Convergint breaks; Formula 1, DXP Enterprises changes emerge; Four Seasons accelerated

By Sara Rosenberg

New York, Nov. 15 – Convergint Technologies (DG Investment Intermediate Holdings 2 Inc.) increased the size of its incremental first-lien term loan and tightened the original issue discount before freeing up for trading on Tuesday.

Also, Formula 1 set the spread on its term loan B at the low end of guidance, added a pricing step-down and revised issue price talk, and DXP Enterprises Inc. downsized its incremental term loan B and modified the original issue discount.

Furthermore, Four Seasons Hotels and Resorts moved up the commitment deadline for its first-lien term loan B, and Nielsen Holdings plc (Neptune Bidco US Inc.) joined the near-term primary calendar.

Convergint reworked, frees

Convergint Technologies raised its fungible incremental first-lien term loan (B2/B) due March 31, 2028 to $145 million from $125 million and adjusted the original issue discount to 96 from 95, a market source remarked.

As before, the incremental term loan is priced at SOFR plus 475 basis points with a 0.75% floor, and has 101 soft call protection for six months.

Recommitments were due at 1 p.m. ET on Tuesday, the source continued. The original deadline was 5 p.m. ET on Tuesday, but it was accelerated to noon ET prior to the changes being announced.

The incremental term loan broke for trading in the afternoon, with levels quoted at 96¼ bid, 97 offered, another source added.

Credit Suisse Securities (USA) LLC is the left lead that will be used to repay revolver borrowings and to fund future acquisitions.

In connection with this transaction, pricing on the company’s existing $184 million incremental first-lien term loan due March 31, 2028 is being increased to SOFR plus 475 bps with a 0.75% floor from SOFR plus 425 bps with a 0.75% floor.

Convergint is a Schaumberg, Ill.-based service-based security systems integrator.

Formula 1 updated

Formula 1 set pricing on its $1.7 billion term loan B due January 2030 at SOFR plus 325 bps, the low end of the SOFR plus 325 bps to 350 bps talk, added a 25 bps step-down at 0.5x inside closing date first-lien net leverage, and changed the original issue discount talk to a range of 98.5 to 99 from a range of 97.5 to 98, according to a market source.

The term loan B still has a 0.5% floor and 101 soft call protection for six months.

Commitments are due at noon ET on Wednesday, accelerated from noon ET on Thursday, with allocations thereafter, the source added.

Goldman Sachs Bank USA, JPMorgan Chase Bank, BNP Paribas Securities Corp., BofA Securities Inc., Mizuho, NatWest, Societe Generale, TD Securities (USA) LLC, Truist, Citigroup Global Markets Inc., Credit Agricole, Morgan Stanley Senior Funding Inc., MUFG, CIBC and Credit Suisse Securities (USA) LLC are leading the deal (/BB/BB+) that will be used with a $725 million term loan A and cash on the balance sheet to refinance an existing term loan B due February 2024.

Formula 1 is a media company that is the exclusive commercial rights holder to FIA Formula One World Championship auto racing.

DXP revised

DXP Enterprises scaled back its fungible incremental term loan B (B2/B) due Dec. 23, 2027 to $105 million from $125 million and revised the original issue discount to 94.5 from talk in the range of 93 to 94, a market source said.

Pricing on the incremental term loan is SOFR+10 bps CSA plus 525 bps with a 1% floor, and the incremental and existing term loan B are getting 101 soft call protection for six months.

Commitments continued to be due at 2 p.m. ET on Tuesday, the source added.

Goldman Sachs Bank USA is leading the deal that will be used to add cash to the balance sheet to pre-fund tuck-in acquisition targets under letters of intent or committed, and to repay borrowings under an existing ABL revolving credit facility due 2027.

DXP amendment

With the incremental term loan, DXP launched an amendment to its existing term loan B to change pricing to SOFR plus 525 bps with a 1% floor from Libor plus 475 bps with a 1% floor, increase the free and clear basket under the accordion to $85 million from $52.5 million, modify the cap on cash netting to $200 million from $150 million, and revise the ratio test for unlimited distributions to 4x net secured leverage from 3.75x.

The amendment was passed by lenders.

A consent fee of 50 bps will be payable to each existing lender that consented to the amendments, other than the amendments solely to convert Libor to SOFR and/or increase the applicable margin, based on the principal amount of the existing term loan held by each existing lender.

DXP is a Houston-based distributer of maintenance, repair and operating products, equipment and services and provider of integrated pumping solutions and supply chain management services.

Four Seasons tweaks timing

Four Seasons Hotels and Resorts accelerated the commitment deadline for its $850 million seven-year senior secured first-lien term loan B (BB+) to noon ET on Thursday from noon ET on Friday, and cashless roll signature pages are now due at 5 p.m. ET on Wednesday instead of 5 p.m. ET on Thursday, according to a market source.

As before, the term loan is talked at SOFR+10 bps CSA plus 325 bps to 350 bps with a 0.5% floor, an original issue discount of 97 and 101 soft call protection for six months.

Citigroup Global Markets Inc. and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to refinance an existing senior secured first-lien term loan due November 2023 and pay related fees and expenses.

Closing is expected on Nov. 30.

Four Seasons is a Toronto-based luxury hotels company.

Nielsen on deck

Nielsen set a lender call for 11 a.m. ET on Wednesday to launch a $1.75 billion equivalent U.S. and euro term loan B due April 2029, a market source remarked.

Talk on the U.S. piece is SOFR+10 bps CSA plus 500 bps with a 0.5% floor and an original issue discount of 89 to 90, and talk on the euro piece is Euribor plus 500 bps with a 0% floor and a discount of 89 to 90, the source added.

Commitments are due at noon ET on Nov. 22.

BofA Securities Inc., Barclays, Credit Suisse, Mizuho, Citigroup Global Markets Inc., HSBC Securities, KKR Capital Markets LLC, Nomura Securities International Inc., BMO Capital Markets Corp., Goldman Sachs, Jefferies LLC, Macquarie Capital, Morgan Stanley Senior Funding Inc., RBC Capital Markets LLC, Truist Securities Inc., BNP Paribas Securities Corp., CIBC, Fifth Third Bank and MUFG are leading the deal that will help support the recently completed buyout of the company by a private equity consortium led by Evergreen Coast Capital Corp. and Brookfield Business Partners LP for $28 per share, or about $16 billion, including the assumption of debt.

Nielsen is a New York-based provider of audience measurement, data and analytics.

Fund flows

In other news, actively managed loan fund flows on Monday were negative $13 million and loan ETFs were positive $28 million, according to market sources.

Inflows for loan funds week-to-date total an estimated $138 million, sources added.

Loan indices rise

IHS Markit’s iBoxx loan indices were stronger on Monday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.24% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.28%.

Month to date, the MiLLi is up 1.1% and year to date its down 1.68%. The LLLi is up 1.21% month to date and down 2.27% year to date.

Average secondary market bids in the U.S. on Monday were 92.54, up 0.06% from the previous day and down 4.45% year to date.

According to the IHS Markit data, some of the top advancers on Monday were Cineworld’s February 2018 U.S. covenant-lite term loan at 30.23, up from 28.73, City Brewing’s April 2021 covenant-lite term loan at 60.33, up from 58.17, and Clarion Events’ February 2018 covenant-lite term loan B2 at 65.92, up from 63.75.

Some top decliners on Monday were Gopher Resource’s March 2018 covenant-lite term loan B at 59.90, down from 66, Wheel Pros’ May 2021 covenant-lite term loan at 67.35, down from 69.53, and National CineMedia’s June 2018 term loan B at 38.98, down from 40.14.

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