SUSE, Ceva Sante break; Forward Air steady as Omni purchase may unravel; Cetera updated

By Sara Rosenberg

New York, Oct. 26 – SUSE (Marcel BidCo) set the sizes of its U.S. and euro term loan B tranches, finalized the original issue discount on the loans at the tight end of guidance and made some changes to documentation before freeing up for trading on Thursday, and Ceva Sante’s U.S. term loan B emerged in the secondary market as well.

Also, Forward Air Corp.’s (Clue Opco LLC) term loan B levels were unchanged in trading as the company disclosed that it may potentially terminate its merger agreement with Omni Logistics LLC.

In more happenings, Cetera Financial Group Inc. (Aretec Group Inc.) finalized the original issue discount on its incremental first-lien term loan at the wide end guidance.

SUSE tweaked

SUSE firmed its U.S. seven-year covenant-lite term loan B size at $675 million and its euro seven-year covenant-lite term loan B size at €550 million, versus talk at launch of a $1.255 billion equivalent U.S. and euro term loan with the split to be determined, and set the original issue discount on both term loans (B2/B+) at 98.5, the tight end of the 98 to 98.5 talk, a market source said.

Additionally, revisions were made to documentation, including setting the unlimited restricted payments test at opening leverage, resetting the CNI build up basket as of the closing date, setting the ratio debt basket at opening leverage, setting the excess cash flow sweep test off opening leverage, adding J-Crew and Chewy protection, and adding management quarterly calls, the source continued.

As before, the U.S. term loan is priced at SOFR plus 450 basis points with a 0.5% floor, the euro term loan is priced at Euribor plus 450 bps with a 0% floor, and both loans have 101 soft call protection for six months.

SUSE hits secondary

On Thursday, SUSE’s term loan allocated and the U.S. term loan B freed to trade, with levels quoted at 98¾ bid, 99¾ offered, another source added.

Goldman Sachs is the left lead on the U.S. term loan. Goldman Sachs, BofA Securities Inc., Deutsche Bank and JPMorgan are the physical bookrunners on the euro term loan. HSBC and Jefferies are joint bookrunners. JPMorgan is the administrative agent.

The new debt will be used to refinance the new loan raised to fund EQT’s tender offer for the company’s shares, to repay existing debt under the OpCo SFA and 2020 sidecar facilities agreement, to amend and extend existing debt facilities, and to pay any related fees, costs and expenses.

SUSE is a Nuremberg, Germany-based provider of open source infrastructure software for large enterprises.

Ceva Sante frees up

Ceva Sante’s $540 million senior secured term loan B due November 2030 also began trading during the session, with levels quoted at 99¼ bid, 99¾ offered, according to a market source.

Pricing on the U.S. term loan is SOFR plus 425 bps with a 0% floor and it was sold at an original issue discount of 99.

The company’s is also getting a €1.8 billion senior secured term loan B due November 2030 priced at Euribor plus 425 bps with a 0% floor and issued at a discount of 99.

Both term loans (B2/B/BB-) have 101 soft call protection for six months.

During syndication, the size of the U.S. term loan firmed from talk at launch of €500 million equivalent, and the discount on the euro term loan was set at the wide end of the 99 to 99.5 talk.

JPMorgan Chase Bank is the sole physical bookrunner on the U.S. term loan. Barclays and JPMorgan are the joint physical bookrunners on the euro term loan. Credit Agricole, Natixis and Nomura are joint bookrunners. JPMorgan is the agent on the U.S. loan and Natixis is the agent on the euro loan. Credit Agricole is the ESG agent.

Proceeds will be used by the France-based animal health company to refinance an existing term loan B and capital expenditures facility, to partially repay a PIK facility, and to pay related fees and expenses.

Forward Air flat

Forward Air’s term loan B was quoted at 96 bid, 96¾ offered on Thursday, unchanged from Wednesday’s levels, following the company’s announcement that it may not complete its acquisition of Omni Logistics from Ridgemont Equity Partners and EVE Partners LLC, a market source remarked.

The company said in a press release that it “believes that Omni has not complied with certain of its obligations” under the merger agreement, and therefore, Forward Air will not be obligated to close.

“As a result, Forward is considering its rights and obligations under the merger agreement, including potentially exercising its right to terminate the merger agreement,” the release added.

The $1.125 billion seven-year senior secured covenant-lite term loan B was syndicated in September and priced at SOFR plus 450 bps with a 0.75% floor and an original issue discount of 96.

Proceeds from the term loan B are earmarked to be used with $725 million of senior secured notes and cash on hand to refinance existing debt at both companies and to pay amounts in connection with the Omni transaction.

The purchase price for Omni under the merger agreement is $150 million in cash and Forward Air common stock and perpetual non-voting convertible preferred stock.

Forward Air is a Greeneville, Tenn.-based provider of transportation services. Omni is a Dallas-based logistics and supply chain management company.

Cetera firms OID

Cetera Financial Group finalized the original issue discount on its fungible $1,688,879,000 incremental first-lien term loan due August 2030 at 97, the wide end of the 97 to 97.5 talk, according to a market source.

Like the existing 2030 first-lien term loan, the incremental term loan is priced at SOFR+CSA plus 450 bps with a 0% floor. CSA is 10 bps one-month rate, 15 bps three-month rate and 25 bps six-month rate.

The incremental term loan and the existing 2030 term loan are getting 101 soft call protection for six months.

The company’s $1.989 billion of credit facilities (B2/B) also include a $300 million five-year revolver.

Allocations went out on Thursday, the source added.

UBS Securities LLC, Goldman Sachs Bank USA, BMO Capital Markets Corp., Deutsche Bank Securities Inc., Truist Securities Inc., Jefferies LLC, Morgan Stanley Senior Funding Inc., Antares Capital and Barclays are leading the deal.

Cetera buying Avantax

Cetera will use the incremental term loan with $700 million of senior secured notes to fund the acquisition of Avantax Inc. for $26.00 in cash per share in a transaction valued at about $1.2 billion, inclusive of Avantax’s net debt, and to refinance the company’s existing first-lien term loan due 2025.

With the acquisition, Genstar and co-investors will be reinvesting in Cetera with new and rollover equity.

Closing is expected by the end of this year, subject to stockholder approval, regulatory approvals and other customary conditions.

Pro forma for the transaction, the first-lien term loan will total around $2.439 billion.

Cetera is a San Diego-based investment adviser network, providing wealth management services through a network of independently managed firms. Avantax is a Dallas-based provider of tax-focused financial planning and wealth management.

Fund flows

In other news, actively managed loan fund flows on Wednesday were negative $46 million and loan ETFs were positive $15 million, sources said.

The tracking estimate for Thursday night’s weekly Lipper numbers for loans are inflows totaling $20 million, sources added.

Loan indices slide

IHS Markit’s iBoxx loan indices were weaker on Wednesday, with the Leveraged Loan indexes (MiLLi) closing down 0.03% and the Liquid Leveraged Loan indices (LLLi) closing down 0.04%.

Month to date, the MiLLi is up 0.1% and year to date it is up 9.93%, and the LLLi is unchanged month to date and up 9.07% year to date.

Average secondary market bids in the United States on Wednesday were 92.94, down 0.02% from the previous day and up 1.16% year to date.

According to the IHS Markit data, some of the top advancers on Wednesday were New Trojan/Careismatic’s January 2021 covenant-lite term loan at 48.41, up from 45.5, CenturyLink/Lumen’s January 2020 covenant-lite term loan B at 73, up from 71.5, and Hearthside Food’s June 2020 incremental covenant-lite term loan B3 at 86.29, up from 85.

Some top decliners on Wednesday were Cano Health’s January 2022 covenant-lite term loan at 61.2, down from 62.29, NEP’s October 2018 U.S. covenant-lite term loan at 91.93, down from 93.52, and McAfee/Magenta’s December 2022 term loan at 78.25, down from 79.44.

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