Citgo Holding, Phoenix Services hit secondary; PetSmart reveals pricing guidance with launch

By Sara Rosenberg

New York, Feb. 9 – Citgo Holding Inc. upsized its term loan B and then the debt made its way into the secondary market on Monday with levels quoted above its issue price, and Phoenix Services (Metal Services LLC) freed up for trading as well.

In more happenings, PetSmart Inc. released price talk with launch, and Healogics Inc., Panda Temple I and Par Pharmaceutical Cos. Inc. joined this week’s calendar.

Citgo tops OID

Citgo’s lifted its 3¼-year senior secured first-lien term loan B to $1.3 billion from $1 billion and then broke for trading on Monday with levels quoted at 95 bid, 96 offered, according to a trader.

Pricing on the loan is Libor plus 850 basis points with a 1% Libor floor and it was sold at an original issue discount of 94. The debt is still non-callable for one year, then at 102 in year two and 101 in year three.

During syndication, the spread on the loan was raised from revised talk of Libor plus 825 bps and initial talk of Libor plus 800 bps, the discount widened from talk of 96 to 97, the maturity was shortened from five years, the excess cash flow sweep was increased, the debt service reserve was modified, the security package was enhanced, additional OpCo debt incurrence was limited to $500 million, and excess cash flow and asset sale paydowns were set at a premium of 101.

Deutsche Bank Securities Inc. is leading the loan that will be used with bonds to fund a distribution to Citgo Holding’s ultimate parent.

Citgo is a Houston-based refiner, marketer and transporter of gasoline, diesel fuel, jet fuel, lubricants, petrochemicals and other petroleum-based industrial products.

Phoenix starts trading

Phoenix Services’ fungible $50 million tack-on first-lien term loan due June 30, 2017 freed up for trading in the afternoon and levels were seen at par bid, par ½ offered, a trader remarked.

Pricing on the tack-on loan is Libor plus 500 bps with a 1% Libor floor, which matches pricing on the existing term loan, and all of the first-lien term loan debt is getting 101 soft call protection for six months.

The tack-on was sold at an original issue discount of 99.51, after being revised from 99.5, a market source said.

Credit Suisse Securities (USA) LLC and Morgan Stanley Senior Funding Inc. are leading the deal that will be used for general corporate purposes.

With the tack-on loan, the company is amending the maximum leverage ratio under its existing loan to reset the levels.

Phoenix Services is a provider of industrial services.

PetSmart discloses talk

Back in the primary, PetSmart held its bank meeting on Monday, launching its $4.3 billion seven-year senior secured covenant-light term loan B (Ba3/BB-) with talk of Libor plus 450 bps to 475 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, a market source said.

By comparison, recent filings with the Securities and Exchange Commission outlined expected pricing on the term loan B at Libor plus 450 bps with a 1% Libor floor.

Commitments are due at 5 p.m. ET on Feb. 20, the source continued.

The company’s $5.05 billion credit facility also includes a $750 million five-year asset-based revolver.

Citigroup Global Markets Inc., Barclays, Deutsche Bank Securities Inc., Nomura Securities International Inc., Jefferies Finance LLC, RBC Capital Markets and Macquarie Capital (USA) Inc. are leading the deal.

PetSmart being acquired

Proceeds from PetSmart’s credit facility, a proposed $1.9 billion senior notes offering and up to about $1.83 billion of equity will be used to fund its buyout by a consortium led by BC Partners Inc. for $83.00 per share in cash, or about $8.7 billion.

The consortium includes funds advised by BC Partners, alongside several of its limited partners, such as La Caisse de depot et placement du Quebec and StepStone.

As a back-up for the notes, the company has a commitment for a $1.9 billion senior unsecured bridge loan priced at Libor plus 700 bps with a 1% Libor floor. The spread will increase by 50 bps every three months until it hits a specified cap.

Closing is expected in the first quarter of this year, subject to shareholder approval, which will be sought at a meeting on March 6, regulatory approval and other customary conditions.

PetSmart is a Phoenix-based specialty pet retailer.

Healogics readies loan

Healogics set a lender call for Tuesday to launch a $125 million add-on first-lien term loan that is talked at Libor plus 425 bps with a 1% Libor floor and an original issue discount that is still to be determined, according to a market source.

The spread and floor on the add-on loan matches the existing first-lien term loan.

J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC are leading the deal that will be used to help fund the acquisition of Accelecare Wound Centers.

Healogics is a Jacksonville, Fla.-based provider of advanced wound-care services. Accelecare is a Bellevue, Wash.-based wound care and disease management company.

Panda Temple on deck

Panda Temple I scheduled a bank meeting for 10 a.m. ET on Tuesday to launch a $405 million credit facility, a market source said.

The debt consists of a $375 million seven-year term loan B and a $30 million working capital facility, the source continued.

Goldman Sachs Bank USA and Credit Suisse Securities (USA) LLC are leading the deal that will be used to refinance existing debt.

Panda Temple I is a clean natural gas-fueled, 758-megawatt combined-cycle facility located in Temple, Texas.

Par Pharmaceutical plans call

Par Pharmaceutical emerged with plans to hold a call on Tuesday to launch a new loan, according to a market source.

Details on the transaction are not yet available, the source said.

Bank of America Merrill Lynch, Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and TPG are leading the deal.

Par Pharmaceutical is a Woodcliff Lake, N.J.-based specialty pharmaceutical company.

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