ArchKey, Culligan deal updates surface; EG Group eliminates add-on term loan plans

By Sara Rosenberg

New York, Nov. 10 – In the primary market on Friday, ArchKey Holdings Inc. reduced the size of its delayed-draw term loan and finalized the original issue discount at the wide end of guidance, and Culligan International Co. (AI Aqua Merger Sub Inc.) added a delayed-draw term loan to its proposed capital structure.

Also, EG Group pulled its U.S. and euro senior secured add-on term loan B from market and is still going forward with its senior secured bond offering, however, the company will now also get privately placed floating rate notes and a bridge loan.

Furthermore, Perrigo joined the near-term new issue calendar with a fungible add-on term loan B that will be used to fund a tender offer for some notes.

ArchKey tweaked

ArchKey scaled back its delayed-draw term loan due June 29, 2028 to $75 million from $100 million, and firmed the original issue discount at 99.125 plus a duration fee of 2.125% for an all-in original issue discount of 97, the wide end of initial talk of 99.125 plus a duration fee of 1.625% to 2.125% for an all-in original issue discount of 97 to 97.5, a market source said.

Pricing on the delayed-draw term loan is SOFR+CSA plus 525 basis points with a 0.75% floor, which matches existing term loan pricing. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

Deutsche Bank Securities Inc. is the left lead on the deal that will be used to fund a distribution to equity holders.

ArchKey is a St. Louis-based electrical and technologies service provider.

Culligan adds delayed-draw

Culligan added a $200 million delayed-draw term loan due July 30, 2028 to its proposed transaction that is available until Dec. 31, 2024, has ticking fees of half the margin starting on day 61 and the full margin starting on day 121, and has a 5.25x net first-lien leverage test, according to a market source.

The delayed-draw term loan is in addition to the company’s $950 million senior secured incremental covenant-lite first-lien term loan B due July 30, 2028, which launched with a lender call on Nov. 7 and is talked at SOFR plus 450 bps with 25 bps step-downs at 4.75x and 4.25x net first-lien leverage, a 0.5% floor, an original issue discount of 97 and 101 soft call protection for six months.

The incremental loan has ticking fees of half the margin from days 61 to 120 and the full margin thereafter.

Commitments are due at noon ET on Tuesday.

Morgan Stanley Senior Funding Inc., JPMorgan Chase Bank, BofA Securities Inc. and Goldman Sachs Bank USA are leading the deal that will be used to fund the acquisition of Primo Water Corp.’s international businesses (Primo Europe) in an all-cash transaction valued at up to $575 million, to fully pay down revolver borrowings and to add cash to the balance sheet.

Culligan is a Rosemont, Ill.-based provider of water treatment products and services.

EG Group pulled

EG Group eliminated plans for a fungible $500 million equivalent U.S. and euro senior secured add-on term loan B due February 2028 that was talked with an original issue discount of 95 to 95.5, a market source remarked.

Like the existing term loans, the U.S. add-on term loan was going to be priced at SOFR plus 550 bps with a 0.5% floor, the euro add-on term loan was going to be priced at Euribor plus 550 bps with a 0% floor, and both add-on loans were going to have 101 soft call protection for six months from Nov. 10.

Under its revised financing plan, the company is still getting roughly $1.6 billion equivalent of U.S. and euro senior secured notes and is now also getting a $200 million asset disposal bridge loan due February 2028 priced at SOFR/Euribor plus 550 bps, and $500 million of floating rate notes (50% Pay in Kind) due November 2028 privately placed with two high quality investors at pricing of SOFR plus 750 bps with an original issue discount of 97, the source continued.

The split of the senior secured notes finalized on Friday at $1.1 billion and €468 million.

EG Group refinancing

EG Group’s notes will be used to partially refinance its remaining 2025 and 2026 debt maturities, and the bridge loan will reduce $200 million of its 2025 tranche A stub, the source added.

Barclays, JPMorgan Chase Bank and BofA Securities Inc. are the physical bookrunners on the deal. Goldman Sachs, HSBC Securities, ING, Lloyds, Morgan Stanley Senior Funding Inc., Rabobank, SMBC and UBS Investment Bank were acting as the joint bookrunners on the add-on term loans.

EG Group is a Blackburn, U.K.-based convenience retail and fuel station company.

Perrigo on deck

Perrigo set a lender call for 2:30 p.m. ET on Monday to launch a fungible $300 million add-on term loan B due 2029 talked with an original issue discount of 98.79 to 99, according to a market source.

Pricing on the add-on term loan is SOFR+10 bps CSA plus 225 bps with a 25 bps step-up at more than 4.8x total net leverage and a 0.5% floor, in line with existing term loan B pricing.

Commitments are due at 5 p.m. ET on Thursday the source added.

JPMorgan Chase Bank is leading the deal that will be used with cash on hand and/or other sources of liquidity to fund a tender offer for up to $300 million of the company’s 3.9% senior notes due 2024.

The tender offer expires at 5 p.m. ET on Dec. 12.

Perrigo is a Dublin-based provider of self-care products and over-the-counter health and wellness solutions.

Fund flows

In other news, actively managed loan fund flows on Thursday were negative $13 million and loan ETFs were positive $5 million, sources said.

Loan funds reported weekly inflows totaling $687 million, with positive $738 million ETFs, which was the largest inflows since April 2022.

Year to date, outflows for loan funds to $18.1 billion, with positive $1.4 billion ETFs, sources added.

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