CQP Holdco, First Brands term loans break; Indicor, H.B. Fuller deal changes emerge

By Sara Rosenberg

New York, Feb. 3 – CQP Holdco LP launched in the morning an add-on term loan B, revised the issue price in the afternoon and freed the debt up for trading later in the day, and First Brands Group LLC’s incremental first-lien term loan made its way into the secondary market as well.

In more happenings, Indicor (Roper Industrial Products Investment Co. LLC) reduced the spread on its U.S. first-lien term loan for a second time and revised the original issue discount again, and finalized the discount on its euro term loan at the tight end of revised talk.

Also, H.B. Fuller Co. set the spread on its first-lien term loan B at the low end of guidance, tightened the issue price and moved up the commitment deadline, and Par Petroleum LLC joined the near-term primary calendar.

CQP launches, frees

CQP Holdco approached lenders on Friday morning with a fungible $275 million add-on term loan B (B1/BB) due June 4, 2028 talked with an original issue discount talk of 99 to 99.5 and then tightened the issue price to par shortly after the 1 p.m. ET commitment deadline passed, according to a market source.

The add-on term loan is priced at Libor plus 350 basis points at less than 5.75 total net leverage (current rate) and Libor plus 375 bps at more than 5.75x total net leverage, with a 0.5% floor.

Recommitments after the tightening were due at 1:30 p.m. ET on Friday and the add-on loan broke for trading in the afternoon, with levels quoted at par 1/8 bid, par ½ offered, a trader added.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to fund a distribution to the sponsors and pay transaction fees and expenses.

Closing is expected during the week of Feb. 6.

Pro forma for the transaction, the term loan B totals $2,737,500,000.

CQP Holdco is an owner and operator of natural gas facilities.

First Brands breaks

First Brands’ fungible $300 million incremental senior secured first-lien term loan (B1/B+/BB+) due March 30, 2027 freed up for trading during the session, with levels quoted at 96¼ bid, 97 offered, a market source said.

Pricing on the incremental term loan is SOFR+CSA plus 500 basis points with a 1% floor, in line with pricing on the company’s existing $425 million incremental term loan that was completed in December 2022, and the new debt was sold at an original issue discount of 96. CSA is 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate. The incremental term loan has 101 soft call protection through June 15, 2023.

During syndication, the incremental term loan was upsized from $250 million.

Jefferies LLC is leading the deal that will be used to fund acquisitions.

First Brands is a Rochester, Mich.-based automotive aftermarket platform offering comprehensive solutions for consumable maintenance and mission-critical repair parts.

Indicor flexes

Indicor trimmed pricing on its $1,230,484,042 first-lien term loan (B1/B) due Nov. 22, 2029 to SOFR plus 450 bps from revised talk of SOFR plus 475 bps and initial talk of SOFR plus 500 bps, and changed the original issue discount to 96.5 from revised talk in the range of 95.5 to 96 and initial talk of 94, according to a market source.

Also, the company set the original issue discount on its €300 million first-lien term loan (B1/B) due Nov. 22, 2029 at 95, the tight end of revised talk of 94.5 to 95 and tighter than initial talk of 93, while keeping pricing at Euribor plus 500 bps with a 0% floor, the source said.

The U.S. term loan still has a 0.5% floor and both term loans still have 101 soft call protection for one year.

Earlier in syndication, pricing on the euro term loan firmed at the low end of the Euribor plus 500 bps to 525 bps talk and some lender friendly revisions were made to documentation.

Recommitments for the U.S. term loan were due at 5 p.m. ET on Friday and allocations are expected on Monday, the source added.

Indicor lead banks

UBS Investment Bank, BNP Paribas Securities Corp., RBC Capital Markets, BMO Capital Markets, Mizuho, Natixis, TD Securities and Santander are leading Indicor’s credit facilities, with UBS the left lead on the U.S. loan and BNP left on the euro loan.

In addition to the first-lien term loans, the company’s credit facilities include a $300 million revolver due Nov. 22, 2027 (B1/B) and a $475 million privately placed second-lien term loan due Nov. 22, 2030.

Proceeds were used to help fund Clayton, Dubilier & Rice LLC’s roughly $2.6 billion acquisition of a majority stake in the industrial products businesses of Roper Technologies Inc., rebranded as Indicor. The transaction closed on Nov. 22, 2022. Roper retained a 49% minority interest in Indicor.

Indicor is a provider of products and services within three primary product categories: material preparation and testing, sensors and controls, and flow control.

H.B. Fuller revised

H.B. Fuller Co. firmed pricing on its $800 million seven-year first-lien term loan B (Ba1/BB+/BBB-) at SOFR plus 250 bps, the low end of the SOFR plus 250 bps to 275 bps talk, and adjusted the issue price to par from 99, a market source remarked.

As before, the term loan has a 0.5% floor and 101 soft call protection for six months.

Commitments are due at noon ET on Monday, accelerated from 5 p.m. ET on Wednesday, the source added.

JPMorgan Chase Bank is leading the deal that will be used with a term loan A to refinance the company’s existing term loan B due 2024.

H.B. Fuller is a St. Paul, Minn.-based industrial adhesives, sealants, coatings and specialty materials company.

Par Petroleum on deck

Par Petroleum set a lender call for 11:30 a.m. ET on Monday to launch a $550 million seven-year covenant-lite term loan B (B1/BB), according to a market source.

The term loan has 101 soft call protection for six months.

Commitments are due at noon ET on Feb. 14, the source added.

Wells Fargo Securities LLC, BofA Securities Inc. and MUFG are leading the deal that will be used to refinance the company’s 7¾% notes due 2025, 12 7/8% senior secured notes due 2026 and existing term loan B due 2026, and for general corporate purposes.

The company also plans to refinance its existing ABL credit facility due 2025 with a new $150 million ABL credit facility due 2028, which it expects to upsize to about $550 million upon the closing of its previously announced acquisition of 63,000 bpd Billings refinery and associated marketing and logistics assets from ExxonMobil Corp. for $310 million, plus hydrocarbon and other inventory to be valued at closing.

Closing on the acquisition is expected in the second quarter, subject to customary conditions.

Par Petroleum is a subsidiary of Par Pacific, a Houston-based refiner, marketer and distributor of crude oil.

Fund flows

In other news, actively managed loan fund flows on Thursday were negative $152 million and loan ETFs were positive $118 million, market sources said.

Loan funds reported weekly outflows totaling $786 million, including negative $49 million ETFs. These were the largest withdrawals since the week ending Dec. 21 with actively managed funds enduring a thirty eighth consecutive weekly withdrawal.

Net inflows for loan funds since the beginning of 2021 are down to $31.3 billion, whereas dedicated loan fund AUM is down to $103 billion from $142 billion in May 2022, sources added.

Outflows for loan funds in 2023 total $2.4 billion following $12.7 billion of outflows in fourth quarter 2022 and $12.8 billion of outflows in 2022.

Loan indices rise

IHS Markit’s iBoxx loan indices were stronger on Thursday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.18% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.23%.

Month to date, the MiLLi is up 0.20% and year to date it is up 2.78%, and the LLLi is up 0.17% month to date and up 2.80% year to date.

Average secondary market bids in the U.S. on Thursday were 92.65, up 0.09% from the previous day and up 0.83% year to date.

According to the IHS Markit data, some of the top advancers on Thursday were AMC Entertainment’s April 2019 covenant-lite term loan B at 65.71, up from 61.83, National CineMedia’s June 2018 term loan B at 30.40, up from 28.80, and Telesat Canada’s December 2019 covenant-lite term loan at 50.50, up from 48.

Some top decliners on Thursday were Clarion Events’ February 2018 covenant-lite term loan B2 at 74.80, down from 77.75, Athletico Physical’s February 2022 covenant-lite term loan B at 67.40, down from 68.88, and Visa Capital’s October 2019 covenant-lite term loan at 75, down from 76.50.

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