Acadia Healthcare restructures, breaks atop OID; Vizient tweaks deals; Kraton relaunches

By Sara Rosenberg

New York, Feb. 4 – Acadia Healthcare Co. Inc. removed the sterling tranche from its incremental term loan B and reduced pricing, and then late Thursday the debt made its way into the secondary market with levels quoted above its original issue discount.

In more happenings, Vizient Inc. downsized its term loan, widened the spread and original issue discount and sweetened the call protection, and Kraton Polymers LLC brought its term loan back to market.

Acadia reworked, trades

Acadia Healthcare eliminated the £250 million sterling tranche from its $955 million incremental senior secured term loan B (Ba2/BB-), making all $955 million dollars, and trimmed the spread to Libor plus 375 basis points from Libor plus 400 bps, a market source said.

As before, the term loan B has a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

In addition, the company will be issuing a $135 million incremental term loan A to repay revolver borrowings, the source continued.

Commitments were due at 2:30 p.m. ET on Thursday and then, late in the day, the term loan B freed up for trading with levels seen at 99¾ bid, 100¼ offered, a trader remarked.

Acadia buying Priory

Proceeds from Acadia’s term loan B and $390 million of bonds will be used to help fund the acquisition of Priory Group for about £1,275,000,000 in cash and 5,363,000 shares of common stock.

Bank of America Merrill Lynch and Jefferies Finance LLC are leading the loans.

Pro forma secured leverage is 3.2 times, and total leverage is 5.4 times.

Closing is expected by Feb. 16. The transaction is not subject to financing.

Acadia is a Franklin, Tenn.-based provider of inpatient behavioral health care services. Priory is a provider of behavioral health care services in the United Kingdom.

Vizient revises deal

Vizient reduced its seven-year secured term loan to $1,275,000,000 from a revised amount of $1,375,000,000 and a launch size of $1,475,000,000 and upsized its bond offering to $600 million from a revised amount of $500 million and an initial amount of $400 million, according to market sources.

Also, pricing on the term loan was raised to Libor plus 525 bps from Libor plus 500 bps, the original issue discount was changed to 97 from 98, the 101 soft call protection was extended to one year from six months, the 12 months MFN sunset was removed, and a net senior secured leverage ratio starting at 5 times was added so that the tranche is no longer covenant-light, sources said.

Additionally, the incremental allowance was modified to $90 million, subject to total leverage of 5.75 times, plus an unlimited amount subject to a senior secured leverage ratio of 3.75 times, from an unlimited amount subject to senior secured leverage of 4.5 times.

The term loan still has a 1% Libor floor.

Vizient upsizes revolver

Along with the term loan changes, Vizient increased the size of its five-year unfunded revolver to $100 million from $75 million, sources continued.

Barclays is leading the now $1,375,000,000 credit facility.

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

Proceeds from the new debt will be used to fund the purchase of the Spend and Clinical Resource Management and Sg2 businesses from MedAssets Inc.

Closing on the acquisition is expected this quarter.

Vizient is an Irving, Texas-based network of not-for-profit health care organizations.

Kraton returns with loan

Kraton Polymers held a lender call at 2 p.m. ET on Thursday, launching an $878 million senior secured term loan B (Ba3/B+) due Jan. 6, 2022 talked at Libor plus 500 bps with a 1% Libor floor, an original issue discount of 92 and 101 soft call protection through Jan. 6, 2017, a market source remarked.

The loan first came to market last year at talk of Libor plus 475 bps to 500 bps with a 1% Libor floor and a discount of 98. Pricing was then changed to Libor plus 500 bps with a 1% Libor floor and an original issue discount of 92 before the deal was pulled in late December due to poor primary conditions.

Commitments are due on Feb. 12, the source added.

Credit Suisse Securities (USA) LLC, Nomura Securities International Inc. and Deutsche Bank Securities Inc. are leading the deal that backs the already completed $1.37 billion acquisition of Arizona Chemical Holdings Corp. from American Securities LLC and refinanced existing debt.

Kraton is a Houston-based producer of engineered polymers and styrenic block copolymers. Arizona Chemical is a biorefiner of pine chemicals with executive offices in Jacksonville, Fla., and Almere, the Netherlands.

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