Connolly, Ortho-Clinical, Environmental, Stater break; primary sees multiple deal changes

By Sara Rosenberg

New York, May 9 - Connolly Inc. increased pricing on its first- and second-lien term loans, modified the original issue discount and call protection on the first-lien debt and then freed up for trading on Friday, and Ortho-Clinical Diagnostics Inc., Environmental Resources Management and Stater Bros. Markets broke as well.

In more happenings, Texas Competitive Electric Holdings Co. LLC reduced the Libor floor and tightened the original issue discount on its debtor-in-possession term loans, and Ability Network Inc. lifted spreads on its first- and second-lien term loans and sweetened the offer price and call premium on the first-lien tranche.

Also, American Rock Salt raised pricing on its first- and second-lien term loans and modified the call premium on the first-lien debt, Sterling Infosystems Inc. updated the spread and offer price on its term loan, PSC Industrial Services extended the call protection on its term loan, and Caesars Entertainment Operating Co. moved up the commitment deadline on its term loan B-7.

Furthermore, Curo Health Services released price talk on its term loans with launch, and Steinway Musical Instruments Inc. and One Call Medical Inc. emerged with new deal plans.

Connolly reworked, trades

Connolly lifted pricing on its $810 million seven-year first-lien term loan (B) to Libor plus 400 bps from talk of Libor plus 350 bps to 375 bps, moved the discount to 99 from 99½ and extended the 101 soft call protection to one year from six months, according to a market source. The 1% Libor floor was unchanged.

Meanwhile, pricing on the $265 million eight-year second-lien term loan (CCC+) was revised to Libor plus 700 bps from talk of Libor plus 650 bps to 675 bps, while the 1% Libor floor, discount of 99 and call protection of 102 in year one and 101 in year two were left intact, the source said.

Other changes to the transaction included removing the MFN sunset and decreasing the accordion to $175 million from $200 million, the source added.

Recommitments were due at noon ET on Friday and, with final terms in place, the debt was able to make its way into the secondary, with the first-lien term loan quoted at par ½ bid, par 7/8 offered and the second-lien term loan quoted at 101 bid, 101¾ offered, a trade remarked.

Connolly funding merger

Proceeds from Connolly's $1.15 billion credit facility, which also includes a $75 million five-year revolver (B), will be used to help fund its merger with iHealth Technologies.

Goldman Sachs Bank USA, RBC Capital Markets, Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc. and Bank of America Merrill Lynch are the lead banks on the deal, with Goldman left on the first-lien debt and RBC left on the second-lien debt.

Connolly is a Wilton, Conn.-based technology-enabled provider of recovery audit services. iHealth Technologies is an Atlanta-based health care analytics company.

Ortho-Clinical frees up

Ortho-Clinical Diagnostics' credit facility also began trading, with the $2,175,000,000 seven-year covenant-light term loan B quoted at 99¼ bid, par ¼ offered, according to a trader.

Pricing on the term loan is Libor plus 375 bps with a 1% Libor floor and it was sold at an original issue discount of 99. There is 101 soft call protection for one year and a ticking fee of the full spread after 30 days.

During syndication, the spread on the term loan was increased from Libor plus 350 bps, the discount was set at the high end of the 99 to 99½ talk, the call protection was extended from six months, the ticking fee was changed from half the spread from days 46 to 75 post allocations and the full spread from days 76 through Aug. 12, and the 50 bps MFN was set for life through the removal of the sunset provision.

Ortho-Clinical revolver

In addition to the term loan, Ortho-Clinical Diagnostics' $2,525,000,000 senior secured credit facility (B1/B) includes a $350 million five-year revolver.

Proceeds from the credit facility, equity and $1.3 billion of senior unsecured notes will be used to fund the $4.15 billion buyout of the company by the Carlyle Group from Johnson & Johnson. The notes offering was recently upsized by $150 million with the equity contribution reduced by the equivalent amount.

Barclays, Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, UBS Securities LLC and Nomura are leading the deal.

Closing is expected in the middle of this year, subject to customary regulatory approvals.

Ortho-Clinical Diagnostics is a Raritan, N.J.-based provider of services for screening, diagnosing, monitoring and confirming diseases.

Environmental levels emerge

Environmental Resources Management's credit facility surfaced in the secondary too, with the $550 million U.S. seven-year covenant-light first-lien term loan term loan (B1/B) quoted at 99½ bid, par offered and the $175 million eight-year covenant-light second-lien term loan (Caa1/CCC+) quoted at 99½ bid, par ½ offered, a market source said.

Pricing on the U.S. first-lien term loan, as well as on a €75.3 million (about $105 million equivalent) seven-year covenant-light first-lien term loan term loan (B1/B), is Libor/Euribor plus 400 bps with a 1% floor, and all of the debt has 101 soft call protection for one year. The U.S. loan was sold at a discount of 99 and the euro loan was issued at 991/2.

The second-lien term loan is priced at Libor plus 700 bps with a 1% Libor floor and was sold at a discount of 99. This tranche has hard call protection of 102 in year one and 101 in year two.

Environmental lead banks

Deutsche Bank Securities Inc., BNP Paribas Securities Corp. and HSBC Securities (USA) Inc. are leading Environmental Resources Management's term debt, with Deutsche left lead on the first-lien loan and BNP left lead on the second-lien loan.

During syndication, the U.S. first-lien term was reduced from $600 million and the discount firmed at the high end of revised talk of 99 to 99½ and wide of initial talk of 991/2, the euro loan was lifted from €40 million and the discount finalized at the high end of revised talk of 99½ to par but in line with initial talk of 991/2, pricing on both tranches was modified from Libor/Euribor plus 450 bps with no floor, and the 18-month MFN sunset provision was eliminated.

Proceeds will be used to refinance debt and fund a dividend to shareholders.

Environmental Resources is a provider of environmental, health, safety, risk and social consulting services.

Stater Bros. breaks

Another deal to hit the secondary market was Stater Bros. Markets, with its $250 million seven-year covenant-light term loan B quoted at par bid, par ¾ offered, according to a trader.

Pricing on the B loan is Libor plus 375 bps with a 1% Libor floor and it was sold at a discount of 991/2. There is 101 soft call protection for one year.

The company's $725 million credit facility (B1/B+) also includes a $150 million five-year revolver, and a $325 million five-year term loan A priced at Libor plus 250 bps with a step-down to Libor plus 225 when net leverage is less than 3 times.

During syndication, the term loan B was downsized from $300 million, pricing was cut from Libor plus 400 bps and the original issue discount was changed from 99, and the term loan A was upsized from $275 million and pricing was trimmed from Libor plus 275 bps.

Stater repaying debt

Proceeds from Stater Bros.' credit facility will be used to refinance an existing senior secured term loan, 7.75% notes due 2015 and 7.375% notes due 2018.

The funding of the term loan A and the term loan B is expected to occur 30 days after the closing date in conjunction with the senior notes redemption.

Bank of America Merrill Lynch is leading the deal.

Stater Bros. is a Bernardino, Calif.-based supermarket chain.

Texas Competitive tweaks deal

Back in the primary, Texas Competitive Electric Holdings changed the Libor floor on its $1,425,000,000 covenant-light term loan and $1.1 billion delayed-draw covenant-light term loan to 0.75% from 1% and modified the original issue discount to 99 5/8 from 991/2, according to a market source.

Pricing on the term loans remained at Libor plus 300 bps, and the delayed-draw term loan still has a ticking fee of half the spread from days 61 through 90 after close. If the delayed-draw term loan is terminated during the 90-day availability window, the original issue discount on the debt will be paid to lenders.

The company's $4,475,000,000 24-month DIP facility (Baa3) also includes a $1.95 billion revolver.

Recommitments were due at 2 p.m. ET on Friday and allocations are expected early in the week of Sept. 12, the source said. The term loan and delayed-draw loan allocations will be done as a strip.

Proceeds will be used for liquidity, adequate protection payments, restructuring costs and general corporate purposes. The delayed-draw loan will backstop letters-of-credit posted to the Railroad Commission of Texas.

Citigroup Global Markets Inc. is leading the deal for the Dallas-based energy company.

Ability flexes up

Ability Network raised pricing on its $200 million seven-year covenant-light first-lien term loan (B2) to Libor plus 500 bps from talk of Libor plus 425 bps to 450 bps, widened the original issue discount to 98 from 99 and extended the 101 soft call protection to one year from six months, according to a market source. This tranche still has a 1% Libor floor.

Also, pricing on the $80 million eight-year covenant-light second-lien term loan (Caa2) was increased to Libor plus 825 bps from talk of Libor plus 775 bps to 800 bps, while the 1% Libor floor, discount of 99 and call protection of 102 in year one and 101 in year two were unchanged, the source said.

The company's $300 million credit facility also includes a $20 million revolver (B2).

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

Deutsche Bank Securities Inc. and Macquarie Capital are leading the deal that will help fund the buyout of the Minneapolis-based health care information technology company by Summit Partners.

American Rock modified

American Rock Salt changed pricing on its $350 million first-lien covenant-light term loan (B3/B) to Libor plus 375 bps from Libor plus 350 bps and extended the 101 soft call protection to one year from six months, a source said.

Also, pricing on the $120 million second-lien covenant-light term loan (Caa1/CCC) was raised to Libor plus 700 bps from Libor plus 675 bps, the source said.

As before, the first-lien loan has a 1% Libor floor and a discount of 991/2, and the second-lien loan has a 1% Libor floor, a discount of 99 and call protection of 103 in year one, 102 in year two and 101 in year three.

Recommitments were due at 5 p.m. ET on Friday with allocations targeted for early in the week of May 12.

RBS Citizens and RBC Capital Markets are leading the deal, with RBS left on the first-lien loan and RBC left on the second-lien loan.

Proceeds will be used by the Retsof, N.Y.-based salt mine operator to refinance an existing term loan B and second-lien notes.

Sterling changes pricing

Sterling Infosystems trimmed the spread on its $250 million seven-year covenant-light term loan to Libor plus 450 bps from revised talk of Libor plus 475 bps but it still came wide of initial talk of Libor plus 400 bps, and the original issue discount firmed at 991/2, the low end of revised talk of 99 to 99½ but in line with initial talk of 991/2, a market source said.

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

Earlier in syndication, the term loan was downsized from $290 million and the call protection was extended from six months.

The company's $275 million credit facility (B2/B) also includes a $25 million six-year revolver.

Sterling recapitalizing

Proceeds from Sterling Inforsystems' credit facility will be used to repay existing debt and fund a distribution to shareholders, which was reduced by $40 million when the term loan was downsized.

GE Capital Markets, Deutsche Bank Securities Inc. and RBS Citizens are leading the deal.

Allocations are expected on Monday and closing is anticipated for Tuesday, the source added.

Sterling Infosystems is a New York-based provider of comprehensive employment and background screening services.

PSC revises call premium

PSC Industrial Services pushed out the 101 soft call protection on its $175 million six-year term loan B to one year from six months, a market source said.

Pricing on the B loan remained at Libor plus 450 bps with a 1% Libor floor and an original issue discount of 99.

The company's $215 million credit facility also includes a $40 million five-year revolver.

Allocations are targeted to go out during the week of Sept. 12, the source added.

RBC Capital Markets and Jefferies Finance LLC are leading the deal that will be used to fund a shareholder distribution.

PSC is a Houston-based integrated industrial services company.

Caesars shuts books

Caesars Entertainment accelerated the commitment deadline on its $1.75 billion incremental term loan B-7 (NA/NA/CCC) due March 1, 2017 to 3 p.m. ET on Friday from Monday, according to a market source.

The loan is talked at Libor plus 950 bps with a 1% Libor floor, an original issue discount of 98 and call protection of non-callable for six months, then at 101 for six months.

Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and Macquarie Capital are leading the loan that will repay existing debt due in 2015 and existing term loans, and be used for general corporate purposes.

The Las Vegas-based diversified casino-entertainment is also talking to lenders about an amendment to its existing senior secured credit facility to increase the leverage ratio level and exclude incremental term loans incurred after March 31 from the definition of senior secured leverage ratio.

Lenders that consent to the amendment will receive a principal paydown of up to $400 million of the outstanding term loans and a one-time fee, and consents are still due at 5 p.m. ET on Monday.

Curo discloses guidance

Also on the primary front, Curo Health Services held its bank meeting, launching its $335 million seven-year first-lien term loan (B2/B) with talk of Libor plus 425 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, according to a market source.

In addition, the $115 million 71/2-year second-lien term loan (Caa2/CCC+) was launched at Libor plus 775 bps to 800 bps with a 1% Libor floor, a discount of 98½ to 99, and call protection of 102 in year one and 101 in year two, the source said.

The company's $485 million credit facility includes a $35 million five-year revolver (B2/B) as well.

J.P. Morgan Securities LLC, GE Capital Markets, SunTrust Robinson Humphrey Inc. and Jefferies Finance LLC are leading the deal that will be used to fund the acquisition of SouthernCare Inc., a Birmingham, Ala.-based hospice provider, to refinance existing debt and for general corporate purposes.

Curo Health is a Mooresville, N.C.-based provider of home health care and hospice services.

Steinway readies loan

Steinway Musical Instruments set a conference call for Monday to launch a $105 million add-on first-lien term loan, according to a market source.

Bank of America Merrill Lynch and Deutsche Bank Securities Inc. are leading the deal that will be used to refinance an existing second-lien term loan.

Steinway is a Waltham, Mass.-based musical instruments company.

One Medical on deck

One Call Medical will hold a call at 11 a.m. ET on Monday to launch a fungible $80 million add-on first-lien term loan B due Nov. 27, 2020, according to a market source.

Pricing on the add-on matches the existing loan at Libor plus 400 bps with a step-down to Libor plus 375 bps when net first-lien leverage is 4.25 times and a 1% Libor floor.

Original issue discount talk on the add-on is not yet available, the source said.

Bank of America Merrill Lynch, RBC Capital Markets, SunTrust Robinson Humphrey Inc. and UBS Securities LLC are leading the deal that will fund a bolt-on acquisition.

One Call is a Parsippany, N.J.-based provider of specialized cost containment services to the workers' compensation industry.

Diamond Resorts closes

In other news, Diamond Resorts Corp. completed its $470 million credit facility (B2/B) that includes a $25 million revolver and a $445 million seven-year first-lien covenant-light term loan, a news release said.

Pricing on the term loan is Libor plus 450 bps with a 1% Libor floor and it was sold at an original issue discount of 991/2. The debt has 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC led the deal that was used to refinance the $374.4 million outstanding under the company's 12% senior secured notes due 2018, outstanding revolver borrowings and other debt and for corporate purposes.

Diamond Resorts is a Las Vegas-based hospitality and vacation ownership company.

Minerals Technologies wraps

Minerals Technologies Inc. closed on its $1.76 billion senior secured credit facility (Ba3/BB) that includes a $200 million five-year revolver and a $1.56 billion seven-year covenant-light term loan B, according to an 8-K filed with the Securities and Exchange Commission.

Pricing on the term loan is Libor plus 325 bps with a 0.75% Libor floor and it was sold at a discount of 99. There is 101 soft call protection for one year.

During syndication, pricing on the term loan was lifted from talk of Libor plus 250 bps to 275 bps, the discoutnw as changed from 99½ and the call protection was extended from six months.

J.P. Morgan Securities LLC, Barclays and U.S. Bank led the deal that was used to help fund the purchase of Amcol International Corp. for $45.75 per share in cash, for a total value of about $1.7 billion.

Minerals Technologies is a New York-based resource- and technology-based growth company that develops, produces and markets specialty mineral, mineral-based and synthetic mineral products and related systems and services. Amcol is a Hoffman Estates, Ill.-based producer and marketer of specialty minerals and materials.

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