Franchise Group breaks; Brazos Midstream changes emerge; NielsenIQ, Atlas Air set talk

By Sara Rosenberg

New York, Jan. 31 – Franchise Group Inc. increased the size of its add-on first-lien term loan and firmed the original issue discount at the tight end of guidance, and then the debt made its way into the secondary market on Tuesday.

Also, Brazos Midstream (Brazos Delaware II LLC) lowered the spread on its term loan B and modified the issue price, and NielsenIQ and Atlas Air Worldwide released price talk on their term loan transactions with launch.

Franchise tweaked, trades

Franchise Group raised its non-fungible add-on first-lien term loan due March 10, 2026 to $300 million from $200 million and set the original issue discount at 95, the tight end of the 94 to 95 talk, according to a market source.

As before, the add-on term loan is priced at SOFR+CSA plus 475 basis points with a 0.75% floor and has 101 soft call protection for six months. CSA is 11.4 bps one-month rate, 26.2 bps three-month rate and 42.8 bps six-month rate.

On Tuesday, the add-on term loan freed to trade, with levels quoted at 95¼ bid, 96¼ offered, a trader added.

JPMorgan Chase Bank is leading the deal that will be used to repay ABL credit facility borrowings.

Franchise Group is a Delaware, Ohio-based owner and operator of franchised and franchisable businesses.

Brazos flexes

Brazos Midstream trimmed pricing on its $800 million seven-year senior secured term loan B (B1/B+) to SOFR plus 375 bps from talk in the range of SOFR plus 400 bps to 425 bps and adjusted the original issue discount to 99 from talk in the range of 98 to 98.5, a market source said.

The term loan still has a 0.5% floor, 101 soft call protection for six months and no CSA.

Recommitments are due at noon ET on Wednesday, the source added.

Barclays, Jefferies LLC, Bank of Oklahoma and Cadence Bank are leading the deal that will be used to refinance an existing term loan B due 2025.

Brazos is a Fort Worth-based natural gas gathering and processing and crude gathering company servicing producers in the Southern Delaware Basin.

NielsenIQ guidance

NielsenIQ came out with price talk on its $1.475 billion incremental term loan B due March 2028 and $500 million equivalent euro incremental term loan B due March 2028 in connection with its lender call in the morning, according to a market source.

Talk on the U.S. term loan is SOFR plus 600 bps with a 0.5% floor and an original issue discount of 92 to 93, and talk on the euro term loan is Euribor plus 600 bps with 25 bps step-downs at 0.5x and 1x inside opening first-lien net leverage, a 0% floor and a discount of 92 to 93, the source said. 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 Feb. 9, and commitments for the euro term loan are due at noon ET on Feb. 9.

JPMorgan Chase Bank, UBS Investment Bank, BofA Securities Inc., BMO Capital Markets, BNP Paribas Securities Corp., Fifth Third, HSBC Securities, MUFG, RBC Capital Markets, Standard Chartered and Santander are the bookrunners on the deal. BofA is the agent.

NielsenIQ buying GfK

NielsenIQ will use the new term loan debt (B2/B) to fund the acquisition of GfK SE, to repay revolver borrowings and for general corporate purposes.

Advent International will be the majority shareholder in the combined company, while Nuremberg Institute for Market Decisions and KKR will remain invested as significant shareholders in the combined company. Advent acquired NielsenIQ in a transaction that closed in 2021. Nuremberg Institute and KKR are current investors in GfK.

Closing is expected early this year, subject to customary conditions.

NielsenIQ is a Chicago-based information services company. GfK is a provider of data and insights to drive marketing, sales and organizational effectiveness.

Atlas Air talk

Atlas Air launched on its morning call its $800 million seven-year first-lien term loan B (Ba1/BB/BB+) at talk of SOFR plus 425 bps with a 0% floor, an original issue discount of 95 to 96 and 101 soft call protection for six months, a market source remarked.

Commitments are due on Feb. 9, the source added.

Goldman Sachs Bank USA, Barclays, Apollo Capital Management, Mizuho Bank and Credit Agricole are leading the deal that will be used with $800 million of other first-lien senior secured debt and equity to fund the buyout of the company by Apollo, J.F. Lehman & Co. and Hill City Capital for $102.50 per share in cash. The transaction has an enterprise valuation of about $5.2 billion.

Closing is expected this quarter, subject to customary conditions and receipt of regulatory approvals.

Atlas Air is a Purchase, N.Y.-based provider of outsourced aircraft and aviation operating services.

Fund flows

In other news, actively managed loan fund flows on Monday were negative $250 million and loan ETFs were flat, market sources said.

Outflows for loan funds week-to-date total an estimated $351 million, following outflows in the prior week of $287 million, sources added.

Loan indices rise

IHS Markit’s iBoxx loan indices were stronger on Monday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.08% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.05%.

Month to date, the MiLLi is up 2.57% and the LLLi is up 2.63%.

Average secondary market bids in the U.S. on Monday were 92.58, up 0.01% from the previous day and up 0.75% year to date.

According to the IHS Markit data, some of the top advancers on Monday were City Brewing’s April 2021 covenant-lite term loan at 44, up from 40.75, West Marine’s June 2021 covenant-lite term loan at 49.67, up from 46, and Cyxtera’s May 2017 covenant-lite term loan at 80.83, up from 77.76.

Some top decliners on Monday were Cano Health’s January 2022 covenant-lite term loan at 77.25, down from 81.70, 888 Holdings’ June 2022 term loan B at 86.83, down from 90.67, and QualTek’s July 2018 covenant-lite term loan at 59.33, down from 60.75.

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