Charter lifted with Disney agreement; Forward Air, Fogo de Chao, USI and more set talk

By Sara Rosenberg

New York, Sept. 11 – Charter Communications Inc.’s term loan B-2 was a little stronger in trading on Monday as the company announced a multi-year distribution agreement with the Walt Disney Co., and Hostess Brands LLC’s term loan was relatively unchanged with news that the company is being purchased by The J.M. Smucker Co.

Meanwhile, in the primary market, Forward Air Corp. (Clue Opco LLC), Fogo de Chao (BCPE Grill Parent Inc.), USI Inc., AerCap (Delos Aircraft Designated Activity Co.), Alight Inc. (Tempo Acquisition LLC), Nouryon, GFL Environmental Inc. and AOC LLC (LSF11 A5 HoldCo LLC) released price talk with launch.

Also, Cogeco Communications Finance (USA) LP (Breezeline), Bausch + Lomb Corp. and Pacific Dental Services joined this week’s primary calendar.

Charter inches higher

Charter Communications’ term loan B-2 moved up by about a quarter of a point on Monday to 99½ bid, 99 7/8 offered following news that a multi-year distribution agreement has been reached with Walt Disney, a trader said.

The company’s term loan B-1 was unchanged to maybe up an eighth of a point, with levels quoted at 99 7/8 bid, par 3/8 offered, the trader added.

As part of the deal with Charter, the majority of Disney’s networks and stations will be immediately restored to Spectrum’s video customers.

Charter is a Stamford, Conn.-based broadband connectivity company and cable operator.

Hostess steady

Hostess Brands’ term loan was quoted at 99¾ bid, par ½ offered on Monday, compared to levels of 99 5/8 bid, par 3/8 offered on Friday, as the company announced that it is being acquired by J.M. Smucker, according to a market source.

Under the agreement, Hostess is being bought for $34.25 per share, consisting of $30 of cash and .03002 of a share of the J.M. Smucker’s common stock, representing a total enterprise value of about $5.6 billion, which includes around $900 million of net debt.

The cash portion of the transaction is expected to be funded through a combination of cash on hand, a bank term loan and long-term public bonds. J.M. Smucker has secured $5.2 billion in a fully committed bridge financing from Bank of America and RBC Capital Markets LLC.

Pro forma total net debt-to-EBITDA ratio is expected to be roughly 4.4x.

J.M. Smucker intends to maintain its investment grade debt rating.

Closing is expected in the third quarter of J. M. Smucker’s current fiscal year ending April 30, 2024.

Hostess is a Lenexa, Kan.-based packaged food company. J.M. Smucker is an Orrville, Ohio-based people and pets food company.

Forward Air proposed terms

Moving to the primary market, Forward Air held its call on Monday morning and announced talk on its $925 million seven-year senior secured covenant-lite term loan B at SOFR plus 375 basis points to 400 bps with a 0.75% floor, an original issue discount of 98 and 101 soft call protection for six months, a market source remarked.

Commitments are due at 5 p.m. ET on Sept. 20, the source added.

Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA, JPMorgan Chase Bank, US Bank, PNC Capital Markets, Capital One, Citizens Bank, Deutsche Bank Securities Inc. and TD Securities (USA) LLC are leading the deal that will be used to support the acquisition of Omni Logistics LLC from Ridgemont Equity Partners and EVE Partners LLC.

Under the agreement, Omni shareholders will receive $150 million in cash and Forward common stock and perpetual non-voting convertible preferred stock. The term loan will be used with cash on hand to help refinance existing debt at both companies and to pay the consideration and other amounts in connection with the transaction.

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

Forward Air is a Greeneville, Tenn.-based provider of transportation services. Omni is a Dallas-based logistics and supply chain management company.

Fogo de Chao guidance

Fogo de Chao came out with talk of SOFR plus 500 bps with a 0.5% floor and an original issue discount of 97 on its $550 million seven-year covenant-lite term loan B (B-) that launched with a lender call in the afternoon, according to a market source.

The term loan has 101 soft call protection for six months.

Commitments are due at noon ET on Sept. 22.

Deutsche Bank Securities Inc., Jefferies LLC and UBS Investment Bank are leading the deal, which will be used to help fund the buyout of the company by Bain Capital Private Equity from Rhone Capital.

Closing is expected this month, subject to customary conditions, including regulatory approvals.

Fogo de Chao is a Dallas-based restaurant chain focused on fire-roasting high-quality meats.

USI holds call

USI emerged in the morning with plans to hold a lender call at 2 p.m. ET on Monday to launch a $600 million seven-year senior secured incremental covenant-lite first-lien term loan B talked at SOFR plus 375 bps with a 0% floor, an original issue discount of 99.5 and 101 soft call protection for six months, a market source said.

Commitments are due at noon ET on Wednesday, the source added.

Morgan Stanley Senior Funding Inc., KKR Capital Markets, Goldman Sachs Bank USA, BofA Securities Inc., Barclays, SPC, Citigroup Global Markets Inc., ING and Macquarie Capital (USA) Inc. are leading the deal. BofA Securities is the administrative agent.

The term loan will be used to fund a repurchase of shares from CDPQ and certain co-investors. More than 50% of the shares held by CDPQ will be purchased in the transaction. Existing shareholder KKR is making a new equity investment of more than $1 billion in the company and will be USI’s largest single shareholder.

Closing is expected this year.

USI is a Valhalla, N.Y.-based insurance brokerage and consulting firm.

AerCap launches

AerCap surfaced in the morning with plans to hold a lender call at 2 p.m. ET on Monday to launch a $600 million term loan B (BBB) due Oct. 31, 2027 talked at SOFR plus 200 bps with a 0% 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 noon ET on Thursday, the source added.

Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc. and RBC Capital Markets are leading the deal that will be used with cash from the balance sheet to refinance an existing term loan B.

Cashless roll is being offered.

AerCap is a Dublin-based aviation leasing company.

Alight holds call

Alight came out in the morning with plans to hold a lender call at 12:30 p.m. ET on Monday to launch a $2.507 billion term loan B due Aug. 31, 2028 talked at SOFR plus 275 bps with a 0.5% floor, a par issue price and 101 soft call protection for six months, a market source remarked.

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

BofA Securities Inc. is leading the deal that will be used to reprice an existing term loan B down from SOFR plus 300 bps with a 0.5% floor.

Alight is a Lincolnshire, Ill.-based provider of integrated, cloud-based human capital and business solutions.

Nouryon comes to market

Nouryon held a lender call at 10:30 a.m. ET to launch an amendment and extension of its $739 million first-lien term loan B due October 2025 and €94 million first-lien term loan B due October 2025, according to a market source.

The extended U.S. term loan due April 3, 2028 will be fungible with the company’s existing $2.5 billion term loan B due April 3, 2028 and is priced at SOFR+10 bps CSA plus 400 bps with a 0% floor, and the extended euro term loan B due April 3, 2028 will be fungible with the company’s existing €1.596 billion term loan B due April 3, 2028 and is priced at Euribor plus 425 bps with a 0% floor, in line with existing U.S. and euro term loan pricing.

Original issue discount talk on the extended U.S. term loan is 98.5 and discount talk on the extended euro term loan is 98 to 98.5, the source said.

Like the existing loan, the extended term loans have 101 soft call protection until Oct. 3.

Nouryon lead banks

JPMorgan Chase Bank, Barclays and HSBC are joint global coordinators and joint bookrunners on Nouryon’s amendment and extension transaction. JPMorgan is the administrative agent.

Commitments are due at 5 p.m. ET on Thursday for the U.S. loan and at noon ET on Thursday for the euro loan, the source added.

Carlyle and GIC are the sponsors.

Nouryon is an Amsterdam-based specialty chemicals company.

GFL repricing

GFL Environmental held a lender call at 1 p.m. ET, launching a $729 million term loan B due May 2027 at talk of SOFR plus 250 bps with a 0.5% floor, an original issue discount of 99.75, 101 soft call protection for six months and no CSA, a market source said.

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

JPMorgan Chase Bank and Barclays are leading the deal. Barclays is the administrative agent.

The loan will be used to reprice an existing term loan B down from SOFR+10 bps CSA plus 300 bps with a 0.5% floor.

GFL is a Vaughan, Ont.-based environmental services company.

AOC sets talk

AOC launched during the session its fungible $375 million incremental term loan B due Oct. 15, 2028 with original issue discount talk of 98 to 98.5, according to a market source.

Like the existing term loan, the incremental term loan is priced at SOFR+10 bps CSA plus 425 bps with a 0.5% floor.

The incremental term loan has 101 soft call protection for six months.

Commitments are due at noon ET on Friday, the source added.

BofA Securities Inc., RBC Capital Markets and others to be announced are leading the deal that will be used with cash on hand to return capital to shareholders and pay related fees and expenses.

AOC is a specialty chemicals company with U.S. headquarters in Collierville, Tenn.

Cogeco joins calendar

Cogeco Communications scheduled a lender call for 2:30 p.m. ET on Tuesday to launch a $900 million seven-year term loan B (BB) talked at SOFR plus 275 bps to 300 bps with a 0% floor, an original issue discount of 99 and 101 soft call protection for six months, market sources said.

Commitments are due at noon ET on Friday, sources added.

BofA Securities Inc., Truist, Wells Fargo Securities LLC, RBC Capital Markets, BMO Capital Markets and CIBC are leading the deal that will be used with a $400 million five-year farm credit term loan to refinance an existing term loan B due 2025.

Cogeco Communications Finance, formerly known as Atlantic Broadband, is a subsidiary of Cogeco Communications Inc., a Montreal-based cable operator.

Bausch readies deal

Bausch + Lomb will hold a lender call at 10 a.m. ET on Tuesday to launch a $500 million five-year term loan B (B1/B-) talked at SOFR plus 400 bps with a 0% floor, an original issue discount of 98 to 98.5 and 101 soft call protection for six months, a market source remarked.

Ticking fees on the term loan are half the margin from days 46 to 90 and the full margin thereafter.

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

JPMorgan Chase Bank is the left lead on the deal that will be used with $1.4 billion of senior secured notes due 2028 to fund the $1.75 billion acquisition of the Xiidra, libvatrep and AcuStream ophthalmology assets from Novartis, to repay revolver borrowings and to pay related fees and expenses.

Closing is expected at or around the end of this month, subject to regulatory approval and other customary conditions.

Bausch + Lomb is a Vaughan, Ont.-based eye health company.

Pacific Dental on deck

Pacific Dental Services set a lender call for 11:30 a.m. ET on Tuesday to launch a fungible $200 million add-on covenant-lite term loan B (B) due May 2028 talked with an original issue discount of 99.03 to 99.5, according to a market source.

Pricing on the add-on term loan is SOFR+CSA plus 350 bps with a 25 bps step-down when total net leverage is less than 2.75x and a 0.75% floor. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

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

BNP Paribas Securities Corp., BMO Capital Markets, Citigroup Global Markets Inc., JPMorgan Chase Bank and Goldman Sachs Bank USA are leading the deal that will be used to repay revolver borrowings and add cash to the balance sheet.

As of June 30, the existing term loan B was sized at $588 million.

Pacific Dental is an Irvine, Calif.-based provider of management services to affiliate dental practices.

Fund flows

In other news, actively managed loan fund flows on Friday were positive $38 million and loan ETFs were positive $30 million, market sources said.

Year to date, outflows for loan funds total $18.6 billion, with negative $335 million ETFs, sources added.

Loan indices rise

IHS Markit’s iBoxx loan indices were stronger on Friday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.09% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.14%.

Month to date, the MiLLi is up 0.37% and year to date it is up 9.26%, and the LLLi is up 0.24% month to date and up 8.67% year to date.

Average secondary market bids in the U.S. on Friday were 92.91, up 0.05% from the previous day and up 1.13% year to date.

According to the IHS Markit data, some of the top advancers on Friday were Jo-Ann Stores’ July 2021 covenant-lite term loan B at 33, up from 32, National Mentor/Civitas’ March 2021 covenant-lite term loan at 89.75, up from 87.95, and Air Methods’ April 2017 covenant-lite term loan B at 29.33, up from 28.75.

Some top decliners on Friday were IXS’ March 2020 covenant-lite term loan B at 84.88, down from 86.75, Gordian Medical/American Medical Technologies’ April 2021 term loan at 63.5, down from 64.5, and Ten-X’s September 2017 covenant-lite term loan B at 94.92, down from 96.

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