Formula 1, Focus, Four Seasons, Playa, USI, SolarWinds, Electro Rent and more set talk

By Sara Rosenberg

New York, Nov. 14 – It was a busy day in the primary market on Monday, with Formula 1, Focus Financial Partners LLC, Four Seasons Hotels and Resorts, Playa Hotels & Resorts BV, USI Inc., SolarWinds Inc., Electro Rent Corp., Convergint Technologies (DG Investment Intermediate Holdings 2 Inc.), Parkway Generation LLC and Ingenovis Health Inc. all launching new loan transactions.

Also, Applied Systems Inc. surfaced with plans to bring an amendment and extension of its credit facilities to market this week.

Meanwhile, in the primary market, United Site Services’ first-lien term loan was weaker in trading on the back of Moody’s Investors Service cutting the company’s ratings.

Formula 1 proposed terms

Formula 1 held its lender call on Monday morning and announced talk on its $1.7 billion term loan B due January 2030 at SOFR plus 325 basis points to 350 bps with a 0.5% floor, an original issue discount of 97.5 to 98 and 101 soft call protection for six months, a market source remarked.

The company is also getting a $725 million term loan A.

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

Goldman Sachs Bank USA and JPMorgan Chase Bank are leading the $2.425 billion of term loans (/BB/BB+) that will be used with cash on the balance sheet to refinance an existing term loan B due February 2024.

Formula 1 is a media company that is the exclusive commercial rights holder to FIA Formula One World Championship auto racing.

Focus refinancing

Focus Financial Partners held a lender call at 10 a.m. ET, launching a $1.65 billion term loan B due June 30, 2028 talked at SOFR plus 325 bps with a 0.5% floor, an original issue discount of 97 to 98, 101 soft call protection for six months and no CSA, according to a market source.

Commitments are due at noon ET on Nov. 21, the source added.

The company is also getting a $350 million delayed-draw term loan A and extending its $650 million revolver from June 2024.

RBC Capital Markets, Stone Point Capital Markets, BMO Capital Markets, Truist, BofA Securities Inc., Capital One, Fifth Third, MUFG, Citizens, Huntington and others to be named are leading the deal (Ba3/BB-).

The new loans will be used to refinance existing debt, including an existing first-lien term loan, and for general corporate purposes, which may include acquisitions.

Focus is a New York-based partnership of independent, fiduciary wealth management firms operating in the registered investment advisor industry.

Four Seasons guidance

Four Seasons Hotels came out with talk of SOFR+10 bps CSA plus 325 bps to 350 bps with a 0.5% floor, an original issue discount of 97 and 101 soft call protection for six months on its $850 million seven-year senior secured first-lien term loan B (Ba3/BB+) that launched with a call in the morning, a market source said.

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

Citigroup Global Markets Inc. and Morgan Stanley Senior Funding Inc. are leading the deal, which will be used to refinance an existing senior secured first-lien term loan due November 2023 and pay related fees and expenses

Closing is expected on Nov. 30.

Four Seasons is a Toronto-based luxury hotels company.

Playa seeks loan

Playa Hotels & Resorts held a lender call at 3 p.m. ET to launch a $1.1 billion six-year covenant-lite term loan B (B2/B) talked at SOFR plus 450 bps with a 0.5% floor, an original issue discount of 96 and 101 soft call protection for six months, according to a market source.

Commitments are due at noon ET on Nov. 22, the source added.

Deutsche Bank Securities Inc., BofA Securities Inc., JPMorgan Chase Bank, Goldman Sachs Bank USA, Truist and SMBC are leading the deal that will be used to opportunistically refinance the company’s capital structure, including its existing revolver, term loan B, term loans A-1, A-2 and A-3, and property loan.

Playa Hotels is an owner, operator and developer of all-inclusive resorts located in Mexico, Dominican Republic and Jamaica.

USI launches

USI held a lender call at 11 a.m. ET to launch a $2.5 billion term loan (B1/B) due 2029 talked at SOFR plus 400 bps with a 0.5% floor, an original issue discount of 97, 101 soft call protection for six months and no CSA, a market source remarked.

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

JPMorgan Chase Bank and KKR Capital Markets are leading the deal. BofA Securities Inc. is the administrative agent.

The new debt will be used to refinance an existing $2.48 billion term loan due May 2024.

USI is a Valhalla, N.Y.-based insurance brokerage and consulting firm.

SolarWinds extending

SolarWinds hosted a lender call at 11 a.m. ET, launching a $1.245 billion amended and extended first-lien term loan (B1/B+) due 2027 at talk of SOFR plus 400 bps to 425 bps with a 0% floor, an original issue discount of 97, 101 soft call protection for six months and no CSA, according to a market source.

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

JPMorgan Chase Bank, Goldman Sachs Bank USA and Wells Fargo Securities LLC are leading the deal. Credit Suisse is the administrative agent.

The transaction will extend by three years an existing term loan due February 2024 that is currently priced at Libor plus 275 bps with a 0% floor. And, as part of the extension, $350 million of the term loan is being repaid.

SolarWinds is an Austin, Texas-based provider of IT network and systems infrastructure management software.

Electro Rent holds call

Electro Rent emerged in the morning with plans to hold a lender call at 2 p.m. ET to launch a $534 million amended and extended covenant-lite first-lien term loan (B-) due Nov. 1, 2024 talked at SOFR+10 bps CSA plus 550 bps with a 1% floor, a 150 bps extension fee and 101 soft call protection for one year, a market source said.

The transaction will extend an existing term loan due Jan. 31, 2024 and change pricing from Libor plus 500 bps with a 1% floor.

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

Deutsche Bank Securities Inc., Barclays, BMO Capital Markets and Goldman Sachs Bank USA are leading the deal.

Electro Rent is a West Hills, Calif.-based provider of electronic testing and measurement equipment services.

Convergint shops loan

Convergint launched in the morning without a lender call a fungible $125 million incremental first-lien term loan (B2/B) due March 31, 2028 talked at SOFR plus 475 bps with a 0.75% floor, an original issue discount of 95 and 101 soft call protection for six months, according to a market source.

Commitments are due at 5 p.m. ET on Tuesday, the source continued.

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to repay revolver borrowings and to fund future acquisitions.

In connection with this transaction, pricing on the company’s existing $184 million incremental first-lien term loan due March 31, 2028 is being increased to SOFR plus 475 bps with a 0.75% floor from SOFR plus 425 bps with a 0.75% floor, the source added.

Convergint is a Schaumberg, Ill.-based service-based security systems integrator.

Parkway comes to market

Parkway Generation held a lender call at 10:30 a.m. ET to launch a fungible $75 million incremental term loan B due February 2029 talked at SOFR+CSA plus 475 bps with a 0.75% floor, an original issue discount of 98.6 and 101 soft call protection for six months, a market source remarked.

CSA is 11.4 bps one-month rate, 26.2 bps three-month rate and 42.8 bps six-month rate.

With this transaction, the company’s existing term loan B will transition to SOFR+CSA plus 475 bps with a 0.75% floor from Libor plus 475 bps with a 0.75% floor.

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

Morgan Stanley Senior Funding Inc. is the left lead on the deal.

The incremental loan will be used to fund a special dividend and pay transaction fees and expense.

Existing lenders are being offered a 50 bps amendment fee.

Pro forma for the transaction, the term loan B will total $1.07 billion.

Parkway Generation is a portfolio of natural gas-fired power generation facilities.

Ingenovis sets talk

Ingenovis Health released talk of SOFR+10 bps CSA plus 425 bps with a 0.5% floor, an original issue discount of 95 to 96 and 101 soft call protection for six months on its non-fungible $85 million incremental covenant-lite first-lien term loan due March 6, 2028 that launched with a call in the morning, according to a market source.

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

Citizens Bank and KeyBanc Capital Markets are leading the deal, which will be used to fund an acquisition.

Cornell Capital and Trilantic North America are the sponsors.

Ingenovis, formerly known as CCRR Parent Inc., is a provider of travel nurse, Allied, Rapid Response, Locum Tenens and labor dispute preparedness talent services to health care facilities.

Applied Systems on deck

Applied Systems set a lender call for 2 p.m. ET on Tuesday to launch up to $2.476 billion of amended and extended credit facilities, a market source said.

The extended facilities consist of an $80 million revolver due June 2026, an up to $1.79 billion covenant-lite first-lien term loan, with a minimum size of $895 million, due September 2026 talked at SOFR plus 450 bps with a 0.5% floor and 101 soft call protection for six months, and an up to $606 million covenant-lite second-lien term loan due September 2027 talked at SOFR plus 700 bps with a 0.75% floor and 101 hard call protection for one year, the source continued. Both term loans have a 50 bps extension fee and no CSA.

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

Nomura Securities, Jefferies LLC and others to be announced are leading the deal that will extend the existing revolver from June 2024, extend the existing first-lien term loan from September 2024 and revise pricing from Libor plus 300 bps with a 0.5% floor, and extend the existing second-lien term loan from September 2025 and modify pricing from Libor plus 550 bps with a 0.75% floor.

Applied Systems is a University Park, Ill.-based cloud software provider to the property & casualty and benefits insurance industry.

United Site softens

Moving to the secondary market, United Site Services’ first-lien term loan dipped to 77 bid, 79½ offered on Monday, from 77½ bid, 80 offered on Thursday following a downgrade by Moody’s Investors Service late last week, a market source said.

The corporate family rating was cut to Caa1 from B3 and the first-lien credit facility was trimmed to B3 from B2. The outlook remains stable.

Moody’s said the downgrade reflects a material deterioration of the company’s credit profile since its October 2021 leveraged buyout, including Moody’s expectation that debt-to-EBITDA will be sustained above 8.5x and a weakened liquidity profile.

Moody’s expects the company’s liquidity sources to dwindle over the next 12 to 15 months if the company is unable to flex its capital spending plan and pause its acquisition activity.

The increasing floating interest rate burden, combined with ongoing non-operating cash charges and extensive capex budget, could continue to erode the company’s liquidity and elevate credit risk, Moody’s added.

United Site is a Westborough, Mass.-based provider of portable restrooms, temporary fence and related site services.

Fund flows

In other news, actively managed loan fund flows on Thursday were negative $93 million and loan ETFs were positive $183 million, according to market sources. Actively managed loan fund flows on Friday were negative $15 million and loan ETFs were positive $48 million

Loan funds reported weekly outflows totaling $582 million, including negative $104 million ETFs. This was a twelfth consecutive withdrawal and twenty first in the past 22 weeks.

The past 12 weeks’ outflows totaled $11.9 billion, or 14% of weekly AUM.

Net inflows for loan funds since the beginning of 2021 are down to $41 billion, and dedicated Loan Fund AUM is down to $109 billion from as much as $142 billion in May, sources added.

Outflows for loan funds year-to-date total $5.4 billion, including negative $3 billion ETF.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.