Freescale loans react to purchase by NXP; Hanson Building Products updates deal again

By Sara Rosenberg

New York, March 2 – Freescale Semiconductor, Inc.’s term loans moved around in the secondary market during Monday’s trading session on news that the company is being acquired by NXP Semiconductors NV.

Over in the primary market, Hanson Building Products moved some funds to its first-lien term loan from its second-lien term loan and modified the offer price on the first-lien debt.

Also, Ineos Finance plc, Surgical Care Affiliates Inc., Coinmach (CSC Serviceworks), Lions Gate Entertainment Corp. and C&J Energy Services Inc. emerged with new loan plans.

Freescale moves around

Freescale Semiconductor’s term loan B-4 was stronger and its term loan B-5 was weaker on Monday following the announcement that it is being bought by NXP Semiconductors, according to traders.

Freescale’s term loan B-4 was quoted by one trader at par bid, par 3/8 offered, up from 99 7/8 bid, par 1/8 offered, and by a second trader at par bid, par ¼ offered, up from 99 7/8 bid, par 1/8 offered. The term loan B-5 was quoted by a trader at par 3/8 bid, par ¾ offered, down from par ½ bid, 101 offered.

One trader explained that there is no call protection on the Freescale debt so the expectation is that it will grind to par, but since the acquisition does not close for a while the debt will be elevated to slightly above par in the near-term as investors view it as a yield play.

And, being that the B-5 loan has a higher interest rate than the B-4 loan, it will trade higher than the B-4 for the time being, the trader added.

Regarding NXP, one trader had the term loan D quoted at 99¾ bid, par ¼ offered, up from 99½ bid, par offered, while a second trader had to the D loan quoted at 99¼ bid, par offered, unchanged from Friday’s levels.

Freescale acquisition details

Under the agreement, Freescale is being bought for $6.25 in cash and 0.3521 of an NXP ordinary share per common share held at the close of the transaction for a total equity value of about $11.8 billion and a total enterprise value of around $16.7 billion including Freescale’s net debt.

Funding for the acquisition is expected to come from $1 billion of new debt led by Credit Suisse Securities (USA) LLC, $1 billion of cash from the balance sheet and about 115 million NXP ordinary shares.

Closing is expected in the second half of the year, subject to regulatory approvals in various jurisdictions and customary conditions, as well as the approval of NXP and Freescale shareholders.

NXP’s net debt to EBITDA at closing will be around 3 times.

Freescale is an Austin, Texas-based semiconductor company. NXP is an Eindhoven, Netherlands-based maker of semiconductors.

Hanson reworks deal

Moving to the primary market, Hanson Building Products lifted its seven-year first-lien covenant-light term loan to $635 million from $595 million and moved the original issue discount to 97½ from revised talk of 97 and initial talk of 99, according to a market source.

The first-lien term loan is still priced at Libor plus 550 basis points with a 1% Libor floor and has 101 soft call protection for one year.

As for the eight-year second-lien covenant-light term loan, it was trimmed to $260 million from $300 million, the source said, while pricing remained at Libor plus 950 bps with a 1% Libor floor and a discount of 95, and call protection was unchanged at non-callable for one year, then at 103 in year two and 101 in year three.

Previously in syndication, pricing on the first-lien term loan was increased from Libor plus 525 bps, and pricing on the second-lien term loan was raised from Libor plus 900 bps, the discount widened from 98 and the call protection was modified from 103 in year one, 102 in year two and 101 in year three.

Hanson getting revolver

In addition to the first- and second-lien term loans, Hanson Building Products’ $1,045,000,000 credit facility includes a $150 million ABL revolver.

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

Credit Suisse Securities (USA) LLC, Barclays and Citigroup Global Markets Inc. are leading the deal that will be used to help fund the buyout of the company by Lone Star Funds from HeidelbergCement for $1.4 billion, of which up to $100 million will be payable in 2016, depending on the performance of the business in 2015.

Closing is expected this quarter, subject to the satisfaction of customary conditions.

Hanson Building Products is a manufacturer of concrete and clay building products.

Ineos on deck

Ineos Finance set a lender call for 9:30 a.m. ET on Tuesday to launch a €750 million-equivalent seven-year senior secured term loan B split between U.S. dollar and euro tranches, with a minimum size of $250 million and a minimum size of €250 million, a market source remarked.

Barclays and J.P. Morgan Securities LLC are the lead bookrunners and joint global coordinators on the deal, and other bookrunners include Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Morgan Stanley Senior Funding Inc.

Ineos, a Switzerland-based manufacturer of petrochemicals, specialty chemicals and oil products, will use the term loan B to refinance existing floating-rate notes due 2019 and a portion of the senior secured notes due 2019.

Surgical Care joins calendar

Surgical Care Affiliates will hold a lender call at 3 p.m. ET on Tuesday to launch a $600 million senior secured credit facility, according to sources.

The facility consists of a $350 million term loan talked at Libor plus 375 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and a $250 million revolver, sources said.

J.P. Morgan Securities LLC is leading the deal that will be used with $350 million of new senior unsecured notes to refinance an existing credit facility, comprised of a $132 million revolver and $596 million of term loans, and for general corporate purposes, including acquisitions and other development activities.

Closing is expected by the end of this quarter.

Surgical Care is a Deerfield, Ill.-based operator of surgical facilities.

Coinmach plans call

Coinmach scheduled a lender call for 2:30 p.m. ET on Tuesday to launch a $125 million add-on first-lien covenant-light term loan due November 2019 talked at Libor plus 325 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 matches existing first-lien term loan pricing.

Deutsche Bank Securities Inc. and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to pay down revolver borrowings and for general corporate purposes, including potential tuck-in acquisitions.

Coinmach is a laundry equipment service provider.

Lions Gate readies loan

Lions Gate Entertainment plans to hold a call on Wednesday afternoon to launch a $250 million second-lien term loan that is talked at a fixed-rate of 5% and is non-callable for one year, then at 102 in year two and 101 in year three, a market source said.

J.P. Morgan Securities LLC is leading the deal.

Proceeds will be used to refinance an existing second-lien term loan.

Lions Gate is a Santa Monica, Calif.-based entertainment company in motion picture production and distribution, television programming and syndication, home entertainment, family entertainment, digital distribution and new channel platforms.

C&J coming soon

C&J Energy Services is scheduled to hold a lender call at 11 a.m. ET on Wednesday to launch a new loan, according to a market source.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Wells Fargo Securities LLC and J.P. Morgan Securities LLC are leading the deal.

C&J is a Houston-based provider of hydraulic fracturing, coiled tubing, cased-hole wireline, pumpdown and other oilfield services.

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