Tosca Services, Duff & Phelps hit secondary; Alkermes pulls term loan B transaction

By Sara Rosenberg

New York, March 6 – Tosca Services LLC reduced the size of its first-lien term loan, increased the spread, modified the Libor floor, widened the original issue discount and sweetened the call protection before breaking for trading on Friday, and Duff & Phelps’ bank debt emerged in the secondary market as well.

In more happenings, Alkermes Inc. withdrew its term loan B from market.

Tosca reworked, breaks

Tosca Services scaled back its seven-year first-lien term loan (B2/B) to $310 million from $325 million by lifting the funded piece to $280 million from $250 million and trimming the delayed-draw piece to $30 million from $75 million, according to a market source.

In addition, pricing on the term loan was flexed to Libor plus 500 basis points from talk in the range of Libor plus 450 bps to 475 bps, the Libor floor was adjusted to 1% from 0%, the original issue discount was changed to 97 from 99 and the 101 soft call protection was extended to one year from six months, the source said.

Commitments were due at 11 a.m. ET on Friday and the loan freed to trade later in the day at 97½ bid, 98½ offered, another source added.

Tosca leads

Credit Suisse Securities (USA) LLC, UBS Investment Bank, KKR Capital Markets, Rabobank and Goldman Sachs Bank USA are leading Tosca’s term loan.

The new debt will be used to help fund the acquisition of Polymer Logistics, a ready packaging systems and technologies company, from private investors and to refinance existing debt.

With the transaction, funds advised by Apax Partners, which acquired Tosca in 2017, will commit additional capital to Tosca to help fund the acquisition of Polymer.

Tosca is an Atlanta-based provider of reusable packaging supply chain solutions.

Duff & Phelps frees up

Duff & Phelps’ $1.225 billion seven-year first-lien term loan began trading in the morning, with levels quoted at 99 1/8 bid, 99 5/8 offered, a market source said.

Pricing on the term loan is Libor plus 375 bps with a 1% Libor floor and it was sold at an original issue discount of 99.

The company’s $1.75 billion equivalent of first-lien credit facilities (B2/B-) also include a $200 million revolver, and a €300 million seven-year first-lien term loan priced at Euribor plus 400 bps with a 0% floor and issued at a discount of 99.

Both term loans have 101 soft call protection for one year, and a ticking fee of half the spread for days 31 to 60 and the full spread thereafter.

Goldman Sachs Bank USA, UBS Investment Bank, BofA Securities, Inc., Morgan Stanley Senior Funding Inc., Stone Point Capital Markets, KKR Capital Markets, Capital One and Credit Suisse Securities (USA) LLC are leading the first-lien debt.

Duff second-lien

Along with the first-lien credit facilities, Duff & Phelps is getting a $450 million eight-year second-lien term loan that was privately placed, another source added.

Pricing on the second-lien term loan is Libor plus 800 bps with a 1% Libor floor. The debt has call protection of 102 in year one and 101 in year two.

Stone Point Capital Markets and Goldman Sachs Bank USA are the leads on the second-lien. Goldman is the administrative agent.

Duff being acquired

Proceeds from Duff & Phelps’ credit facilities will be used to help fund the buyout of the company by Stone Point Capital and Further Global from the Permira funds for $4.2 billion. Permira will continue to hold a significant stake in the company.

During syndication, pricing on the U.S. first-lien term loan firmed at the tight side of revised talk of Libor plus 375 bps to 400 bps and higher than initial talk of Libor plus 350 bps, pricing on the euro loan finalized at the wide end of revised talk of Euribor plus 375 bps to 400 bps and higher than initial talk of Euribor plus 350 bps, the Libor floor on the U.S. term loan was increased from 0%, the original issue discount on both term loans widened from 99.5, the call protection on both term loans was extended from six months and changes were made to the credit agreement.

Closing on the buyout is expected in the second quarter.

Duff & Phelps is a New York-based independent adviser with expertise in the areas of valuation, corporate finance, disputes and investigations, compliance and regulatory matters, and other governance-related issues.

Alkermes shelved

Alkermes removed from market its $350 million five-year senior secured covenant-lite term loan B (Ba3/BB) as a result of unfavorable market conditions, a market source remarked.

Talk on the term loan was Libor plus 225 bps with a 0% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

Morgan Stanley Senior Funding Inc. and Cowen were leading the deal that was going to be used to refinance an existing term loan B and to fund general corporate purposes.

Alkermes is a Dublin-based biopharmaceutical company.

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