Tank, Sheridan Heath deals allocate; cash loans and synthetics finish week on high note

By Paul A. Harris

Portland, Ore., June 29 - Tank Holding Corp.'s $355 million Libor plus 550 basis points seven-year covenant-light term loan priced on Friday at 98 and broke to 98.5 bid, 99.5 offered, sources said.

Elsewhere, Sheridan Holdings Inc. priced and allocated $710 million of secured loans in two tranches.

The leverage markets were strongly positive on Friday, according to an investor who is active in both syndicated loans and high-yield bonds.

Against a backdrop of surging stock prices - the Nasdaq gained 3% - the LCDX 18 bank loan index finished a point higher at 98 3/8 bid, 98 7/8 offered.

Tank term loan allocates

Tank Holding's term loan Libor spread came 25 bps beyond the wide end of earlier talk of 500 bps to 525 bps.

The discount increased to 2 points from 1½ points, with the loan pricing at 98. Previous discount talk had the deal coming at 98.50.

The term loan includes 101 soft call protection for one year.

The $405 million credit facility (B1) also features a $50 million six-year revolver which remains talked at Libor plus 375 basis points with no Libor floor.

GE Capital Markets and RBC Capital Markets LLC are the lead banks on the deal.

Proceeds will be used to help fund the company's buyout by Leonard Green & Partners from Olympus Partners.

Sheridan loans break

Sheridan Holdings' upsized $600 million Libor plus 475 basis points six-year covenant-light first-lien term loan (B1/B+) priced at 99 and broke to 99¾ bid, par ¼ offered.

Pricing on the loan, which was upsized from $570 million, had firmed at Libor plus 475 basis points, the tight end of Libor plus 475 bps to 500 bps talk, and the original issue discount was tightened to 99 from 98.

Meanwhile, a downsized $110 million Libor plus 775 bps seven-year covenant-light second-lien term loan (Caa1/B-) also priced at 99 and broke to par bid.

The second-lien loan was downsized from $140 million.

The spread was flexed down to Libor plus 775 bps from talk of Libor plus 825 bps to 850 bps and the discount moved to 99 from 98.

Both tranches have a 1.25% Libor floor.

The first-lien term loan still has 101 repricing protection for one year, and the second-lien term loan still has call protection of 103 in year one, 102 in year two and 101 in year three.

The company's $810 million credit facility also provides for a $100 million five-year revolver (B1/B+) with pricing at Libor plus 475 bps, the low end of the Libor plus 475 bps to 500 bps talk, with no Libor floor.

The original issue discount on the revolver was 99.

The only financial covenant is a springing revolver covenant.

Credit Suisse Securities (USA) LLC and Barclays Capital Inc. are the joint lead arrangers on the deal and bookrunners with Bank of America Merrill Lynch, UBS Securities LLC and SunTrust Robinson Humphrey Inc.

Proceeds will be used to refinance existing debt.

Cash but no calendar

Primary market activity remained slow to moderate late in the final week in June, sources said.

"There is cash to put to work," a portfolio manager commented, noting that Lipper AMG reported $257.5 million of inflows into the bank loan mutual funds for the week to Wednesday, extending year-to-date weekly flows to $1.46 billion, according to a Prospect News analysis of information provided by market sources.

"Things have been on the quiet side," the manager said.

"July appears to be shaping up as a quiet month in the bank loan and high-yield markets. That's causing bids to edge up a little.

"New issues are trading up a little more strongly than before, with risk aversion diminishing," he added.

A lot of bids wanted in competition transactions (BWICs) came during the final week in June, the manager said, adding that all of them have been trading.

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