Owens-Brockway Glass, Knowledge Universe, AMAG Pharmaceuticals, Vistage, USI free to trade

By Sara Rosenberg

New York, Aug. 13 – Owens-Brockway Glass Container Inc. (Owens-Illinois Inc.) moved some funds between its term loans, firmed term B pricing at the low end of talk, modified the original issue discount and then broke for trading on Thursday, and Knowledge Universe Education LLC, AMAG Pharmaceuticals Inc., Vistage and USI Inc. hit the secondary as well.

In more happenings, Hudson’s Bay Co. set pricing on its term loan at the high end of talk and added a leverage-based step-down, and US LBM Holdings LLC increased its first- and second-lien term loan sizes, revised spreads and original issue discounts and sweetened the call protection on the first-lien tranche,

Also, Patterson Medical lifted the spread on its term loan B, set the issue price at the wide end of guidance and extended the call premium, and Albany Molecular Research Inc. adjusted the call protection on its term loan B.

Owens-Brockway revised

Owens-Brockway Glass Container reduced its seven-year covenant-light term loan to $575 million from $750 million, finalized pricing at Libor plus 275 basis points, the low end of the Libor plus 275 bps to 300 bps talk, and tightened the original issue discount to 99.75 from 99.5, according to a market source.

As before, the term loan B has a 0.75% Libor floor and 101 soft call protection for six months.

With the term loan B downsizing, the company’s term loan A due April 2020 was upsized to $675 million from $500 million, with pricing unchanged at Libor plus 175 bps with a 25 bps upfront fee, the source said.

The term loan B has a ticking fee of half the spread from days 31 to 60 and the full spread plus floor thereafter, and the term loan A has a ticking fee of 30 bps per annum.

Owens hits secondary

After terms finalized, Owens-Brockway’s new bank debt freed up for trading on Thursday, with the term loan B quoted at 100 1/8 bid, 100½ offered, the source continued.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Scotiabank, Barclays, Rabobank and HSBC Securities (USA) Inc. are leading the $1.25 billion of term loans (Baa3/BBB).

Proceeds will be used with $1 billion of senior notes to fund the roughly $2.15 billion acquisition of Vitro, SAB de CV’s food and beverage glass container business.

Closing is required by May 12, 2016 or the loan commitments will fall away, the source added, and is subject to approval by Vitro’s shareholders and customary regulatory approvals.

Owens-Brockway is a Perrysburg, Ohio-based glass container manufacturer.

Knowledge Universe frees up

Knowledge Universe’s credit facility emerged in the secondary market as well, with the $645 million seven-year first-lien covenant-light term loan (B1/B) seen at 98½ bid, 99 offered and the $200 million eight-year second-lien covenant-light term loan (Caa1/CCC+) seen at 98 bid, 99 offered, a trader remarked.

Pricing on the first-lien term loan is Libor plus 500 bps with a 1% Libor floor, and it was sold at an original issue discount of 98.5. There is 101 soft call protection for one year.

The second-lien term loan is priced at Libor plus 925 bps with a 1% Libor floor and was issued at a discount of 98. This tranche has call protection of 103 in year one, 102 in year two and 101 in year three.

During syndication, pricing on the first-lien term loan finalized at the high end of the Libor plus 475 bps to 500 bps talk, the discount was modified from 99, and the call protection was extended from six months, and pricing on the second-lien term loan was raised from talk of Libor plus 875 bps to 900 bps, the discount widened from 99, and the call protection was sweetened from 102 in year one and 101 in year two.

Knowledge Universe revolver

In addition to the first- and second-lien term loans, Knowledge Universe’s $925 million credit facility includes an $80 million revolver (B1/B).

Credit Suisse Securities (USA) LLC, Barclays and BMO Capital Markets are leading the deal.

Proceeds will be used to help fund the buyout of the company by Partners Group, which is expected to close later this year.

Knowledge Universe is a for-profit provider of early childhood education in the United States and the parent company of KinderCare Learning Centers, as well as the brands Children’s Creative Learning Centers and Champions.

AMAG starts trading

AMAG Pharmaceuticals’ $350 million six-year senior secured covenant-light term loan (Ba2/BB) also broke, with levels quoted at par bid, 100½ offered, according to a trader.

Pricing on the term loan is Libor plus 375 bps with a 1% Libor floor, and it was issued at a discount of 99.75. There is 101 soft call protection for six months.

The other day, pricing on the loan was lowered from Libor plus 400 bps, the discount was changed from 99.5, and the MFN sunset provision was eliminated.

Jefferies Finance LLC and Barclays are leading the deal.

AMAG funding acquisition

Proceeds from AMAG’s term loan will be used to help fund the acquisition of Cord Blood Registry from GTCR for $700 million and to repay AMAG’s existing roughly $320 million senior secured term loan.

The company is also using proceeds from a senior notes offering to finance the acquisition. The notes were upsized recently to $500 million from $450 million, with the extra proceeds going towards adding cash to the balance sheet.

Closing is expected in the third quarter, subject to regulatory approval and customary conditions.

AMAG is a Waltham, Mass.-based specialty pharmaceutical company. Cord Blood is a stem cell collection and storage company serving pregnant women and their families.

Vistage tops OID

Vistage’s credit facility began trading too, with the $150 million term loan B quoted at 99½ bid, par offered, a source remarked.

Pricing on the term loan is Libor plus 550 bps with a 1% Libor floor, and it was sold at an original issue discount of 99. The debt has 101 soft call protection for six months.

Recently, pricing on the B loan was increased from talk of Libor plus 475 bps to 500 bps and amortization was raised to 2.5% per annum from 1%.

The company’s $165 million credit facility also includes a $15 million revolver.

SunTrust Robinson Humphrey Inc. and Credit Suisse Securities (USA) LLC are leading the deal that will be used to refinance existing debt and fund a dividend.

Vistage is a San Diego, Calif.-based for-profit membership organization of CEOs.

USI add-on breaks

Another deal to make its way into the secondary market was USI’s fungible $230 million add-on term loan B due Dec. 27, 2019, with levels seen at 99¼ bid, 99½ offered, according to a trader.

Pricing on the add-on loan is Libor plus 325 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.03. The add-on and the company’s existing term loan B are getting 101 soft call protection for six months.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to fund a dividend to shareholders.

USI is a Valhalla, N.Y.-based insurance broker.

Hudson’s Bay updated

Back in the primary, Hudson’s Bay firmed pricing on its $1,085,000,000 seven-year term loan B (B1/BB) at Libor plus 375 bps, the high end of the Libor plus 350 bps to 375 bps talk, and added a step-down to Libor plus 350 bps at less than 2 times leverage, according to a market source.

As before, the term loan has a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

Commitments were due at 5 p.m. ET on Thursday, with allocations targeted for Friday.

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., RBC Capital Markets and Scotiabank are leading the deal that will be used to help fund the €2.42 billion acquisition of Galeria Holding (Kaufhof).

Closing is expected by the end of the third fiscal quarter, subject to customary conditions.

Hudson’s Bay is an Ontario-based operator of department stores. Kaufhof is an operator of department stores in Germany and Belgium.

US LBM reworked

US LBM raised its seven-year first-lien covenant-light term loan (B3/B+) to $657 million from $650 million, lifted pricing to Libor plus 525 bps from talk of Libor plus 450 bps to 475 bps, changed the original issue discount to 98 from 99 and extended the 101 soft call protection to one year from six months, according to market sources. The 1% Libor floor was left unchanged.

As for the eight-year second-lien covenant-light term loan (Caa2/B-), it was upsized to $154 million from $150 million, the spread was increased to Libor plus 925 bps from talk of Libor plus 850 bps to 875 bps and the discount widened to 96 from 98.5, sources said. This tranche still has a 1% Libor floor and call protection of 102 in year one and 101 in year two.

The company’s now $986 million credit facility also includes a $175 million ABL revolver.

Commitments are due at 3 p.m. ET on Friday.

US LBM lead banks

Credit Suisse Securities (USA) LLC, RBC Capital Markets, Barclays and SunTrust Robinson Humphrey Inc. are leading US LBM’s credit facility.

Proceeds will be used to help fund the buyout of the company by Kelso & Co. BlackEagle Partners LLC and certain members of the company’s management will be investors along with Kelso.

Funds from the term loan upsizings will be used to compensate for the wider original issue discounts on the tranches, sources added.

US LBM is a Green Bay, Wis.-based owner of building material distribution businesses.

Patterson changes emerge

Patterson Medical lifted pricing on its $300 million seven-year covenant-light term loan B (Ba3) to Libor plus 425 bps from Libor plus 375 bps, firmed the original issue discount at 99, the wide end of the 99 to 99.5 talk, and extended the 101 soft call protection to one year from six months, a source remarked, adding that the 1% Libor floor was left intact.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Barclays and Jefferies Finance LLC are leading the deal that will be used with equity to fund the buyout of the company by Madison Dearborn Partners from Patterson Cos. Inc. for gross proceeds of around $715 million in cash.

Closing is expected in the fiscal second quarter, subject to regulatory requirements and other customary conditions.

Patterson Medical is a distributor of rehabilitation supplies and non-wheelchair assistive patient products to the physical and occupational therapy markets.

Albany Molecular tweaks deal

Albany Molecular Research pushed out the 101 soft call protection on its $200 million six-year term loan B to one year from six months and reduced the free and clear incremental basket to $50 million from $60 million, a market source said.

Any incremental term loan will be prohibited to make a junior debt payment, the source continued.

Pricing on the B loan remained at Libor plus 475 bps with a 1% Libor floor and an original issue discount of 99.

The company’s $230 million credit facility (B1/B+) also includes a $30 million five-year revolver.

Allocations are expected on Friday.

Barclays is leading the deal that will be used to support the company’s acquisition of Gadea Grupo Farmaceutico and to repay revolver borrowings.

Net senior secured leverage is 1.5 times, and net total leverage is 3.9 times, the source added.

Albany Molecular is an Albany, N.Y.-based drug discovery services and manufacturing company.

Emdeon closes

In other news, Emdeon Inc. completed its acquisition of Altegra Health Inc. from Parthenon Capital Partners, a news release said.

To help fund the transaction, Emdeon got a new fungible $395 million incremental term loan B (Ba3/B+) due November 2018 priced at Libor plus 250 bps with a 1.25% Libor floor, which matches existing term loan B pricing, and sold at an original issue discount of 99.75.

During syndication, the discount on the loan was tightened from 99.5.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Jefferies Finance LLC, Mizuho Securities USA Inc. and SunTrust Robinson Humphrey Inc. led the deal.

Emdeon is a Nashville-based provider of health care revenue and payment cycle management and clinical information exchange solutions. Altegra Health is a Miami Lakes, Fla.-based provider of technology-enabled, next generation payment solutions to health care providers.

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