Micron breaks following revisions; McGraw-Hill dips on refi; Netsmart, AmWINS tweak deals

By Sara Rosenberg

New York, April 15 – Micron Technology Inc. finalized the spread on its term loan B at the low end of guidance, eliminated the Libor floor and tightened the original issue discount, and then the debt freed up for trading on Friday afternoon.

In other secondary market happenings, McGraw-Hill Global Education Holdings LLC’s term loan softened with news of a proposed refinancing transaction.

Back in the primary, Netsmart Technologies Inc. lowered pricing on its revolver, cut the spread on it first-lien term loan and modified the issue price and trimmed pricing on its second-lien term loan while sweetening the call protection.

In addition, AmWINS Group Inc. upsized its add-on first-lien term loan, NBTY Inc. released price talk on its proposed term loans, and American Airlines Group Inc. joined the near-term new issue calendar.

Micron reworked, trades

Micron firmed pricing on Friday on its $750 million six-year senior secured covenant-light term loan B at Libor plus 600 basis points, the tight end of the Libor plus 600 bps to 625 bps talk, reduced the Libor floor to 0% from 0.75% and changed the original issue discount to 99 from 98, according to a market source.

As before, the term loan has 101 soft call protection for six months.

Prior to the pricing updates, the term loan was upsized from $500 million as a result of strong demand.

Commitments were due at noon ET, and, thereafter, the loan made its way into the secondary market with levels quoted at 100½ bid, 101 offered, a trader remarked.

Morgan Stanley Senior Funding Inc., Citigroup Global Markets Inc., HSBC Holdings plc and J.P. Morgan Securities LLC are leading the deal that will be used with $1.25 billion of senior secured notes, upsized from $1 billion, for general corporate purposes, including working capital and capital expenditures, and to pay related fees and expenses.

Micron is a Boise, Idaho-based semiconductor company.

McGraw-Hill softens

Also in trading, McGraw-Hill Global Education’s term loan slipped to par bid, 100½ offered from 100¼ bid, 100¾ offered after word hit that the company will be refinancing the debt with a new credit facility, a trader remarked.

The company plans to hold a bank meeting at 10:30 a.m. ET in New York on Monday to launch a $1,655,000,000 credit facility, comprised of a $350 million five-year revolver and a $1,305,000,000 six-year first-lien covenant-light term loan.

Price talk on the term loan is Libor plus 475 bps with a 1% Libor floor and an original issue discount of 99, a market source said.

Commitments are due on April 28.

In addition to refinance existing debt, the credit facility will merge McGraw-Hill School Education into the McGraw-Hill Global Education credit group and fund a dividend, the source added.

Credit Suisse Securities (USA) LLC is the left lead bank on the deal.

McGraw-Hill is a New York-based provider of education materials.

Netsmart changes emerge

Switching back to the primary market, Netsmart Technologies cut pricing on its $50 million five-year revolver (B2/B+) and $395 million seven-year first-lien term loan (B2/B+) to Libor plus 475 bps from talk of Libor plus 525 bps to 550 bps, and on its $167 million 7.5-year second-lien term loan (Caa2/CCC+) to Libor plus 875 bps from talk of Libor plus 950 bps, according to a market source.

Additionally, the original issue discount on the first-lien term loan was tightened to 99 from 98.5, and the call protection on the second-lien term loan was modified to non-callable for one year, then at 103 in year two and 101 in year three, from 103 in year one and 101 in year two, the source said.

Both term loans still have a 1% Libor floor, the first-lien term loan still has 101 soft call protection for six months, and the original issue discount on the second-lien term loan is still 97.5.

Netsmart being acquired

Proceeds from Netsmart’s credit facility will be used to help fund its buyout by GI Partners and Allscripts Healthcare Solutions Inc. As a part of the venture, Netsmart will merge the Allscripts Homecare business unit into the Netsmart CareFabric suite of solutions.

UBS Investment Bank is leading the $612 million senior secured credit facility.

Recommitments were due by 4 p.m. ET on Friday, the source added.

Netsmart is an Overland Park, Kan.-based IT company focused on health and human services.

AmWINS ups loan

AmWINS Group increased the size of its fungible add-on first-lien term loan to $40 million from $30 million, a market source said.

As before, pricing on the add-on term loan is Libor plus 425 bps with a 1% Libor floor and an original issue discount of 99.5.

Allocations are expected on Monday, the source added.

Credit Suisse Securities (USA) LLC is leading the debt that will be used to fund acquisitions.

AmWINS is a Charlotte, N.C.-based specialty insurance broker.

NBTY reveals talk

NBTY came out with price talk of Libor plus 425 bps to 450 bps with a 1% Libor floor and an original issue discount of 98.5 to 99 on its $1.4 billion covenant-light term loan B that will launch to U.S. investors on Monday, according to a market source.

The company already launched a £300 million covenant-light term loan B to European investors with a bank meeting on Friday, and talk on that tranche is Libor plus 525 bps to 550 bps with a 1% Libor floor and a discount of 98.5 to 99, the source said.

All of the term loans have 101 soft call protection for six months.

Commitments are due on April 27, the source added.

Bank of America Merrill Lynch and Barclays are leading the senior secured deal (B1).

NBTY refinancing

Proceeds from NBTY’s term loans will be used to help fund the redemption of all of the outstanding 7.75%/8.5% contingent cash pay senior notes due 2017 issued by its parent company, Alphabet Holding Co. Inc., to redeem all of its 9% senior notes due 2018 and to repay all outstanding borrowings under its existing senior secured credit facilities.

The company also plans to use borrowings under a new $400 million asset-based credit facility, $1,075,000,000 in senior notes and cash on hand for the refinancing.

NBTY is a Ronkonkoma, N.Y.-based manufacturer, marketer, distributor and retailer of vitamins and nutritional supplements.

American Airlines on deck

American Airlines scheduled a lender call for 1 p.m. ET on Monday to launch a $750 million seven-year term loan B, according to a market source.

Barclays is leading the loan that will be used to repay the company’s $588 million term loan B-2 due in 2016, to pay related fees and expenses, and for general corporate purposes.

Post-news, the term loan B-2 that is being refinanced was quoted in trading at 99 7/8 bid, 100 1/8 offered, unchanged from previous levels, a trader added.

American Airlines is a Fort Worth-based airline company.

ON Semiconductor closes

In other news, ON Semiconductor Corp. completed its $2.8 billion credit facility (Ba1/BB) consisting of a $600 million five-year revolver and a $2.2 billion seven-year covenant-light term loan B, according to an 8-K filed with the Securities and Exchange Commission.

Revolver pricing is Libor plus 400 bps.

Pricing on the term loan B is Libor plus 450 bps with a 0.75% Libor floor, and it was sold at an original issue discount of 98.5. The debt includes 101 soft call protection for one year.

During syndication, the term loan B was upsized from $2 billion, the discount was revised from 98, the call protection was extended from six months, and the MFN sunset was eliminated so that the debt has 50 bps MFN for life. Also, the revolver was upsized from $400 million.

ON Semiconductor leads

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, BMO Capital Markets, HSBC Securities (USA) Inc. and SMBC led ON Semiconductor’s credit facility.

Proceeds were deposited into escrow to be used to fund the acquisition of Fairchild Semiconductor International Inc. for $20.00 per share in an all-cash transaction valued at about $2.4 billion.

Due to the term loan B upsizing and the decision to draw $200 million under the revolver, the company cancelled plans for a $400 million senior unsecured notes offering.

Pro forma net leverage is 3.2 times including synergies.

ON Semiconductor is a Phoenix-based semiconductor company. Fairchild Semiconductor is a San Jose, Calif.-based semiconductor company.

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