American Tire breaks; Citgo softens on holdco debt plans; Global Knowledge changes emerge

By Sara Rosenberg

New York, Jan. 20 – American Tire Distributors Inc.’s incremental term loan made its way into the secondary market on Tuesday, with levels quoted above its original issue discount, and Citgo Petroleum Corp. saw its term loan B weaken on news of additional debt at the holdco level.

Also in trading, Endo International plc’s term loan B was unchanged to better as the company came out with more details on financing plans for its acquisition of Auxilium Pharmaceuticals Inc.

Moving to the primary market, Global Knowledge Training LLC raised pricing and modified original issue discounts on its first- and second-lien term loans, SIG Combibloc Group AG and Curo Health Services released price talk with launch, and Select Staffing (Koosharem LLC) joined this week’s calendar.

American Tire frees up

American Tire Distributors’ $140 million non-fungible covenant-light secured term loan due June 1, 2018 began trading on Tuesday, with levels seen at 98¾ bid, 99¼ offered, according to a trader.

Pricing on the loan is Libor plus 475 basis points with a step-down to Libor plus 450 bps at total net leverage of 4 times and a 1% Libor floor. There is 101 hard call protection until March 28, 2015, and the debt was issued at an original issue discount of 98¼ after tightening last week from 98.

Bank of America Merrill Lynch is leading the deal that will be used with funds from an initial public offering of common stock to redeem 11½% senior subordinated notes due 2018 and for general corporate purposes.

In connection with the new term loan, the Huntersville, N.C.-based replacement tire distributor is amending its existing term loan to revise the step-down to Libor plus 450 bps to take effect at total net leverage of 4 times instead of at 4.5 times and to change the secured debt incurrence test to 4.5 times net secured leverage from 4 times. Current pricing of Libor plus 475 bps on the existing term will be unchanged with the amendment.

Lenders were offered a 25 bps amendment fee.

Citgo Petroleum retreats

Citgo Petroleum’s term loan B fell in the secondary market following the announcement that its parent company, Citgo Holding Inc., will be coming to market with a new term loan and bonds, according to a trader.

The term loan B was quoted at 93½ bid, 95½ offered, down from 97 bid, 98¼ offered, the trader said.

In the morning, investors were told that Citgo Holding will be holding a bank meeting at 10 a.m. ET in New York on Thursday to launch a $1 billion senior secured first-lien term loan B that is non-callable for one year, then at 102 in year two and 101 in year three, a market source remarked.

Deutsche Bank Securities Inc. is leading the deal.

Proceeds will be used with an expected $1.5 billion pari passu high-yield offering to fund a distribution to Citgo Holding’s ultimate parent.

Citgo is a Houston-based refiner, marketer and transporter of gasoline, diesel fuel, jet fuel, lubricants, petrochemicals, and other petroleum-based industrial products.

Endo flat to up

Endo International’s term loan B was seen in trading by some as stronger and by others as unchanged after new details came out on the financing for its purchase of Auxilium, including plans to draw funds under a revolver instead of getting a previously announced $500 million incremental term loan.

One trader had the term loan B quoted at 98¼ bid, 99¼ offered, up from 97¾ bid, 98¾ offered, while a second trader had the B loan quoted at 98¼ bid, 98¾ offered, in line with prior levels. The company’s term loan A was quoted by the first trader at 97¾ bid, 98¾ offered, up from 97½ bid, 98½ offered.

Under the agreement, Endo is buying Auxilium for $33.25 per share in cash and stock in a transaction valued at $2.6 billion, including the repayment and assumption of debt.

Along with the revolver draw, Endo intends to use senior notes and cash on hand for the acquisition.

Closing is expected in the first half of this year, subject to the approval of Auxilium’s stockholders, regulatory approval in the United States and certain other jurisdictions, and other customary conditions.

Endo is a Dublin-based specialty health care company that has U.S. headquarters in Malvern, Pa. Auxilium is a Chesterbrook, Pa.-based specialty biopharmaceutical company.

Global Knowledge reworked

Over in the primary, Global Knowledge lifted pricing on its $175 million six-year first-lien term loan (B1/B+) to Libor plus 550 bps from Libor plus 525 bps and moved the original issue discount to 98½ from 99, while keeping the 1% Libor floor and 101 soft call protection for one year intact, according to a market source.

As for the $50 million seven-year second-lien term loan (Caa1/B), pricing was increased to Libor plus 950 bps from Libor plus 900 bps and the discount was changed to 98 from 98½, the source said. This tranche still has a 1% Libor floor and call protection of 103 in year one, 102 in year two and 101 in year three.

Furthermore, a maximum total leverage covenant was added to the previously covenant-light term loans.

Along with the term loans, the company is getting a $20 million revolver (B1/B+).

Recommitments are due at 5 p.m. ET on Jan. 27, the source added.

Credit Suisse Securities (USA) LLC, Macquarie Capital and ING are leading the $245 million credit facility that will help fund the buyout of the company by Rhone Capital LLC from MidOcean Partners.

Global Knowledge is a Cary, N.C.-based provider of IT and business skills training.

SIG Combibloc sets talk

SIG Combibloc Group held its bank meeting in New York on Tuesday, launching its €1,965,000,000 equivalent U.S. dollar and euro seven-year covenant-light term loan with talk of Libor/Euribor plus 450 bps to 475 bps with a 1% floor, an original issue discount of 99 and 101 soft call protection for six months, a market source said.

The company’s €2,265,000,000 equivalent credit facility (B1/B+), which will launch to European investors with a bank meeting on Wednesday, also includes a €300 million six-year multicurrency revolver.

Commitments are due on Feb. 3, the source added.

Barclays, Bank of America Merrill Lynch, Goldman Sachs, Nomura Securities Co. Ltd., RBC Capital Markets, Credit Agricole, Mizuho, RBS Securities Inc., UniCredit and Rabobank are leading the deal.

SIG Combibloc buyout

Proceeds from SIG Combibloc’s credit facility, a €700 million equivalent notes offering and equity will be used to fund its acquisition by Onex Corp. for up to €3.75 billion.

Of the total purchase amount, €3,575,000,000 will be paid at the closing and an additional up to €175 million will be payable based on the financial performance of SIG Combibloc in 2015 and 2016.

Net senior secured leverage is 4.6 times, and net total leverage is 6.3 times.

Closing is expected this quarter, subject to customary conditions and regulatory approvals.

SIG Combibloc is a Switzerland-based supplier of carton packaging and filling machines for beverages and food.

Curo reveals guidance

Curo Health Services came out with talk of Libor plus 525 bps to 550 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months on its $380 million first-lien term loan that launched with a bank meeting during the session, according to a market source.

The company’s $545 million senior secured credit facility also includes a $45 million revolver, and a $120 million second-lien term loan that was privately placed.

Commitments are due on Jan. 29, the source said.

Goldman Sachs Bank USA, Jefferies Finance LLC and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to help fund the buyout of the company by Thomas H. Lee.

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

Select Staffing readies deal

Select Staffing released details on the financing for its acquisition of EmployBridge from Morgan Stanley Global Private Equity and Constitution Capital, with the new debt emerging as a $225 million tack-on senior secured term loan due May 2020 that will launch with a bank meeting at 10 a.m. ET in New York on Wednesday, a source said.

The tack-on term loan is talked at Libor plus 650 bps with a 1% Libor floor, and call protection of 102 through May 2015 followed by a 101 soft call for six months thereafter, all in line with the existing term loan.

The original issue discount on the tack-on loan is still to be determined, the source continued.

Commitments are due on Feb. 3 and closing is expected in February.

Credit Suisse Securities (USA) LLC and RBC Capital Markets are leading the deal.

With the tack-on loan, the company is launching an amendment of its existing $370 million term loan due May 2020. The consent fee is not yet available.

Select Staffing is a provider of workforce management services. EmployBridge is a provider of specialty staffing services. The combined company will be based in Atlanta.

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