DiversiTech, Emerald break; CenturyLink, Focus, Blue Buffalo among group of deals revised

By Sara Rosenberg

New York, May 18 – DiversiTech Holdings Inc. changed the original issue discount on its first-lien term loan and then freed to trade on Thursday, and Emerald Expositions Holding Inc. surfaced in the secondary market as well.

In more happenings, CenturyLink Inc. upsized its term loan B, cut pricing and sweetened the call protection, Focus Financial Partners lowered the spread on its first-lien term loan and tightened the original issue discount, and Blue Buffalo Pet Products Inc. firmed pricing on its term loan B at the low end of guidance and modified the issue price.

Also, Hyster-Yale Materials Handling Inc. reduced pricing on its term loan B, added a step-down and adjusted the original issue discount, AES Corp., SeaStar Solutions (Marine Acquisition Corp.) and Xplornet Communications Inc. revised issue prices on their term loans, and Civitas Solutions Inc. (National Mentor Holdings Inc.) extended the call protection on its term loan B.

Furthermore, AGS LLC released price talk with launch, and Ortho-Clinical Diagnostics, Berlin Packaging LLC and Montreign Operating Co. LLC emerged with new deal plans.

DiversiTech tweaked

DiversiTech revised the original issue discount on its $325 million seven-year covenant-light first-lien term loan (B2/B+) to 99.75 from talk in the range of 99 to 99.5 and left pricing at Libor plus 350 basis points with a 1% Libor floor, according to a market source. The tranche has 101 soft call protection for six months.

Previously in syndication, the spread on the first-lien term loan was reduced from Libor plus 375 bps.

The company’s $495 million of senior secured credit facilities also include a $50 million five-year revolver (B2/B+), and a $120 million eight-year second-lien term loan (Caa2/CCC+) priced at Libor plus 750 bps with a 1% Libor floor and a discount of 99. The second-lien loan has call protection of 102 in year one and 101 in year two.

Along with the change to the first-lien term loan discount on Thursday, it was disclosed that the MFN on both the first-and second-lien term loans was set for life, versus 12 months initially, the source said.

Commitments were due at noon ET.

DiversiTech begins trading

With final terms in place, DiversiTech’s credit facilities broke for trading, with the first-lien term loan quoted at par 1/8 bid, par 5/8 offered, a trader added.

RBC Capital Markets LLC, Barclays, Deutsche Bank Securities Inc. and SG Americas Securities LLC are the joint lead arrangers and bookrunners on the deal, with RBC the left lead on the first-lien debt and Barclays the left lead on the second-lien debt. RBC is the administrative agent on all of the tranches.

Proceeds will be used to help fund the buyout of the company by Permira Funds from the Jordan Co. LP, which expected to close this quarter, subject to customary regulatory approvals and conditions.

DiversiTech is a Duluth, Ga.-based manufacturer of components and products related to the heating, ventilating, air conditioning and refrigeration industry.

Emerald tops par

Emerald Expositions’ credit facilities freed up too, with the $565 million seven-year term loan quoted at par 1/8 bid, par 5/8 offered, a trader remarked.

Pricing on the term loan is Libor plus 300 bps with a step-down to Libor plus 275 bps when net leverage is 2.75 times and a 0% Libor floor. The debt was sold at an original issue discount of 99.75 and has 101 soft call protection for six months.

During syndication, the step-down was added, and the discount was adjusted from 99.5.

The company’s $715 million in credit facilities (B1/BB) also include $150 million revolver.

Bank of America Merrill Lynch, Barclays, Goldman Sachs Bank USA, RBC Capital Markets LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC are leading the deal that will be used to refinance an existing revolver and term loan.

Emerald Expositions is a San Juan Capistrano, Calif.-based operator of business-to-business trade shows.

CenturyLink reworked

Back in the primary market, CenturyLink lifted its covenant-light term loan B due January 2025 to up to $6 billion from $4.5 billion, reduced pricing to Libor plus 275 bps from talk of Libor plus 300 bps to 325 bps, and extended the 101 soft call protection to one year from six months, while leaving the 0% Libor floor and original issue discount of 99.5 unchanged, a market source said.

Ticking fees on the term loan B are half the spread from days 31 to 60 and the full spread thereafter.

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

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., Barclays, Goldman Sachs Bank USA, J.P. Morgan Securities LLC, RBC Capital Markets LLC, MUFG, Wells Fargo Securities LLC, Mizuho Bank and SunTrust Robinson Humphrey Inc. are leading the deal.

CenturyLink buying Level 3

Proceeds from CenturyLink’s term loan B will be used to help fund the acquisition of Level 3 Communications Inc. for $26.50 per share in cash and a fixed exchange ratio of 1.4286 shares of CenturyLink stock for each Level 3 share it owns, which implies a purchase price of $66.50 per Level 3 share. The transaction is valued at about $34 billion, including the assumption of debt.

Funds raised through the term loan B upsizing will be used to reduce the size of the company’s bridge loan commitment and to refinance Level 3 notes, the source added.

Closing on the transaction is expected by the end of the third quarter, subject to regulatory approvals and other customary conditions.

CenturyLink is a Monroe, La.-based communications, hosting, cloud and IT services company. Level 3 is a Broomfield, Colo.-based provider of communications services to enterprise, government and carrier customers.

Focus changes emerge

Focus Financial cut pricing on its $755 million seven-year covenant-light first-lien term loan (B+) to Libor plus 325 bps from talk of Libor plus 350 bps to 375 bps and revised the original issue discount to 99.875 from 99.5, according to a market source.

As before, the first-lien term loan has a 0% Libor floor and 101 soft call protection for six months.

Recommitments were due at 5 p.m. ET on Thursday, the source said.

RBC Capital Markets and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to help fund the acquisition of a majority stake in the company by an investor group led by Stone Point Capital and KKR from Centerbridge Partners, Summit Partners and Polaris Partners in a transaction that values Focus Financial at about $2 billion.

A $207 million eight-year covenant-light second-lien term loan (B-) for the buyout has been privately placed at pricing of Libor plus 750 bps with a 0% Libor floor and an original issue discount of 99. This tranche includes call protection of 102 in year one and 101 in year two.

Focus Financial is a New York-based partnership of independent, fiduciary wealth-management firms.

Blue Buffalo revised

Blue Buffalo Pet Products finalized the spread on its $400 million seven-year senior secured term loan B at Libor plus 200 bps, the low end of the Libor plus 200 bps to 225 bps talk, and moved the issue price to par from 99.5, a market source remarked.

The term loan still has a 25 bps pricing step-down when first-lien gross leverage is less than or equal to 1 time or the company achieves investment-grade corporate and facility ratings, a 0% Libor floor and 101 soft call protection for six months.

The company’s $520 million senior secured credit facilities (BB+) also include a $120 million revolver.

Commitments were due at 5 p.m. ET on Thursday, the source added.

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are leading the deal that will be used to refinance existing debt.

Closing is expected during the week of May 22.

Blue Buffalo is a Wilton, Conn.-based pet food company.

Hyster-Yale flexes

Hyster-Yale Materials Handling lowered pricing on its $200 million term loan B (B1/BB) to Libor plus 400 bps from talk of Libor plus 425 bps to 450 bps, added a step-down to Libor plus 375 bps at 2 times total gross leverage, and tightened the original issue discount to 99.75 from 99, a market source said.

As before, the term loan has a 0% Libor floor and 101 soft call protection for six months.

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

Bank of America Merrill Lynch is leading the deal that will be used to repay borrowings under the company’s secured credit facility, to fund any future acquisitions and strategic investments and for general corporate purposes.

Hyster-Yale is a Cleveland-based designer, engineer, manufacturer, seller and servicer of electric, warehousing and internal combustion engine lift trucks and aftermarket parts.

AES adjusts OID

AES revised the original issue discount on its $525 million five-year senior secured covenant-light term loan B (Ba1/BBB-) to 99.875 from 99.75, according to a market source.

The loan is still priced at Libor plus 200 bps with a 0.75% Libor floor and has 101 soft call protection for six months.

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

Barclays, Deutsche Bank Securities Inc., Goldman Sachs Bank USA and Mizuho are leading the deal that will be used to redeem 6.75% convertible trust securities due 2029 and for transaction fees and expenses.

Pro forma senior secured leverage is 0.7 times and total leverage is 4.7 times.

Closing is expected this quarter.

AES is an Arlington, Va.-based power company.

SeaStar tightens price

SeaStar Solutions modified the issue price on its fungible $70 million add-on term loan B (B) due January 2021 to par from 99.875, according to a market source.

Pricing on the add-on term loan is Libor plus 375 bps with a 1% Libor floor, in line with existing term loan B pricing, and the debt has 101 soft call protection for six months.

RBC Capital Markets, UBS Investment Bank and Antares Capital are leading the deal that will be used for acquisition financing.

Existing lenders are being offered a 12.5 bps amendment fee.

Recommitments and consents are due at noon ET on Friday. Allocations are expected shortly thereafter, the source added.

SeaStar is a Litchfield, Ill.-based manufacturer and distributor of marine steering and control systems and engine and drive parts.

Xplornet modified

Xplornet Communications tightened the issue price on its $75 million add-on term loan B (B1/B) to par from 99.75, a market source said.

The loan is priced at Libor plus 600 bps with a 1% Libor floor.

Commitments are due on Friday, the source added.

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

Xplornet is a Woodstock, New Brunswick-based rural-focused broadband service provider.

Civitas sweetens call premium

Civitas Solutions extended the 101 soft call protection on its $636 million term loan B due Jan. 31, 2021 to one year from six months, according to a market source.

Pricing on the loan remained at Libor plus 300 bps with a 0.75% Libor floor and a par issue price.

Barclays is leading the deal that will be used to reprice an existing term loan down from Libor plus 325 bps with a 1% Libor floor.

Commitments continue to be due at noon ET on Friday, the source added.

Civitas is a Boston-based provider of home and community-based health and human services.

AGS details surface

Also in the primary market, AGS held its bank meeting, launching $480 million in credit facilities (B+), split between a $30 million five-year revolver and a $450 million seven-year first-lien term loan, a market source remarked.

Talk on the term loan is Libor plus 550 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, the source continued.

Commitments are due on June 1.

Jefferies Finance LLC and Macquarie Capital (USA) Inc. are leading the deal that will be used to refinance an existing first-lien term loan, the repay certain seller notes and to put cash on the balance sheet for general corporate purposes.

AGS is a Las Vegas-based designer and manufacturer of gaming products for the casino floor.

Ortho-Clinical readies loan

Ortho-Clinical Diagnostics will launch at 2 p.m. ET on Monday a $200 million incremental senior secured term loan B due June 30, 2021, according to a market source.

Barclays is leading the deal that will be used to repay revolver borrowings.

Ortho-Clinical Diagnostics is a Raritan, N.J.-based provider of in-vitro diagnostics solutions for screening, diagnosing and monitoring diseases.

Berlin joins calendar

Berlin Packaging scheduled a lender call for 11 a.m. ET on Friday to launch a repricing of its $819 million senior secured term loan B, a market source remarked.

Morgan Stanley Senior Funding Inc. is leading the deal.

Berlin Packaging is a Chicago-based hybrid packaging supplier.

Montreign on deck

Montreign Operating set a lender call for 11 a.m. ET on Friday to launch a fungible $35 million incremental first-lien term loan B due January 2023 priced at Libor plus 825 bps with a 1% Libor floor and talked with an original issue discount of 99.5 to 99.75, a market source said.

The loan is non-callable through July 23, 2019, then at 102 through July 23, 2020 and at 101 through July 23, 2021.

Commitments are due at 5 p.m. ET on Tuesday, the source added.

Credit Suisse Securities (USA) LLC, Fifth Third and Nomura are leading the deal that will be used to reduce an equity contribution.

Existing lenders are being offered a 5 bps amendment fee.

Montreign Operating is a casino operator in the Hudson Valley.

Boyd closes

In other news, Boyd Corp. completed its acquisition of Aavid Thermalloy, a Laconia, N.H.-based design engineering and manufacturing corporation focused on thermal management solutions, according to a news release.

To help fund the transaction, Boyd got $1.09 billion in credit facilities, split between a $75 million revolver, a $730 million first-lien term loan (B2) and a $285 million second-lien term loan (Caa2).

Pricing on the first-lien term loan is Libor plus 475 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 six months.

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

Boyd lead banks

Antares Capital, Societe Generale and Macquarie Capital (USA) Inc. were the leads on Boyd’s credit facilities.

During syndication, pricing on the first-lien term loan firmed at the high end of revised talk of Libor plus 450 bps to 475 bps and up from initial talk in the range of Libor plus 375 bps to 400 bps, and the discount widened from 99.5, and pricing on the second-lien term loan finalized at the high end of revised talk of Libor plus 850 bps to 875 bps, and up from initial talk of Libor plus 800 bps, the discount was changed from 99 and the call protection was sweetened from 102 in year one and 101 in year two.

Also during syndication, the MFN sunset and the asset sale proceed step-down were eliminated, the excess cash flow sweep was increased to 75%, the free and clear accordion was reduced to $120 million from $160 million with the grower eliminated, the first-and second-lien incremental incurrence ratios were decreased by 0.25 times, to 4.25 times and 6 times, respectively, the available amount was reduced to $35 million, and restricted payments and investment baskets were tightened.

Boyd, a Genstar Capital portfolio company, is a Modesto, Calif.-based designer and manufacturer of highly engineered, specialty material-based thermal management and environmental sealing solutions.

Dynagas completed

Dynagas LNG Partners (Arctic LNG Carriers Ltd.) announced in a news release the closing of its $480 million six-year first-lien term loan B (B1/BB-).

Pricing on the loan is Libor plus 450 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.

During syndication, pricing on the loan firmed at the high end of the Libor plus 425 bps to 450 bps talk.

Credit Suisse Securities (USA) LLC and Barclays led the deal that was used to refinance existing bank facilities.

Dynagas is a Monaco-based master limited partnership formed by Dynagas Holding Ltd. that owns six liquefied natural gas carriers employed on multi-year charters.

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