PetSmart, Par Pharmaceutical break; Waste Industries, Veresen, BATS, Healogics tweak deals

By Sara Rosenberg

New York, Feb. 19 – PetSmart Inc.’s credit facility made its way into the secondary market on Thursday, and Par Pharmaceutical Cos. Inc. lowered pricing on its term loan B-3, finalized the original issue discount and then it too freed up for trading.

In more happenings, Waste Industries USA Inc. tightened the spread and offer price on its term loan B and extended the call protection, and Veresen Midstream LP reduced the size of its term loan B and modified the original issue discount

Also in the primary market, BATS Global Markets Inc. downsized its new term loan while widening the offer price and also upsized its add-on term loan, and Healogics Inc. adjusted the discount on its add-on term loan.

Furthermore, American Beacon Advisors Inc. and Axiall Corp. disclosed pricing guidance on their deals with launch, National Mentor Holdings Inc. (Civitas Solutions Inc.) released original issue discount talk, and Research Now Group Inc. joined the near-term calendar.

PetSmart frees up

PetSmart’s credit facility began trading on Thursday, with the $4.3 billion seven-year senior secured covenant-light term loan B (Ba3/BB-) quoted at par ½ bid, par 7/8 offered, according to a trader.

Pricing on the term loan is Libor plus 400 basis points with a 1% Libor floor and it was sold at an original issue discount of 99½. There is 101 soft call protection for one year and, beginning on March 20, a ticking fee of the full spread plus the Libor floor.

During syndication, pricing on the B loan was reduced from revised talk of Libor plus 425 bps and initial talk of Libor plus 450 bps to 475 bps, and the discount was tightened from 99.

The company’s $5.05 billion credit facility also provides for a $750 million five-year asset-based revolver.

PetSmart lead banks

Citigroup Global Markets Inc., Barclays, Deutsche Bank Securities Inc., Nomura Securities International Inc., Jefferies Finance LLC, RBC Capital Markets and Macquarie Capital (USA) Inc. are leading PetSmart’s credit facility.

Proceeds will be used with $1.9 billion of senior notes and about $2.3 billion of equity to fund the buyout of the company by a consortium led by BC Partners Inc. for $83.00 per share in cash, or about $8.7 billion.

The buying consortium includes funds advised by BC Partners, alongside several of its limited partners, such as La Caisse de depot et placement du Quebec and StepStone.

Closing is expected during the week of March 9, subject to shareholder and regulatory approval and other customary conditions. The shareholder vote will take place on March 6.

PetSmart is a Phoenix-based specialty pet retailer.

Par Pharma updated, trades

Par Pharmaceutical reduced pricing on its $425 million term loan B-3 (B1/B) to Libor plus 325 bps from talk of Libor plus 375 bps to 400 bps and set the original issue discount at 99½, the tight end of the 99 to 99½ talk, while keeping the 1% Libor floor and 101 soft call protection for six months intact, according to a market source.

Recommitments were due at 11 a.m. ET on Thursday and then the deal broke for trading in the afternoon with levels seen at 99¾ bid, par 1/8 offered, a trader said.

Bank of America Merrill Lynch, Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and TPG are leading the deal that will be used to help fund a dividend.

Par Pharmaceutical is a Woodcliff Lake, N.J.-based specialty pharmaceutical company.

Waste modified

Back in the primary, Waste Industries cut pricing on its $700 million five-year covenant-light term loan B (B1/BB-) to Libor plus 325 bps from talk of Libor plus 350 bps to 375 bps, changed the original issue discount to 99¾ from 99 and extended the 101 soft call protection to one year from six months, a market source said, adding that the 1% Libor floor was unchanged.

Recommitments were due at noon ET on Thursday.

Bank of America Merrill Lynch, Macquarie Capital (USA) Inc., Credit Suisse Securities (USA) LLC and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to refinance existing credit facilities, repay industrial revenue bonds, redeem class A equity units and pay a distribution to class B shareholders, the source said.

Waste Industries is a Raleigh, N.C.-based solid waste management company.

Veresen tweaks deal

Veresen Midstream reduced its seven-year term loan B (Ba3/BB-) to $575 million from $600 million to adjust for Canadian and U.S. dollar rate movements and moved the original issue discount to 98½ from 98, according to a market source.

Also, the MFN sunset provision was eliminated so that there is 50 bps MFN for life, the source said.

As before, the loan is priced at Libor plus 500 bps with a 1% Libor floor and has 101 soft call protection for one year.

Recommitments are due at 10 a.m. ET on Friday, the source added.

RBC Capital Markets, TD Securities (USA) LLC and HSBC Securities (USA) Inc. are leading the deal.

The company’s senior secured credit facility also includes a C$75 million revolver that will be available for operating and working capital requirements and a C$1,275,000,000 non-revolving expansion facility that will be largely undrawn initially and available to fund future growth.

Veresen funding acquisition

Proceeds from Veresen Midstream’s term loan B will be used to finance the purchase of certain natural gas gathering and compression assets supporting Montney development in the Dawson area of northeastern British Columbia from Encana Corp. and the Cutbank Ridge Partnership for $600 million, plus actual costs accrued in 2015.

Closing is expected this quarter, subject to receipt of approvals under the Competition Act and the Investment Canada Act and other customary conditions.

The company is a joint venture being formed by Veresen Inc. and Kohlberg Kravis Roberts & Co. LP.

Veresen will fund its interest in Veresen Midstream by contributing its Hythe/Steeprock gathering and processing assets valued at $920 million, and in exchange will receive from Veresen Midstream $420 million, resulting in a 50% equity position valued at $500 million, and KKR will fund its 50% interest in Veresen Midstream by contributing $500 million in cash.

BATS restructures

BATS Global Markets reduced its three-year term loan to $150 million from $250 million and modified the original issue discount to 99 from 99½, while keeping pricing at Libor plus 375 bps with no Libor floor, a source remarked.

Additionally, the fungible add-on term loan was lifted to $228 million from $128 million, and pricing was left at Libor plus 475 bps with a 1% Libor floor and an original issue discount of 99, the source continued.

As before, both term loans have 101 soft call protection for one year.

J.P. Morgan Securities LLC is leading the $378 million of term debt (BB-) that will be used to fund the acquisition of Hotspot FX from KCG Holdings for $365 million.

Closing is expected in the first half of this year.

BATS is a Kansas City, Mo.-based operator of securities markets. Hotspot is a Jersey City, N.J.-based institutional spot foreign exchange market.

Healogics revises offer price

Healogics changed the original issue discount on its $125 million add-on first-lien term loan to 98.56 from 98.5, making the debt fungible with the existing term loan, a market source told Prospect News.

Pricing on the add-on is Libor plus 425 bps with a 1% Libor floor, which matches pricing on the existing first-lien term loan.

J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC are leading the deal that will be used to help fund the acquisition of Accelecare Wound Centers.

Healogics is a Jacksonville, Fla.-based provider of advanced wound-care services. Accelecare is a Bellevue, Wash.-based wound care and disease management company.

American Beacon talk emerges

Also in the primary, American Beacon Advisors held its bank meeting on Thursday and, with the event, talk on its first- and second-lien term loans was announced, according to a market source.

The $220 million first-lien term loan (B+) is talked at Libor plus 475 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, and the $90 million second-lien term loan (B-) is talked at Libor plus 875 bps with a 1% Libor floor, a discount of 98 and call protection of 102 in year one and 101 in year two, the source said.

The company’s $350 million credit facility also includes a $40 million revolver (B+).

Commitments are due on March 5, the source added.

RBC Capital Markets LLC and Barclays are leading the deal.

American Beacon buyout

Proceeds from American Beacon’s credit facility will be used to help fund its acquisition by Kelso & Co. and Estancia Capital Management from TPG Capital and Pharos Capital Group LLC.

Closing is expected in the second quarter, subject to customary conditions, including approvals of the board of trustees and shareholders of the American Beacon family of mutual funds and consents from other American Beacon clients.

Total leverage is 5.5 times and equity is 50% of the capitalization.

American Beacon Advisors is a Fort Worth, Texas-based provider of investment advisory services to institutional and retail markets.

Axiall reveals guidance

Axiall launched with an afternoon bank meeting its $250 million senior secured term loan B (Ba1/BBB-) due in 2022 with talk of Libor plus 350 bps with a 0.75% Libor floor, an original issue discount of 99½ and 101 soft call protection for six months, according to a source.

Commitments are due on Feb. 26, the source said.

Wells Fargo Securities LLC and RBC Capital Markets are leading the deal that will be used to refinance an existing term loan due in 2017 and for general corporate purposes.

Closing is expected this quarter, subject to market conditions, as well as the negotiation and execution of definitive documents and the satisfaction of customary conditions.

Axiall is an Atlanta-based chemicals and building products company.

National Mentor launches

National Mentor came out with original issue discount talk in the 98¾ area on its fungible $55 million incremental term loan B due Jan. 31, 2021 that launched with a morning call, a market source remarked.

The incremental loan is priced at Libor plus 325 bps with a 1% Libor floor, which matches existing term loan pricing, and all of the term loan debt will get 101 soft call protection for six months.

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

Barclays, Bank of America Merrill Lynch and UBS AG are leading the deal that will be used to redeem 12½% senior notes.

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

Research Now on deck

Research Now Group set a bank meeting for Tuesday morning in New York to launch a $425 million credit facility, according to a market source.

The facility consists of a $35 million revolver, a $255 million first-lien term loan B and a $135 million second-lien term loan, the source said.

GE Capital Markets, Deutsche Bank Securities Inc. and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to help fund the buyout of the company by Court Square Capital Partners from TA Associates, Polaris Partners, Sutter Hill Ventures and other shareholders.

Research Now is a Plano, Texas-based digital data collection provider.

© 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.