Covenant Surgical, Crosby and RCN free to trade; Nexstar revises loan; PGS pulls deal

By Sara Rosenberg

New York, June 19 – Covenant Surgical Partners Inc. added a delayed-draw first-lien term loan to its capital structure, firmed the spread on its funded first-lien term loan at the low end of talk and then broke for trading on Wednesday, and deals from Crosby US Acquisition Corp. and RCN (Radiate Holdco LLC) emerged in the secondary market too.

In more happenings, Nexstar Media Group Inc. changed the original issue discount on its incremental term loan B, and PGS ASA (Petroleum Geo Services) withdrew its credit facilities from market.

Also, Areas Worldwide released price talk with launch, and Cypress Performance Group (Encapsys LLC) and Consolidated Container Co. LLC joined this week’s primary calendar.

Covenant tweaked, breaks

Covenant Surgical Partners added a $50 million delayed-draw first-lien term loan to its capital structure priced at Libor plus 400 basis points, and set the spread on its funded $250 million first-lien term loan at Libor plus 400 bps, the low end of the Libor plus 400 bps to 425 bps talk, a market source remarked.

The delayed-draw and funded first-lien term loans have a 0% Libor floor and an original issue discount of 99.

Included in the first-lien term loan is 101 soft call protection for six months.

After terms finalized, the strip of delayed-draw and funded first-lien term loan debt began trading, with levels quoted at 99¼ bid, par offered, the source added.

The company’s now $435 million of credit facilities also provide for a $35 million revolver and a $100 million privately placed second-lien term loan.

KKR Capital Markets is leading the deal that will be used to refinance existing debt and fund acquisitions under letters of intent.

Covenant Surgical is a Nashville, Tenn.-based acquirer and operator of ambulatory surgery centers and physician practices.

Crosby hits secondary

Crosby’s credit facilities began trading too, with the $475 million seven-year first-lien term loan (B2/B-) quoted at 99¼ bid, 99¾ offered, according to a market source.

Pricing on the first-lien term loan is Libor plus 475 bps with a 0% Libor floor, and it was sold at an original issue discount of 99. The debt has 101 soft call protection for six months.

The company’s $695 million of credit facilities also include a $70 million revolver (B2/B-) and a $150 million privately placed second-lien term loan (Caa2/CCC).

During syndication, the first-lien term loan was downsized from $625 million as the second-lien term loan was added to the capital structure, and pricing on the first-lien loan firmed at the high end of revised guidance in the range of Libor plus 450 bps to 475 bps but in line with initial talk of Libor plus 475 bps.

UBS Investment Bank, KKR Capital Markets and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to refinance existing debt, with UBS left on the first-lien and KKR left on the second-lien.

Crosby is a Tulsa, Okla.-based provider of lifting, rigging and material handling hardware.

RCN frees up

RCN’s non-fungible $300 million incremental covenant-lite first-lien term loan (B) due February 2024 allocated and broke for trading, and the debt was quoted at 98½ bid, a market source said.

Pricing on the term loan is Libor plus 350 bps with a 0.75% Libor floor and it was sold at an original issue discount of 98.5. The tranche has 101 soft call protection for six months.

During syndication, pricing on the term loan was increased from Libor plus 325 bps and the discount firmed at the wide end of the 98.5 to 99.03 talk.

Guggenheim Securities, Bank of America Merrill Lynch, Barclays, Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc., Nomura and SocGen are leading the deal that will be used to fund a shareholder distribution.

RCN is a cable operator.

Nexstar updated

Back in the primary market, Nexstar Media Group tightened the original issue discount on its $3.04 billion seven-year covenant-lite incremental term loan B to 99.5 from 99, a market source remarked.

The incremental term loan B is still priced at Libor plus 275 bps with a 0% Libor floor.

Included in the incremental term loan B is a pricing step-down to Libor plus 250 bps at 0.75x inside closing net first-lien leverage, 101 soft call protection for six months and a ticking fee of half the spread from days 46 to 90 and the full spread thereafter.

The company is also getting a $700 million incremental term loan A.

Recommitments were due at 3 p.m. ET on Wednesday, the source added.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., MUFG, SunTrust Robinson Humphrey Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Citizens Bank, Fifth Third, Goldman Sachs Bank USA, Mizuho, Regions Bank and Capital One are leading the debt.

Nexstar buying Tribune

Nexstar will use the new term loans (Ba3/BB) and $1.12 billion of notes to help fund its acquisition of Tribune Media Co. for $46.50 per share in a cash transaction that is valued at $6.4 billion, including the assumption of Tribune’s outstanding debt.

Tribune shareholders will also be entitled to additional cash consideration of around $0.30 per month if the transaction has not closed by Aug. 31, 2019, pro-rated for partial months and less an adjustment for any dividends declared on or after Sept. 1, 2019.

Closing is expected late in the third quarter, subject to regulatory approvals, approval by Tribune’s shareholders and other customary conditions.

Nexstar is an Irving, Tex.-based diversified media company. Tribune is a Chicago-based owner of television and digital properties.

PGS shelves deal

PGS withdrew its $525 million five-year covenant-lite first-lien term loan B from market due to increased volatility in the capital markets and weaker investor sentiment toward oil field service, a news release said.

The term loan was talked at Libor plus 550 basis points with a step-up to Libor plus 600 bps if total net leverage is greater than 2.5 times, a 0% Libor floor, an original issue discount of 98 to 98.5 and 101 soft call protection for one year.

The Norway-based marine geophysical company’s pulled $775 million of credit facilities (B2/B+/B+) also included a $250 million 4.5-year revolver.

Barclays was the lead left arranger on the deal and agent. Barclays, JPMorgan, DNB and Clarksons were the joint global coordinators.

Proceeds were going to be used with $150 million of 5.5-year second-lien notes, which are no longer in the works, balance sheet cash and the second installment from the sale of RamformSterling to redeem and repay the company’s $212 million senior notes due December 2020, to repay an existing $380 million term loan B due March 2021, to repay some revolver borrowings, and to pay related fees and expenses.

Areas Worldwide guidance

Areas Worldwide held its bank meeting in London on Wednesday and announced talk on its €850 million seven-year term loan B at Euribor plus 425 bps with a 0% floor and an original issue discount of 99.5 and on its €200 million equivalent U.S. dollar seven-year term loan B at a 25 bps to 50 bps wider spread than the euro loan, according to a market source.

The company’s €1,325,000,000 of credit facilities (B1/B) also include a €125 million 6.5-year revolver and a €150 million seven-year acquisition and capex facility.

Commitments are due at 7 a.m. ET on July 2.

BNP Paribas, Credit Agricole, Deutsche Bank and Morgan Stanley are the physical bookrunners on the deal and Bank of America Merrill Lynch is a passive bookrunner.

The new debt will be used to help fund the buyout of the company by PAI Partners from Elior Group in a transaction with an enterprise value of €1,542,000,000.

Closing is expected this summer, subject to customary conditions.

Areas Worldwide is a concession catering company.

Cypress joins calendar

Cypress Performance Group set a lender call for 11 a.m. ET on Thursday to launch a fungible $134 million incremental covenant-lite first-lien term loan (B2/B) due November 2024 talked at Libor plus 350 bps with a 25 bps step-down at B1/B+ ratings, a 1% Libor floor and an original issue discount of 99, according to a market source.

Commitments are due at 5 p.m. ET on June 27, the source said.

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to refinance an existing second-lien term loan.

In connection with this transaction, pricing on the company’s existing first-lien term loan will be increased by 25 bps from Libor plus 325 bps to match the incremental term loan pricing.

Cypress Performance is a Baltimore-based company that offers a portfolio of advanced materials and diversified products.

Consolidated Container on deck

Consolidated Container emerged with plans to hold a call at 3 p.m. ET on Thursday to launch a loan deal to prospective lenders, a market source said.

Citigroup Global Markets Inc. is the left lead on the deal.

Consolidated Container is an Atlanta-based rigid plastic packaging manufacturer.

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