California Resources, HCA, PrimeSource Building free to trade; WCA Waste revises deal

By Sara Rosenberg

New York, Aug. 5 – California Resources Corp. increased the size of its first-lien second-out term loan, trimmed the spread and then broke for trading on Friday, and deals from HCA Inc. and PrimeSource Building Products (PriSo Acquisition Corp.) emerged in the secondary as well.

In more happenings, WCA Waste Corp. modified the original issue discount on its term loan B, and Compass Diversified Holdings released talk on its incremental loan with launch.

Also, Dollar Tree Inc. came to market with an add-on term loan A, and ESH Hospitality Inc., Dayton Power and Light Co. and Macom Technology Solutions Holdings Inc. joined the near-term calendar.

California Resources reworked

California Resources raised its first-lien second-out term loan due Dec. 31, 2021 to $1 billion from $700 million and cut pricing to Libor plus 1,037.5 basis points from Libor plus 1,050 bps, while keeping the 1% Libor floor and original issue discount of 99 unchanged, according to a market source.

The loan is non-callable for three years, then with half the coupon in year four.

The debt is structured as a secured financing being done in loan form but has total return characteristics consistent with bonds.

Goldman Sachs Bank USA is leading the deal that will be used to pay existing term loan and revolver borrowings.

Closing is expected on or before Aug. 12.

California Resources breaks

With final terms in place, California Resources’ term loan began trading, and levels were quoted at 100 3/8 bid, 100 7/8 offered, a trader remarked.

In addition to the term loan transaction, the company is planning on amending its existing first-lien secured credit agreement to allow for tender offers for its 5% senior notes due 2020, 5.5% senior notes due 2021, 6% senior notes due 2024 and 8% second-lien secured notes due 2022 that can be purchased with $525 million in cash, reduce revolver commitments to $1.4 billion from $1.6 billion and grant a lien on assets not currently pledged to secure the existing facilities.

The tender offers are conditioned on the amendment, the availability of sufficient funds from the existing facility to complete the tender offers and the tender of at least $500 million of notes.

California Resources is a Los Angeles-based oil and natural gas exploration and production company.

HCA starts trading

HCA’s $1.2 billion 7.5-year term loan B-7 (Ba1/BBB-/BB+) emerged in the secondary market as well, with levels quoted at 100 1/8 bid, 100 3/8 offered, a trader remarked.

Pricing on the term loan B-7 is Libor plus 275 bps with no Libor floor, and it was issued at par. The debt has 101 soft call protection for six months.

During syndication, the loan was upsized from $1 billion and the issue price was tightened from 99.75.

Bank of America Merrill Lynch is leading the deal that will be used to refinance some term loan B-4 borrowings.

HCA is a Nashville, Tenn.-based health care services provider.

PrimeSource frees up

PrimeSource’s fungible $75 million add-on term loan B (B2/B) due May 8, 2022 broke for trading too, with levels seen at 99¼ bid, 99¾ offered, a trader said.

Pricing on the add-on loan is Libor plus 350 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.

Deutsche Bank Securities Inc. is leading the deal that will be used to help fund a dividend.

Closing is targeted for Aug. 8.

PrimeSource is a Dallas-based two-step building products distributor.

WCA tweaks OID

Back in the primary market, WCA Waste tightened the original issue discount on its $300 million term loan B to 99.75 from 99.5 and left pricing at Libor plus 300 bps with a 1% Libor floor, according to a market source.

The term loan still has 101 soft call protection for six months.

The company’s $425 million credit facility (B2/B+) also includes a $125 million revolver.

Commitments are due on Tuesday, the source said.

SunTrust Robinson Humphrey Inc. is leading the deal that will be used to refinance existing bank debt.

WCA is a Houston-based vertically integrated non-hazardous solid waste management company.

Compass Diversified sets talk

Compass Diversified held its call on Friday, launching its $250 million incremental term loan B with talk of Libor plus 325 bps with a 1% Libor floor and an original issue discount of 99.25 to 99.5, according to a market source.

Commitments are due on Aug. 12, the source said.

Bank of America Merrill Lynch is leading the deal that will be used with revolver borrowings to fund the acquisition of 5.11 Tactical for $400 million, excluding working capital and certain other adjustments upon closing.

Compass Diversified is a Westport, Conn.-based owner and manager of a diverse family of middle market businesses. 5.11 Tactical is an Irvine, Calif.-based designer and marketer of purpose-built tactical apparel and gear.

Dollar Tree seeks add-on

Dollar Tree launched a $1,275,000,000 add-on term loan A with initial pricing of Libor plus 175 bps, a market source said.

J.P. Morgan Securities LLC is leading the deal that will be used to repay some term loan B-1 borrowings.

Dollar Tree is a Chesapeake, Va.-based discount retailer.

ESH readies deal

ESH Hospitality is set to hold a bank meeting at 10 a.m. ET in New York on Tuesday to launch a $1.3 billion seven-year covenant-light term loan B, according to a market source.

Along with the term loan, the company is looking to get a $350 million revolver.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Goldman Sachs Bank USA, Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., Barclays, Credit Suisse Securities (USA) LLC and Macquarie Capital (USA) Inc. are leading the deal (B1) that will be used to help repay a roughly $1.5 billion CMBS loan and replace an existing $250 million revolver.

Other funds for the refinancing will come from cash on hand and revolver borrowings.

ESH is a subsidiary of Extended Stay America Inc., a Charlotte, N.C.-based owner/operator of company-branded hotels.

In connection with this transaction, Extended Stay America intends to get a new $50 million revolver to replace its existing $50 million revolver, and the leads on the deal are Deutsche Bank, JPMorgan, Citigroup, Goldman Sachs, Bank of America, Morgan Stanley, Barclays and Macquarie.

Dayton joins calendar

Dayton Power and Light scheduled a lenders’ presentation for 2 p.m. ET on Monday to launch a $445 million senior secured term loan B, a market source said.

Morgan Stanley Senior Funding Inc. and J.P. Morgan Securities LLC are leading the loan that will be used to refinance the company’s existing 1.875% first mortgage bonds due 2016.

Dayton Power is a Dayton, Ohio-based power company.

Macom on deck

Macom Technology Solutions emerged with plans to hold a call for loan lenders at 11 a.m. ET on Monday, according to a market source.

Goldman Sachs Bank USA, Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc. and Citizens Bank are leading the deal.

Macom is a Lowell, Mass.-based supplier of high-performance analog RF, microwave, millimeterwave and photonic semiconductor products.

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