Patriot Rail breaks; CDK, Berry, Alphia updates emerge; Heritage-Crystal revises deadline

By Sara Rosenberg

New York, Oct. 2 – Patriot Rail’s add-on term loan B made its way into the secondary market on Monday and was quoted above its original issue discount.

Meanwhile, in the primary market, CDK Global Inc. firmed the spread on its term loan B at the high end of talk and widened the original issue discount, and Berry Global Group Inc. set the issue price on its first-lien term loan at the wide end of guidance.

Also, Alphia Inc. lifted pricing on its term loan B, removed step-downs, modified the original issue discount, sweetened the call protection and made lender friendly changes to documentation, and Heritage-Crystal Clean Inc. (JFL-Tiger Acquisition Co. Inc.) accelerated the commitment deadline for its first-lien term loan.

Furthermore, Delrin, APi Group DE Inc. and Ineos Enterprises Holdings Ltd. released price talk with launch, and HomeServe North America, Citco and ADT Inc. (Prime Security Services Borrower LLC) joined this week’s primary calendar.

Patriot Rail frees

Patriot Rail fungible $100 million add-on term loan B (B2/B) due Oct. 18, 2026 began trading on Monday afternoon, with levels quoted at 99 5/8 bid, par 1/8 offered, according to a market source.

Pricing on the add-on term loan is SOFR+CSA plus 400 basis points with a 0.25% floor, in line with existing term loan B pricing, and the new debt was sold at an original issue discount of 99.27. CSA is ARRC standard 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate. The add-on term loan has 101 soft call protection for six months.

RBC Capital Markets is leading the deal that will be used for general corporate purposes and to fund a dividend.

Pro forma for the transaction, the term loan B will total about $395 million.

Patriot Rail is a Jacksonville, Fla.-based owner of a portfolio of short-line railroads, port terminals and related infrastructure assets, providing transportation and logistics solutions.

CDK tweaked

CDK Global finalized pricing on its $3.582 billion term loan B due July 2029 at SOFR plus 400 basis points, the high end of the SOFR plus 375 bps to 400 bps talk, and moved the original issue discount to 99.75 from talk in the range of 99.875 to par, a market source remarked.

As before, the term loan has a 0% floor and 101 soft call protection for six months.

Goldman Sachs Bank USA is the left lead on the deal. Credit Suisse is the administrative agent.

The term loan will be used to reprice an existing $3.582 billion term loan B due July 2029. When completed in 2022, the term loan was priced at SOFR plus 450 bps with a 25 bps step-down at 4.75x first-lien net leverage and a 0.5% floor.

CDK is a Hoffman Estates, Ill.-based provider of a fully integrated cloud-based software platform to auto dealerships and original equipment manufacturers.

Berry updated

Berry Global set the original issue discount on its $3.09 billion first-lien term loan due July 2029 at 99.75, the wide end of the 99.75 to 99.875 talk, according to a market source.

Pricing on the term loan remained at SOFR+CSA plus 175 basis points bps with a 0% floor, and the debt still has 101 soft call protection for six months. CSA is 11 bps one-month rate, 26 bps three-month rate and 43 bps six-month rate.

Goldman Sachs Bank USA is the left lead on the deal that will be used to amend and extend an existing first-lien term loan due July 2026.

Berry Global is an Evansville, Ind.-based, supplier of rigid, flexible and non-woven products sold into consumer-oriented end markets.

Alphia reworked

Alphia raised pricing on its $640 million seven-year term loan B (B2/B) to SOFR plus 500 bps from SOFR plus 450 bps, eliminated pricing step-downs, widened the original issue discount to 95 from talk in the range of 97 to 98 and extended the 101 soft call protection to one year from six months, a market source said.

Also, lender friendly modifications were made to the free and clear basket, pari passu, junior, and unsecured debt or non-collateral debt prongs, MFN, the excess cash flow sweep, the asset sale sweep, incurrence, investments, restricted payments, restricted debt payments, EBITDA definition and consolidated total debt definition, the company is now required to hold quarterly lender calls and management discussion and analysis, and Serta, Chewy and J Crew protections were added, the source continued.

The term loan still has a 0.5% floor.

Recommitments were due at 5 p.m. ET on Monday, the source added.

Goldman Sachs Bank USA, Jefferies LLC, BMO Capital Markets, Citizens, Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., Rabobank, SMBC and Wells Fargo Securities LLC are leading the deal that will be used to help fund the buyout of the company by PAI Partners from J.H. Whitney Capital Partners.

Closing is subject to customary conditions, including the receipt of certain regulatory approvals.

Alphia is a Denver-based contract manufacturer of dry pet food and treats.

Heritage-Crystal accelerated

Heritage-Crystal Clean moved up the commitment deadline for its $600 million seven-year first-lien term loan to 5 p.m. ET on Wednesday from 10 a.m. ET on Friday, according to a market source.

Talk on the term loan is SOFR plus 525 bps with a 0.5% floor, an original issue discount of 97 to 97.5 and 101 soft call protection for six months.

The company’s $700 million of credit facilities (B) also include a $100 million five-year revolver.

Jefferies Finance LLC and SMBC are leading the deal that will be used with up to $551.4 million of equity to fund the buyout of the company by J.F. Lehman & Co. for $45.50 per share in cash. The transaction values the company at about $1.2 billion.

Closing is expected in the fourth quarter, subject to customary conditions, including approval by shareholders.

Heritage-Crystal Clean is a Hoffman Estates, Ill.-based provider of provider of specialized environmental and waste management services.

Delrin proposed terms

Delrin held its lender call on Monday morning and announced talk on its $700 million equivalent U.S. and euro seven-year first-lien term loan (B2/B+) at SOFR/Euribor plus 450 bps with an original issue discount of 98 to 98.5 and 101 soft call protection for six months, a market source remarked.

The U.S. tranche has a minimum size of $500 million and a 0.5% floor, and the euro loan has a 0% floor.

Commitments are due at noon ET on Oct. 12, the source added.

Goldman Sachs Bank USA, RBC Capital Markets, BMO Capital Markets, UBS Investment Bank, KeyBanc Capital Markets and KKR Capital Markets are leading the deal that will be used to help fund the acquisition of an 80.1% ownership interest in the company by The Jordan Co. from DuPont in a transaction valuing the business at $1.8 billion.

At close, DuPont will receive pre-tax cash proceeds of about $1.25 billion, a note receivable of $350 million, and will own a 19.9% non-controlling common equity interest in Delrin.

Closing is expected around year-end, subject to customary conditions and regulatory approval.

Delrin is a producer of acetal homopolymer, a high-end engineering thermoplastic.

APi holds call

APi Group emerged in the morning with plans to hold a lender call at 10 a.m. ET to launch a repricing of its existing $985 million covenant-lite incremental first-lien term loan B due Jan. 3, 2029, and a repricing of its existing $1.027 billion covenant-lite first-lien term loan B due Oct. 10, 2026 with an option to extend the debt to January 2029, according to a market source.

The final size of the 2029 and 2026 term loans will be based on lender participation in the extension option.

Talk on the 2029 term loan B is SOFR+CSA plus 225 bps to 250 bps and talk on the 2026 term loan B is SOFR+CSA plus 200 bps to 225 bps. Both loans are talked with CSA of ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate, a 0% floor, a par issue price and 101 soft call protection for six months, the source continued.

Commitments from existing lenders are due by 5 p.m. ET on Wednesday and commitments from new lenders are due by noon ET on Thursday, the source added.

Citigroup Global Markets Inc. is the left lead on the deal.

The repricing will take the 2029 term loan down from SOFR+ARRC CSA plus 275 bps and the 2026 term loan down from SOFR+ARRC CSA plus 250 bps.

APi is a New Brighton, Minn.-based business services provider of safety, specialty and industrial services.

Ineos guidance

Ineos Enterprises launched on its morning call its fungible €645 million equivalent U.S. and euro senior secured add-on term loan B (Ba3/BB/BB+) due July 7, 2030 at original issue discount talk of 98.5 to 99, a market source said.

Like the existing term loans, the U.S. add-on term loan is priced at SOFR+10 bps CSA plus 375 bps with a 0% floor, the euro add-on term loan is priced at Euribor plus 400 bps with a 0% floor, and both loans have 101 soft call protection until January 2024.

Sizes of the U.S. and euro tranches are still to be determined.

Barclays is the sole bookrunner on the add-on U.S. term loan. Barclays, MUFG and NatWest Markets are joint physical bookrunners on the euro add-on term loan. Barclays is the administrative agent.

Commitments are due at 5 p.m. ET on Thursday for the U.S. term loan and at noon ET on Thursday for the euro term loan.

The new debt will be used by the London-based specialty and commodity chemical producer to refinance all of its existing term loan A and euro term loan B debt due 2026 and to pay transaction fees and expenses.

HomeServe on deck

HomeServe set a lender call for 12:20 p.m. ET on Tuesday to launch a $1.05 billion seven-year term loan B, according to a market source.

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

Commitments are due at 5 p.m. ET on Oct. 12, the source added.

Deutsche Bank Securities Inc., MUFG, RBC Capital Markets, ING, BofA Securities Inc. and Brookfield Capital Solutions are leading the deal that will be used to refinance the company’s existing capital structure.

HomeServe is a Norwalk, Conn.-based provider of low-cost service plans, repair and energy efficiency services.

Citco joins calendar

Citco will hold a lender call at 10 a.m. ET on Tuesday to launch a fungible $410 million add-on term loan B, a market source remarked.

Goldman Sachs Bank USA is the left lead on the deal. UBS Investment Bank is the administrative agent.

The term loan will be used to fund a minority shareholder recapitalization.

Citco is an independent pure play hedge fund, private equity and real estate administrator.

ADT readies deal

ADT scheduled a lender call for 2 p.m. ET on Tuesday to launch a $1.4 billion seven-year term loan B, according to a market source.

The term loan has 101 soft call protection for six months, the source said.

Commitments are due at 5 p.m. ET on Oct. 10.

Barclays, Deutsche Bank Securities Inc., Mizuho, RBC Capital Markets, Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., MUFG, BNP Paribas Securities Corp. and Citizens Bank are leading the deal that will be used with cash from the balance sheet and proceeds from the completed $1.6 billion sale of ADT’s commercial security, fire and life safety business to GTCR to refinance an existing term loan B due 2026.

First-lien net leverage will be about 2.5x and total net leverage will be about 2.9x.

ADT is a Boca Raton, Fla.-based provider of security, automation and smart home solutions services.

Loan indices rise

In other news, IHS Markit’s iBoxx loan indices were stronger on Friday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.02% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.02%.

Month to date, the MiLLi is up 0.88% and year to date it is up 9.83%, and the LLLi is up 0.6% month to date and up 9.07% year to date.

Average secondary market bids in the U.S. on Friday were 93.08, up 0.03% from the previous day and up 1.32% year to date.

According to the IHS Markit data, some of the top advancers on Friday were iQor’s November 2020 second out covenant-lite PIK term loan at 70.75, up from 69.83, National Mentor/Civitas’ March 2021 covenant-lite term loan at 88.79, up from 88, and Sivantos/Widex’s February 2019 U.S. covenant-lite term loan B2 at 97.33, up from 96.5.

Some top decliners on Friday were Jo-Ann Stores’ July 2021 covenant-lite term loan B at 31.5, down from 32.63, Diamond Sports/Sinclair/Regional Sports’ March 2022 first priority term loan at 50.33, down from 52.1, and ScionHealth’s December 2021 covenant-lite term loan B at 23.33, down from 24.

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