ION, Polymer, Ryman price; Seadrill brings $1 billion; loan funds see $1.1 billion outflows

By Paul A. Harris

Portland, Ore., June 5 – Leveraged loan primary activity sustained a rapid pace on Thursday as ION Trading Technologies Sarl, Polymer Group Inc. and Ryman Hospitality priced term loans on Thursday.

And Seadrill rolled out a $1 billion add-on to its term loan, with a bank meeting set for early in the week ahead.

Meanwhile in the secondary the LCDX22 index of bank loan credit default swaps ended the Thursday session ¼ point higher at 104 5/8 bid, 105 1/8 offered, according to a market source.

Both those positive signs came despite a fund flows picture was thorny, as the dedicated bank loan funds saw $1.1 billion of outflows for the week to Wednesday, according to a mutual fund manager.

Seadrill to add $1 billion

Seadrill Operating LP and Seadrill Partners Finco LLC have set a bank meeting for Monday to launch a $1 billion add-on to their Libor plus 300 bps term loan B due February 2021 (expected ratings Ba3/BB-), according to a market source.

Deutsche Bank is the left lead. Barclays, Credit Suisse and RBC are the joint leads.

The loan has a 1% Libor floor and 101 soft call through February 2015. It also has a 1% annual amortization.

Proceeds will be used to refinance existing debt associated with West Auriga and West Capricorn which are being added to the collateral group.

The company is concurrently seeking an amendment to the existing $1.8 billion term loan B to accommodate the add-on.

Seadrill is an Oslo-based provider of offshore drilling services to the oil and gas industry.

ION Trading prices at par

ION Trading Technologies priced three term loan tranches at par on Thursday, according to a market source.

The deal included a downsized $170 million seven-year first-lien term loan (B2/B) with a coupon of Libor plus 325 basis points, and an upsized €500 million seven-year first-lien term loan (B2/B) with a coupon of Libor plus 350 bps.

The company downsized its U.S. first-lien term loan to $170 million from a revised amount of $300 million and an initial size of $400 million and upsized its euro first-lien term loan to €500 million from a revised amount of €400 million and an initial amount of €300 million, according to a market source.

Thursday’s transaction also included a $250 million eight-year second-lien term loan (Caa2/CCC+) priced at Libor plus 625 bps. The second-lien term loan was reduced to $250 million from a revised size of $260 million and an initial amount of $300 million.

The reoffer prices of all three tranches came on top of price talk.

The original issue discount on the euro first-lien term loan was tightened to par from 99¾, while pricing remained at Euribor plus 350 basis points with a 1% floor.

The spread on the second-lien term loan was trimmed to Libor plus 625 bps from Libor plus 675 bps, but the 1% Libor floor, par offer price call protection of 102 in year one and 101 in year two and were unchanged.

As before, the U.S. first-lien term loan is priced at Libor plus 325 bps with a 1% Libor floor and a par offer price.

Both first-lien term loans still have 101 soft call protection for one year and amortization of 1% per annum.

Another change made was to extend maturities on the first-lien term loans to seven years from six years and on the second-lien term loan to eight years from seven years, the source continued.

The company’s credit facility still includes a $40 million five-year revolver.

UBS AG is the bookrunner on the deal.

Proceeds will be used to refinance existing debt.

Other funds for the transaction will come from $25 million of equity, increased from $15 million after having been previously upsized from $10 million.

This transaction is downsizing the amount of U.S. dollar first- and second-lien term loans that the company has through the issuance of the new euro term loan so as to decrease the borrower’s foreign exchange exposure.

ION Trading is a provider of trading software.

Polymer prices upsized deal

Polymer Group priced its upsized $415 million fungible senior secured incremental covenant-light term loan (B2/B-) at par with a coupon of Libor plus 425 basis points on Thursday, according to a market source.

The deal grew from the original$355 million.

The reoffer price came on top of price talk that richened from the 99.75 area.

The maturity is the earlier of Dec. 19, 2019 and 91 days prior to the maturity of the company’s 7¾% senior secured notes due Feb. 1, 2019 as long as there is $150 million or more of those notes outstanding.

The coupon steps down by 25 bps when senior secured net leverage ratio goes below 3.5-times. The deal features a 1% Libor floor.

Of the total term loan amount, $105 million is a delayed-draw tranche that is available until Dec. 31. This portion was increased from $45 million.

The delayed-draw ticking fee is half the spread from days 31 to 60 and the full spread thereafter.

There is an incremental allowance for $75 million plus an amount, such that, pro forma for the incurrence, senior secured leverage is 4.5 times.

The deal is expected to close on June 11.

Citigroup Global Markets Inc., Barclays, RBC Capital Markets and HSBC Securities (USA) Inc. are the bookrunners on the deal. The administrative agent is Citicorp North America, Inc.

Proceeds will be used to help fund the acquisition of 71.25% of the outstanding capital stock of Companhia Providencia Industria e Comercio, a Brazilian manufacturer of nonwovens used in hygiene, health-care and industrial applications. The additional proceeds are expected to be used primarily for the repayment of existing secured debt.

Other funds for the transaction are expected to come from $210 million of senior unsecured notes.

Completion of the acquisition is expected in the third or fourth quarter, subject to customary conditions, including approval by antitrust authorities.

Polymer Group is a Charlotte, N.C.-based producer of engineered materials with a focus on nonwoven products.

Ryman covenant-light deal prices

Ryman Hospitality Properties Inc. (RHP Hotel Properties LP) priced its $400 million covenant-light term loan B due January 2021 (Ba3/BB) at 99.75 on Thursday, according to a market.

The Libor spread decreased to 300 basis points from 325 bps. The Libor floor decreased to 75 bps from 100 bps. And the discount firmed at 99.5 versus previous price talk of 99 to 99.5.

There is a coupon step-down to 275 bps when net secured leverage falls below 3.5-times on or after Dec. 31, 2014.

The 101 soft call protection was extended to one year from six months.

Deutsche Bank Securities Inc., Wells Fargo Securities LLC, J.P. Morgan Securities LLC, Bank of America Merrill Lynch and U.S. Bank are the bookrunners on the deal.

Credit Agricole, Bank of Nova Scotia and Raymond James were co-managers.

Proceeds will be used to repay revolving credit facility borrowings and for general corporate purposes.

Ryman is a Nashville, Tenn.-based real estate investment trust specializing in group-oriented, destination hotels in urban and resort markets.

Brickman talks add-on

Brickman Group Ltd. is talking a $725 million add-on to its incremental first-lien term loan at 99 with a coupon of Libor plus 300 bps, according to a market source.

Commitments are due on June 19.

The loan has a 1% Libor floor and 101 soft call protection for six months.

Jefferies LLC is the lead arranger. Macquarie, Mizuho, SMBC, Nomura, and KKR Capital are the joint lead arrangers. Morgan Stanley is the administrative agent.

The $825 million credit facility also has a $100 million revolver.

The Rockville, Md.-based provider of landscape maintenance and snow removal services plans to use the proceeds to help fund the acquisition of ValleyCrest Cos. LLC from MSD Capital LP.

Ameriforge hikes pricing

Ameriforge Group Inc. eliminated the original issue discount on its $65 million add-on first-lien covenant-light term loan due Dec. 19, 2019 (B1/B+), a market source said on Thursday.

The deal is now talked at par, an increase from earlier talk in the 99.5 area.

Pricing on a $35 million add-on second-lien covenant-light term loan due Dec. 19, 2020 remained in the 101 area, unchanged.

The deadline was Thursday, advanced from the previous deadline of Monday, June 9.

The add-on first-lien term loan is talked at Libor plus 375 basis points with a 1.25% Libor floor, and the add-on second-lien term loan is talked at Libor plus 750 bps with a 1.25% Libor floor.

Spread and floor on both add-on term loans match the existing first-and second-lien term loans.

The company is also seeking an amendment to its credit facility for which lenders are being offered a 12.5 bps consent fee, the source added.

Deutsche Bank Securities Inc., Goldman Sachs Bank USA, RBC Capital Markets LLC, UBS AG and BNP Paribas Securities Corp. are the bookrunners on the $100 million deal.

Proceeds will be used to fund the acquisition of VerdErg, a United Kingdom-based supplier of diverless subsea connector systems.

Ameriforge is a Houston-based manufacturer of highly engineered products, subassemblies and integrated systems for the oil and gas, midstream, downstream, power generation, aerospace, transportation and industrial markets.

Michaels moves up timing

Michaels Stores Inc. set a noon ET Friday deadline for commitments on its $850 million covenant-light term loan due January 2020, according to a market source.

That accelerates timing from the previously announced June 10 deadline.

The deal comes with price talk of Libor plus 300 basis points with a 1% Libor floor and an original issue discount of 99 to 99½.

The term loan has 101 soft call protection for six months.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Barclays, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., Wells Fargo Securities LLC, Guggenheim and Macquarie Capital (USA) Inc. are the leads on the deal.

Proceeds will be used to refinance existing senior notes due 2018.

Michaels Stores is an Irving, Texas-based arts and crafts specialty retailer.

Gates talks dual-currency deal

Gates Global LLC set price talk for $2.49 billion and €200 million of seven-year first-lien covenant-light term loans on Thursday, according to a market source.

Both tranches are talked with Libor spreads of 375 to 400 basis points at 99. Both feature 1% Libor floors and 101 soft call protection for 12 months.

Credit ratings remain to be determined.

Commitments are due on June 19.

Credit Suisse Securities (USA) LLC is the lead.

Proceeds will be used to help fund the buyout of the company by Blackstone from Onex Corp. and Canada Pension Plan Investment Board.

The credit facility also includes a $125 million five-year revolver and $325 million ABL.

Gates Global is a Denver-based manufacturer of power transmission belts and fluid power products.

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