Houghton Mifflin breaks for trading; Oldcastle, Element Materials price talk emerges

By Sara Rosenberg

New York, April 4 – Houghton Mifflin Harcourt Co. firmed the spread and the original issue discount on its first-lien term loan at the wide end of guidance, extended the call protection and revised some documentation items before freeing up for trading on Monday.

In more happenings, Oldcastle BuildingEnvelope (Oscar AcquisitionCo LLC) and Element Materials released price talk with launch.

Also, MKS Instruments Inc., Delivery Hero, TouchTunes (TA TT Buyer LLC) and Dayco Products LLC joined this week’s new issue calendar.

Houghton updated

Houghton Mifflin Harcourt set pricing on its $1.48 billion seven-year first-lien term loan (B2/B-/B+) at SOFR+10 basis points CSA plus 525 bps, the high end of the 500 bps to 525 bps talk, finalized the original issue discount at 97, the wide end of the 97 to 97.5 talk, and extended the 101 soft call protection to one year from six months, a market source said.

Furthermore, MFN was changed to 50 bps for 24 months from 100 bps for six months and carve-outs were modified, incremental capacity was revised, and Serta protection and quarterly lender calls were added.

The term loan still has a 0.5% floor.

The company’s $2.12 billion of senior secured credit facilities also include a $250 million five-year revolver (B2/B-/B+) and a $390 million privately placed eight-year second-lien term loan.

Houghton hits secondary

On Monday afternoon, Houghton Mifflin Harcourt’s first-lien term loan broke for trading, with levels quoted at 97¼ bid, 98¼ offered, a trader added.

BofA Securities Inc., JPMorgan Chase Bank, Deutsche Bank Securities Inc., Macquarie Capital (USA) Inc., Citizens Bank, Goldman Sachs Bank USA, Mizuho, Blackstone and StonePoint are leading the first-lien debt. JPMorgan is the left lead on the second-lien loan.

The credit facilities will be used with equity to fund the buyout of the company by Veritas Capital for $21 in cash per share, which implies an equity value of about $2.8 billion, and to refinance existing debt.

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

Houghton Mifflin is a Boston-based learning technology company.

Oldcastle guidance

In other news, Oldcastle BuildingEnvelope held its lender call on Monday morning and announced talk on its $1.285 billion seven-year senior secured covenant-lite first-lien term loan B (B1) at SOFR+10 bps CSA plus 425 bps to 450 bps with a 0.5% floor, an original issue discount of 97 and 101 soft call protection for six months, according to a market source.

Commitments are due at noon ET on April 13, the source added.

Citigroup Global Markets Inc., JPMorgan Chase Bank, BNP Paribas Securities Corp., Mizuho, Macquarie Capital (USA) Inc., Goldman Sachs Bank USA, MUFG and Stifel are leading the deal that will be used to help fund the buyout of the company by KPS Capital Partners LP from CRH plc for an enterprise value of $3.8 billion. The consideration, payable on closing, includes cash of $3.45 billion together with a transfer of lease liabilities of $350 million.

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

Oldcastle BuildingEnvelope is a supplier of value-added, glazing-focused, interior and exterior products and services.

Element Materials launches

Element Materials emerged in the morning with plans to hold a lender call at noon ET on Monday to launch $1.825 billion equivalent of term loans (B1/B), a market source remarked.

The debt is split between a $1.425 billion seven-year term loan talked at SOFR plus 450 bps with a 0.5% floor and an original issue discount of 97.5 to 98, and a $400 million equivalent euro seven-year term loan talked at Euribor plus 450 bps with a 0% floor and a discount of 98, the source continued.

Both term loans have 101 soft call protection for six months.

Commitments are due at noon ET on April 12, another source added.

BofA Securities Inc., Goldman Sachs and ING are physical bookrunners on the deal, with BofA left lead on the U.S. loan, and Goldman and ING left leads on the euro. Credit Agricole and Lloyds are passive bookrunners, and Bank of Ireland, HSBC, SMBC and Standard Chartered are mandated lead arrangers.

The loans will be used to help fund the buyout of the company by Temasek from Bridgepoint.

Element Materials is a London-based provider of testing, inspection and certification services.

MKS readies deal

MKS Instruments scheduled a lender call for 10 a.m. ET on Tuesday to launch its $5.75 billion equivalent of senior secured credit facilities, according to a market source.

The facilities consist of a $500 million five-year revolver, a $1 billion five-year term loan A talked at SOFR+CSA plus 250 bps with a 0% floor and an original issue discount of 99.75, a $3.81 billion seven-year term loan B talked at SOFR+CSA plus 300 bps with a 0.5% floor and a discount of 98, and a €400 million seven-year term loan B talked at Euribor plus 325 bps with a 0% floor and a discount of 98, the source said.

CSA is 10 bps one-month rate, 15 bps three-month rate and 25 bps six-month rate.

The term loan B debt has 101 soft call protection for one year.

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

JPMorgan Chase Bank, Barclays, BofA Securities Inc., HSBC Securities, Citigroup Global Markets Inc. and Mizuho are leading the deal that will be used to help fund the acquisition of Atotech Ltd. for $16.20 in cash and 0.0552 of a share of MKS common stock for each Atotech common share.

MKS is an Andover, Mass.-based provider of technologies that enable advanced processes and improve productivity. Atotech is a Berlin-based specialty chemicals technology company.

Delivery coming soon

Delivery Hero will hold a lender call at 10 a.m. ET on Tuesday to launch an $825 million 5.25-year term loan B (B-) talked at SOFR plus 625 bps to 650 bps with a 0.5% floor and an original issue discount of 97, a market source said.

The term loan is non-callable for one year.

Commitments are due at 5 p.m. ET on April 13, the source added.

JPMorgan Chase Bank is the sole physical bookrunner on the deal. UniCredit, HSBC and Barclays are bookrunners. HSBC is the agent.

The loan will be used with a €300 million pre-placed term loan B (B-) for general corporate purposes, including to potentially refinance existing convertible debt at maturity, working capital and guarantees.

The Berlin-based food delivery service company also plans on getting a €375 million three-year revolver, with two one-year extension options.

TouchTunes on deck

TouchTunes set a lender meeting for 9:30 a.m. ET on Thursday to launch a $385 million seven-year covenant-lite first-lien term loan, according to a market source.

Citizens Bank is leading the deal that will be used to help fund the buyout of the company by TA Associates from Searchlight Capital Partners LP and Newlight Partners LP.

TouchTunes is a New York-based in-venue, interactive music and entertainment platform.

Dayco joins calendar

Dayco Products will hold a lender call at noon ET on Tuesday to launch a $470 million term loan B due May 2025, a market source remarked.

The term loan has 102 hard call protection for one year and then 101 hard call protection for six months, the source added.

BofA Securities Inc. is leading the deal that will be used to refinance/extend an existing $452 million term loan due May 2023 that is priced at Libor plus 425 bps with a 0% Libor floor.

Dayco is a Roseville, Mich.-based engine products and drive systems manufacturer for the automotive, heavy-duty, and industrial market segments.

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