Pike inches up; Summit Materials, Atlantic Aviation updates emerge; Flexera, Sabert set talk

By Sara Rosenberg

New York, Nov. 29 – Pike Corp.’s term loan was a little higher in the secondary market on Wednesday as the company announced plans to repay a separate term loan tranche and the company’s ratings were upgraded by S&P Global Ratings.

Meanwhile, in the primary market, Summit Materials LLC increased the size of its first-lien term loan B, reduced the spread and tightened the original issue discount, and Atlantic Aviation finalized pricing on its first-lien term loan at the wide end of guidance.

Additionally, Flexera Software LLC and Sabert Corp. disclosed price talk on their term loan transactions in connection with their lender calls.

Pike gains

Pike’s term loan moved up by about a quarter of a point on Wednesday to par 1/8 bid, par ½ offered after news emerged that the company will be repaying an incremental term loan and ratings were lifted by S&P, according to a trader.

The term loan being repaid is due in 2028 and is priced at SOFR plus 350 basis points. This tranche was quoted at par bid, par ½ offered post repayment news, down from par 1/8 bid, par 5/8 offered, another source added.

Funds for the repayment will come from a $400 million senior notes offering, which will also be used for general corporate purposes, including repayment of borrowings outstanding under the company’s revolver.

Regarding ratings, S&P upgraded the company’s term loan and revolver to BB- from B and existing senior unsecured notes to B- from CCC+.

S&P said that the new notes transaction is viewed as leverage neutral and the belief is that the reduced senior secured debt burden results in higher recovery prospects for the company’s remaining senior secured facilities in an event of default.

Pike is a Mount Airy, N.C.-based specialty construction and engineering firm.

Summit reworked

Moving to the primary market, Summit Materials raised its five-year senior secured covenant-lite first-lien term loan B to $1.01 billion from $500 million, trimmed pricing to SOFR plus 250 bps from talk in the range of SOFR plus 275 bps to 300 bps, and adjusted the original issue discount to 99.75 from 99.5, a market source remarked.

The term loan has a 0% floor, 101 soft call protection for six months, and ticking fees of half the margin from days 46 to 75 and the full margin thereafter.

Recommitments were due at 4 p.m. ET on Wednesday and allocations are expected on Thursday, the source continued.

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

Summit adds refinancing

Due to the upsizing to the term loan, Summit Materials will now repay an existing term loan B due 2027, instead of just using loan proceeds to help fund the cash consideration of the acquisition of Argos USA from Cementos Argos and to pay transaction fees and expenses.

The existing term loan B was quoted at 99¾ bid, par ¾ offered in the secondary market on Wednesday, up from 99½ bid, par ½ offered on Tuesday, another source added.

Argos USA, an Alpharetta, Ga.-based cement producer, is being bought for about $1.2 billion in cash subject to closing adjustments, and about 54.7 million shares of Summit stock.

Other funds for the acquisition will come from $800 million of senior notes.

Closing on the acquisition is expected in the first half 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.

Atlantic sets spread

Atlantic Aviation firmed pricing on its $1.069 billion first-lien term loan due 2028 at SOFR plus 350 bps, the high end of the SOFR plus 325 bps to 350 bps talk, according to a market source.

As before, the term loan has a 0.5% floor, a par issue price for existing lenders, an original issue discount of 99.75 for new money and 101 soft call protection for six months.

Allocations are expected on Thursday, the source added.

KKR Capital Markets is leading the deal that 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.

Flexera guidance

Flexera Software held its lender call on Wednesday afternoon and announced talk on its $425 million incremental first-lien term loan due March 2028 at SOFR+CSA plus 375 bps to 400 bps with a 0.75% floor, an original issue discount of 98.5 to 99.04 and 101 soft call protection for six months, a market source said.

CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

The incremental term loan has ticking fees of half the spread from days 61 to 90 and the full spread thereafter.

Commitments are due at noon ET on Dec. 7, the source added.

Jefferies LLC, Barclays, UBS Investment Bank, Goldman Sachs Bank USA and Mizuho are leading the deal that will be used with equity to fund an acquisition.

Flexera is an Itasca, Ill.-based provider of SaaS-based IT management solutions that enable enterprises to accelerate digital transformation and multiply the value of their technology investments.

Sabert holds call

Sabert emerged in the morning with plans to hold a lender call at 2 p.m. ET to launch a $458 million covenant-lite term loan B due Dec. 10, 2026 talked at SOFR+CSA plus 375 bps with a 1% floor, a par issue price and 101 soft call protection for six months, according to a market source.

CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

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

Wells Fargo Securities LLC is the left lead on the deal that will be used to reprice an existing term loan B due Dec. 10, 2026 down from SOFR+ARRC CSA plus 450 bps with a 1% floor.

Sabert is a Sayreville, N.J.-based food packaging company.

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