Veritext breaks; Cetera, Penn National, Boyd, Frontdoor, Vantage Specialty revisions surface

By Sara Rosenberg

New York, Aug. 14 – Veritext Corp.’s credit facilities freed to trade during Tuesday’s market hours, with the first-and second-lien term loans quoted above their original issue discounts.

Over in the primary market, Cetera Financial Group moved some funds between its first-and second-lien term loans, set spreads at the low end of guidance, and revised the original issue discount on the first-lien tranche, and Penn National Gaming Inc. increased the size of its term loan B, trimmed pricing and adjusted the original issue discount.

In addition, Boyd Corp. again reduced pricing on its second-lien term loan and modified the issue price, Frontdoor lowered the spread on its term loan B and tightened the original issue discount, and Vantage Specialty Chemicals Holdings Inc. firmed the issue price on its add-on term loan B at the narrow side of talk.

Veritext hits secondary

Veritext’s credit facilities broke for trading on Tuesday, with the $75 million delayed-draw first-lien term loan (B2/B) and $300 million seven-year first-lien term loan (B2/B) strip quoted at par bid, par ½ offered, and the $105 million eight-year second-lien term loan (Caa2/CCC+) quoted at par bid, according to a market source.

Pricing on the first-lien term loan debt is Libor plus 375 bps with a 25 bps leverage-based step-down and a 0% Libor floor, and it was sold at an original issue discount of 99.75. The term loan has 101 soft call protection for six months, and the delayed-draw term loan has a 24-month commitment period and a ticking fee of half the spread from days 61 to 120 and the full spread thereafter. The delayed-draw original issue discount will be paid to the lender of record at the time of drawing.

The second-lien term loan is priced at Libor plus 700 bps with a 25 bps leverage-based step-down and a 0% Libor floor. This tranche was issued at a discount of 99.5 and has hard call protection of 102 in year one and 101 in year two.

Veritext getting revolver

Along with the term loans, Veritext’s $520 million of senior secured credit facilities include a $40 million five-year revolver (B2/B).

During syndication, the delayed-draw term loan was upsized from $50 million and the discount on the first-lien term loan debt was modified from 99.5. Also, pricing on the second-lien term loan was reduced from Libor plus 725 bps and the discount was changed from 99.

Jefferies LLC, BNP Paribas Securities Corp. and Macquarie Capital (USA) Inc. are leading the deal that will be used to help fund the buyout of the company by Leonard Green & Partners LP.

Veritext is a Livingston, N.J.-based provider of deposition and litigation support solutions.

Cetera sets changes

Moving to the primary market, Cetera Financial Group lifted its seven-year covenant-light first-lien term loan to $825 million from $775 million, firmed pricing at Libor plus 425 bps, the low end of the Libor plus 425 bps to 450 bps talk, and adjusted the original issue discount to 99.75 from 99.5, while leaving the 0% Libor floor and 101 soft call protection for six months unchanged, a market source remarked.

Furthermore, the eight-year covenant-light second-lien term loan was scaled back to $190 million from $240 million and the spread was set at Libor plus 825 bps, the low end of the Libor plus 825 bps to 850 bps talk, the source continued. This tranche still has a 0% Libor floor, an original issue discount of 99 and call protection of 102 in year one and 101 in year two.

Also, the debt now has 50 bps MFN for life with no inside maturity carve-out.

The company’s $1,115,000,000 of credit facilities also include a $100 million five-year revolver.

Cetera being acquired

Proceeds from Cetera’s credit facilities will be used to help fund its buyout by Genstar Capital, the completion of which is subject to regulatory approvals and other customary conditions.

Allocations are expected on Wednesday, the source added.

UBS Investment Bank, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, SunTrust Robinson Humphrey Inc., Antares Capital and Jefferies LLC are leading the deal.

Leverage through the second-lien debt will be about 5.5 times.

Cetera is an El Segundo, Calif.-based network of financial advisers.

Penn National modified

Penn National Gaming raised its seven-year term loan B to $1,128,750,000 from $820 million, cut pricing to Libor plus 225 bps from Libor plus 250 bps and revised the original issue discount to 99.75 from 99.5, a market source said.

As before, the term loan has a 0% Libor floor, 101 soft call protection for six months and a ticking fee of half the spread from days 31 to 60 and the full spread from days 61 to 90.

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

Bank of America Merrill Lynch, Goldman Sachs Bank USA, Fifth Third Bank, U.S. Bank, Wells Fargo Securities LLC, Citizens Bank, SunTrust Robinson Humphrey Inc. and TD Securities (USA) LLC are leading the deal that will be used with cash and asset sale proceeds to fund the acquisition of Pinnacle Entertainment Inc. and, due to the upsizing, refinance an existing $308,750,000 term loan B due 2024.

Pinnacle is being acquired for $20 in cash and 0.42 of a share of Penn National common stock for each Pinnacle share. The transaction is valued at about $2.8 billion.

Closing is expected in the second half of 2018, subject to regulatory approvals and customary conditions.

Penn National is a Wyomissing, Pa.-based owner and manager of gaming and racing facilities and video gaming terminal operations. Pinnacle is a Las Vegas-based owner and operator of gaming entertainment properties.

Boyd reworked

Boyd cut the spread on its $315 million eight-year covenant-light second-lien term loan (CCC+) to Libor plus 675 bps from revised talk of Libor plus 700 bps and initial talk in the range of Libor plus 750 bps to 775 bps, and tightened the issue price to par from revised talk of 99.5 and initial talk of 99, according to a market source.

The second-lien term loan still has a 25 bps step-down upon completion of an initial public offering, a 0% Libor floor and call protection of 102 in year one and 101 in year two.

The company is also getting a $1.3 billion seven-year covenant-light first-lien term loan (B-) priced at Libor plus 350 bps with a 25 bps step-down upon an IPO and a 25 bps step-down at 0.5 times inside opening first-lien net leverage, a 0% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

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

Previously in syndication, the first-lien term loan was upsized from $1.2 billion and pricing was cut from Libor plus 375 bps, the second-lien term loan was downsized from $415 million, and the ticking fees were revised from half the margin from days 31 to 60 and the full margin thereafter.

Boyd lead banks

Goldman Sachs Bank USA, J.P. Morgan Securities LLC, RBC Capital Markets, Barclays, Citigroup Global Markets Inc., UBS Investment Bank, KeyBanc Capital Markets, Societe Generale and ING Capital are leading Boyd’s $1,615,000,000 of term loans, with Goldman the left lead on the first-lien loan and JPMorgan the left lead on the second-lien loan. RBC is the administrative agent.

The new debt will be used to help fund the buyout of the company by Goldman Sachs Merchant Banking from Genstar Capital.

Boyd is a Pleasanton, Calif.-based provider of highly engineered thermal management and environmental sealing solutions.

Frontdoor revised

Frontdoor trimmed pricing on its $650 million seven-year term loan B to Libor plus 250 bps from talk in the range of Libor plus 275 bps to 300 bps and changed the original issue discount to 99.75 from 99.5, according to a market source.

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

The company’s $900 million of credit facilities (Ba2/B+) also include a $250 million revolver.

J.P. Morgan Securities LLC is leading the deal that will be used with $350 million of notes to help fund the spinoff of ServiceMaster Global Holdings Inc.’s American Home Shield business.

Frontdoor is a Memphis, Tenn.-based provider of home service plans.

Vantage updated

Vantage Specialty Chemicals set the issue price on its fungible $35 million add-on senior secured covenant-light term loan B (B3) due Oct. 28, 2024 at par, the tight end of the 99.75 to par talk, and accelerated the commitment deadline to noon ET on Wednesday from noon ET on Thursday, a market source said.

The add-on term loan is priced at Libor plus 400 bps with a 1% Libor floor.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to repay revolver borrowings and fund a small acquisition.

Vantage is a Chicago-based manufacturer and distributor of specialty chemicals.

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