Invenergy, Idera incremental trading levels emerge; CEC, US Ecology, Total Safety revised

By Sara Rosenberg

New York, Aug. 13 – Invenergy Thermal Operating I LLC’s incremental first-lien term loan freed to trade on Tuesday above its original issue discount, and Idera Inc. finalized the original issue discount on its incremental first-lien term loan at the tight end of guidance before allocating during the session.

In more happenings, CEC Entertainment Inc. lifted pricing on its first-lien term loan, revised the Libor floor, changed the issue price and sweetened the call protection, and US Ecology Inc. increased the size of its term loan B, lowered the spread, added a pricing step-down and modified the original issue discount.

Also, Total Safety changed spread, floor, issue price, call protection, maturity and documentation for its first-lien term loan debt and downsized the delayed-draw tranche, and WS Audiology (Auris Luxembourg III SA) came to market with an add-on term loan B-2.

Invenergy frees up

Invenergy’s fungible $75 million incremental first-lien term loan due August 2025 began trading on Tuesday, with levels quoted at par bid, par ˝ offered, according to a market source.

The incremental term loan is priced at Libor plus 350 basis points with a 25 bps step-down based on leverage and a 0% Libor floor, in line with the existing first-lien term loan, and was sold at an original issue discount of 99.75. The debt has 101 soft call protection for six months.

During syndication, the incremental term loan was upsized from $50 million and the discount was revised from 99.5.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to fund a shareholder distribution.

In connection with this transaction, the company is amending its existing credit facilities to allow for the incremental debt and revise restricted payments.

Existing lenders were offered a 25 bps consent fee for the amendment.

Invenergy is a Chicago-based operator of power generation facilities.

Idera updated, allocates

Idera set the original issue discount on its fungible $40 million incremental senior secured first-lien term loan (B2/B-) due June 2024 at 99.25, the tight end of the 99.03 to 99.25 talk, according to a market source.

Like the existing loan, the incremental term loan is priced at Libor plus 450 bps with a 1% Libor floor.

The first-lien term loan debt was quoted at 99 3/8 bid, par 1/8 offered post allocations on Tuesday, another source added.

Jefferies LLC is leading the deal that will be used with cash from the balance sheet to fund a strategic acquisition.

Idera is a Houston-based provider of database, application development and testing software.

CEC changes emerge

In other news, CEC Entertainment flexed pricing on its $760 million seven-year covenant-lite first-lien term loan (B2/B-) to Libor plus 650 bps from talk in the range of Libor plus 550 bps to 575 bps, adjusted the Libor floor to 1% from 0%, widened the original issue discount to 96 from 99 and extended the 101 soft call protection to one year from six months, a market source said.

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

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to refinance an existing term loan and to pay related fees and expenses.

CEC is an Irving, Tex.-based operator of family dining and entertainment stores through Chuck E. Cheese and Peter Piper Pizza brands.

US Ecology revised

US Ecology raised its seven-year covenant-lite term loan B (Ba3/BB+) to $450 million from $400 million, trimmed pricing to Libor plus 250 bps from Libor plus 275 bps, added a step-down to Libor plus 225 bps if corporate family ratings are Ba2 and BB with stable outlooks and moved the original issue discount to 99.75 from 99.5, according to a market source.

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

Recommitments are due at noon ET on Wednesday, the source said.

Wells Fargo Securities LLC and BofA Securities Inc. are leading the deal that will be used to refinance NRC Group Holdings Corp.’s existing debt, to pay transaction related fees in connection with US Ecology’s all-stock acquisition of NRC Group and, because of the upsizing, to repay revolver borrowings.

US Ecology is a Boise, Idaho-based provider of environmental services to commercial and government entities. NRC Group is a Great River, N.Y.-based provider of environmental, compliance and waste management services.

Total Safety reworked

Total Safety downsized its delayed-draw first-lien term loan (B3/B-) to $37.5 million from $75 million, lifted pricing on the tranche and on its $330 million first-lien term loan (B3/B-) to Libor plus 600 bps from Libor plus 550 bps, increased the Libor floor to 1% from 0% and modified the original issue discount to 93 from 98, a market source remarked.

Additionally, the 101 soft call protection on the first-lien term loan was extended to one year from six months, the maturity on the debt was shortened to six years from seven years, the delayed-draw period was reduced to six months from one year and amortization was increased to 5% per annum from 1% per annum.

Delayed-draw term loan ticking fees are still half the margin for days 31 to 60 and the full margin thereafter.

The company’s now $442.5 million of credit facilities also include a $75 million ABL revolver.

Total Safety documentation

Total Safety also made a number of documentation changes including increasing the excess cash flow sweep to 75% with step-downs to 50%, 25% and 0% at 0.5x, 1x and 1.5x, respectively, inside closing date net leverage from 50% with step-downs to 25% and 0% at 0.5x and 1x inside closing date net leverage.

MFN was changed to 50 bps for life from 50 bps for 12 months and all carve-outs were removed, and the incremental starter/freebie basket was reduced to $36 million from $72 million, the 100% LTM EBITDA grower to the freebie was removed and the ratio debt was revised to 0.25x inside closing date leverage from flat to closing date leverage.

The available amount starter basket was lowered to $0 million from $14 million, the general restricted payments basket was trimmed to $4 million from $11 million, and the restricted junior payments basket was reduced to 1.5x inside closing date net leverage from 1x inside closing date net leverage.

Unrestricted subsidiaries designation is now subject to a closing date net leverage test instead of a fixed charge coverage ratio of 2x and a new $5 million was added on the aggregate amount of unrestricted subsidiaries, and the asset sale reinvestment window was revised to 12 months with no commitment period from 18 months plus 6 months if committed to be reinvested.

Total Safety definitions

Total Safety revised its EBITDA definition to remove the contract start-up costs/12 month contract run-rate EBITDA contribution and to cap pro forma adjustments to 20%, and the pro forma adjustment definition to remove product margin synergies from the available pro forma effect calculations and reduce the look-forward period to 12 months from 24 months.

Furthermore, the company added a required lender vote for the release of any non-wholly owned guarantor and is now required to hold quarterly lender calls.

Recommitments were due at the close of business on Tuesday, the source added.

Goldman Sachs Bank USA, Citizens Bank and Credit Suisse Securities (USA) LLC are leading the deal that will be used to fund the acquisition of Sprint Safety, to refinance existing debt at Total Safety and to pay transaction-related fees and expenses.

Littlejohn is the sponsor.

Total Safety is a Houston-based provider of outsourced safety and compliance solutions. Sprint Safety is a provider of safety equipment rentals, breathable air solutions, training and turnaround management.

WS Audiology holds call

WS Audiology hosted a lender call at 1 p.m. ET on Tuesday to launch a fungible $100 million add-on senior secured covenant-lite term loan B-2 due February 2026 talked with an original issue discount of 99.5, according to a market source.

The add-on term loan B-2 is priced at Libor plus 375 bps with a 0% Libor floor, which matches existing term loan B-2 pricing.

Commitments are due at 5 p.m. ET on Aug. 20, the source said.

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are leading the deal that will be used for general corporate purposes, including strategic mergers & acquisitions. Deutsche Bank Securities Inc. is the administrative agent.

Closing is expected during the week of Aug. 26.

The total pro forma term loan B-2 size will be $1.26 billion.

WS Audiology is a pure play producer of hearing aids and accessories with headquarters in Lynge, Denmark and Singapore.

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