Global Eagle Entertainment, Las Vegas Sands term loans free to trade above issue prices

By Sara Rosenberg

New York, Dec. 22 – Global Eagle Entertainment Inc.’s credit facility made its way into the secondary market on Thursday, with its first-lien term loan quoted above its original issue discount, and Las Vegas Sands LLC broke for trading too.

Over in the primary market, timing on the launch of Optiv Security Inc.’s proposed credit facility surfaced.

Global Eagle starts trading

Global Eagle Entertainment’s credit facility freed up for trading on Thursday, with the $500 million six-year first-lien term loan quoted at 97¼ bid, 98¼ offered, according to a trader.

Pricing on the term loan is Libor plus 600 basis points with a 1% Libor floor, and it was sold at an original issue discount of 97. The debt is non-callable for one year, then has hard call protection of 102 in year two and 101 in year three.

The company’s $585 million senior secured credit facility (B1/BB-) includes an $85 million five-year revolver as well.

Closing is expected in the first week of January.

Global Eagle leads

Citigroup Global Markets Inc., Macquarie Capital (USA) Inc., Bank of American Merrill Lynch, Barclays, Citizens Bank and TD Securities (USA) LLC are leading Global Eagle’s credit facility.

During syndication, the first-lien term loan was upsized from $460 million, pricing was raised from Libor plus 525 bps, the discount widened from talk of 98 to 99, the call protection was changed from a 101 soft call for six months, the maturity was shortened from seven years, the 18-month MFN sunset was removed, setting the 50-bps MFN for the life of the deal, and the excess cash flow sweep was increased to 75% with step-downs, from 50%.

Also, add-backs for cost savings, operating expense reductions and synergies were capped to 25% of consolidated EBITDA and the realization period for such transactions and initiatives was set to 18 months, from no cap and 24 months.

And, the incremental allowance was revised to the sum of $50 million, from $75 million, and an unlimited amount subject to, with respect to any first-lien incremental facility, closing date first-lien net leverage, with respect to any secured incremental facility, 4 times secured net leverage, from closing date secured net leverage, and with respect to any unsecured incremental facility 4.75 times total net leverage, from 5 times.

Global Eagle refinancing

Proceeds from Global Eagle’s credit facility will be used to refinance a roughly $265 million first-lien term loan, a roughly $92 million second-lien term loan and about $39 million of revolver borrowings at Emerging Markets Communications LLC and for general corporate purposes.

Initially, the company was also seeking a $125 million eight-year second-lien term loan talked at Libor plus 950 bps with a 1% Libor floor, a discount of 98 and hard call protection of 102 in year one and 101 in year two, but this tranche was removed from the transaction during syndication.

The reduced proceeds raised from the credit facility due to the removal of the second-lien term loan will decrease cash to the balance sheet.

Global Eagle is a Marina Del Rey, Calif.-based provider of satellite-based connectivity and media.

Las Vegas Sands breaks

Las Vegas Sands’ repriced roughly $2.19 billion term loan B began trading as well, with levels seen at 100¼ bid, 100 5/8 offered, a trader said.

Pricing on the term loan B is Libor plus 225 bps with no Libor floor, and it was issued at par.

Scotiabank is the bookrunner and administrative agent on the deal and an arranger with Bank of America Merrill Lynch, Barclays, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Fifth Third Bank and Goldman Sachs Bank USA.

The repricing will take the term loan B down from Libor plus 250 bps with a 0.75% Libor floor.

Las Vegas Sands is a Las Vegas-based developer and operator of integrated resorts.

Optiv timing emerges

Switching to the primary market, Optiv Security set a bank meeting for 10:30 a.m. ET on Jan. 5 to launch its previously announced proposed credit facility, according to a market source.

The facility consists of an ABL revolver, a covenant-light first-lien term loan and a covenant-light second-lien term loan, with tranche sizes not yet available, the source said.

Jefferies Finance LLC is the left lead on the deal that will be used to help fund the buyout of the company by KKR from a group of private investors, including a private equity fund managed by Blackstone, which will maintain a minority interest in Optiv along with Optiv management. Other selling shareholders include Investcorp and Sverica.

Closing is expected in the first quarter of 2017, subject to customary conditions.

Optiv Security is a Denver-based provider of end-to-end cyber security solutions.

DigitalGlobe closes

In other news, DigitalGlobe Inc. completed its $1,475,000,000 credit facility (Ba3/BB+) that includes a $200 million revolver and a $1,275,000,000 seven-year term loan B, a news release said.

Pricing on the term loan B is Libor plus 275 bps with a step-down to Libor plus 250 bps when total leverage is 2.75 times and a 0.75% Libor floor. The loan was issued at an original issue discount of 99.75 and has 101 soft call protection for six months.

During syndication, pricing on the term loan B was reduced from Libor plus 300 bps, the step-down was added, and the discount was tightened from 99.5.

Barclays led the deal that was used to pay down revolver borrowings, to refinance a term loan B due 2020 and 5¼% notes due 2021 and to pay related fees and expenses.

DigitalGlobe is a Westminster, Colo.-based provider of Earth imaging and geospatial solutions.

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