TMF, Garrett, ImageFirst, BroadStreet, GMS break; Signature, Titan, Signant changes emerge

By Sara Rosenberg

New York, April 27 – TMF Group (TMF Sapphire Bidco BV) firmed the original issue discount on its U.S. term loan B at the tight end of guidance, and upsized its euro term loan B while also revising the spread and the issue price, and Garrett Motion Inc. widened the spread and issue price on its term loan B, sweetened the call protection and shortened the maturity, and then both of these deals freed to trade on Thursday.

Also, ImageFirst Holdings LLC added a delayed-draw term loan to its capital structure and modified the issue price on its funded incremental term loan before breaking for trading, and loans from BroadStreet Partners Inc. and GMS Inc. (GYP Holdings III Corp.) made their way into the secondary market as well.

In addition, Hertz Corp.’s strip of term loan B and term loan C debt was a little stronger in trading as the company announced first quarter numbers that revealed better-than-expected revenue and net income numbers.

In more happenings, Signature Aviation plc tightened the original issue discount on its add-on term loan B-2 after accelerating the commitment deadline, and Titan Acquisition Holdings upsized its first-lien term loan B, trimmed the spread, added a leverage-based step-down and changed the issue price.

Furthermore, Signant Health (Bracket Intermediate Holding Corp.) increased the size of its funded first-lien term loan and canceled plans for a delayed-draw first-lien term loan, Kenan Advantage Group Inc. moved up the commitment deadline for its incremental first-lien term loan, and Heartland Dental LLC and Oxbow Carbon LLC released price talk with launch.

TMF revised, trades

TMF firmed the original issue discount on its $400 million term loan B due May 2028 at 98, the tight end of initial talk of 97 to 98, and left pricing at SOFR plus 500 basis points with a 0% floor, a market source said.

Furthermore, the company upsized its euro term loan B due May 2028 to €955 million from €950 million, cut pricing to Euribor plus 450 bps from Euribor plus 475 bps, and adjusted the original issue discount to 98.5 from initial talk of 97 to 98, the source continued.

The euro loan still has a 0% floor, and both loans (B2/B) still have 101 soft call protection for six months.

On Thursday, the U.S. term loan broke for trading, with levels quoted at 98½ bid, 99½ offered, another source added.

Goldman Sachs is the left lead on the U.S. term loan. Barclays, Goldman Sachs, HSBC Securities and Nomura are the physical bookrunners on the euro loan, and Deutsche Bank and Jefferies are passive bookrunners. HSBC is the agent.

The term loans will be used to extend the maturity of an existing €950 million term loan B due May 2025, to refinance existing second-lien debt, to repay revolving credit facility borrowings and for acquisition activity.

TMF is an Amsterdam-based provider of legal financial and employee administration services.

Garrett reworked, breaks

Garrett Motion lifted pricing on its $700 million term loan B (//BB+) to SOFR plus 450 bps from SOFR plus 400 bps, moved the original issue discount to 96.5 from 98, extended the 101 soft call protection to one year from six months, shortened the maturity to April 2028 from seven years, and increased amortization to 7.5% in years one and two and 10% in years three, four and five from 1% per annum, according to a market source.

As before, the term loan has a 0.5% floor.

Recommitments were due at 11:30 a.m. ET on Thursday, and the term loan freed up later in the day, with levels quoted at 96¾ bid, 97½ offered, another source added.

JPMorgan Chase Bank is leading the deal that will be used to fund the repurchase of about $280 million of series A cumulative convertible preferred stock from Centerbridge Partners LP and about $290 million of series A cumulative convertible preferred stock from Oaktree Capital Management LP, and the conversion of the company’s series A cumulative convertible preferred stock into shares of common stock.

With the new term loan, the company is seeking an amendment to its existing credit agreement to change the definition of restricted payment and to transition its existing U.S. loan to SOFR from Libor.

Garrett is a Rolle, Switzerland-based provider of passenger vehicle, commercial vehicle, aftermarket replacement and performance enhancement solutions.

ImageFirst updated

ImageFirst added a $20 million delayed-draw incremental covenant-lite term loan to its transaction, and revised the original issue discount on its non-fungible $100 million incremental covenant-lite term loan due April 27, 2028 to 97.5 from 97, a market source remarked. The delayed-draw term loan has the same issue price as the funded term loan.

Pricing on the term loan debt is SOFR+CSA plus 500 bps with a 0.75% floor and the debt has 101 soft call protection for six months. CSA is 10 bps one-month rate, 15 bps three-month rate and 25 bps six-month rate.

Previously in syndication, pricing on the incremental term loan was reduced from SOFR plus 550 bps.

Antares Capital is leading the deal that will be used for general corporate purposes and to fund acquisitions under letters of intent.

Closing is expected on Friday.

ImageFirst frees up

During the session, ImageFirst’s new incremental term loan debt made its way into the secondary market, with levels quoted at 97¾ bid, 98¼ offered, another source said.

In connection with the new term loan, pricing on the company’s existing $264.1 million first-lien term loan will be changed to SOFR+CSA plus 475 bps with a 0.75% floor from Libor plus 450 bps with a 0.75% floor, revised from an initial proposal of SOFR+CSA plus 500 bps.

The change to SOFR will occur after the existing Libor contract expires in a week or two.

Existing lenders waived MFN and lender were offered a 50 bps amendment fee.

The existing term loan was quoted at 97 bid, 97½ offered on Thursday, the source added.

ImageFirst, a Calera Capital portfolio company, is a King of Prussia, Pa.-based provider of linen, laundry, and safety and hygiene services specializing in the health care industry.

BroadStreet hits secondary

BroadStreet Partners’ $935 million incremental term loan B-3 (B2/B) due January 2029 freed to trade too, with levels quoted at 99 bid, 99¾ offered, according to a trader.

Pricing on the term loan is SOFR plus 400 bps with a 0% floor and it was sold at an original issue discount of 98.75. The debt has 101 soft call protection for six months.

During syndication, the term loan was upsized from $735 million, pricing firmed at the low end of the SOFR plus 400 bps to 425 bps talk and the discount was changed from 98.

RBC Capital Markets, BMO Capital Markets, M&T Bank, CIBC, The Bank of Nova Scotia, TD Securities (USA) LLC and Truist are leading the deal that will be used to support a new core agency partnership and fund cash to the balance sheet for mergers and acquisitions.

BroadStreet is a Columbus, Ohio-based insurance broker.

GMS breaks

GMS’ $500 million seven-year term loan B (Ba2/BB-) also began trading during the session, with levels quoted at 99¾ bid, par ¼ offered, a market source remarked.

Pricing on the term loan is SOFR plus 300 bps with a 0% floor and it was sold at an original issue discount of 99.5. The loan has 101 soft call protection for six months.

During syndication, the spread on the term loan finalized at the low end of revised talk of SOFR plus 300 bps to 325 bps and down from initial talk of SOFR plus 325 bps to 350 bps, and the discount was tightened from revised talk of 99.25 and initial talk of 98.5.

JPMorgan Chase Bank is leading the deal that will be used to help refinance an existing term loan B due 2025.

GMS is a Tucker, Ga.-based distributor of interior construction products.

Hertz inches up

Hertz’s term loan B and term loan C strip moved up to 99 5/8 bid, par 1/8 offered on Thursday from 99½ bid, par offered on Wednesday as the company released first quarter numbers that surpassed expectations, a trader said.

For the quarter, the company reported total revenues of $2.047 billion, up 13% from $1.81 billion in the first quarter of 2022.

GAAP net income for the quarter was $196 million, or $0.61 per diluted share, versus GAAP net income of $426 million, or $0.82 per diluted share, in the prior year, and adjusted net income was $126 million, or $0.39 per adjusted diluted share, compared to adjusted net income of $403 million, or $0.87 per adjusted diluted share in the first quarter last year.

The company’s liquidity position was $2.2 billion at March 31, of which $728 million was unrestricted cash.

Hertz is an Estero, Fla.-based car rental company.

Signature tightened

Back in the primary market, Signature Aviation moved up the commitment deadline for its fungible $400 million add-on term loan B-2 (B2) due July 2, 2029 to 1 p.m. ET on Thursday from noon ET on Friday, and then modified the original issue discount to 99 from talk in the range of 98 to 98.5, according to a market source.

After the change to the discount, a recommitment deadline was set for 3 p.m. ET on Thursday, the source added.

Pricing on the add-on term loan is SOFR plus 375 bps with a 0.5% floor, and the debt has 101 soft call protection for six months.

RBC Capital Markets is the left lead on the deal that will be used to fund a dividend.

Signature Aviation is a London-based aviation services company.

Titan modified

Titan Acquisition raised its seven-year first-lien term loan B to $700 million from $675 million, reduced pricing to SOFR plus 450 bps from SOFR plus 475 bps, added a 25 bps step-down at 4x net first-lien leverage and revised the original issue discount to 98.5 from talk in the range of 97 to 98, a market source remarked.

As before, the term loan has a 25 bps pricing step-down upon an initial public offering, a 0% floor, 101 soft call protection for six months and ticking fees of half the spread from days 46 to 90 and the full spread thereafter.

Recommitments are due at 10:30 a.m. ET on Friday, the source added.

JPMorgan Chase Bank, BNP Paribas Securities Corp., Mizuho, Wells Fargo Securities LLC and BofA Securities Inc. are leading the deal that will be used to help fund the buyout of the company by Lone Star Funds from Carlyle and Stellex Capital Management.

Due to the term loan upsizing, the equity component of the financing was reduced.

Closing is expected this year, subject to customary conditions, including governmental approvals.

Titan is a Portland, Ore.-based provider of ship repair services and marine and heavy complex fabrication. The company was formed in 2019 through the combination of Vigor Industrial LLC and MHI Holdings LLC.

Signant restructures

Signant Health lifted its funded five-year first-lien term loan to $980 million from $850 million and terminated plans for a $130 million delayed-draw first-lien term loan, a market source said, explaining that the change was made “due to operational dynamics with cashless rolling into a delayed-draw term loan”.

Talk on the term loan is SOFR+10 bps CSA plus 500 bps with one 25 bps leverage-based step-down, a 0.5% floor, an original issue discount of 96.5 and 101 soft call protection for six months.

The delayed-draw term loan was going to be available for six months and had ticking fees of half the margin for days 46 to 90 and the full margin thereafter.

The company’s $1.06 billion of credit facilities also include an $80 million revolver.

Commitments are due at 2 p.m. ET on Tuesday.

Jefferies LLC and Antares Capital are leading the deal that will be used to refinance the company’s existing debt and fund an acquisition. In place of the delayed-draw term loan, the company will place the funded $130 million in a segregated account at close, for the purpose of the near-term potential acquisition under a letter of intent. If the acquisition does not close, the company will have six months from the closing date to use the funds on another acquisition or can repay it in full.

Signant is a Blue Bell, Pa., provider of clinical research technology and solutions for clinical trials.

Kenan tweaks timing

Kenan Advantage Group accelerated the commitment deadline for its non-fungible $250 million incremental first-lien term loan (B2) due 2026 to 4 p.m. ET on Friday from 2 p.m. ET on Monday, according to a market source.

Talk on the term loan is SOFR+CSA plus 400 bps with a 0.75% floor, an original issue discount of 98.5 and 101 soft call protection for six months. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

KeyBanc Capital Markets LLC, Barclays, Citizens, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., CIBC, Fifth Third, ING, MUFG and Regions Capital are leading the deal that will be used with cash on hand to refinance a $300 million second-lien term loan due 2027.

Kenan Advantage is a North Canton, Ohio-based provider of liquid bulk transportation services to the fuels, chemicals, liquid foods and merchant gas markets.

Heartland guidance

Heartland Dental held its lender call on Thursday afternoon and announced price talk on its up to roughly $1,850,200,000 senior secured amended and extended first-lien term loan (B-) due April 30, 2028 at SOFR plus 500 bps with a 0.75% floor and an original issue discount of 96 to 97, a market source remarked.

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

Commitments and consents are due at noon ET on Wednesday.

KKR Capital Markets, Jefferies LLC, BMO Capital Markets, TD Securities (USA) LLC, Credit Agricole, Mizuho, MUFG, SMBC and Macquarie Capital (USA) Inc. are leading the loan that will be used with $500 million of new senior secured notes, $200 million of new cash equity and a $75 million new strategic partner contribution to partially refinance extending lenders as part of an amend and extend of their existing term loan and for general corporate purposes.

KKR and Ontario Teachers’ Pension Plan are the sponsors.

Heartland Dental is an Effingham, Ill.-based dental support organization.

Oxbow holds call

Oxbow Carbon held a lender call at 2 p.m. ET on Thursday, launching a $350 million seven-year term loan B at talk of SOFR+10 bps CSA plus 375 bps to 400 bps with a 0.5% floor, an original issue discount of 98 and 101 soft call protection for one year, according to a market source.

The company’s $900 million of credit facilities (B1/BB-) also include a $325 million revolver and a $225 million term loan A.

Commitments are due at 10 a.m. ET on May 5, the source added.

BofA Securities Inc., JPMorgan Chase Bank, Rabobank, Truist, Capital One, Citizens, Wells Fargo Securities LLC and others to be announced are leading the deal that will be used to refinance the company’s existing senior secured credit facilities.

Oxbow Carbon is a West Palm Beach, Fla.-based recycler and upgrader of refinery byproducts.

Fund flows

In other news, actively managed loan fund flows on Wednesday were negative $122 million and loan ETFs were negative $117 million, market sources said.

The tracking estimate for Thursday night’s weekly Lipper numbers are outflows totaling $650 million, sources added.

Loan indices dip

IHS Markit’s iBoxx loan indices were weaker on Wednesday, with the Leveraged Loan indexes (MiLLi) closing out the day down 0.03% and the Liquid Leveraged Loan indices (LLLi) closing out the day down 0.07%.

Month to date, the MiLLi is up 0.88% and year to date it is up 3.96%, and the LLLi is up 1.06% month to date and up 4.39% year to date.

Average secondary market bids in the U.S. on Wednesday were 91.54, down 0.02% from the previous day and down 0.37% year to date.

According to the IHS Markit data, some of the top advancers on Wednesday were Envision Healthcare/Amsurg’s July 2022 first-out covenant-lite term loan at 78.58, up from 74, Genesis Care’s March 2020 U.S. covenant-lite term loan B at 28.71, up from 27.83, and Rodan & Fields’ June 2018 covenant-lite term loan B at 35.2, up from 34.67.

Some top decliners on Wednesday were International Textile’s May 2018 covenant-lite term loan at 47.67, down from 51.44, Rackspace Hosting’s February 2021 covenant-lite term loan B at 41.43, down from 43.44, and Packers Sanitation Services/PSSI’s March 2021 covenant-lite term loan at 48.13, down from 49.58.

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