Idera, Foundation Building deal changes emerge; MedImpact reveals loan pricing guidance

By Sara Rosenberg

New York, Sept. 30 – Idera Inc. on Wednesday increased pricing on its first- and second-lien term loans, widened original issue discounts, sweetened call premiums and shortened maturities, and Foundation Building Materials LLC revised spread, issue price and call protection on its first-lien term loan.

Also in the primary market, MedImpact released price talk on its term loan with launch, and details on Affordable Care Inc. timing and structure surfaced.

Idera reworks deal

Idera lifted pricing on its $300 million first-lien term loan (B2/B) to Libor plus 550 basis points from talk of Libor plus 475 bps to 500 bps, moved the original issue discount to 98 from 99, extended the 101 soft call protection to one year from six months and shortened the maturity to six years from seven years, according to a market source.

Regarding the $100 million second-lien term loan (Caa2/CCC+), pricing was increased to Libor plus 950 bps from talk of Libor plus 875 bps to 900 bps, the discount was changed to 97 from 98.5, the call protection was revised to 103 in year one, 102 in year two and 101 in year three from 102 in year one and 101 in year two and the maturity was shortened to seven years from 7.5 years, the source remarked.

As before, both term loans have a 1% Libor floor.

Idera getting revolver

In addition to the first- and second-lien term loans, Idera’s $425 million credit facility includes a $25 million revolver (B2/B).

Jefferies Finance LLC is the lead arranger on the entire deal and a joint bookrunner with Fifth Street on the second-lien loan.

Proceeds will be used to help fund the acquisition of Embarcadero Technologies Inc. from Thoma Bravo.

Idera is a Houston-based provider of IT performance monitoring solutions. Embarcadero is a San Francisco-based provider of professional grade database management tools for designing, developing and managing databases and the data they contain.

Foundation Building revised

Foundation Building Materials raised pricing on its $245 million seven-year first-lien term B (B3/B+) to Libor plus 625 bps from talk of Libor plus 550 bps to 575 bps, widened the original issue discount to 97 from 99 and pushed out the 101 soft call protection to one year from six months, a market source said.

The first-lien term loan continues to have a 1% Libor floor.

Other changes made included setting the MFN for life and added a total leverage covenant step-down to 5 times in December 2017, the source remarked.

The company’s $375 million credit facility also includes a $50 million ABL revolver and an $80 million eight-year second-lien term loan (Caa2/CCC+) that remains talked at Libor plus 975 bps to 1,000 bps with a 1% Libor floor, a discount of 97.5 and call protection of 102 in year one and 101 in year two.

Foundation Building leads

RBC Capital Markets, Credit Suisse Securities (USA) LLC, Jefferies Finance LLC and SunTrust Robinson Humphrey Inc. are leading Foundation Building’s credit facility.

Commitments are still due at 5 p.m. ET on Thursday, the source added.

Proceeds will be used to help fund the buyout of the Tustin, Calif.-based building material company by Lone Star Funds.

MedImpact discloses talk

MedImpact held its bank meeting on Wednesday, launching its $350 million seven-year first-lien term loan B (B+) with talk of Libor plus 425 bps to 450 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source remarked.

Commitments are due on Oct. 14, the source added.

UBS AG is leading the deal that will be used to fund a cash tender offer, which will expire at midnight ET on Oct. 28, for the company’s 10½% senior secured notes due 2018.

MedImpact is a San Diego-based full-service pharmacy benefit management company.

Affordable Care on deck

Affordable Care emerged with plans to hold a bank meeting on Tuesday morning to launch a $325 million first-lien term loan, according to a market source.

The company’s $500 million credit facility also includes a $40 million revolver, and a $135 million second-lien term loan that has been privately placed, the source said.

Jefferies Finance LLC and Golub Capital are leading the deal that will be used to help fund the buyout of the company by Berkshire Partners LLC from American Capital.

Previously, it was known that Jefferies would be left lead on the financing and that there would be a first-and second-lien structure, with the second-lien privately placed, but a bank meeting date and tranche sizes were unavailable.

Affordable Care is a dental practice management services company.

Hudson’s Bay closes

In other news, Hudson’s Bay Co. completed its acquisition of Galeria Holding (Kaufhof) for €2.5 billion, according to a news release.

To help fund the transaction, Hudson’s Bay got a new $1,085,000,000 seven-year term loan B (B1/BB) led by Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., RBC Capital Markets and Scotiabank.

Pricing on the loan is Libor plus 375 bps, after firming during syndication at the wide end of the Libor plus 350 bps to 375 bps talk. The debt has a step-down to Libor plus 350 bps at less than 2 times leverage, which was added during syndication, a 1% Libor floor and 101 soft call protection for six months, and was issued at a discount of 99.5.

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

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