Duff & Phelps frees to trade atop OID; Lummus, Internet Brands launch transactions

By Sara Rosenberg

New York, June 9 – Duff & Phelps tightened the original issue discount on its incremental first-lien term loan B and then the debt made its way into the secondary market on Tuesday.

Also, Lummus Technology (Illuminate Buyer LLC) came to market with a larger-than-expected term loan and released price talk on the debt, and Internet Brands Inc. announced and launched an incremental first-lien term loan.

Duff updated, breaks

Duff & Phelps changed the original issue discount on its fungible $300 million incremental first-lien term loan B (B2/B-) due April 2027 to 98 from the 97.5 area, a market source remarked.

As before, pricing on the incremental term loan is Libor plus 375 basis points with a 1% Libor floor, in line with existing term loan pricing, and the debt is getting 101 soft call protection for one year.

Recommitments were due at 11 a.m. ET on Tuesday and the incremental term loan began trading in the afternoon, with levels quoted at 98 5/8 bid, 99 1/8 offered, another source added.

Goldman Sachs Bank USA, Stone Point Capital Markets, UBS Investment Bank, BofA Securities Inc., Morgan Stanley Senior Funding Inc., KKR Capital Markets and Credit Suisse Securities (USA) LLC are leading the deal that will be used to fund the acquisition of Virtue, a data-driven regulatory compliance service provider, repay existing revolving credit facility borrowings and add cash to balance sheet.

Duff & Phelps is a New York-based independent adviser with expertise in the areas of valuation, corporate finance, disputes and investigations, compliance and regulatory matters, and other governance-related issues.

Lummus launches

Lummus Technology revealed shortly before its 10 a.m. ET lender call began that its seven-year covenant-lite first-lien term loan would be sized at $1.05 billion, up from the previously announced amount of $600 million, according to a market source.

Also, price talk on the term loan was disclosed as Libor plus 425 bps to 450 bps with a 0% Libor floor and an original issue discount of 97, the source said.

Included in the term loan is 101 soft call protection for six months.

The decision to upsize the term loan resulted from the elimination of plans for a secured notes offering that was being considered but never launched, the source explained.

The company’s now $1.375 billion of credit facilities (B1/B+) also provide for a $175 million revolver and a $150 million letter-of-credit facility.

Lummus lead banks

Credit Suisse Securities (USA) LLC, Macquarie Capital (USA) Inc., RBC Capital Markets, Societe Generale, UBS Investment Bank and SunTrust Robinson Humphrey Inc. are leading Lummus’ credit facilities.

Commitments are due at 5 p.m. ET on June 18.

Proceeds will be used to help fund the acquisition of the company by the Chatterjee Group and Rhone Capital from Houston-based McDermott International Inc. for $2.725 billion.

Lummus is a developer and licensor of mission essential technologies for the refining and petrochemical industries and a supplier of catalysts and proprietary equipment.

Internet Brands holds call

Internet Brands surfaced in the morning with plans to hold a lender call at 2:30 p.m. ET to launch a non-fungible $500 million incremental covenant-lite first-lien term loan due September 2024, a market source said.

Then, in the afternoon, price talk on the incremental term loan emerged at Libor plus 375 bps with a 1% Libor floor and an original issue discount of 97, the source added.

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

Commitments are due at 5 p.m. ET on Thursday.

Credit Suisse Securities (USA) LLC, KKR Capital Markets, BofA Securities Inc. and others to be named are leading the deal that will be used to refinance a revolver draw and for general corporate purposes.

Internet Brands is an El Segundo, Calif.-based integrated online media and software services organization focused on four categories: Health, Automotive, Legal and Home/Travel.

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