Organon, Michaels, One Call break; Quikrete, Russell Investments, ImageFirst disclose talk

By Sara Rosenberg

New York, April 8 – Organon & Co. increased the size of its U.S. term loan B, decreased the size of its euro term loan B, canceled plans for a term loan A and set the original issue discount on the term loan B debt at the tight end of talk before freeing up for trading on Thursday.

Also, before breaking for trading, Michaels Cos. Inc. upsized its first-lien term loan and finalized the spread at the low end of guidance, and One Call Corp. made some changes to documentation for its first-lien term loan B.

In more happenings, Quikrete Holdings Inc., Russell Investments US Institutional Holdco Inc. and ImageFirst Holdings LLC released price talk with launch, and Aptean and Signature Aviation plc joined the near-term primary calendar.

Organon restructures

Organon lifted its U.S. seven-year term loan B to $3 billion from $2 billion, scaled back its euro seven-year term loan B to €750 million from $1 billion equivalent and eliminated plans for a $2 billion term loan A, according to a market source.

The company also upsized its U.S. senior secured notes to $2.1 billion from $2 billion, its euro senior secured notes to €1.25 billion from $1 billion equivalent and its senior unsecured notes to $2 billion from $1.5 billion to assist in the term loan A elimination.

In addition, the original issue discount on the U.S. and euro term loans finalized at 99.5, the tight end of the 99 to 99.5 talk, the source said.

As before, the U.S. term loan is priced at Libor plus 300 basis points with a 0.5% Libor floor, the euro term loan is priced at Euribor plus 300 bps with a 0% floor and both term loans have 101 soft call protection for six months.

Organon hits secondary

On Thursday, Organon’s bank debt broke for trading, with the U.S. term loan B quoted at 99¾ bid, par 1/8 offered, a trader added.

JPMorgan Chase Bank, Morgan Stanley Senior Funding Inc., BofA Securities Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA and HSBC Securities (USA) Inc. are leading the deal.

The new loans and bonds will be used to help fund the creation of the company through the spinoff of Merck’s women’s health, legacy brands and biosimilars businesses.

Organon is a Jersey City, N.J.-based pharmaceutical company that develops and delivers health solutions through a portfolio of prescription therapies within women’s health, biosimilars and established brands.

Michaels updated

Michaels raised its seven-year covenant-lite first-lien term loan (Ba3/B) to $1.95 billion from $1.8 billion and set pricing at Libor plus 425 bps, the low end of the Libor plus 425 bps to 450 bps talk, a market source remarked.

The term loan still has a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

The company’s now $2.95 billion of credit facilities also include a $1 billion ABL revolver.

Credit Suisse Securities (USA) LLC, Barclays, Wells Fargo Securities LLC, Deutsche Bank Securities Inc., RBC Capital Markets, Mizuho, BofA Securities Inc., Truist, Citizens Bank, Jefferies LLC, BMO Capital Markets, BNP Paribas Securities Corp. and Goldman Sachs Bank USA are leading the deal.

Commitments were due at 1:30 p.m. ET on Thursday, accelerated from 5 p.m. ET on Thursday, the source continued.

Michaels frees up

Later in the day, Michaels’ first-lien term loan made its way into the secondary market, with levels quoted at 99¼ bid, 99¾ offered, another source added.

The bank debt will be used with $850 million of senior secured notes, downsized from $1 billion with the term loan upsizing, $1.3 billion of senior unsecured notes, around $1.4 billion of new equity and about $750 million of cash on hand to fund the buyout of the company by Apollo Global Management Inc. for $22.00 per share in cash. The transaction values Michaels at an equity value of about $3.3 billion.

Closing is expected in the first half of the company’s fiscal year, subject to customary conditions, including regulatory approval and the tender of shares representing at least a majority of the company’s outstanding common stock.

Michaels is an Irving, Tex.-based retailer of arts and crafts supplies and home decor products.

One Call tweaked, breaks

One Call made some revisions to documentation for its $700 million first-lien term loan B (B1/B-) and then the debt began trading in the afternoon, with levels quoted at 98½ bid, 99½ offered, a market source said.

Pricing on the term loan is Libor plus 550 bps with a 0.75% Libor floor and it was sold at an original issue discount of 98. The debt has 101 hard call protection for two years.

Earlier in syndication, pricing on the term loan was increased from talk in the range of Libor plus 475 bps to 500 bps, the discount was changed from 99 and the call protection was revised from a 101 soft call for six months.

JPMorgan Chase Bank, Wells Fargo Securities LLC, Jefferies LLC, CIT, KKR Capital Markets and Blackstone are leading the deal that will be used with a $450 million privately placed second-lien financing to refinance existing debt.

One Call is a Jacksonville, Fla.-based health care network management company and provider of specialized solutions to the workers’ compensation industry.

Quikrete sets talk

Meanwhile, in other news, Quikrete held its call on Thursday and announced talk on its $1.5 billion seven-year incremental covenant-lite term loan B (Ba3/BB-) at Libor plus 275 bps with a 0% Libor floor and an original issue discount of 99 to 99.5, according to a market source.

The incremental term loan has 101 soft call protection for six months and a ticking fee of half the margin from days 46 to 90 and the full margin plus Libor thereafter.

Commitments are due at noon ET on April 16.

Wells Fargo Securities LLC is leading the deal that will be used to help fund the acquisition of Forterra Inc. for $24.00 per share in an all-cash transaction valued at $2.74 billion, including outstanding debt.

Closing is expected in the fourth quarter, subject to regulatory approval and other customary conditions.

The company is also seeking an amendment to its existing term loans to waive mandatory repayment rights for any required divestitures, such that the proceeds are directed to the additional debt financing commitment in the event it funds, and is asking for consents by 3 p.m. ET on Tuesday.

Quikrete is an Atlanta-based buildings materials company. Forterra is an Irving, Tex.-based manufacturer of water and drainage infrastructure pipe and products.

Russell proposed terms

Russell Investments came out with talk of Libor plus 325 bps with a 1% Libor floor and an original issue discount of 99 on its fungible roughly $407 million senior secured incremental first-lien term loan B (Ba2) due May 2025 that launched with a call in the afternoon, a market source said.

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

Commitments are due at noon ET on April 15.

Barclays, Macquarie Capital (USA) Inc. and Credit Suisse Securities (USA) LLC are leading the deal that will be used to refinance an existing term loan due 2023 and fund a one-time distribution to shareholders.

In connection with this transaction, pricing on the company’s existing term loan due May 2025 will be changed to Libor plus 325 bps from Libor plus 300 bps to match the incremental pricing.

Russell is a Seattle-based asset manager.

ImageFirst guidance

ImageFirst launched on its afternoon call its $210 million covenant-lite first-lien term loan and $50 million delayed-draw covenant-lite first-lien term loan at talk of Libor plus 450 bps with a 0.75% Libor floor and an original issue discount of 99, a market source remarked.

The company’s $310 million of credit facilities (B3/B) also include a $50 million revolver.

Commitments are due on April 22, the source added.

Antares Capital and KeyBanc Capital Markets are leading the deal that will be used to refinance existing first-lien credit facilities.

Leverage is 3.7x.

ImageFirst, a Calera Capital portfolio company, is a King of Prussia, Pa.-based provider of outsourced laundry and textile rental services with a focus on outpatient and specialty health care.

Aptean joins calendar

Aptean set a lender call for 9:30 a.m. ET on Friday to launch a repricing of its roughly $262 million second-lien term loan, according to a market source.

Golub Capital is the left lead on the deal.

The second-lien term loan is currently priced at Libor plus 850 bps with a 0% Libor floor.

Aptean is an Alpharetta, Ga.-based provider of mission-critical enterprise software solutions.

Signature readies deal

Signature Aviation, a London-based aviation services company, will hold a lender call on Tuesday to launch $2.15 billion of credit facilities, a market source said.

The facilities consist of a $350 million five-year revolver, and a $1.8 billion seven-year covenant-lite term loan B talked at Libor plus 350 bps with a 0.5% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, the source added.

Commitments are due on April 27.

The term loan may be reduced to about $1.68 billion if the company completes the sale of its Engine Repair and Overhaul business to StandardAero before closing. If the sale is completed after closing, the term loan B is expected to be paid down to about $1.68 billion with proceeds from the sale.

RBC Capital Markets, Santander, Barclays, MUFG and HSBC Securities (USA) Inc. are leading the deal that will be used with $4.157 billion of equity to fund the buyout of the company by Blackstone, Cascade and Global Infrastructure Partners for $5.62 per share in cash. The transaction values the entire issued and to be issued share capital of Signature at about $4.727 billion.

Closing is expected in the second quarter, subject to regulatory approvals.

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