Summit Materials term loan frees to trade; Element Solutions, PG&E talk surfaces

By Sara Rosenberg

New York, Nov. 30 – Summit Materials LLC’s first-lien term loan B made its way into the secondary market on Thursday, with levels quoted above its original issue discount.

Meanwhile, in the primary market, Element Solutions Inc./MacDermid Inc. and PG&E Corp. released price talk with their lender calls, and Indicor LLC joined this week’s new issue calendar.

Summit hits secondary

Summit Materials’ $1.01 billion five-year senior secured covenant-lite first-lien term loan B (Baa3/BBB-) broke for trading on Thursday, with levels quoted at par bid, par ˝ offered, according to a trader.

Pricing on the term loan is SOFR plus 250 basis points with a 0% floor and it was sold at an original issue discount of 99.75. The debt has 101 soft call protection for six months, 0 bps CSA, and ticking fees of half the margin from days 46 to 75 and the full margin thereafter.

During syndication, the term loan was upsized from $500 million, pricing was reduced from talk in the range of SOFR plus 275 bps to 300 bps and the discount was tightened from 99.5.

Morgan Stanley Senior Funding Inc., Goldmans Sachs Bank USA, RBC Capital Markets, Citigroup Global Markets Inc., Barclays and Capital One are the bookrunners on the deal. BofA is the administrative agent.

Summit buying Argos

Summit Materials will use to term loan and $800 million of senior notes to fund the cash consideration of the acquisition of Argos USA from Cementos Argos and to pay transaction fees and expenses, and the funds from the recent upsizing will be used to repay an existing term loan B due 2027.

Under the agreement, Cementos Argos will receive about $1.2 billion in cash subject to closing adjustments, and about 54.7 million shares of Summit stock, valuing Argos USA at around $3.2 billion based on Summit’s closing share price of $36.00 as of Sept. 6.

Closing on the acquisition is expected in the first quarter of 2024, subject to customary conditions, including regulatory approvals and approval by Summit Materials shareholders.

Summit Materials is a Denver-based supplier of aggregates, cement, ready-mix concrete and asphalt. Argos USA is an Alpharetta, Ga.-based cement producer.

Element launches

Moving to the primary market, Element Solutions/MacDermid held a lender call at 1:15 p.m. ET on Thursday, launching a $1 billion seven-year term loan B (BBB-) 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, a market source remarked.

Commitments are due at 5 p.m. ET on Dec. 7, the source added.

BofA Securities Inc. is the left lead on the deal that will be used with cash from balance sheet to be used to refinance the company’s existing term loan B due 2026.

Element Solutions is a Fort Lauderdale, Fla.-based diversified specialty chemicals company.

PG&E holds call

PG&E emerged in the morning with plans to hold a lender call at 1:30 p.m. ET to launch a $750 million term loan B due June 2027 talked at SOFR plus 275 bps to 300 bps with a 0.5% 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 5 p.m. ET on Monday, the source added.

JPMorgan Chase Bank is leading the deal that will be used to extend an existing term loan B from June 23, 2025.

The existing term loan B is currently sized at about $2.66 billion, but a portion of the debt is being repaid with proceeds from a $1.9 billion convertible senior secured notes offering.

The sale of the convertible notes is expected to close on Monday.

PG&E is an Oakland, Calif.-based energy company.

Indicor readies deal

Indicor set a lender call for 10 a.m. ET on Friday to launch a roughly $1.224 billion first-lien term loan Nov. 22, 2029 and a roughly €299 million first-lien term loan Nov. 22, 2029, a market source said.

Talk on the U.S. term loan is SOFR plus 400 bps with a 0.5% floor and an original issue discount of 99.75 to par, and talk on the euro term loan is Euribor plus 450 bps with a 0% floor and a discount of 99.75 to par, the source continued. Both term loans have 101 soft call protection for six months.

Commitments for the U.S. term loan are due at 5 p.m. ET on Dec. 6 and commitments for the euro term loan are due at 6 a.m. ET on Dec. 7, the source added.

UBS Investment Bank and BNP Paribas Securities Corp. are leading the deal, with UBS the left lead on the U.S. loan and BNP left on the euro loan. UBS is the administrative agent.

The loans will be used to reprice an existing U.S. term loan down from SOFR plus 450 bps with a 0.5% floor and an existing euro term loan down from Euribor plus 500 bps with a 0% floor.

Indicor is a diversified industrial solutions company providing specialized, mission-critical products for industrial manufacturers.

Atlantic allocates

In other news, Atlantic Aviation allocated its $1.069 billion first-lien term loan due 2028 that is priced at SOFR plus 350 bps with a 0.5% floor, a par issue price for existing lenders and an original issue discount of 99.75 for new money, according to a market source.

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

During syndication, pricing on the term loan firmed at the wide end of the SOFR plus 325 bps to 350 bps talk.

KKR Capital Markets is leading the deal, which will be used to reprice an existing incremental first-lien term loan down from SOFR plus 400 bps with a 0.5% floor.

Atlantic Aviation is an operator of fixed base operations, providing a full suite of critical services to the private aviation sector.

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