SAI, Eastern Power break; Axalta, American, Montreign, RE/MAX, Intermedia, Priority revised

By Sara Rosenberg

New York, Dec. 7 – Deals from SAI Global and Eastern Power LLC (TPF II Power LLC) made their way into the secondary market on Wednesday, and Alere Inc.’s term loan softened following news that Abbott Laboratories filed a complaint to terminate its proposed acquisition of Alere but then the debt rebounded to end the day unchanged.

Over in the primary market, Axalta Coating Systems reduced its U.S. term loan B size, increased its euro term loan B size, lowered pricing on the euro tranche and tightened the issue price on both the U.S. and the euro pieces, and American Airlines Inc. revised size and original issue discount on its term loan B.

Also, Montreign Operating Co. LLC upsized its term loan B and firmed the spread at the midpoint of guidance and added a term loan A to its capital structure, and RE/MAX LLC reduced pricing on its term loan, set the issue price at the tight side of talk and extended the call protection.

In addition, Intermedia.net Inc. and Priority Payment Systems (Priority Holdings LLC) lifted spreads on their first-lien term loans, and RCN Grande (Radiate Holdco LLC) and Oberthur Technologies Group SAS accelerated the commitment deadlines on their loans deals.

Furthermore, Rackspace Hosting Inc., Virgin Media, Global Eagle Entertainment Inc., MediaOcean LLC and Equinix Inc. disclosed price talk with launch, and LegalShield (Pre-Paid Legal Services Inc.) surfaced with new deal plans.

SAI starts trading

SAI Global’s term debt freed up for trading on Wednesday, with the $325 million U.S. seven-year first-lien senior secured term loan B (Ba3/B+) quoted at 99½ bid, 100½ offered, and the A$255 million seven-year first-lien senior secured term loan B (Ba3/B+) quoted at 99½ bid, according to a market source.

Pricing on the U.S. term loan is Libor plus 450 basis points and pricing on the Australian term loan is Libor plus 550 bps, with both tranches having a 1% Libor floor, and sold at an original issue discount of 99. There is 101 soft call protection for one year on the loans.

On Tuesday, the spread on the U.S. term debt was increased from talk of Libor plus 400 bps to 425 bps, the call protection was extended from six months, the U.S. and Australian split was finalized, the MFN sunset was removed, the incremental facility incurrence ratios were reduced to 4.5 times and 5.6 times (closing date levels) from 4.75 times and 6 times, the incremental “freebie” was lowered to $75 million/75% of EBITDA from $105 million/100% of EBITDA, the property service asset sale covenant was revised to remove the specific associated restricted payment capacity, and the company agreed to hold quarterly calls and produce management’s discussion and analysis.

SAI funding buyout

Proceeds from SAI’s credit facility will be used to help finance its acquisition by Baring Asia Private Equity Fund VI for $4.75 in cash per share. The transaction has an implied enterprise value of $1,237,000,000.

Goldman Sachs Bank USA, UBS Investment Bank and HSBC Securities (USA) Inc. are leading the deal.

Closing on the buyout is expected in late December, subject to SAI shareholder approval, court approval and Foreign Investment Review Board approval.

SAI is a Sydney, Australia-based provider of risk management products and services to businesses across a diverse range of end-markets and geographies.

Eastern Power frees up

Eastern Power’s fungible $200 million incremental senior secured term loan B (BB-) due Oct. 2, 2021 hit the secondary market too, with levels seen at 100 1/8 bid, 100 5/8 offered, a trader remarked.

The incremental loan is priced at Libor plus 400 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.5, after tightening on Monday from 99. The new debt, along with the existing term loan B, will get 101 soft call protection for six months.

Including the incremental loan, the term loan B will total $1,647,000,000.

Morgan Stanley Senior Funding Inc. and Credit Suisse Securities (USA) LLC are leading the deal that will be used to fund a one-time dividend.

Closing is expected on Friday.

Eastern Power is an owner of gas-fired electric generating stations.

Alere retreats, rebounds

Also in trading, Alere’s term loan dropped to 99 bid, 99¾ offered from 99¾ bid, 100 1/8 offered after Abbott announced that it is trying to terminate its pending purchase of the company due to a substantial loss in Alere’s value following the merger agreement, a market source said.

However, the term loan then bounced back to 99¾ bid, 100 1/8 offered before the day was over, the source continued, explaining that the loan market is extremely strong, and people saw this as a rare opportunity to buy discounted paper.

Regarding the merger agreement, Abbott filed a complaint seeking termination of the agreement in the Delaware Court of Chancery, citing material adverse events, including the government eliminating the billing privileges of a substantial Alere division, the permanent recall of an important product platform, multiple new government subpoenas, a five-month delay in filing its 10-K and admissions of internal control failures requiring restatement of its 2013 to 2015 financials.

In response, Alere issued a statement saying that Abbott’s lawsuit is entirely without merit and that Alere has fully complied with its contractual obligations under the merger agreement.

Alere is a Waltham, Mass.-based provider of near-patient diagnosis, monitoring and health management. Abbott is an Abbott Park, Ill.-based pharmaceutical health-care products company.

Axalta reworks loans

Moving to the primary market, Axalta Coating Systems cut its U.S. term loan B due February 2023 to $1,545,000,000 from $1,775,000,000 and revised the issue price to par from talk of 99.5 to 99.75, according to a market source, who said pricing on the tranche remained at Libor plus 250 bps with a 0.75% Libor floor, and there is still 101 soft call protection for six months.

With the U.S. term loan B downsizing, the company’s euro term loan B due February 2023 was lifted to €400 million from €187 million, pricing was trimmed to Euribor plus 225 bps from Euribor plus 250 bps and the issue price was changed to par from talk of 99.5 to 99.75, the source continued. This tranche still has a 0.75% Euribor floor and 101 soft call protection for six months.

Recommitments were due at 1 p.m. ET on Wednesday, the source added.

Barclays is leading the deal (Ba1/BBB-) that will be used with cash on hand to refinance $1,775,000,000 of term loans due 2020 priced at Libor plus 275 bps with a 1% Libor floor and €187 million of term loans due 2020 priced at Euribor plus 300 bps with a 1% Euribor floor, and to pay related transaction fees and expenses.

Axalta is a Philadelphia-based manufacturer, marketer and distributor of coatings systems.

American Airlines modified

American Airlines increased its seven-year senior secured term loan B (Ba1/BB+) to $1.25 billion from $1 billion and changed the original issue discount to 99.75 from 99.5, a market source said.

The term loan is still priced at Libor plus 250 bps with a 0.75% Libor floor and has 101 soft call protection for six months.

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

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc., BNP Paribas Securities Corp., Credit Agricole, ICBC and US Bank are leading the deal that will be used to repay a 2019 term loan and for general corporate purposes.

Closing is targeted for Dec. 15.

American Airlines is a Fort Worth-based airline company.

Montreign updates emerge

Montreign raised its six-year first-lien term loan B to $390 million from $375 million and set pricing at Libor plus 825 bps, the middle of the Libor plus 800 bps to 850 bps talk, a market source remarked.

The term loan still has a 1% Libor floor, an original issue discount of 98, and call protection of non-callable for 2.5 years, then at 102 for a year and 101 for a year.

Also, the company added a new $70 million five-year term loan A priced at Libor plus 500 bps with no Libor floor and an original issue discount of 98, downsized its equipment financing to $40 million from $70 million, and upsized its total equity to $374 million from $358 million, the source continued.

And, the loan collateral package will now include both the Entertainment Village and golf course.

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

Credit Suisse Securities (USA) LLC is leading the deal that will be used to fund the development of the Montreign Resort Casino in the Hudson Valley region in New York.

Montreign Operating is a casino operator in the Hudson Valley.

RE/MAX tweaks deal

RE/MAX cut pricing on its $235 million seven-year term loan to Libor plus 275 bps from Libor plus 300 bps, firmed the original issue discount at 99.5, the tight end of the 99 to 99.5 talk, and extended the 101 soft call protection to one year from six months, according to a market source.

The term loan still has a 0.75% Libor floor.

The company’s $245 million credit facility (Ba3/BB+) also includes a $10 million revolver.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance $188 million in outstanding debt and fund the acquisition of RE/MAX Regional Services.

Net debt to adjusted EBITDA will be 1.8 times.

RE/MAX is a Denver-based franchisor of real estate brokerage services.

Intermedia flexes

Intermedia.net lifted pricing on its $190 million seven-year first-lien term loan (B1/B+) to Libor plus 525 bps from Libor plus 475 bps, a market source remarked.

The first-lien term loan is still talked with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

The company’s $285 million credit facility also includes a $25 million five-year revolver (B1/B+), and a $70 million eight-year second-lien term loan (Caa1/CCC+) talked at Libor plus 925 bps with a 1% Libor floor, a discount of 98 and call protection of 102 in year one and 101 in year two.

SunTrust Robinson Humphrey Inc. and TD Securities (USA) LLC are leading the deal that will be used to help fund the buyout of the company by Madison Dearborn Partners from Oak Hill Capital Partners.

Closing is expected this year, subject to regulatory approvals and other customary conditions.

Intermedia.net is a Mountain View, Calif.-based provider of cloud business applications.

Priority raises pricing

Priority Payment Systems flexed pricing on its $200 million six-year first-lien term loan to Libor plus 525 bps from the Libor plus 475 bps area, according to a market source.

As before, the term loan is talked with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

The company’s $225 million credit facility (B1/B) also includes a $25 million revolver.

SunTrust Robinson Humphrey Inc. is leading the deal that will be used with an $80 million holdco subordinated note to fund the buyout by management of some of the ownership interest in the company from Comvest Partners and to refinance existing debt.

Secured leverage is about 4 times.

Priority Payment is an Alpharetta, Ga.-based credit and debit card payments processing provider to small and midsized brick and mortar and e-commerce merchants.

RCN moves deadline

RCN Grande accelerated the commitment deadline on its $1.33 billion seven-year covenant-light first-lien term loan to 5 p.m. ET on Wednesday from 5 p.m. ET on Dec. 12, a market source said.

The term loan is talked at Libor plus 350 bps with a 0.75% Libor floor, an original issue discount of 99.5, 101 soft call protection for six months, and a ticking fee of half the spread from days 31 to 90 and the full spread thereafter.

The company’s $1.48 billion credit facility (B1/B) also includes a $150 million revolver.

Credit Suisse Securities (USA) LLC, UBS Investment Bank, Morgan Stanley Senior Funding Inc. and Deutsche Bank Securities Inc. are leading the deal that will be used to help fund the acquisitions of RCN Telecom Services LLC for $1.6 billion and Grande Communications Networks LLC for $650 million by TPG Capital, Google Capital and Patriot Media Management from Abry Partners.

RCN and Grande will then be combined into one broadband services provider.

Closing is expected in the first quarter of 2017, subject to regulatory approvals and customary conditions.

Oberthur shutting early

Oberthur Technologies moved up the commitment deadline on its €2.1 billion seven-year U.S. and euro term loan to the close of business on Monday from Dec. 14, according to a market source.

Talk on the term loan is Libor/Euribor plus 425 bps to 450 bps with no floor, an original issue discount of 99.5 and 101 soft call protection for six months.

The company’s €2.4 billion equivalent senior secured credit facility (B2/B-/B+) also includes a €300 million multi-currency six-year revolver priced at Euribor plus 400 bps with no floor.

Deutsche Bank, Goldman Sachs International and Morgan Stanley are jointly leading syndication on the euro tranche, and Goldman Sachs is the left lead bookrunner on the U.S. tranche.

Proceeds will be used to help fund the acquisition of Morpho for a total enterprise value of €2.5 billion and to refinance existing Oberthur debt, including €190 million senior notes due 2020.

Pro forma net total leverage is 4.3 times based on September 2016 LTM EBITDA of €461 million.

Oberthur Technologies is a France-based provider of chip-based digital authentication products and solutions. Morpho is a provider of security and identity solutions.

Rackspace repricing

In more primary happenings, Rackspace hosted a lender call at 3 p.m. ET on Wednesday, launching a $2 billion senior secured covenant-light term loan B (Ba2/BB+/BB+) due Nov. 3, 2023 at talk of Libor plus 350 bps with a 1% Libor floor, a par issue price and 101 soft call protection for six months, a market source said.

Cashless roll commitments are due at 5 p.m. ET on Tuesday and new money commitments are due at 5 p.m. ET on Dec. 14, the source added.

Citigroup Global Markets Inc. is leading the deal that will be used to reprice an existing term loan B from Libor plus 400 bps with a 1% Libor floor.

Closing is expected during the week of Dec. 19.

Rackspace is a San Antonio-based managed cloud company.

Virgin Media holds call

Virgin Media surfaced in the morning with plans to host a lender call at 1 p.m. ET to launch a minimum $750 million eight-year term loan I (Ba3/BB-) at talk of Libor plus 275 bps to 300 bps with no floor, an original issue discount of 99.5 and 101 soft call protection for six months, according to a market source.

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

Citigroup Global Markets Inc. is the global coordinator on the deal and joint bookrunner with Barclays, Bank of America Merrill Lynch, Credit Agricole CIB, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Scotiabank. Scotiabank is the administrative agent.

Proceeds will be used to refinance in full the company’s £100 million term loan D, partially redeem the $900 million 5.375% senior secured notes due 2021 and £990 million 6% senior secured notes due 2021 and pay related premiums, fees and expenses.

Virgin Media, a subsidiary of Liberty Global plc, is a Hook, England-based provider of broadband, TV, mobile phone and home phone services.

Global Eagle guidance

Global Eagle Entertainment released price talk on its first- and second-lien term loans with its lender call, a source remarked.

The $460 million seven-year first-lien term loan (Ba3/BB-) is talked at Libor plus 525 bps with a 1% Libor floor, an original issue discount of 98 to 99 and 101 soft call protection for six months, and the $125 million eight-year second-lien term loan (B3/B-) is talked at Libor plus 950 bps with a 1% Libor floor, a discount of 98 and hard call protection of 102 in year one and 101 in year two, the source continued.

The company’s $670 million senior secured deal also includes an $85 million five-year revolver (Ba3/BB-).

Commitments are due on Dec. 16, the source added.

Citigroup Global Markets Inc. and Macquarie Capital (USA) Inc. are leading the deal that will be used to refinance a roughly $265 million first-lien term loan, a roughly $92 million second-lien term loan and about $39 million in revolver borrowings at Emerging Markets Communications LLC, and for working capital, capital expenditures, acquisitions, investments and general corporate purposes.

Global Eagle is a Marina Del Rey, Calif.-based provider of satellite-based connectivity and media.

MediaOcean launches

MediaOcean came out with talk of Libor plus 400 bps to 425 bps with a 1% Libor floor, a par issue price and 101 soft call protection for six months on its $282.5 million first-lien term loan repricing that launched with a lender call during the session, a market source said.

Commitments are due on Dec. 14, the source added.

Macquarie Capital (USA) Inc. is leading the deal that will reprice the term loan down from Libor plus 475 bps with a 1% Libor floor.

MediaOcean is a New York-based software company for the advertising sector.

Equinix releases talk

Equinix had its lender meeting, and in connection with the event, talk on its new €500 million seven-year covenant-light term loan B and repricing of its U.S. and sterling term loan B debt was announced, according to a market source.

The new euro term loan is talked at Euribor plus 325 bps with no floor and an original issue discount of 99.75, the U.S. term loan B repricing is talked at Libor plus 250 bps to 275 bps with no floor and a par issue price, and the sterling term loan B repricing is talked at Libor plus 300 bps to 325 bps with a 0.75% Libor floor and a par issue price, the source said, adding that all of the term loans include 101 soft call protection for six months.

As of Sept. 30, the company had $248,750,000 outstanding under its U.S. term loan B and £298.5 million outstanding under its sterling term loan B.

Commitments are due on Dec. 15.

Equinix funding acquisition

Proceeds from Equinix’s new euro term loan will be used to help fund the purchase of a portfolio of 24 data center sites and their operations from Verizon Communications Inc. for $3.6 billion in an all cash transaction.

As for the repricing portion of the transaction, it will take the U.S. term loan B down from Libor plus 325 bps with a 0.75% Libor floor and the sterling term loan B down from Libor plus 375 bps with a 0.75% Libor floor.

Bank of America Merrill Lynch is the left lead on the deal.

Closing on the acquisition is expected by mid-2017, subject to the customary conditions.

Equinix is a Redwood City, Calif.-based interconnection and data center company.

LegalShield joins calendar

LegalShield set a lender call for 11 a.m. ET on Thursday to launch $50 million in incremental senior secured term loans, according to a market source.

The debt consists of a $40 million incremental first-lien term loan B and a $10 million incremental second-lien term loan, the source said.

Morgan Stanley Senior Funding Inc. and RBC Capital Markets are leading the deal that will be used to make a one-time redemption of equity interests.

The transaction will include an amendment to the company’s existing roughly $270 million first-lien term loan B and existing $175 million second-lien term loan.

LegalShield is an Ada, Okla.-based provider of legal services.

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