American Airlines, Veritiv, IVC, Flutter, Instructure, Iqvia, 84 Lumber, IMA loans break

By Sara Rosenberg

New York, Nov. 17 – American Airlines Inc. upsized its term loan B, finalized the spread at the low end of talk and tightened the original issue discount, Veritiv Corp. (Verde Purchaser LLC) reduced the size of its term loan B and added call protection, and IVC Evidensia downsized its U.S. term loan B and upsized its euro term loan B, firmed spreads on the U.S. and euro tranches and set the issue price on its sterling term loan B, and then these deals freed to trade on Friday.

Also, Flutter Entertainment plc upsized its term loan B and finalized the original issue discount at the tight end of revised guidance before breaking for trading, and deals from Instructure Holdings Inc., Iqvia Inc., 84 Lumber Co. and IMA Financial Group all hit the secondary market as well.

In other news, Northeast Grocery Inc. released price talk on its term loan B in connection with its lender call.

American revised, trades

American Airlines raised its 5.5-year term loan B (Ba2/BB/BB-) to $1.1 billion from $750 million, set pricing at SOFR plus 350 basis points, the low end of the SOFR plus 350 bps to 375 bps talk, and modified the original issue discount to 99 from 98.5, a market source remarked.

As before, the term loan has a 0% floor and 101 soft call protection for six months.

Recommitments were due at noon ET on Friday and the term loan B broke in the afternoon, with levels quoted at 99¼ bid, 99¾ offered, a trader added.

Citigroup Global Markets Inc., BofA Securities Inc. and Morgan Stanley Senior Funding Inc. are joint lead arrangers on the deal. Barclays, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, JPMorgan Chase Bank, SMBC, BNP Paribas Securities Corp., Credit Agricole, MUFG, US Bank and Bank of Texas are joint arrangers.

The term loan will be used with $1 billion of senior secured notes, upsized from $750 million, to refinance in full, instead of in part, existing 11¾% secured notes due 2025 and to pay related transaction fees and expenses.

American Airlines, a Fort Worth-based airline company, expects to close on the term loan on Dec. 4.

Veritiv restructured

Veritiv trimmed its seven-year term loan B (B2/B+) to $600 million from $700 million while raising its senior secured notes offering to $700 million from $600 million, and added 101 soft call protection for six months to the term loan, according to a market source.

The term loan remained priced at SOFR plus 500 bps with a 0% floor and an original issue discount of 97.

Previously in syndication, pricing on the term loan was lifted from SOFR plus 450 bps and the discount was revised from 98.

The company’s now $1.425 billion of credit facilities also include an $825 million five-year ABL revolver.

RBC Capital Markets, Goldman Sachs Bank USA, Wells Fargo Securities LLC, BMO Capital Markets, UBS Investment Bank, BNP Paribas Securities Corp., Mizuho Bank, TD Securities (USA) LLC, Natixis, Rabobank, Regions Capital Markets, Citizens Bank, ING Capital, Stifel and the Bank of Nova Scotia are leading the deal.

Veritiv hits secondary

Recommitments for Veritiv’s term loan B were due at noon ET on Friday and the debt began trading in the afternoon, with levels quoted at 97 bid, 97½ offered, another source added.

The term loan, notes and $1.12 billion of equity will fund the buyout of the company by Clayton, Dubilier & Rice LLC for $170 per share in a transaction with an enterprise value of $2.6 billion.

Closing is expected this quarter, subject to shareholder approval and regulatory approvals.

Veritiv is an Atlanta-based distributor of packaging, facility solutions and print products.

IVC updated

IVC Evidensia scaled back its U.S. five-year senior secured term loan B to $1.1 billion from $1.25 billion, set pricing at SOFR plus 550 bps, the high end of the SOFR plus 525 bps to 550 bps talk, and left the 0.5% floor and original issue discount of 98 unchanged, a market source said.

In addition, the company raised its euro five-year senior secured term loan B to €2.27 billion from €2.13 billion and firmed pricing at Euribor plus 500 bps, the low end of the Euribor plus 500 bps to 525 bps talk, while leaving the 0% floor and discount of 98 intact, the source continued.

Furthermore, the discount on the company’s £900 million five-year senior secured term loan B finalized at 97.5, the tight end of the 97 to 97.5 talk, with pricing unchanged at Sonia plus 575 bps with a 0% floor.

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

Earlier in syndication, the company added J.Crew and Chewy protection, and 100 bps MFN with a 12-month sunset.

The term loans will be used to fully repay the existing VS debt facilities and associated breakage costs, repay and extend the maturity of existing pound sterling and euro term loans from February 2026, repay revolving credit facility borrowings and pay the transaction fees and expenses.

IVC breaks

Recommitments for IVC Evidensia’s term loans were due at 10:30 a.m. ET on Friday and the U.S. loan hit the secondary market later in the session, with levels quoted at 98¼ bid, 99 offered, another source added.

Barclays is the sole physical bookrunner on the U.S. term loan, and Goldman Sachs, HSBC, NatWest Markets, SMBC, BofA Securities Inc., CIBC, Citigroup Global Markets Inc., Credit Agricole, RBC Capital Markets and Santander are joint bookrunners. Barclays is the agent.

Barclays, Goldman Sachs, HSBC, NatWest Markets and SMBC are joint physical bookrunners on the euro term loan, and BofA Securities, Credit Agricole, CIBC, Citigroup, RBC, Santander and Mizuho are joint bookrunners. NatWest is the agent.

Barclays, Goldman Sachs and SMBC are joint physical bookrunners on the sterling term loan, and HSBC, NatWest Markets, BofA Securities, Santander, CIBC, Citigroup, Credit Agricole, Mizuho and RBC are joint bookrunners. NatWest is the agent.

IVC, owned by EQT, Silver Lake, Berkshire Partners and Nestle, is a veterinary services provider.

Flutter upsizes, frees

Flutter Entertainment increased in the morning its term loan B due 2030 to a minimum of $3.33 billion and a maximum of $3.91 billion from $2.68 billion and firmed the original issue discount at 99.75, the tight end of revised talk of 99.5 to 99.75 and tighter than initial talk of 99.5, a market source remarked. The size of the loan was then set in the afternoon at $3.4 billion.

As before, pricing on the term loan is SOFR plus 225 bps with one leverage-based pricing step-down and a 0.5% floor, and the debt has 101 soft call protection for six months.

Pricing on the term loan was cut on Thursday from talk in the range of SOFR plus 250 bps to 275 bps.

The term loan B began trading during the session, with levels quoted at 99 7/8 bid, par 1/8 offered, another source added.

JPMorgan Chase Bank, Wells Fargo Securities LLC, BofA Securities Inc. and Barclays are global coordinators on the deal and bookrunners with Citigroup Global Markets Inc., Mediobanca, NatWest, Santander, AIB, Citizens, Lloyds and Mizuho.

The term loan will be used by the Dublin-based sports betting and gaming operator to refinance an existing term loan B due 2026 and, due to the upsizing, to repay $720 million of a term loan B due 2028.

Instructure starts trading

Instructure’s fungible $685 million add-on term loan B due October 2028 (//BB+) also broke, with levels quoted at 99 3/8 bid, 99 7/8 offered, according to a market source.

Pricing on the add-on term loan is SOFR+CSA plus 275 bps with a 0.5% floor, and it was sold at an original issue discount of 99.03. CSA is the ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate. The debt has 101 soft call protection for six months.

JPMorgan Chase Bank, Macquarie Capital (USA) Inc., Morgan Stanley Senior Funding Inc., Golub Capital and Goldman Sachs Bank USA are leading the deal that will be used with balance sheet cash to fund the acquisition of Parchment in a transaction valued at about $835 million.

Closing is expected in the first quarter of 2024, subject to regulatory approval and customary conditions.

Pro forma for the transaction, net debt is 3.8x and total debt is 4.2x.

The add-on term loan is fungible with the company’s existing $493 million term loan B due October 2028.

Instructure is a Salt Lake City-based educational technology company. Parchment is an academic credential management platform.

Iqvia breaks

Iqvia’s $1.5 billion term loan B due 2031 freed up too, with levels quoted at par bid, par 3/8 offered, a market source remarked.

Pricing on the term loan is SOFR plus 200 bps with a 0% floor, and it was issued at par. The debt has 101 soft call protection for one year.

During syndication, the size of the term loan firmed from revised talk of a minimum of $1.5 billion and an initial amount of $1.25 billion, pricing was reduced from talk in the range of SOFR plus 225 bps to 250 bps, the issue price was tightened from 99, and the call protection was extended from six months.

JPMorgan Chase Bank is the left lead on the deal. BofA Securities Inc. is the administrative agent.

The term loan will be used with $1.25 billion of senior secured notes, upsized recently from $500 million, to repay a euro term loan B due March 2024, a U.S. term loan B due January 2025 and a U.S. term loan B due June 2025, and to pay related fees and expenses.

Iqvia is a Danbury, Conn.-based provider of advanced analytics, technology solutions and contract research services to the life sciences industry.

84 Lumber frees

84 Lumber’s $450 million seven-year covenant-lite term loan B (Ba2/BB-) made its way into the secondary market as well, with levels quoted at 99¾ bid, par ¼ offered, according to a market source.

Pricing on the term loan is SOFR+10 bps CSA plus 275 bps with a 0% floor and it was sold at an original issue discount of 99.5. The loan has 101 soft call protection for six months.

During syndication, pricing on the term loan was lowered from SOFR plus 300 bps and the discount firmed at the tight end of the 99 to 99.5 talk.

Wells Fargo Securities LLC is the left lead on the deal that will be used with about $100 million of cash on hand to refinance an existing term loan B due 2026.

84 Lumber is an Eighty Four, Pa.-based supplier of building materials, manufactured components and services for single and multi-family residences and commercial buildings.

IMA tops OID

IMA Financial’s fungible $375 million add-on covenant-lite term loan B-1 due November 2028 (B3/B) freed up, with levels quoted at 99 5/8 bid, par 1/8 offered, a trader said.

Pricing on the add-on term loan is SOFR+CSA plus 375 bps with a 0.5% floor, and the debt was sold at an original issue discount of 99.5 and has 101 soft call protection for six months. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

During syndication, the add-on term loan was upsized from $350 million and the discount was tightened from talk in the range of 99.04 to 99.25.

BMO Capital Markets, JPMorgan Chase Bank, US Bank, Citigroup Global Markets Inc. and Capital One are leading the deal that will be used to refinance an existing term loan B-2, to repay revolver borrowings, to fund potential acquisitions and for general corporate purposes.

New Mountain Capital, SkyKnight Capital and the Stephens Group are the sponsors.

IMA Financial is a Denver-based property and casualty and employee-benefit specialty insurance brokerage.

Northeast Grocery guidance

In more happenings, Northeast Grocery held its lender call on Friday morning and announced talk on its $550 million five-year term loan B (B+/BB+) at SOFR plus 750 bps with a 1% floor, an original issue discount of 96 to 97 and call protection of non-callable for one year, then at 103 in year two and 101 in year three, according to a market source.

Commitments are due at noon ET on Dec. 4.

Deutsche Bank Securities Inc., UBS Investment Bank and BofA Securities Inc. are leading the deal that will be used to refinance existing debt.

Northeast Grocery is a Schenectady, N.Y.-based traditional food retailer.

Augusta wrapping soon

Augusta Sportswear Brands was expected to conclude documentation comments on Friday for its $390 million of senior secured credit facilities, and allocations are targeted for the week of Nov. 20, likely Tuesday or Wednesday, a market source remarked.

The facilities consist of a $50 million revolver, and a $340 million six-year covenant-lite term loan talked at SOFR plus 600 bps with a 1% floor, an original issue discount of 98 and hard call protection of 102 in year one and 101 in year two.

Antares Capital LP is leading the deal that will be used to support the buyout of the company by Platinum Equity.

Augusta Sportswear is a Grovetown, Ga.-based supplier of team uniforms and off-field performance wear primarily serving youth and recreational segments.

Fund flows

In other news, actively managed loan fund flows on Thursday were negative $30 million and loan ETFs were positive $17 million, sources said.

Loan funds reported weekly inflows totaling $288 million, with positive $738 million ETFs. Loan ETFs have seen inflows in 10 of 12 weeks.

Year to date, outflows for loan funds total $17.8 billion, with positive $1.8 billion ETFs, sources added.

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