Air Medical prices atop talk; Power Team prices tighter than talk

By Paul A. Harris

Portland, Ore., Feb. 28 – Rising interest rates should cause momentum to continue to build in the leveraged loan market, according to a bank loan and bond investor returning from the J.P. Morgan Global High-Yield and Leveraged Finance Conference in Miami, who took a Wednesday call from Prospect News.

Referencing an address by Jamie Dimon, chief executive officer and president of JPMorgan Chase, the investor said that Dimon believes a 4% yield on the 10-year Treasury is a real possibility.

The Treasury is coming with an unprecedented amount of issuance in the months ahead, which could drive the rate, the investor recounted.

The 10-year closed Wednesday yielding 2.87%.

Dimon professed a bullish outlook for the remainder of 2018 at the conference, the investor said.

The JPMorgan CEO noted that consumer spending is in good shape, leverage at the banks, at 15 to 1, is in decent shape, and economic expansion should continue at least into the late 2019-2020 time-frame.

Dimon noted that the U.S. economy is basically at full employment and that as the labor market tightens, if productivity does not improve, margins will decline, and the economy will have peaked, the investor recounted.

Meanwhile in Wednesday's bank loan market Air Medical Group Holdings Inc. completed the repricing of a $1,918,121,662 amount of senior secured term loan B due April 28, 2022 (B1/B).

And PowerTeam Services LLC finalized pricing for its $790 million credit facility at levels tighter than talk.

Air Medical prices atop talk

Air Medical Group Holdings completed repricing of a $1,918,121,662 amount of senior secured term loan B due April 28, 2022 (B1/B) with a 325 basis points spread to Libor atop a 1% Libor floor at par.

The deal came on top of talk.

Morgan Stanley Senior Funding Inc. and KKR Capital Markets LLC are the joint lead arrangers and bookrunners on the deal. Morgan Stanley is the administrative agent.

EOC talk Libor plus 325 bps to 350 bps

EOC Group, Inc., which does business as Mavis Discount Tire and Express Oil Change & Engineers, set talk for its $1.09 billion seven-year first-lien term loan at Libor plus 325 basis points to 350 bps.

The rate has a stepdown of 25 bps based on leverage and a stepdown of 25 bps following an initial public offering.

The term loan has a 0% Libor floor and is offered at 99.5.

The term loan will be sold as a pro rata strip.

EOC, which launched its $1.88 billion credit facility at a bank meeting on Wednesday, is also seeking a $100 million revolver.

There is also a $435 million eight-year second-lien term loan and a $71.5 million delayed-draw eight-year second-lien term loan, both of which have been pre-placed.

Jefferies, Antares, KKR Capital Markets, Angel Island and Cowen are arrangers with Jefferies on the left.

Commitments are due by March 14.

Proceeds will be used to fund Golden Gate Capital’s acquisition of Mavis Discount Tire and the merger of Mavis with Express Oil Change & Tire Engineers, an existing Golden Gate portfolio company.

PowerTeam prices tighter than talk

PowerTeam Services finalized pricing for its $790 million credit facility at levels tighter than talk.

A $95 million seven-year first-lien term loan (B2/B) is priced at Libor plus 325 basis points with a 1% Libor floor and an original issue discount of 99.75 compared to talk of Libor plus 325 bps to 350 bps and a price of 99.5.

Terms on the $135 million eight-year second-lien term loan (Caa2/CCC+) are a coupon of Libor plus 725 bps with a 1% Libor floor, priced at 99.25. Talk was Libor plus 725 bps to 750 bps and an original issue discount of 99.

Recommitments were due Wednesday.

Credit Suisse Securities (USA) LLC is the left lead bank on the deal, and Jefferies, Antares and Deutsche Bank are also lead arrangers.

Proceeds will be used to refinance existing debt and fund a shareholder distribution.

Crestwood prices five-year loan

Crestwood Holdings LLC priced a $350 million five-year senior secured term loan B (B3/B-) with a 750 basis points spread to Libor, a 0% Libor floor, at 98.

The spread came at the wide end of the Libor plus 725 to 750 bps spread talk. The reoffer price came at the cheap end of the 98 to 98.5 price talk.

Morgan Stanley Senior Funding Inc. is the lead bank on the deal.

Proceeds will be used to refinance an existing term loan B.

Warner Music launches, tightens

Warner Music Group launched a $320 million covenant-light incremental first-lien term loan due November 2023 (expected Ba3/B+) with a lender call on Wednesday and then later in the session tightened talk.

Ahead of the call, talk was announced at Libor plus 225 basis points and a 0% Libor floor, both matching the existing loan, and a price of 99.75 to par.

Later in the session Wednesday the price was tightened to par.

Credit Suisse is the lead arranger.

Timing was also accelerated on the loan to 12 p.m. ET on March 1 from 5 p.m. ET on March 1 originally.

Warner also priced $325 million of senior notes on Wednesday.

Warner will use the proceeds from the term loan and the notes to refinance existing debt, specifically its $634,863,000 of 6¾% senior notes due 2022 for which the company began a tender offer on Wednesday.

Gateway Casinos talk

Gateway Casinos & Entertainment Ltd. talked its $305 million seven-year senior secured term loan B (Ba3/BB-) with a 325 basis points spread to Libor, a 0% Libor floor at 99.75.

The deal is subject to a springing maturity, features a six month soft call at 101, and amortizes at 1% annually.

Commitments are due Tuesday.

Morgan Stanley Senior Funding, Inc., SunTrust Robinson Humphrey, Inc., BMO Capital Markets Corp., Credit Suisse AG, Goldman Sachs Lending Partners, Macquarie Capital (USA) Inc. and National Bank of Canada are the joint bookrunners and joint lead arrangers. BMO is the administrative agent.

The Burnaby, B.C.-based owner of gaming properties plans to use the proceeds, along with proceeds from an announced sale-leaseback, to repay and refinance its existing term loans, to repay its outstanding revolver, to repay the Langley mortgage, to fund a distribution to shareholders and for general corporate purposes.

Polyconcept add-on loan, repricing

Polyconcept set pricing on its fungible $20 million add-on term loan B due Aug. 16, 2023 and repricing of its $459 million term loan B due Aug. 16, 2023 at Libor plus 375 basis points, the tight end of price talk of Libor plus 375 bps to 400 bps.

Other terms are unchanged from talk.

The add-on term loan is talked with an original issue discount of 99.75 and the repricing is offered at par. The loan has a 1% Libor floor.

Goldman Sachs Bank USA, RBC Capital Markets and Natixis are the lead banks on the deal.

Proceeds from the add-on term loan will be used to add cash to the balance sheet and fund potential future tuck-in acquisitions, and the repricing will take the existing term loan down from Libor plus 475 bps with a 1% Libor floor.

Telenet tightens pricing

Telenet removed the original issue discount on its $301 million fungible add-on to its term loan B due March 2026.

The loan, designated term loan AL2, is now priced at par instead of 99.75 originally.

As before, it has a coupon of Libor plus 250 basis points with a 0% Libor floor, matching the existing loan.

Proceeds will be used to refinance the company’s senior secured notes due 2024.

Goldman Sachs, BNP Paribas, Scotia and Societe Generale are lead arrangers with Goldman on the left.

Recommitments are due Thursday.

Qdoba to launch on Thursday

Qdoba Restaurant Corp. will launch a $203 million seven-year term loan B at a meeting scheduled for 1 p.m. ET on Thursday.

Deutsche Bank and HSBC are bookrunners for the transaction with Deutsche on the left.

The loan will not have financial covenants.

Proceeds will be used to help finance the acquisition of Qdoba by funds affiliated with Apollo Global Management, LLC.

Medical Solutions prices

Medical Solutions Holdings Inc. priced its fungible $140 million incremental first-lien term loan due June 2024 with 375 basis points spread to Libor and a 1% Libor floor.

The deal was discounted to 99.75 for new money lenders.

UBS Investment Bank, Morgan Stanley & Co. and SunTrust Robinson Humphrey were the arrangers.

Proceeds from the incremental loan will be used to fund an acquisition, and the repricing will take the existing first-lien term loan down from Libor plus 425 bps with a 1% Libor floor.

KIK Custom allocates

The KIK Custom Products Inc. $804.4 million term loan B due May 15, 2023 allocated on Wednesday.

The deal came with a Libor plus 400 basis points spread, a 1% Libor floor and an original issue discount of 99.75.

Barclays, BMO Capital Markets, Nomura, Macquarie Capital (USA) Inc. and SunTrust Robinson Humphrey Inc. are the bookrunners on the deal.

Proceeds will be used to reprice an existing term loan B and extend the maturity by about nine months.

Leidos Innovations lender call

Leidos Innovations Corp. scheduled a call for current and prospective lenders for 9:30 a.m. ET on Thursday.

Citigroup will lead the loan transaction.

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