EP Energy strengthens in second day of trading; Amplify, Veresen emerge with loan changes

By Sara Rosenberg

New York, Aug. 22 – In what was described as a generally light day of trading, EP Energy LLC saw its new term loan gain some ground in the secondary market on Monday compared to where it freed up at the end of last week.

Meanwhile, in the primary market, Amplify Snack Brands Inc. lifted pricing on its term loan and extended the call protection, and Veresen Midstream reduced the size of its incremental term loan B and adjusted the original issue discount.

EP Energy rises

EP Energy’s roughly $582 million covenant-light term loan (B3/B+) due June 30, 2021 was quoted at 97½ bid, 99 offered by late in the session on Monday, up from 96½ bid, 98½ offered where it broke for trading on Friday, according to a trader.

Pricing on the new term loan is Libor plus 875 bps with a 1% Libor floor, and lenders were offered a 300-bps extension fee. The debt has hard call protection of 103 in year one and 101 in year two.

Citigroup Global Markets Inc. is leading the loan that will be given to lenders in exchange for around 95% of the company’s existing term loan B-2 due April 2019 and term loan B-3 due May 2018 debt.

As of June 30, there was $142 million outstanding under the term B-2 priced at Libor plus 350 bps with a 1% Libor floor and $469 million outstanding under the term B-3 at Libor plus 275 bps with a 0.75% Libor floor.

With the exchange, lenders approved an amendment to the existing term loan to remove the covenants restricting the incurrence of debt and issuance of disqualified stock and preferred stock and the incurrence and existence of liens.

EP Energy is a Houston-based oil and natural gas exploration and production company.

Liquid Web bid at OID

Also in trading, Liquid Web’s $55 million fungible incremental term loan due July 2021 was quoted with indicative levels of 99 bid, par offered on Monday, after allocating late last week, a market source said.

Pricing on the incremental term loan is Libor plus 500 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.

During syndication, the incremental term loan was downsized from $57 million primarily due to higher than anticipated free cash flow generation within the second quarter, and the spread was lifted from Libor plus 450 bps. As a result, pricing on the company’s existing $99.5 million first-lien term loan is being increased from Libor plus 450 bps with a 1% Libor floor to match pricing on the incremental loan.

The company is also getting a fungible $5 million incremental revolver that will be unfunded at close.

SunTrust Robinson Humphrey Inc. and KeyBanc Capital Markets LLC are leading the deal that will be used to fund two tuck-in acquisitions that are expected to close this week.

Liquid Web is a Lansing, Mich.-based provider of professional web hosting and managed cloud services.

Amplify revisions surface

Moving to the primary market, Amplify Snack Brands increased pricing on its $600 million seven-year covenant-light term loan to Libor plus 550 bps from Libor plus 525 bps and extended the 101 soft call protection to one year from six months, according to a market source.

Additionally, the MFN sunset was eliminated, and the incremental free and clear allowance was reduced to $50 million from $100 million, the source said.

The term loan still has a 1% Libor floor and an original issue discount of 99.

The company’s $650 million senior secured credit facility (B2/B) also includes a $50 million five-year revolver that will be unfunded at close.

Commitments were due by 5 p.m. ET on Monday, the source added.

Amplify funding acquisition

Amplify’s credit facility will be used to help finance the purchase of Crisps Topco Ltd. (Tyrrells) from Investcorp and management for £278 million in cash and about 2.1 million shares of common stock and to refinance existing debt at Amplify.

Jefferies Finance LLC, Credit Suisse Securities (USA) LLC and Goldman Sachs Bank USA are leading the new debt.

Closing on the credit facility is targeted for Aug. 26.

The acquisition is subject to customary conditions, including approval by regulators.

Pro forma for the transaction, net leverage is 5.7 times based on last-12-months June 30 pro forma combined adjusted EBITDA of $104.4 million.

Amplify is an Austin, Texas-based snack food company. Crisps Topco is a Herefordshire, England-based snacking company.

Veresen reworks deal

Veresen Midstream trimmed its fungible incremental term loan B due March 31, 2022 to $150 million from $300 million and revised the original issue discount to 98.79 from talk in the range of 98.5 to 98.75, a market source remarked.

As before, pricing on the incremental term loan B is Libor plus 425 bps with a 1% Libor floor.

Including the incremental loan, the term loan B will total $718 million, and all of that debt is getting 101 soft call protection for six months.

Commitments were due at 4 p.m. ET on Monday.

With the term loan B downsizing, the company’s expansion facility increase was upsized to C$405 million from C$250 million, while its revolver increase remained at C$50 million, the source added.

Veresen lead banks

RBC Capital Markets, TD Securities (USA) LLC and HSBC Securities (USA) Inc. are leading Veresen’s new bank debt.

Proceeds will be used to repay existing debt, to fund the construction of in-progress facilities/pipelines, for general partnership purposes and to pay related fees and expenses.

Veresen is a Calgary, Alta.-based jointly owned limited partnership between Veresen Inc. and Kohlberg Kravis Roberts & Co. LP that was formed in March 2015 to build, own and operate natural gas gathering and processing infrastructure in Western Canada.

Global Healthcare wraps

In other news, Global Healthcare Exchange LLC allocated last week its fungible $10 million add-on first-lien term loan at initial talk of Libor plus 425 basis points with a 1% Libor floor and an original issue discount of 99.75, according to a market source.

The spread and floor on the add-on first-lien term loan matches pricing on the company’s existing $415 million first-lien term loan B.

Proceeds from the add-on first-lien loan and a privately placed $135 million second-lien term loan will be used to fund a shareholder distribution to private equity owner Thoma Bravo.

SunTrust Robinson Humphrey Inc. is leading the deal.

Global Healthcare Exchange is a Louisville, Colo.-based provider of SaaS/cloud-based supply-chain-automation technology and services to the health care sector.

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