Alere dips on subsidiary problems; Calpine breaks; DTZ updates deal; Bass extends deadline

By Sara Rosenberg

New York, Nov. 4 – Alere Inc.’s term loan fell in trading on Friday after the company revealed that one of its subsidiaries is having its Medicare enrollment revoked, Calpine Corp.’s term loan freed to trade, and levels on Infoblox Inc.’s second-lien term loan surfaced.

Moving to the primary market, DTZ (DTZ U.S. Borrower LLC and DTZ AUS Holdco Pty Ltd.) finalized the original issue discount on its add-on first-lien term loan, and Bass Pro Group LLC extended the commitment deadline on its term loan B.

In addition, Genesys, Fantasy Springs Resort Casino (East Valley Tourist Development Authority), Conduent Inc. and Cheddar’s Scratch Kitchen joined the near-term new issue calendar.

Alere retreats

Alere’s term loan weakened in the secondary market on Friday as the company disclosed in a 10-Q filed with the Securities and Exchange Commission that its subsidiary, Arriva Medical LLC, received a notice, dated Oct. 5, that its Medicare enrollment will be revoked by CMS, according to a market source.

The term loan was quoted at 97 bid, 98½ offered, down from 99¼ bid, 99¾ offered, the source said.

The filing said that CMS is asserting that, over a five-year period, Arriva, a durable medical equipment supply business, allegedly submitted claims for 211 deceased patients, which is why Medicare enrollment is being cancelled.

Alere’s initial appeal of this determination was denied by CMS on Nov. 2, and, therefore, Arriva’s Medicare enrollment will be revoked effective Nov. 4, pending the outcome of further appeals.

The company’s results of operation for the nine months ended Sept. 30, included about $88 million in revenue attributable to Arriva.

Alere is a Waltham, Mass.-based provider of near-patient diagnosis, monitoring and health management.

Calpine hits secondary

Calpine’s $550 million 364-day senior secured covenant-light term loan began trading during the session, with levels seen at 99¼ bid, 99¾ offered, according to a trader.

Pricing on the loan is Libor plus 175 basis points with no Libor floor, and it was sold at an original issue discount of 99. The debt has 101 soft call protection for six months.

Morgan Stanley Senior Funding Inc., MUFG, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC are leading the deal that will be used with cash on hand to finance the acquisition of Noble Americas Energy Solutions LLC from Noble Group Ltd. for $800 million plus an estimated $100 million of net working capital at closing.

Closing is expected in late November/early December, subject to approval by Noble Group shareholders, regulatory approvals and customary conditions.

Calpine is a Houston-based generator of electricity from natural gas and geothermal resources. Noble Americas Energy is a San Diego-based supplier of power to commercial and industrial retail customers.

Infoblox second-lien levels

Infoblox’s $250 million eight-year covenant-light second-lien term loan (Caa1/CCC/CCC+) was quoted at 98 bid, 99 offered on Friday morning, after allocating late Thursday, a trader remarked.

The company’s $500 million seven-year covenant-light first-lien term loan (B1/B-/BB-) was quoted at 98¼ bid, 98¾ offered, unchanged from where it broke in the prior evening, another trader added.

Pricing on the second-lien term loan is Libor plus 850 bps with a 1% Libor floor, and it was sold at an original issue discount of 98, and pricing on the first-lien term loan is Libor plus 500 bps with a 1% Libor floor, and it was issued at a discount of 98 as well.

The second-lien term loan has hard call protection of 102 in year one and 101 in year two, and the first-lien term loan has 101 soft call protection for one year.

During syndication, pricing on the second-lien term loan was increased from Libor plus 825 bps, the discount was modified from talk of 98.5 to 99, the spread on the first-lien term loan was lifted from Libor plus 450 bps, the discount widened from talk of 99 to 99.5 and the call protection was extended from six months.

Infoblox funding buyout

Proceeds from Infoblox’s $800 million senior secured credit facility, which also includes a $50 million five-year revolver (B1/B-/BB-), will be used with $755 million in equity to fund its buyout by Vista Equity Partners for $26.50 per share of common stock in cash, or about $1.6 billion.

Bank of America Merrill Lynch, RBC Capital Markets LLC, Barclays, Deutsche Bank Securities Inc. and Macquarie Capital (USA) Inc. are leading the debt, with Bank of America left lead on the first-lien loan and RBC left lead on the second-lien loan.

Closing is expected in the company’s fiscal second quarter, subject to customary conditions and regulatory approvals.

Infoblox is a Santa Clara, Calif.-based provider of Actionable Network Intelligence to enterprise, government and service provider customers.

EMI holds steady

EMI Music Publishing’s repriced $1,071,000,000 term loan was quoted at par bid, 100¼ offered, in line with where the debt freed up for trading during the previous session, a trader said.

Pricing on the loan is Libor plus 275 bps with no Libor floor, and it was issued at par. The debt has 101 soft call protection for six months.

UBS Investment Bank is leading the deal.

The repricing will take the term loan down from Libor plus 300 bps with a 1% Libor floor.

EMI Music is a New York-based music publisher.

DTZ firms discount

Meanwhile, in the primary market, DTZ set the original issue discount on its $235 million add-on first-lien term loan due Nov. 4, 2021 at 99.04, according to a market source. Talk had been in the range of 99 to 99.5.

The term loan is priced at Libor plus 325 bps with a 1% Libor floor.

UBS Investment Bank is leading the deal that will be used to refinance an existing second-lien term loan priced at Libor plus 825 bps with a 1% Libor floor.

DTZ, a TPG Capital portfolio company, is a real estate services company.

Bass Pro moves deadline

Bass Pro Group pushed out the commitment deadline on its $3.37 billion seven-year covenant-light term loan B (B1/B+) to Nov. 14 from Friday, a market source said.

The term loan B is talked at Libor plus 425 bps with a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

Bank of America Merrill Lynch, Wells Fargo Securities LLC, Citigroup Global Markets Inc., RBC Capital Markets LLC, UBS Investment Bank and Goldman Sachs Bank USA are leading the deal that will be used to help fund the acquisition of Cabela’s Inc. for $65.50 per share in cash, or about $5.5 billion.

Closing is expected in the first half of 2017, subject to approval by Cabela’s shareholders, regulatory approvals and other customary conditions.

Bass Pro is a Springfield, Mo.-based outdoor retailer. Cabela’s is a Sidney, Neb.-based marketer and retailer of hunting, fishing, camping and outdoor merchandise.

Genesys sets meetings

Genesys will hold a bank meeting at 1:30 p.m. ET in New York on Monday and a bank meeting at 11 a.m. GMT in London on Tuesday to launch a $2.25 billion equivalent credit facility, a market source remarked.

The facility consists of a $150 million five-year revolver, a $1.55 billion seven-year covenant-light term loan B and a $550 million equivalent seven-year covenant-light euro term loan B, the source added.

Bank of America Merrill Lynch, Goldman Sachs Bank USA, Citigroup Global Markets Inc. and RBC Capital Markets LLC are leading the deal that will be used to help fund the acquisition of Interactive Intelligence Group Inc. for $60.50 per share in cash and refinance existing debt. The transaction is valued at about $1.4 billion.

Closing is expected by the end of the year, subject to customary conditions, including regulatory approval and approval by Interactive Intelligence shareholders. The transaction is not contingent on financing.

Genesys is a Daly City, Calif.-based provider of omnichannel customer experience and contact center solutions. Interactive Intelligence is an Indianapolis-based provider of cloud and on-premise solutions for customer engagement, communications and collaboration.

Fantasy Springs readies loan

Fantasy Springs Resort Casino emerged with plans to hold a lender call at 1:30 p.m. ET on Monday to launch a $130 million five-year term loan B talked at Libor plus 800 bps with a 1% Libor floor, an original issue discount of 98 and call protection of non-callable for two years, then at 102 in year three and 101 in year four, according to a market source.

Commitments are due on Nov. 18, the source said.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance existing debt.

Fantasy Springs, operated by Indio, Calif.-based East Valley Tourist, is a full scale resort in the Coachella Valley.

Conduent on deck

Conduent scheduled a bank meeting for Monday to launch a $750 million seven-year term loan B talked at Libor plus 450 bps with a 0.75% Libor floor, an original issue discount of 98.5 and 101 soft call protection for six months, a market source said.

J.P. Morgan Securities LLC is leading the deal that will be used to help fund the company’s spin-off from Xerox Corp.

Conduent is a provider of business process services with expertise in transaction-intensive processing, analytics and automation.

Cheddar’s joins calendar

Cheddar’s Scratch Kitchen set a bank meeting for 2:30 p.m. ET on Monday to launch a $335 million first-lien term loan B, according to a market source.

Morgan Stanley Senior Funding Inc. and Societe Generale are leading the debt that will be used to fund the acquisition of Greer Restaurant Operation Entities, the company’s largest franchisee.

Cheddar’s Scratch Kitchen is a casual dining operator focusing on made-from-scratch food.

ServiceMaster prices

In other news, ServiceMaster Global Holdings Inc.’s allocated its $1.95 billion credit facility that includes a $300 million revolver due 2019 and a $1.65 billion term loan B due 2023, a news release said.

Pricing on the term loan B is Libor plus 250 bps with no Libor floor, and it was sold at an original issue discount of 99.75. The debt has 101 soft call protection for one year.

On Thursday, the term loan B was upsized from $1.5 billion, the spread was set at the low end of the Libor plus 250 bps to 275 bps talk and the call protection was extended from six months.

J.P. Morgan Securities LLC is the left lead on the deal that will be used with $750 million of senior notes to refinance about $2.4 billion of existing term loan B debt due 2021 and a $300 million revolver due 2019.

The notes were downsized from $1 billion with the term loan B upsizing, and the $100 million reduction in the total amount of term loan B and bond debt being obtained will reduce pro forma cash on the balance sheet.

ServiceMaster is a Memphis-based provider of residential and commercial services.

WME IMG allocates

WME IMG LLC allocated its fungible $100 million add-on term loan (B1) that is priced at Libor plus 425 bps with a 1% Libor floor and was issued at par, a source said.

KKR Capital Markets is leading the deal.

Proceeds will be used for acquisitions and other corporate purposes.

WME IMG is an entertainment, sports and fashion company.

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