ERT, Evoqua, Quorum Health break; DJO down on downgrades; Samsonite, Pinnacle tweak deals

By Sara Rosenberg

New York, April 12 – ERT (eResearchTechnology Inc.) lowered pricing on its term loan, modified the issue price and extended the call protection, and Evoqua Water Technologies (EWT Holdings III Corp.) tightened the spread and original issue discount on its term loan, and then both deals made their way into the secondary market on Tuesday.

In more trading happenings, Quorum Health Corp.’s credit facility freed up, and DJO Finance LLC’s term loan retreated by a few points on the back of downgrades to the company’s corporate rating and credit facility rating by Moody’s Investors Service.

Back in the primary market, Samsonite trimmed pricing on its term loan B and set the original issue discount at the tight end of guidance, Pinnacle Entertainment Inc. cut price talk on its B loan while also revising the issue price and the call protection, and Netsmart Technologies Inc. moved up the commitment deadline on its deal.

Also, Ciena Corp. released price talk with launch, Pharmaceutical Product Development LLC (Jaguar Holding Co. II) came to market with a tack-on term loan, and Russell Investments and PQ Corp. surfaced with new deal plans.

ERT revised, breaks

ERT cut pricing on its $495 million seven-year covenant-light first-lien term loan to Libor plus 500 basis points from talk of Libor plus 525 bps to 550 bps, tightened the original issue discount to 99 from 98 and extended the 101 soft call protection to one year from six months, a market source said.

The term loan still has a 1% Libor floor.

The company’s $540 million credit facility (B1/B) also includes a $45 million five-year revolver.

Recommitments were due at 2 p.m. ET on Tuesday, and then the term loan B hit the secondary market with levels quoted at 99½ bid, the source added.

Goldman Sachs Bank USA and Bank of America Merrill Lynch are leading the deal that will be used with a $220 million of privately placed second-lien financing and equity to fund the buyout of the company by Nordic Capital Fund VIII from Genstar Capital.

Closing is expected in the second quarter, subject to regulatory approvals and customary conditions.

ERT is a Philadelphia-based provider of patient data collection solutions for use in clinical drug development.

Evoqua reworked, trades

Evoqua lowered pricing on its non-fungible $185 million tack-on first-lien term loan (B2/B) due Jan. 15, 2021 to Libor plus 450 bps from talk of Libor plus 475 bps to 500 bps and moved the original issue discount to 99 from talk of 98 to 98.5, according to a market source.

As before, the term loan has a 1% Libor floor and 101 soft call protection for one year.

Recommitments were due by 1 p.m. ET, and then the debt freed up for trading with levels quoted at 99½ bid, par offered, a trader remarked.

Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc. and RBC Capital Markets are leading the deal that will be used to fund the acquisition of Neptune Benson, a manufacturer of high-quality water filtration and disinfection products for the recreational, industrial and municipal water markets.

Closing is expected this spring, subject to customary regulatory approvals.

Evoqua is a Warrendale, Pa.-based provider of equipment and services for water treatment.

Quorum tops OID

Quorum Health’s credit facility also began trading, with the $880 million six-year first-lien term loan (B1/B) quoted at par bid, 100½ offered, according to a trader.

Pricing on the term loan is Libor plus 575 bps with a 1% Libor floor, and it was sold at an original issue discount of 98. The debt has 101 soft call protection for six months.

During syndication, pricing on the term loan was increased from talk of Libor plus 500 bps to 525 bps, and the discount widened from 98.5.

The company’s $1,105,000,000 secured credit facility also includes a $100 million five-year revolver (B1/B) and a $125 million ABL revolver.

Credit Suisse Securities (USA) LLC is leading the deal that will be used with $400 million of senior notes to help fund the spinoff of the company from Community Health Systems Inc. and for general corporate purposes.

Quorum is a Brentwood, Tenn.-based operator and manager of general acute care hospitals and outpatient services.

DJO loan falls

Also in the secondary market, DJO Finance’s term loan dropped as investors reacted to ratings downgrades announced by Moody’s Investors Service on Monday, traders said.

The term loan was quoted by one trader at 95 bid, 96 offered, down from 98 bid, 98½ offered, and by a second trader at 95 bid, 96¼ offered, down from 98 bid, 98 3/8 offered.

The company’s corporate family rating was cut to Caa1 from B3, its senior secured credit facility rating was dropped to B1 from Ba3, its second priority senior secured notes rating was downgraded to Caa2 from Caa1, and its senior secured global notes rating was cut to Caa3 from Caa2.

Moody’s said that the rating action reflects the company’s operating performance weakness and deterioration of credit metrics beyond previous expectations.

DJO is a Vista, Calif.-based developer, manufacturer and distributor of medical device solutions for musculoskeletal health, vascular health and pain management.

BWIC announced

A $115 million Bid Wanted In Competition emerged with bids due at 1 p.m. ET on Wednesday, according to a trader.

Some of the names in the portfolio include Aramark Corp., Community Health Systems Inc., HCA Inc., Infor Inc., Nielsen Finance LLC, Reynolds Group Holdings Inc., Texas Competitive Electric Holdings Co. LLC, TransDigm Inc., Vantiv LLC and West Corp.

There are about 51 issuers in the portfolio, the trader added.

Samsonite updates pricing

Switching back to the primary market, Samsonite reduced pricing on its $675 million seven-year term loan B to Libor plus 325 bps from talk of Libor plus 375 bps to 400 bps and firmed the original issue discount at 99.5, the tight end of the 99 to 99.5 talk, according to a market source.

The term loan B still has a 0.75% Libor floor and 101 soft call protection for six months.

The company’s $2,425,000,000 senior secured credit facility (Ba2/BBB-) also includes a $500 million five-year revolver and $1.25 billion five-year term loan A.

Commitments were due at 5 p.m. ET on Tuesday, the source added. The deadline was moved up from Friday.

Samsonite lead banks

Morgan Stanley Senior Funding, Inc., HSBC Bank USA, SunTrust Robinson Humphrey Inc., MUFG, Barclays, Citizens Capital Markets, ING, Fifth Third and Bank of China are leading Samsonite’s credit facility, with Morgan Stanley the administrative agent on the term loan B and HSBC the administrative agent on the term loan A.

Proceeds will be used with cash on hand to fund the acquisition of Tumi Holding Inc. for $26.75 per share in cash, or about $1.82 billion, and to refinance existing credit facilities at both companies.

Closing is expected in the second half of this year, subject to the receipt of approvals by Samsonite and Tumi shareholders, the receipt of required regulatory approvals and the satisfaction of other customary conditions.

Samsonite International SA is the borrower on the revolver, and Samsonite IP Holdings is the borrower on the term loans.

Hong Kong-based Samsonite and South Plainfield, N.J.-based Tumi are manufacturers of bags and luggage.

Pinnacle changes surface

Pinnacle Entertainment trimmed price talk on its $350 million seven-year covenant-light term loan B (Ba2/BB+) to Libor plus 300 bps to 325 bps from revised talk of Libor plus 350 bps to 375 bps and initial talk of Libor plus 375 bps, changed the original issue discount to 99.75 from 99 and extended the 101 soft call protection to one year from six months, a market source remarked.

The term loan B has a 0.75% Libor floor, which was changed earlier in syndication from 1%.

Recommitments were due at 5 p.m. ET on Tuesday, the source added.

The company also plans to get a $400 million five-year revolver and a $185 million five-year term loan A.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Goldman Sachs Bank USA, Fifth Third Bank, U.S. Bank, Credit Agricole CIB, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC are leading the deal.

Pinnacle refinancing

Proceeds from Pinnacle’s credit facility will be used with $300 million of senior notes to refinance existing debt and for general corporate purposes.

The new debt is being done in connection with the spinoff of the operating business and the real property of Belterra Park Gaming & Entertainment into a separately traded public company (Pinnacle) and the sale of the remaining real estate assets (PropCo.) of Pinnacle to Gaming and Leisure Properties Inc.

Closing is expected on April 28, subject to customary conditions and regulatory approvals.

Pinnacle is a Las Vegas-based owner and operator of gaming entertainment properties.

Netsmart moves deadline

Netsmart Technologies accelerated the commitment deadline on its $612 million senior secured credit facility to 5 p.m. ET on Thursday from Monday, according to a market source.

The facility consists of a $50 million five-year revolver talked at Libor plus 525 bps to 550 bps with no Libor floor; a $395 million seven-year first-lien term loan talked at Libor plus 525 bps to 550 bps with a 1% Libor floor, an original issue discount of 98.5 and 101 soft call protection for six months; and a $167 million 7.5-year second-lien term loan talked at Libor plus 950 bps with a 1% Libor floor, a discount of 97.5 and call protection of 103 in year one and 101 in year two.

UBS Investment Bank and Deutsche Bank Securities Inc. are the joint lead arrangers on the deal that will help fund the company’s new venture with GI Partners and Allscripts Healthcare Solutions Inc. as investors.

As a part of the venture, Netsmart will merge the Allscripts Homecare business unit into the Netsmart CareFabric suite of solutions.

Netsmart is an Overland Park, Kan.-based IT company focused on health and human services.

Ciena releases talk

Also in the primary, Ciena held its bank meeting on Tuesday afternoon, launching its $200 million five-year covenant-light term loan B (Ba2) with talk of Libor plus 375 bps to 400 bps with a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a source remarked.

Commitments are due at noon ET on April 19, the source added.

Bank of America Merrill Lynch and Deutsche Bank Securities Inc. are leading the deal that will be used to add cash to the balance sheet and, in the future, to help repay convertible notes due in 2017.

Pro forma secured and net leverage will be 1.4 times and 4.3 times, respectively.

Closing is expected on April 25.

Ciena is a Hanover, Md.-based supplier of communications networking equipment and software.

Pharmaceutical Product loan

Pharmaceutical Product Development launched in the morning a fungible $200 million tack-on first-lien term loan due Aug. 18, 2022 talked at Libor plus 325 bps with a step-down, a 1% Libor floor, an original issue discount of 98.75 and a ticking fee of the spread plus the floor beginning 31 days post allocating, a market source said.

The spread and floor on the tack-on loan match pricing on the company’s existing $2,556,000,000 term loan.

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

Credit Suisse Securities (USA) LLC is leading the new debt that will be used to fund an acquisition.

Pharmaceutical Product Development is a Wilmington, N.C.-based contract research organization focused on clinical development and laboratory services.

Russell on deck

Russell Investments set a bank meeting in New York for Thursday to launch a $700 million credit facility (NA/NA/BB), according to a market source.

The facility consists of a $50 million five-year revolver and a $650 million seven-year term loan B, the source said.

Barclays, Macquarie Capital (USA) Inc. and Credit Suisse Securities (USA) LLC are leading the deal that will be used to help fund the buyout of the Seattle-based asset manager by TA Associates and Reverence Capital Partners from London Stock Exchange Group plc in a transaction valued at $1.15 billion, subject to customary closing adjustments.

Closing is expected in the first half of this year, conditioned on regulatory and other required approvals.

PQ plans meeting

PQ Corp. scheduled a bank meeting for 10 a.m. ET in New York on Thursday to launch a credit facility financing, a market source remarked.

Citigroup Global Markets Inc. is the left lead on the deal.

PQ is a Malvern, Pa.-based producer of specialty inorganic performance chemicals and catalysts.

Blount closes

In other news, the buyout of Blount International Inc. by American Securities LLC and P2 Capital Partners LLC for $10.00 in cash per share has been completed, a news release said.

To help fund the transaction, Blount got a new $550 million senior secured credit facility (B1/B+) that includes a $75 million five-year revolver and a $475 million seven-year first-lien term loan.

Pricing on the term loan is Libor plus 625 bps with a 1% Libor floor, and it was sold at an original issue discount of 97. The debt has 101 soft call protection for one year.

During syndication, the term loan was upsized from $300 million as a $175 million equivalent euro-denominated seven-year first-lien term loan was eliminated from the capital structure, pricing was increased from Libor plus 600 bps, the discount widened from 98, and modifications were made to the definition of consolidated EBITDA, the incremental allowance, the excess cash flow sweep and the maximum total net leverage ratio.

Barclays, KeyBanc Capital Markets Inc. and ING Capital led the deal.

Total leverage is 4.4 times, and net total leverage is 4 times.

Blount is a Portland, Ore.-based manufacturer and marketer of replacement parts, equipment and accessories in forestry, lawn and garden; farm, ranch and agriculture; and concrete cutting and finishing.

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