Advantage Sales, First Data, Paragon Offshore, Red Lobster deal modifications surface

By Sara Rosenberg

New York, July 10 – Advantage Sales & Marketing LLC tightened spreads and the original issue discounts on its first- and second-lien term loans on Thursday and added a delayed-draw loan to its capital structure.

Also, First Data Corp. lifted the size of its term loan so it can take out some PIK debt, Paragon Offshore raised its term loan amount, adjusted spread guidance, tightened the offer price and extended the call protection, and Red Lobster Management LLC increased the size of its term loan B.

Furthermore, Southcross Holdings Borrower LP, Southcross Energy Partners LP, Dave & Buster’s Inc. and Osum Production Corp. came out with talk on their deals that launched during the session, and Endemol Holdings NewCo and Boulder Brands Inc. joined the near-term calendar.

Advantage Sales restructures

Advantage Sales & Marketing lowered pricing on its $1.8 billion seven-year first-lien covenant-light term loan to Libor plus 325 basis points from talk of Libor plus 350 bps to 375 bps, revised the original issue discount to 99¾ from talk 99 to 99½ and extended the 101 soft call protection to one year from six months, according to a market source. This tranche still has a 1% Libor floor.

Also, pricing on the $760 million eight-year second-lien covenant-light term loan was trimmed to Libor plus 650 bps from Libor plus 700 bps and the discount was changed to 99¼ from 99, the source said.

The loan still has a 1% Libor floor and call protection of 102 in year one and 101 in year two.

Furthermore, a $60 million delayed-draw term loan was added to the credit facility, with pricing matching the first-lien term loan as the tranches are expected to be fungible and a ticking fee of half the spread from days 31 to 60 and the full spread thereafter.

The delayed-draw loan has a seven-year final maturity and is available for four months post closing in up to two draws of $30 million each to fund acquisition, related earn-outs and/or to repay revolver borrowings that were used to fund acquisitions and/or earn-outs, the source added.

Advantage Sales revolver

Along with the term loans, Advantage Sales & Marketing’s now $2.82 billion credit facility includes a $200 million five-year revolver.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Jefferies Finance LLC are leading the deal that will be used to help fund the buyout of the company by Leonard Green & Partners LP and CVC Capital Partners from Apax Partners.

Closing is expected in the third quarter, subject to customary conditions.

Advantage Sales & Marketing is an Irvine, Calif.-based sales and marketing agency.

First Data tweaks size

First Data increased its $4.25 billion and €311 million first-lien March 2018 term loan by the equivalent of $350 million with the U.S. and euro split of the additional funds still to be determined, according to a market source.

Pricing the March 2018 term debt, as well as on a $1,008,000,000 first-lien term loan due September 2018, is Libor/Euribor plus 350 bps with no Libor floor and an original issue discount of 99½ for rolled and new money commitments.

Earlier this week, the offer price on rolled commitments was changed from 99¾.

Recommitments are due at 11 a.m. ET on Friday.

Credit Suisse Securities (USA) LLC and KKR Capital Markets are leading the deal that will be used to refinance existing term loans due in March 2018 and September 2018 priced at Libor/Euribor plus 400 bps with no Libor floor, and, due to the upsizing, to repay holdco PIK notes, the source added.

First Data is a Greenwood Village, Colo.-based provider of electronic commerce and payment services.

Paragon reworks loan

Paragon Offshore upsized its senior secured seven-year term loan B to $650 million from $545 million, modified price talk to Libor plus 275 bps to 300 bps from Libor plus 300 bps to 325 bps, moved the original issue discount to 99½ from 99 and extended the 101 soft call protection to one year from six months, a source said.

As before, the term loan has a 1% Libor floor.

Commitments were due at the end of the day on Thursday, the source added.

J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and Barclays are leading the deal that will be used with senior unsecured notes to fund the company’s spin-off from Noble Corp., which is expected to occur in the third quarter.

Paragon Offshore is a London-based provider of standard specification offshore drilling rigs.

Red Lobster upsizes

Red Lobster raised the size of its seven-year covenant-light term loan B to $380 million from $375 million, according to a market source.

The term loan B is still priced at Libor plus 525 bps with a 1% Libor floor and an original issue discount of 98, and still has 101 soft call protection for one year.

Recently, pricing on the B loan was lifted from talk of Libor plus 475 bps to 500 bps, the discount widened from 99 and the call protection was extended from six months. Also, the free and clear accordion was cut to $50 million from $100 million and the unlimited prong was revised to 2.25 times first-lien leverage from 2.5 times, and the starting excess cash flow sweep was raised to 75% from 50%.

The company’s now $430 million credit facility (B3/B) also includes a $50 million revolver.

Recommitments were due at noon ET on Thursday, the source added.

Red Lobster lead banks

Deutsche Bank Securities Inc., GE Capital Markets and Jefferies Finance LLC are leading Reed Lobster’s credit facility.

Proceeds will be used with a fully executed $1.5 billion sale-leaseback agreement with American Realty Capital Properties Inc. to fund the buyout of the company by Golden Gate Capital from Darden Restaurants Inc. for $2.1 billion in cash.

Closing is expected in Darden’s first fiscal quarter of 2015, subject to customary conditions and regulatory approvals. The transaction is not subject to shareholder approval or financing.

Red Lobster is an Orlando, Fla.-based casual dining seafood restaurant company.

Southcross Holdings talk

Southcross Holdings held its bank meeting on Thursday morning, and with the event talk on its $525 million seven-year first-lien term loan (B2) emerged at Libor plus 550 bps with a 1% Libor floor, an original issue discount of 99 and call protection of 102 in year one and 101 in year two, according to a market source.

Commitments for the midstream services company’s $575 million credit facility, which also includes a $50 million super priority revolver, are due on July 24.

UBS AG and Barclays are leading the deal that will be used to repay debt at BlackBrush TexStar.

Southcross Energy LLC is combining with TexStar Midstream Services, and a newly formed company, Southcross Holdings LP, will own 100% of the general partner of Southcross and equity interests in Southcross as well as former TexStar assets. EIG Global Energy Partners, Charlesbank Capital Partners and Tailwater Capital will each indirectly own around one-third of Southcross Holdings.

Closing is expected in the third quarter, subject to customary conditions, including expiration of any required anti-trust filings under Hart-Scott-Rodino.

Southcross Energy guidance

Southcross Energy released talk of Libor plus 475 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year on its $450 million seven-year term loan B (B1/B) that launched at the same morning meeting at Southcross Holdings, a source remarked.

The company’s $570 million credit facility also includes a $120 million five-year revolver.

Commitments are due on July 24, the source added.

Wells Fargo Securities LLC, UBS AG and Barclays are leading the deal that will be used to help fund the acquisition of one-third of TexStar Midstream Services LP’s midstream assets (TexStar Rich Gas System) for about $450 million, comprised of $180 million in cash and 14.633 million newly issued 7% payment-in-kind common units, and to provide additional funds for future growth capital projects and other partnership purposes.

Southcross Energy Partners is a Dallas-based master limited partnership that provides natural gas gathering, processing, treating, compression and transportation services and NGL fractionation and transportation services. TexStar is a San Antonio-based midstream services company.

Dave & Buster’s launches

Dave & Buster’s launched at its meeting its $530 million six-year covenant-light term loan B with talk of Libor plus 375 bps to 400 bps with a 1% Libor floor and an original issue discount of 99½, a source said.

As previously reported, the term loan B has 101 soft call protection for six months.

The company’s $580 million credit facility (B2/B) also includes a $50 million five-year revolver.

Commitments are due on July 24, the source said.

Jefferies Finance LLC and Goldman Sachs Bank USA are leading the deal that will be used to refinance existing debt.

Dave & Buster's is a Dallas-based owner and operator of dining and entertainment venues.

Osum holds meeting

Osum Production had its bank meeting in the afternoon, launching its $210 million six-year senior secured first-lien term loan (B3/B+) with talk of Libor plus 500 bps with a 1% Libor floor, an original issue discount of 99 and soft call protection of 102 in year one and 101 in year two, according to a market source.

Commitments are due at noon ET on July 24, the source said.

Barclays and Goldman Sachs Bank USA are leading the deal that will be used with cash on hand and from existing shareholders to fund the C$325 million acquisition of Orion Oil Sands Project from Shell Canada.

Secured and total leverage is 2.7 times.

Closing is expected on or about July 31.

Osum Production is an indirectly wholly owned subsidiary of Osum Oil Sands Corp., a Calgary, Alta.-based private oil sands company.

Endemol details surface

Endemol emerged with plans to hold a bank meeting at 10 a.m. ET in New York on Tuesday and a bank meeting at 11 a.m. BST in London on Wednesday to launch €1,035,000,000 in term loans, according to a market source.

The debt consists of a €700 million equivalent first-lien term loan (U.S., euro and GBP) and a €335m equivalent second-lien term loan (U.S. and euro), the source said.

Previously, all that was known on the deal was that it was expected July business and it included first- and second-lien tranches.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Credit Suisse and Nomura are leading the loans, with Deutsche left lead on the first-lien and JPMorgan left lead on the second-lien.

Proceeds will be used to help fund the recapitalization by Apollo Global Management of Endemol, an Amsterdam-based creator, producer and distributor of multiplatform entertainment.

Boulder Brands readies call

Boulder Brands scheduled a call for 10 a.m. ET on Friday for credit facility lenders, according to a market source, who said details on the purpose of the call are not yet available.

RBC Capital Markets is leading the deal.

Boulder Brands, previously known as Smart Balance Inc., is a Paramus, N.J.-based health and wellness food company.

Citgo deadline emerges

In other news, Citgo Petroleum Corp. is asking lenders to get their commitments in by July 23 for its $650 million senior secured term loan B (B1/NA/BB+) that launched with a bank meeting on Wednesday, a source said.

As previously reported, the loan is talked at Libor plus 350 bps to 375 bps with a 1% Libor floor and an original issue discount of 99.

The loan has 101 soft call protection for one year, the source said.

Deutsche Bank Securities Inc., ABN Amro Inc., BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., Mizuho Securities USA Inc., Natixis and SMBC are leading the deal that will be used to refinance existing debt and fund a distribution to parent company Petroleos de Venezuela SA.

Citgo is a Houston-based refiner and marketer of transportation fuels, lubricants, petrochemicals and other industrial products.

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