Rodan, American Bath, Option, Rough Country, EPIC break; Fortress, Aleris and more revised

By Sara Rosenberg

New York, June 7 – Rodan & Fields LLC widened the spread and original issue discount on its term loan B, sweetened the call protection and made a number of documentation changes before freeing up for trading on Thursday.

Also, American Bath Group LLC changed the leverage-based step-down on its term loan debt, Option Care (HC Group Holdings III Inc.) firmed the spread on its term loan at the low end of guidance and Rough Country reduced the size of its add-on term loan, and then these deals made their way into the secondary market too, as did EPIC Y-Grade Services LP.

In more happenings, Fortress Investment Group (FinCo I LLC) lifted pricing on its term loan B and eliminated the ratings-based step-down, Aleris International Inc. revised the spread and call protection on its term loan, and EVO Payments International LLC increased the spread on its term loan B.

Furthermore, Lyons Magnus Inc. and Southern Graphics Inc. set pricing on their term loans at the high end of talk, TransUnion Inc. accelerated the commitment deadline on its term loan B-3, and PowerSchool Group LLC moved up timing on its credit facilities.

Lastly, Harsco Corp. and Exela Intermediate LLC announced price talk with launch, and Savage Enterprises LLC, Dhanani Group Inc. and Screenvision LLC joined the near-term primary calendar.

Rodan & Fields reworked

Rodan & Fields increased pricing on its $600 million seven-year covenant-light term loan B to Libor plus 400 bps from Libor plus 275 bps, revised the original issue discount to 99 from 99.5, extended the 101 soft call protection to one year from six months and removed the sunset and certain other exceptions to the MFN provision, a market source remarked. The 0% Libor floor was unchanged.

Additional changes included adding a cap of 20% to the amount of certain specified addbacks to consolidated EBITDA relating to pro forma synergies, cost savings and operating expense reductions, reducing the ratio levels for certain leverage ratio-based baskets for investments and restricted payments to 2 times secured net leverage, and reducing the leverage ratios applicable to the sweep step-down with respect to the excess cash flow sweep to 50% above 1.5 times secured net leverage, stepping down to 25% between 1.25 times and 1.5 times secured net leverage and 0% below 1.25 times secured net leverage, the source continued.

Also, the company removed the sweep step-downs for the asset sale sweep, added a requirement for quarterly lender calls, made changes to the definitions of permitted ratio debt and available incremental amount, which will be $225 million without any grower and unlimited first-lien amount subject to 2 times first-lien net leverage, and eliminated the market capitalization-based prong of the basket for restricted payments made after a qualifying initial public offering.

Rodan hits secondary

Recommitments were due at 3 p.m. ET, and by late Thursday, Rodan & Fields’ term loan B freed to trade, with levels quoted at 99¾ bid, par ¾ offered, another source added.

Along with the term loan B, the company’s $800 million of senior secured credit facilities (B1/BB) include a $200 million five-year revolver.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Citizens Bank and MUFG are leading the deal that will be used to refinance existing credit facilities and pay a dividend to shareholders, excluding TPG.

Closing is expected in mid-June.

Rodan & Fields is a San Francisco-based producer of skincare products.

American Bath tweaked, trades

American Bath Group revised the 25 bps pricing step-down on its $50 million incremental first-lien term loan (B2/B) due Sept. 30, 2023 and repriced $582 million first-lien term loan (B2/B) due Sept. 30, 2023 to be subject to 3.75 times net first-lien leverage instead of 4 times net first-lien leverage, a market source remarked.

Pricing on the term loan debt remained at Libor plus 425 bps with a 1% Libor floor. The incremental loan still has an original issue discount of 99.5, the repricing still has a par issue price and all of the debt still includes 101 soft call protection for six months.

During the session, the term loan debt broke for trading, with levels quoted at par ¼ bid, 101 offered, the source added.

Credit Suisse Securities (USA) LLC is the left lead on the deal.

The incremental loan will be used to fund a distribution to shareholders and the repricing will take the existing term loan down from Libor plus 525 bps with a 1% Libor floor.

American Bath is a Savannah, Tenn.-based designer and manufacturer of fiberglass reinforced plastic, sheet molded compound and acrylic bathtubs and showers.

Option Care firms, frees up

Option Care set pricing on its $404 million covenant-light term loan B (B2/B-) due April 7, 2022 at Libor plus 375 bps, the low end of the Libor plus 375 bps to 400 bps talk, and left the 0% Libor floor, par issue price and 101 soft call protection for six months unchanged, according to a market source.

The debt then began trading on Thursday, with levels seen at par ¼ bid, 101 offered, a trader added.

Bank of America Merrill Lynch is leading the deal that will be used to refinance an existing term loan B.

Option Care is a provider of home and alternate treatment site infusion therapy services.

Rough Country downsized, breaks

Rough Country scaled back its fungible add-on first-lien term loan to $66.5 million from $77 million that will be used to help repay an existing $85 million second-lien term loan because the decision was made to use more cash on the balance sheet and revolver borrowings for the paydown since cash generation was stronger than expected, according to a market source.

Pricing on the add-on loan is Libor plus 375 bps with a leverage-based step-down to Libor plus 350 bps and a 1% Libor floor, in line with existing term loan pricing, and the add-on is being issued at talk at an original issue discount of 99.5.

After terms finalized, the add-on loan freed to trade and levels were quoted at par 1/8 bid, par ¾ offered, the source said.

Golub Capital is leading the deal.

Including the add-on, the first-lien term loan will total about $260 million.

Rough Country is a Dyersburg, Tenn.-based supplier of aftermarket suspension lift kits and components to the off-road SUV and light truck enthusiast market.

EPIC starts trading

EPIC Y-Grade Services’ credit facilities surfaced in the secondary, with the $650 million seven-year term loan B (B3/B) quoted in the 98 bid, 99 offered area, a market source said.

Pricing on the term loan is Libor plus 550 bps with a 0% Libor floor and it was sold at an original issue discount of 98. The debt has call protection of 102 in year one and 101 in year two.

During syndication, pricing on the term loan was increased from Libor plus 500 bps, the discount was changed from 99 and the call protection was revised from a 101 soft call for six months.

The company’s $690 million of credit facilities also include a $40 million five-year super-priority revolver (Ba3).

UBS Investment Bank and Deutsche Bank Securities Inc. are leading the deal that will be used to fund the buildout of EPIC Y-Grade Pipeline, which will consist of 700 miles of Y-grade pipeline from the Permian and Eagle Ford Basins to Corpus Christi, Texas, and two Y-grade fractionators in Corpus Christi, currently under construction.

Fortress modifies deal

Back in the primary market, Fortress Investment raised pricing on its $1.2 billion covenant-light term loan B (BB) due Dec. 27, 2022 to Libor plus 200 bps from Libor plus 175 bps and removed the 25 bps step-down if corporate ratings from any two of S&P Global Ratings, Moody’s Investors Service and Fitch Ratings were investment grade, according to a market source.

As before, the term loan has a 0% Libor floor, a par issue price and 101 soft call protection for six months.

Allocations are targeted for Friday, the source said.

Deutsche Bank Securities Inc. is leading the deal that will be used to reprice an existing term loan B down from Libor plus 250 bps with a 0% Libor floor.

The size of the repriced term loan B represents a $197 million pay down on the existing loan from cash on the balance sheet.

Fortress is a New York-based alternative asset management firm.

Aleris revisions emerge

Aleris International lifted pricing on its $1.1 billion covenant-light first-lien term loan (B3/B-) due February 2023 to Libor plus 475 bps from Libor plus 450 bps and extended the 101 soft call protection to one year from six months, while keeping the 0% Libor floor and original issue discount of 99 intact, a market source remarked.

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Barclays and J.P. Morgan Securities LLC are leading the deal that will be used with cash on hand and $400 million in notes to redeem 7 7/8% senior notes due 2020 and 9½% senior secured notes due 2021 and to repay some ABL facility borrowings.

Commitments are due at 2 p.m. ET on Friday and allocations are expected thereafter, the source continued.

Aleris documentation changes

Regarding documentation, under Aleris’ incremental, the credit facility basket was lowered to $75 million from $150 million, the general basket was cut to $50 million from $150 million and the foreign subsidiary basket was trimmed to $100 million from $175 million, and under restricted payments, the starter basket can not be used for dividends, stock repurchase or exchangeable notes buybacks, and there can be no dividends, stock repurchases or exchangeable notes buybacks when leverage is greater than 5 times.

Also, under investments, the general investment basket was reduced to $150 million from $250 million, the joint venture basket was trimmed to $0 million from $150 million and 50% of the general basket can be used for unrestricted subsidiaries, the source added.

Additionally, for investments in a Chinese/Asian subsidiary, if it’s an unrestricted subsidiary the maximum is $100 million, if it’s a restricted subsidiary the maximum amount is $250 million and the investment is limited in scope to the existing facility, and, under asset sale reinvestment, for all asset sales, at least 80% of proceeds must be in cash, 80% of the value of the proceeds must repay debt in30 days, and the remaining 20% is subject to 365-day reinvestment rights, down from 450 days.

Aleris is a Cleveland-based manufacturer and seller of aluminum rolled products.

EVO lifts pricing

EVO Payments widened pricing on its $659.6 million senior secured covenant-light term loan B (B2/B) due December 2023 to Libor plus 325 bps from talk in the range of Libor plus 275 bps to 300 bps, a market source said.

As before, the term loan has a 25 bps step-down upon achievement of B1/B+ corporate ratings, a 0% Libor floor, a par issue price and 101 soft call protection for six months.

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

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

Closing is expected in mid-June.

EVO Payments is an Atlanta-based payments processor and acquirer for merchants, independent sales organizations, financial institutions, government organizations and multinational corporations.

Lyons updated

Lyons Magnus firmed pricing on its fungible $15 million incremental covenant-light first-lien term loan due Nov. 14, 2024 and repricing of its existing $195 million covenant-light first-lien term loan due Nov. 14, 2024 at Libor plus 375 bps, the high end of the Libor plus 350 bps to 375 bps talk, according to a market source.

The term loan debt still has a 25 bps step-down at 3.35 times net first-lien leverage, a 1% Libor floor and 101 soft call protection for six months, the incremental loan still has an original issue discount of 99.875 and the repricing still has a par issue price.

RBC Capital Markets is leading the deal.

The incremental loan will be used to repay $15 million of the company’s second-lien term loan and the repricing will take the existing term loan down from Libor plus 425 bps with a 25 bps step-down and a 1% Libor floor.

Lyons Magnus, a Paine Schwartz Partners portfolio company, is a developer, manufacturer and marketer of fruit and flavor solutions for the foodservice, health care and industrial dairy channels.

Southern Graphics finalized

Southern Graphics set pricing on its $574 million covenant-light term loan B (B1/B) due Dec. 31, 2022 at Libor plus 325 bps, the high end of the Libor plus 300 bps to 325 bps talk, a market source remarked.

The term loan still has a 0% Libor floor, a par issue price and 101 soft call protection for six months.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Deutsche Bank Securities Inc. are leading the deal that will be used to refinance an existing term loan B priced at Libor plus 350 bps with a 0% Libor floor.

Southern Graphics is a Louisville, Ky.-based provider of design-to-print graphics services to the consumer products packaging industry.

TransUnion moves deadline

TransUnion accelerated the commitment deadline on its $1.4 billion seven-year covenant-light term loan B-3 to 5 p.m. ET on Thursday from noon ET on Friday, a market source said.

Commitments for the company’s $400 million term loan A due August 2022 continue to be due at noon ET on Friday, the source added.

Talk on the term loan B-3 is Libor plus 225 bps with a 0% Libor floor, a discount of 99.5 to 99.75 and 101 soft call protection for six months, and talk on the term loan A is Libor plus 175 bps with a 0% Libor floor and an original issue discount of 99.75.

Deutsche Bank Securities Inc., RBC Capital Markets, Bank of America Merrill Lynch and Capital One are leading the $1.8 billion in term loans (Ba2/BB+).

TransUnion funding acquisitions

Proceeds from TransUnion’s term loans will be used to finance the acquisitions of Callcredit Information Group Ltd., a Leeds, U.K.-based consumer credit bureau, for £1 billion, iovation, a Portland, Ore.-based provider of device-based information, and Healthcare Payment Specialists, a Fort Worth, Texas-based company that helps health care providers optimize Medicare reimbursement.

Closing on the Callcredit and iovation transactions is expected late in the second quarter or early in the third quarter, subject to regulatory approval, and closing on the Healthcare Payment acquisition from Nautic Partners is expected in the second quarter, pending regulatory approval.

TransUnion is a Chicago-based provider of information management and risk management services.

PowerSchool accelerated

PowerSchool moved up the commitment deadline on its $1.26 billion of credit facilities to 5 p.m. ET on Monday from 5 p.m. ET on June 14, a market source remarked.

The facilities consist of a $120 million five-year revolver (B2), a $775 million seven-year first-lien term loan (B2) and a $365 million eight-year second-lien term loan (Caa2).

Talk on the first-lien term loan is Libor plus 325 bps to 350 bps with a 0% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, and talk on the second-lien term loan is Libor plus 675 bps to 700 bps with a 0% Libor floor, a discount of 99 and call protection of 102 in year one and 101 in year two.

Barclays, Credit Suisse Securities (USA) LLC, Macquarie Capital (USA) Inc., Ares, Golub and Jefferies LLC are leading the deal, with Barclays left on the first-lien and Credit Suisse left on the second-lien.

PowerSchool being purchased

Proceeds from PowerSchool’s credit facilities will be used to help fund its buyout by Onex Corp. and Vista Equity Partners. Vista is the current owner of the company but will invest new capital in the business with the purchase of a stake by Onex.

Concurrently with the Onex/Vista transaction, PowerSchool will acquire PeopleAdmin, a provider of cloud-based talent management solutions for the education sector.

Closing is expected in the second half of this year, subject to customary conditions and regulatory approvals.

PowerSchool is a Folsom, Calif.-based education technology platform for K-12 schools.

Harsco releases guidance

Also on the new deal front, Harsco held its lender call on Thursday, launching its $545 million senior secured term loan B due December 2024 at talk of Libor plus 225 bps to 250 bps with a 1% Libor floor, a par issue price and 101 soft call protection for six months, according to a market source.

Commitments are due on Wednesday, the source said.

Goldman Sachs Bank USA, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Bank of America Merrill Lynch, RBC Capital Markets, U.S. Bank and KeyBanc Capital Markets are leading the deal that will be used to reprice an existing term loan down from Libor plus 300 bps with a 1% Libor floor.

Along with the repricing, the company plans to increase the amount of its revolving credit commitments by as much as $100 million to $500 million.

Harsco is a Camp Hill, Pa.-based diversified industrial company providing a range of onsite services and engineered products to the global steel, energy and railway sectors.

Exela discloses talk

Exela came out with talk of Libor plus 650 bps with a 1% Libor floor, a par issue price and 101 soft call protection for six months on its $346 million term loan B (B3/B) that launched with an afternoon call, a market source said.

Commitments are due at 5 p.m. ET on June 19, the source added.

RBC Capital Markets is the left lead on the deal that will be used to reprice an existing term loan down from Libor plus 750 bps with a 1% Libor floor.

Exela in an Irving, Texas-based business process automation company.

Savage coming soon

Savage Enterprises scheduled a lender presentation for 2:30 p.m. ET on Tuesday to launch $1.5 billion of senior secured credit facilities, according to a market source.

The facilities consist of a $400 million ABL revolver and a $1.1 billion term loan B, the source said.

Morgan Stanley Senior Funding Inc., Wells Fargo Securities LLC, PNC Capital Markets LLC and Citigroup Global Markets Inc. are leading the deal that will be used to fund the acquisition of Bartlett and Co. and pay related fees and expenses.

Closing is expected in August.

Savage is a Salt Lake City-based supply chain provider. Bartlett is a Kansas City, Mo.-based grain and milling firm.

Dhanani joins calendar

Dhanani Group emerged with plans to hold a lender call at noon ET on June 14 to launch a $420 million seven-year covenant-light term loan B that has 101 soft call protection for six months, a market source remarked.

Commitments are due at noon ET on June 22, the source added.

Wells Fargo Securities LLC is the left lead on the deal, which will be used to refinance existing debt, to help fund proposed tuck-in acquisitions and for general corporate purposes.

Dhanani is a Burger King, Popeyes and La Madeleine franchisee.

Screenvision on deck

Screenvision set a bank meeting for 12:30 p.m. ET in New York on Tuesday to launch a $175 million seven-year covenant-light first-lien term loan that includes a 0% Libor floor and 101 soft call protection for six months, according to a market source.

Commitments are due at noon ET on June 26, the source said.

Deutsche Bank Securities Inc. is leading the deal that will be used to help fund the acquisition of a controlling stake in the company by Abry Partners. The company’s existing owners, Shamrock Capital and AMC Entertainment, will maintain minority stakes.

Closing is expected this summer.

Screenvision is a New York-based provider of cinema advertising, on-screen advertising, in-lobby promotions and integrated marketing programs.

Dental Corp. closes

In other news, Dental Corp. of Canada Inc. closed on its $925 million of credit facilities, split between a $50 million revolver (B2/B-), a $500 million seven-year first-lien term loan (B2/B-), a $125 million seven-year delayed-draw first-lien term loan (B2/B-), a $200 million eight-year second-lien term loan (Caa2/CCC) and a $50 million eight-year delayed-draw second-lien term loan (Caa2/CCC).

Pricing on the first-lien term loan debt is Libor plus 375 bps with a 0% Libor floor, and it was sold at an original issue discount of 99.75. The loan has 101 soft call protection for six months.

The second-lien term loan debt is priced at is Libor plus 750 bps with a 0% Libor floor and was issued at a discount of 99. This tranche has hard call protection of 102 in year one and 101 in year two.

The delayed-draw availability is 24 months.

During syndication, the discount on the first-lien term loan debt was revised from 99.5, ticking fees on the delayed-draw first-and second-lien term loans were changed to half the spread from days 31 to 60 and the full spread thereafter from half the spread from days 61 to 120 and the full spread thereafter, and a requirement was added for the company to provide management discussion and analysis and hold quarterly calls.

Dental funds buyout

Proceeds from Dental Corp.’s credit facilities were used to help fund its acquisition by L Catterton and refinance existing debt.

Imperial Capital Group Ltd. and OPTrust Private Markets Group, together with management and Dental Corp.’s dentist shareholders, continue to hold a significant equity interest in the company.

Jefferies LLC, CIBC and TD Securities (USA) LLC led the debt.

Dental Corp. is a network of general and specialist dental clinics in Canada.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.