTS reveals guidance

MTS Systems came out 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 on its $460 million seven-year covenant-light term loan B that launched with a bank meeting during the session, a source remarked.

The company’s $560 million credit facility (B1/BB-) also includes a $100 million five-year revolver.

Commitments are due on June 24, the source added.

J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading the deal that will be used with proceeds from a common stock offering and a tangible equity units offering to fund the acquisition of PCB Group Inc. for $580 million and to repay existing revolver borrowings.

Closing is expected in MTS’ fiscal fourth quarter that ends Oct. 1, subject to regulatory approvals and other customary conditions.

MTS is an Eden Prairie, Minn.-based supplier of high-performance test systems and position sensors. PCB is a Depew, N.Y.-based designer, manufacturer and distributor of sensor technologies.

First Eagle joins calendar

First Eagle Investment Management set a lender call for 10 a.m. ET on Thursday to launch a fungible $150 million senior secured add-on first-lien term loan B due Dec. 1, 2022 talked at Libor plus 400 bps with a 0.75% Libor floor, an original issue discount of 98.56 and 101 soft call protection through Dec. 1, 2016, a market source said.

Morgan Stanley Senior Funding Inc. is the left lead on the deal that will be used to refinance existing revolver borrowings and for general corporate purposes.

Commitments are due at noon ET on Friday.

In connection with the transaction, the company will be seeking an amendment to its existing credit facility, the source added.

First Eagle is a New York-based independent, privately held asset management firm.

Global Brass coming soon

Global Brass and Copper scheduled a lender call for Thursday to launch a $320 million term loan B (B2/BB-), according to a market source.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance existing notes.

Global Brass is a Schaumburg, Ill.-based converter, fabricator, processor and distributor of specialized non-ferrous products.

Six Flags done at terms

Six Flags Entertainment Corp. wrapped up syndication of its term loan B repricing at talk of Libor plus 250 bps with a 0.75% Libor floor, a par issue price and 101 soft call protection for six months, according to a market source.

The source said that “almost everybody rolled on the reprice”.

Wells Fargo Securities LLC is leading the repricing, which will take the term loan B down from Libor plus 275 bps with a 0.75% Libor floor, and will result in the removal of an existing step-down to Libor plus 250 bps.

The term loan B will be sized at roughly $545 million after a planned $150 million paydown with proceeds from a $300 million senior unsecured notes offering.

Remaining net proceeds from the notes sale will be used to fund repurchases of the company’s common stock from time to time, subject to compliance with its financing agreements, and if not used for stock repurchases the funds can be used for strategic initiatives.

Six Flags is a Grand Prairie, Texas-based regional theme park company.

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