Goodyear second-lien term loan dips with repricing news; Salient downsizes, sets final terms

By Sara Rosenberg

New York, June 5 – Goodyear Tire & Rubber Co. saw its second-lien term loan soften in trading during Friday’s market hours following news that the company will be approaching lenders with a repricing proposal.

Meanwhile, in the primary market, Salient Partners LP reduced the size of its term loan and finalized the spread at the wide end of revised guidance.

Also, Protection 1 (Apollo Security Services Borrower LLC) came out with timing, structure and price talk on its buyout deal, and StandardAero joined the near-term primary calendar.

Goodyear slides

Goodyear’s second-lien term loan weakened in the secondary market as news emerged of a potential repricing that would take existing lenders out at par, according to a trader.

The second-lien term loan was quoted at 100 1/8 bid, 100½ offered, down from 100¾ bid, 101 offered, the trader said.

Under the proposal, Goodyear is looking to get a $1 billion covenant-light second-lien term loan due April 2019 that is talked at Libor plus 275 basis points to 300 bps with a 0.75% Libor floor, a par issue price and 101 soft call protection for one year, a source remarked.

The transaction would reprice the company’s existing second-lien term loan from Libor plus 375 bps with a 1% Libor floor.

J.P. Morgan Securities LLC is leading the repricing that is slated to launch with a lender call on Monday, the source added.

Goodyear is an Akron, Ohio-based tire company.

Salient updates deal

Switching to the primary market, Salient Partners trimmed its term loan to $100 million from $160 million and firmed pricing at Libor plus 650 bps, the high end of revised talk of Libor plus 600 bps to 650 bps and wide of initial talk of Libor plus 500 bps, according to a market source.

As before, the term loan has a 1% Libor floor, an original issue discount of 98 and 101 soft call protection for six months. However, the discount had been changed from 99 earlier in the syndication process.

The company’s now $115 million credit facility also includes a $15 million revolver.

Books on the deal close at noon ET on Monday, the source remarked.

Macquarie Capital (USA) Inc. is leading the transaction.

Salient extending sub debt

As a result of the term loan downsizing, Salient will not be refinancing its subordinated debt, the source explained. But, the maturity of the subordinated debt will be extended beyond the term loan maturity.

Salient will still use the new credit facility to refinance some existing debt and fund the purchase of Forward Management LLC.

Closing on the acquisition is expected this quarter, subject to approval by Forward Funds’ shareholders and customary conditions.

Salient is a Houston-based investment management firm. Forward Management is a San Francisco-based asset management firm.

Protection 1 details emerge

Protection 1 set a bank meeting for 10 a.m. ET in New York on Tuesday to launch the credit facility that will help fund its previously announced buyout by Apollo Global Management LLC and combination with ASG Security, which is also being purchased by Apollo, and will refinance existing debt, according to a market source.

With timing in place, it was disclosed that the credit facility is sized at $1.45 billion, split between a $95 million revolver, a $1,055,000,000 six-year first-lien covenant-light term loan and a $300 million seven-year second-lien covenant-light term loan, the source said.

Talk on the first-lien term loan is Libor plus 400 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and talk on the second-lien term loan is Libor plus 875 bps with a 1% Libor floor, a discount of 98 and call protection of 102 in year one and 101 in year two, the source continued.

Protection 1 lead banks

Credit Suisse Securities (USA) LLC, Barclays, Deutsche Bank Securities Inc., Jefferies Finance LLC, RBC Capital Markets and Goldman Sachs Bank USA are leading Protection 1’s credit facility.

Commitments are due at 5 p.m. ET on June 23, the source added.

Closing on the buyout is expected mid-year.

Protection 1 is an Illinois-based business and home security company. ASG Security is a Beltsville, Md.-based electronic security and monitoring company. The newly created company will continue to operate under the Protection 1 brand.

StandardAero readies deal

StandardAero scheduled a bank meeting for Tuesday to launch a $1,075,000,000 credit facility, a market source remarked.

The facility consists of a $150 million ABL revolver and a $925 million first-lien term loan, the source continued.

Jefferies Finance LLC, KKR Capital Markets and MCS Capital Markets are leading the deal that will be used with $485 million of notes to help fund the buyout of the company by Veritas Capital from Dubai Aerospace Enterprise Ltd.

StandardAero is a Scottsdale, Ariz.-based provider of aircraft engine maintenance, repair and overhaul services.

On Assignment closes

In other news, On Assignment Inc. closed on its $975 million credit facility (Ba2/BB) that includes a $150 million revolver and an $825 million seven-year covenant-light term loan B, according to an 8-K filed with the Securities and Exchange Commission.

Pricing on the term loan is Libor plus 300 bps with a 0.75% Libor floor, and it was sold at an original issue discount of 99.5. There is 101 soft call protection for six months.

During syndication, the term loan was downsized from $875 million and pricing was trimmed from Libor plus 350 bps, and the revolver was upsized from $100 million.

Wells Fargo Securities LLC led the deal that was used to fund the acquisition of Creative Circle LLC for $540 million in cash and $30 million of common stock and to refinance existing debt.

On Assignment is a Calabasas, Calif.-based provider of diversified professional staffing solutions. Creative Circle is a digital/creative staffing firm.

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