HUB, Avolon, Covanta, Phinia, Bowlero break; RxBenefits, Samsonite accelerate deadlines

By Sara Rosenberg

New York, June 8 – HUB International Ltd. increased the size of its term loan B, added a ratings-based pricing step-down and modified the issue price, Avolon upsized its first-lien term loan B-6, and Covanta Holding Corp. lowered pricing on its term loan B and term loan C and revised the original issue discount on the tranches, and then these deals made their way into the secondary market on Thursday.

Also, before breaking for trading, Phinia Inc. downsized its term loan B, and widened the spread and issue price, and Bowlero Corp. lifted the size of its add-on term loan and set the original issue discount at the tight end of guidance.

In more happenings, RxBenefits Inc. (RXB Holdings Inc.) and Samsonite International SA moved up the commitment deadlines for their term loans, and EG Group joined the near-term calendar with an amendment and extension transaction.

HUB reworked, frees

HUB International raised its seven-year term loan B (B2/B) to $4.75 billion from $4.25 billion, added a 25 bps pricing step-down at B2/B corporate credit ratings and adjusted the original issue discount to 99 from talk in the range of 98 to 98.5, according to a market source.

Currently, the company’s corporate credit ratings are B3/B.

The term loan is still priced at SOFR plus 425 bps, with a 0.75% floor, and still has a 25 bps step-down upon an initial public offering and 101 soft call protection for six months.

Recommitments were due at 1:30 p.m. ET on Thursday and the term loan began trading later in the day, with levels quoted at 99 3/8 bid, 99 5/8 offered, another source added.

Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., Barclays, JPMorgan Chase Bank, BofA Securities Inc., BMO Capital Markets, Nomura, Macquarie Capital (USA) Inc., Credit Suisse Securities (USA) LLC and ATB are leading the deal. Morgan Stanley is the administrative agent.

The term loan will be used with $2.175 billion of senior secured notes, downsized from $2.675 billion, to refinance existing term loans due 2025 and fund current and future acquisitions under letters of intent.

HUB, a Hellman & Friedman portfolio company, is a Chicago-based insurance brokerage firm.

Avolon upsized, hits secondary

Avolon lifted its senior secured covenant-lite first-lien term loan B-6 due June 2028 to $1,681,768,173.13 from $1,431,768,173.13, according to a market source.

Pricing on the term loan remained at SOFR plus 250 bps with a 0.5% floor and an original issue discount of 99, and the debt still has 101 soft call protection for six months.

Recommitments were due at 2:30 p.m. ET on Thursday and the term loan B-6 freed up late in the day, with levels quoted at 99¼ bid, 99½ offered, a trader added.

Morgan Stanley Senior Funding Inc. and Wells Fargo Securities LLC are leading the deal that will be used to amend and extend an existing $1,431,768,173.13 term loan B-3 due January 2025 priced at Libor plus 175 bps, and funds from the upsizing will be used for general corporate purposes.

Closing is expected in mid-June.

Avolon is a Dublin-based aircraft lessor.

Covanta flexed, breaks

Covanta trimmed the spread on its non-fungible $400 million sustainability linked term loan B due Nov. 30, 2028 and non-fungible $30 million sustainability linked term loan C due Nov. 30, 2028 to SOFR plus 300 bps from SOFR plus 325 bps, and changed the original issue discount to 99 from talk in the range of 98 to 98.5, according to a market source.

As before, the term loans, which will trade as a strip, have a 12.5 bps coupon increase for each key performance indicator not met by the observation date of Dec. 31, 2025, a 0.5% floor and 101 soft call protection for six months.

Recommitments were due at noon ET on Thursday and the strip of term loan debt freed to trade in the afternoon, with levels quoted at 99 3/8 bid, 99 7/8 offered, another source added.

Barclays is the left lead on the $430 million of term loans (Ba2/BB) that will be used to reimburse a portion of EQT Infrastructure’s initial equity contribution in relation to the acquisition of Circon Holdings Inc. from Kinderhook Industries and to enhance liquidity.

Covanta, an EQT portfolio company, is a Morristown, N.J.-based waste to energy company, providing an environmentally sustainable solution for waste disposal. Circon is a La Porte, Tex.-based provider of environmental services.

Phinia revised, trades

Phinia scaled back its term loan B to $425 million from $500 million, lifted pricing to SOFR plus 400 bps from SOFR plus 375 bps, changed the original issue discount to 96 from talk in the range of 98.5 to 99 and shortened the maturity to five years from seven years, a market source said.

The term loan B still has 10 bps CSA, a 0.5% floor, 101 soft call protection for six months and a ticking fee of the full margin plus SOFR starting on June 19.

On Thursday, the term loan B began trading, with levels quoted at 96½ bid, 97½ offered, another source added.

JPMorgan Chase Bank, BofA Securities Inc., PNC Bank, US Bank and Wells Fargo Securities LLC are leading the deal. BofA is the administrative agent.

The company is also getting a $500 million revolver and a $300 million term loan A.

The credit facilities will be used to help fund the spinoff of the company from BorgWarner Inc.

Closing is expected this year, subject to customary conditions.

Phinia is an Auburn Hills, Mich.-based provider of fuel systems, starters and alternators to the commercial vehicle, light vehicle, and aftermarket end markets.

Bowlero modified, frees

Bowlero increased its fungible add-on term loan due February 2028 to $250 million from $150 million and firmed the original issue discount at 98.25, the tight end of the 97.75 to 98.25 talk, according to a market source.

The add-on term loan is priced at SOFR plus 350 bps with a 0% floor, and has 101 soft call protection until Aug. 8.

During the session, the add-on term loan broke for trading, with levels quoted at 98 5/8 bid, 99 1/8 offered, another source added.

JPMorgan Chase Bank is leading the deal that will be used to fund the acquisition of Lucky Strike Entertainment LLC for about $90 million, to pay down revolver borrowings and, as a result of the upsizing, for general corporate purposes.

Closing on the acquisition is expected in the first half of Bowlero’s fiscal year 2024, subject to customary conditions.

Bowlero is a Mechanicsville, Va.-based operator of bowling centers. Lucky Strike is an upscale bowling company.

RxBenefits tweaks timing

RxBenefits accelerated the commitment deadline for its non-fungible $150 million add-on first-lien term loan (B3/B) due Dec. 18, 2027 to noon ET on Friday, with allocations expected thereafter, from 5 p.m. ET on Wednesday, a market source remarked.

The add-on term loan continues to be talked at SOFR plus 525 bps with a 0.75% floor, an original issue discount of 97.5 and 101 soft call protection for six months.

Barclays, Deutsche Bank Securities Inc. and Goldman Sachs Bank USA are leading the deal that will be used with balance sheet cash to repay an existing second-lien term loan.

Advent International and Great Hill Partners are the sponsors.

RxBenefits is a Birmingham, Ala.-based pharmacy benefits optimizer for the employee benefit industry.

Samsonite accelerated

Samsonite moved up the commitment deadline for its $600 million seven-year term loan B (Ba1/BB+/BBB-) to 5 p.m. ET on Thursday from 5 p.m. ET on Monday, a market source said.

Talk on the term loan is SOFR plus 275 bps with a 0.5% floor, an original issue discount of 98.5 to 99 and 101 soft call protection for six months.

JPMorgan Chase Bank is the left lead on the term loan B.

Along with the term loan B, the company is getting an $800 million term loan A priced at SOFR plus 137.5 bps and an $850 million revolver.

HSBC Securities (USA) Inc. is the left lead on the term loan A and revolver, and syndication of those tranches has already been completed.

Proceeds will be used with cash on hand to refinance the company’s existing senior secured credit facilities.

Samsonite is a Hong Kong-based manufacturer of bags and luggage.

EG Group on deck

EG Group set a lender call for 9:30 a.m. ET on Monday to launch a $2.791 billion first-lien term loan B due February 2028, a €2.117 billion first-lien term loan B due February 2028, a £600 million first-lien term loan B due February 2028 and a A$378 million first-lien term loan B due February 2028, according to a market source.

Small group question and answer meetings will be available for the transaction from Monday through June 15.

Commitments are due on June 21, the source added.

Barclays is leading the deal that will be used to amend and extend existing U.S., euro, GBP and AUD first-lien term loans due February 2025, and an existing U.S. first-lien term loan due March 2026.

EG Group is a Blackburn, U.K.-based convenience retail and fuel station company.

Fund flows

In other news, actively managed loan fund flows on Wednesday were negative $26 million and loan ETFs were positive $46 million, market sources remarked.

The leveraged loan asset class is tracking its second weekly inflow in the last 42 weeks, sources added.

Loan indices rise

IHS Markit’s iBoxx loan indices were stronger on Wednesday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.15% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.16%.

Month to date, the MiLLi is up 0.64% and year to date it is up 4.56%, and the LLLi is up 0.76% month to date and up 4.63% year to date.

Average secondary market bids in the U.S. on Wednesday were 91.13, up 0.14% from the previous day and down 0.82% year to date.

According to the IHS Markit data, some of the top advancers on Wednesday were EyeCare Partners’ November 2021 second-lien covenant-lite term loan at 71.33, up from 63.33, Heritage Power’s July 2019 term loan at 25, up from 22.21, and Cineworld’s September 2019 incremental RSA/backstop with rights covenant-lite term loan at 30.19, up from 27.30.

Some top decliners on Wednesday were Cyxtera’s May 2017 covenant-lite term loan at 46.67, down from 54, Air Methods’ April 2017 covenant-lite term loan B at 42.33, down from 44.14, and Correct Care Solutions’ September 2018 covenant-lite term loan at 67.44, down from 70.

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