ETC Group, Kindred At Home term loans break; Bayer Environmental changes surface

By Sara Rosenberg

New York, Aug. 3 – ETC Group (EOS Finco) reduced the size of its U.S. term loan, set the spread at the high end of talk, eliminated one pricing step-down and extended the call protection, and added a euro term loan to the transaction, before freeing up for trading on Wednesday, and Kindred At Home Hospice’s first- and second-lien term loans broke as well.

In more happenings, Bayer Environmental Science (Discovery Purchaser Corp.) tightened original issue discounts on its first- and second-lien term loans, and sweetened the call protection on the first-lien tranche, and WatchGuard Technologies Inc. joined this week’s new issue calendar.

ETC reworked

ETC Group trimmed its U.S. senior secured seven-year first-lien term loan term loan to $540.02 million from €972.4 million equivalent, finalized pricing at SOFR plus 600 basis points, the wide end of the SOFR plus 575 bps to 600 bps talk, removed a 25 bps step-down at 4.25x first-lien net leverage and extended the 101 soft call protection to one year from six months, a market source remarked.

As before, the U.S. term loan has a 25 bps step-down at 4.75x first-lien net leverage, a 0.5% floor and an original issue discount of 92.

With the U.S. term loan downsizing, the company added a €475 million euro senior secured seven-year first-lien term loan term loan priced at Euribor plus 625 bps with 25 bps step-downs at 4.75x and 4.25x first-lien net leverage, a 0% floor and a discount of 92, the source continued.

ETC starts trading

Recommitments for ETC Group’s U.S. term loan were due at noon ET on Wednesday and the debt freed up in the afternoon, with levels quoted at 92¼ bid, 93¼ offered, another source added.

Credit Suisse Securities (USA) LLC, Barclays, BNP Paribas Securities Corp., Bank of Ireland, Credit Agricole, Mizuho, MUFG and Standard Chartered are leading the deal.

The term loans (B2/B) will be used to help fund the acquisition of a majority interest in the company by Cinven from Carlyle and to pay related fees and expenses. Carlyle will hold a significant minority stake in ETC.

ETC is a France-based designer, procurer and distributor of materials, tools and equipment used by the telecom industry.

Kindred hits secondary

Kindred At Home’s bank debt broke for trading, with the $1.6 billion 5½-year first-lien term loan B (B2/B) quoted at 93½ bid, 94½ offered and the $450 million six-year second-lien term loan (Caa2/CCC+) quoted at 93 bid, 94 offered, according to market sources.

Pricing on the first-lien term loan B is SOFR plus 525 bps with a 0.5% floor and it was sold at an original issue discount of 93. The debt has 101 soft call protection for six months.

The second-lien term loan is priced at SOFR plus 825 bps with a 0.5% floor and was issued at a discount of 93. This tranche has hard call protection of 102 in year one and 101 in year two.

During syndication, the first-lien term loan B was upsized from $1.2 billion as plans for a $400 million five-year term loan A were eliminated, the discount on the term loan B firmed at the tight end of the 92 to 93 talk and the discount on the second-lien term loan was revised from talk in the range of 91 to 92.

Kindred lead banks

Goldman Sachs Bank USA, Barclays, Deutsche Bank Securities Inc., UBS Investment Bank, BNP Paribas Securities Corp., Citizens, Mizuho, RBC Capital Markets, Truist and Wells Fargo Securities LLC are leading Kindred At Home’s loans, with Goldman the left lead on the first-lien and Barclays the left lead on the second-lien.

Proceeds will be used to help fund the acquisition of a 60% interest in the company by Clayton, Dubilier & Rice from Humana Inc. for about $2.8 billion. Humana will retain a 40% stake in the company.

Closing is expected this quarter, subject to customary state and federal regulatory approvals.

Kindred At Home Hospice is a provider of home-based personal care and hospice services.

Bayer tweaks deal

Back in the primary market, Bayer Environmental adjusted the original issue discount on its $1.346 billion seven-year first-lien term loan (B3/B-) to 92 from 90 and extended the 101 soft call protection to one year from six months, a market source said.

Furthermore, the company tightened the discount on its $300 million eight-year second-lien term loan (Caa2/CCC) to 87 from 85.5, the source continued.

Pricing on the first-lien term loan is still SOFR plus 437.5 bps with a 0.5% floor, and the second-lien term loan is still priced at SOFR plus 700 bps with a 0.5% floor and is non-callable for one year, then at 102 in year two and 101 in year three.

The company’s $2.021 billion of credit facilities also include a $50 million ABL revolver and a $325 million revolver (B3/B-).

Bayer deadline

Recommitments for Bayer Environmental’s credit facilities were due at 5:30 p.m. ET on Wednesday and allocations are targeted for Thursday morning, the source added.

Credit Suisse Securities (USA) LLC, Barclays, BMO Capital Markets, HSBC Securities (USA) Inc., ING and BofA Securities Inc. are leading the deal, with Credit Suisse the left lead on the first-lien and Barclays the left lead on the second-lien.

The credit facilities will be used to help fund the buyout of the company by Cinven from Bayer AG for a total enterprise value of $2.6 billion.

Bayer Environmental is a Cary, N.C.-based provider of environmental solutions to diverse end markets.

WatchGuard on deck

WatchGuard Technologies set a lender call for 11 a.m. ET on Thursday to launch a $550 million seven-year first-lien term loan (B-) talked at SOFR plus 525 bps with a 0.5% floor, an original issue discount of 92 to 93 and 101 soft call protection for one year, according to a market source.

Commitments are due on Aug. 15, the source added.

The company is also getting a $200 million privately placed second-lien term loan, the source said.

Goldman Sachs Bank USA, Barclays and Deutsche Bank Securities Inc. are leading the deal that will be used to support the acquisition of a majority stake in the company by Vector Capital.

WatchGuard Technologies is a Seattle-based provider of network security, endpoint security, secure Wi-Fi, multi-factor authentication and network intelligence.

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