Culligan, Smyrna, Hertz break; Buckeye accelerated; TransDigm, American, others set talk

By Sara Rosenberg

New York, Nov. 14 – Culligan International Co. (AI Aqua Merger Sub Inc.) trimmed the spread on its term loans, removed one pricing step-down and modified ticking fees before freeing up for trading late in the day on Tuesday.

Also, Smyrna Ready Mix Concrete LLC trimmed pricing on its term loan B and then broke for trading, and Hertz Corp.’s incremental term loan B made its way into the secondary market as well.

In more happenings, Buckeye Partners LP moved up the commitment deadline for its term loan B, TransDigm Group Inc., American Airlines Inc., Instructure Holdings Inc., IMA Financial Group and PremiStar released price talk with launch, and Enverus joined this week’s calendar with plans for a unitranche facility.

Culligan revised

Culligan lowered pricing on its $1.15 billion senior secured incremental covenant-lite first-lien term loan B due July 30, 2028, split between a $950 million funded tranche and a $200 million unfunded delayed-draw term loan, to SOFR plus 425 basis points from SOFR plus 450 bps and removed a 25 bps step-down at 4.25x net first-lien leverage, according to a market source.

In addition, ticking fees on the term loan debt were changed to half the margin at day 46 and the full margin at day 91 from half the margin from days 61 to 120 and the full margin thereafter, the source said.

As before, the term loan debt has a 25 bps step-down at 4.75x net first-lien leverage, a 0.5% floor, an original issue discount of 97 and 101 soft call protection for six months.

Delayed-draw term loan availability is until Dec. 31, 2024.

Previously in syndication, the delayed-draw term loan was added to the transaction.

Culligan frees up

Recommitments for Culligan’s incremental term loan B were due at 2 p.m. ET on Tuesday and the debt began trading late in the day, with levels quoted at 97¾ bid, 98½ offered, a trader added.

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.

Closing on the funded portion of the term loan is expected on Dec. 29.

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

Smyrna updated, breaks

Smyrna Ready Mix reduced pricing on its $538 million term loan B due 2029 (Ba3) to SOFR plus 350 bps from talk in the range of SOFR plus 375 bps to 400 bps, a market source said.

The term loan still has a 0% floor, an original issue discount of 99.75 and 101 soft call protection for six months.

Recommitments were due at 11 a.m. ET on Tuesday, and the term loan B freed to trade later in the day, with levels quoted at par bid, par ½ offered, another source added.

JPMorgan Chase Bank is leading the deal that will be used with $1.1 billion of senior secured notes to refinance an existing term loan B, to pay down asset-based lending borrowings and to fund an acquisition.

Smyrna Ready Mix is a Murfreesboro, Tenn.-based manufacturer and retailer of ready-mixed concrete.

Hertz hits secondary

Hertz’s non-fungible $500 million incremental senior secured term loan B due June 30, 2028 broke for trading during the session, with levels quoted at 98 5/8 bid, 99 1/8 offered, according to a market source.

Pricing on the incremental term loan is SOFR plus 375 bps with a 0% floor, and it was sold at an original issue discount of 98. The debt has 101 soft call protection for six months.

During syndication, the incremental term loan was upsized from $400 million, pricing firmed at the low end of the SOFR plus 375 bps to 400 bps talk and the discount finalized at the tight end of the 97.5 to 98 talk.

Barclays, Goldman Sachs Bank USA and others to be announced are leading the deal that will be used to repay outstanding borrowings under the company’s existing senior secured revolver due 2026, to pay transaction related fees and expenses, and for general corporate purposes.

Hertz is an Estero, Fla.-based car rental company.

Buckeye tweaks timing

In other news, Buckeye Partners accelerated the commitment deadline for its $1 billion term loan B (Ba1/BB+/BBB-) to 11 a.m. ET on Wednesday from 5 p.m. ET on Thursday, a market source remarked.

The term loan is talked at SOFR plus 250 bps to 275 bps with a 0% floor, an original issue discount of 99.5 and 101 soft call protection for six months.

MUFG, Truist Securities, CIBC, Wells Fargo Securities LLC, TD Securities (USA) LLC, ING, Mizuho, JPMorgan Chase Bank, Goldman Sachs Bank USA, Santander and National Australia Bank are leading the deal that will be used to fund a partial refinancing of the company’s term loan B due 2026 priced at SOFR plus 225 bps with a 0% floor and revolving borrowings.

Buckeye is a Houston-based owner and operator of integrated midstream assets.

TransDigm proposed terms

TransDigm held a lender call at 1:30 p.m. ET on Tuesday to launch a $1 billion first-lien term loan J due February 2031 (Ba3/B+) talked at SOFR plus 325 bps with a 0% floor, an original issue discount of 99 to 99.5 and 101 soft call protection for six months, according to a market source.

Commitments are due at 1 p.m. ET on Thursday, the source added.

Goldman Sachs Bank USA is the left lead on the deal that will be used with $1 billion of senior secured notes and cash on hand to fund the acquisition of Communications & Power Industries’ electron device business for about $1.385 billion and for general corporate purposes, including further increasing liquidity and funding potential future acquisitions, dividends or stock repurchases.

Closing on the acquisition is expected by the end of TransDigm’s third fiscal quarter of 2024, subject to regulatory approvals and customary conditions. The debt is expected to close prior to the acquisition close.

TransDigm is a Cleveland-based designer, producer and supplier of highly engineered aircraft components for commercial and military aircraft. The electron device business manufactures electronic components and subsystems primarily serving the aerospace and defense market.

American holds call

American Airlines surfaced in the morning with plans to hold a lender call at 1 p.m. ET to launch a $750 million 5.5-year term loan B (Ba2/BB/BB-) talked at SOFR plus 350 bps to 375 bps with a 0% floor, an original issue discount of 98.5 and 101 soft call protection for six months, a market source said.

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

Citigroup Global Markets Inc., BofA Securities Inc. and Morgan Stanley Senior Funding Inc. are leading the deal that will be used with other pari passu secured debt to partially refinance existing 11¾% secured notes due 2025 and to pay related transaction fees and expenses.

Closing is expected during the week of Nov. 27.

American Airlines is a Fort Worth-based airline company.

Instructure launches

Instructure held a lender call at 10 a.m. ET, launching a fungible $685 million add-on term loan B due October 2028 (//BB+) talked with an original issue discount of 99.03, a market source remarked.

Pricing on the add-on term loan is SOFR+CSA plus 275 bps with a 0.5% floor, and the debt is getting 101 soft call protection for six months. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

Commitments are due at 10 a.m. ET on Friday, the source added.

JPMorgan Chase Bank, Macquarie Capital (USA) Inc., Morgan Stanley Senior Funding Inc., Golub Capital and Goldman Sachs Bank USA are leading the deal that will be used with balance sheet cash to fund the acquisition of Parchment in a transaction valued at about $835 million.

Closing is expected in the first quarter of 2024, subject to regulatory approval and customary conditions.

Pro forma for the transaction, net debt is 3.8x and total debt is 4.2x.

Instructure is a Salt Lake City-based educational technology company. Parchment is an academic credential management platform.

IMA guidance

IMA Financial launched on its morning lender call its fungible $350 million add-on covenant-lite term loan B-1 due November 2028 with original issue discount talk of 99.04 to 99.25, according to a market source.

Pricing on the add-on term loan is SOFR+CSA plus 375 bps with a 0.5% floor. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

The add-on and existing term loan are getting 101 soft call protection for six months, the source said.

Commitments are due at noon ET on Friday.

BMO Capital Markets is leading the deal that will be used to refinance an existing term loan B-2, repay revolver borrowings and fund an acquisition under a letter of intent.

New Mountain Capital, SkyKnight Capital and the Stephens Group are the sponsors.

IMA Financial is a Denver-based property and casualty and employee-benefit specialty insurance brokerage.

PremiStar talk

PremiStar came out with original issue discount talk of 99.03 on its fungible $75 million add-on covenant-lite first-lien term loan due August 2028 that launched with a call in the morning, a market source said.

Pricing on the add-on term loan is SOFR plus 450 bps with a 0.75% floor.

Commitments are due on Nov. 21, the source added.

Truist Securities is the left lead on the deal, which will be used for general corporate purposes, including to fund near-term acquisitions.

PremiStar, formerly known as Reedy Industries, is a Deerfield, Ill.-based provider of commercial heating, ventilation and air conditioning services.

Enverus on deck

Enverus is scheduled to hold a lender question and answer session at 9:30 a.m. ET on Thursday to discuss a $2.25 billion unitranche facility, according to a market source.

Golub Capital is the left lead on the deal that will be used to refinance existing debt, pay fees and expenses, and provide for future merger and acquisition activity, the source added.

Hellman & Friedman and Genstar are the sponsors.

Enverus, formerly known as Drillinginfo, is an Austin, Tex.-based provider of mission critical data and analytics and business automation software solutions for the energy and power industries.

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