Dresser Natural Gas, DataBank break; Husky softens; Bay Club, SI Group changes surface

By Sara Rosenberg

New York, Aug. 21 – Deals from Dresser Natural Gas Solutions and DataBank emerged in the secondary market during Tuesday’s session, and Husky Injection Molding Systems (Titan Acquisition Ltd.) saw its term loan fall on earnings results.

Moving to the primary market, Bay Club (Bulldog Purchaser Inc.) widened the original issue discount and extended the call protection on its first-lien term loan debt, finalized the issue price on its second-lien term loans at the tight end of guidance and adjusted delayed-draw ticking fees.

In addition, SI Group narrowed the original issue discount on its first-lien term loan from revised talk but it still came wider than initial talk, and U.S. Lumber Group LLC surfaced with new deal plans.

Dresser tops OID

Dresser Natural Gas Solutions’ credit facilities broke for trading on Tuesday, with the $150 million seven-year first-lien term loan quoted at par bid, according to a trader.

Pricing on the first-lien term loan is Libor plus 425 basis points with a step-down to Libor plus 400 bps and a 1% Libor floor. The debt was sold at an original issue discount of 99.5 and has 101 soft call protection for six months.

During syndication, pricing on the first-lien term loan was reduced from Libor plus 450 bps, the step-down was added and the discount was tightened from 99.

The company’s $235 million of credit facilities also include a $35 million five-year revolver and a $50 million privately placed eight-year second-lien term loan.

BNP Paribas Securities Corp. is leading the deal that will be used to help fund the buyout of the company by First Reserve from Baker Hughes.

Dresser Natural Gas is an original equipment manufacturer of commercial and industrial natural gas meters and pipeline repair products.

DataBank frees up

DataBank’s $25 million add-on term loan B began trading as well, with levels quoted at 99¾ bid, par ¼ offered, a market source remarked.

Pricing on the add-on term loan is Libor plus 375 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.75.

SunTrust Robinson Humphrey Inc. is leading the deal that will be used to pay down revolver borrowings.

DataBank is a Dallas-based provider of enterprise-class data center, cloud, and interconnection services.

Husky retreats

Also in trading, Husky Injection Molding’s term loan weakened to 94 bid, 95 offered from 98¼ bid, 98¾ offered after the company released to lenders disappointing financial results, a trader said.

The company is owned by Platinum Equity.

Husky is a Bolton, Ont.-based supplier of injection molding equipment and services to the plastics industry.

Bay Club tweaks deal

Over in the primary market, Bay Club changed the original issue discount on its $340 million seven-year covenant-light first-lien term loan (B2/B+) and $185 million delayed-draw covenant-light first-lien term loan (B2/B+) to 99 from 99.5, while keeping pricing at Libor plus 375 bps with a 0% Libor floor, according to a market source.

The 101 soft call protection on the first-lien term loan was extended to one year from six months.

Regarding the $125 million eight-year covenant-light second-lien term loan (Caa2/CCC+) and $65 million delayed-draw covenant-light second-lien term loan (Caa2/CCC+), the discount was set at 99, the tight end of the 98.5 to 99 talk, the source said. This tranche is still priced at Libor plus 775 bps with a 0% Libor floor, and has hard call protection of 102 in year one and 101 in year two.

Also, the delayed-draw ticking fees were modified to half the margin from days 31 to 60 and the full margin thereafter from half the margin from days 61 to 120 and the full margin thereafter, and the carve-out for real estate sale and lease back specified disposition was revised to $125 million from $250 million and ratios were tightened to 0.5 times inside closing leverage levels.

Bay Club getting revolver

In addition to the first-and second-lien term loans, Bay Club’s $765 million of senior secured credit facilities include a $50 million five-year revolver (B2/B+).

Commitments were due at 4 p.m. ET on Tuesday, pushed out from noon ET on Tuesday, the source added.

Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch, Jefferies LLC and KKR Capital Markets LLC are leading the deal that will be used to fund the buyout of the company by KKR from York Capital Management and minority investors.

Bay Club is a San Francisco-based active lifestyle and hospitality company.

SI Group revised

SI Group moved the original issue discount on its $1,475,000,000 seven-year first-lien term loan to 96 from revised talk in the range of 94 to 95 and initial talk of 99, according to a market source.

As before, the first-lien term loan is priced at Libor plus 475 bps with a 0% Libor floor, and has 101 soft call protection for one year.

Previously in syndication, the first-lien term loan was upsized from $1,425,000,000 as plans for a $250 million eight-year second-lien term loan were eliminated, pricing was lifted from Libor plus 400 bps and the call protection was extended from six months. The eliminated second-lien loan had been talked at Libor plus 800 bps with a 0% Libor floor, a discount of 98.5 and hard call protection of 102 in year one and 101 in year two.

The company’s $1,725,000,000 of credit facilities (B2/B/BB-) also include a $250 million five-year revolver.

SI Group leads

J.P. Morgan Securities LLC, HSBC Securities (USA) Inc., Deutsche Bank Securities Inc. and Bank of America Merrill Lynch are leading SI Group’s credit facilities, with JPMorgan the left lead on the first-lien loan. HSBC was the left lead on the second-lien loan.

The new debt will be used to help fund the buyout of the company by SK Capital Partners from descendants of W. Howard Wright. SI Group will then be combined with SK Capital’s current portfolio company Addivant, a Danbury, Conn.-based supplier of additives used to improve the production and performance properties of polymers, plastics and rubbers.

Closing is expected in the second half of this year.

SI Group is a Schenectady, N.Y.-based developer and manufacturer of performance additives and intermediates.

U.S. Lumber on deck

U.S. Lumber set a bank meeting in New York for Sept. 6 to launch $600 million of credit facilities, a market source said.

The facilities consist of a $100 million five-year ABL revolver and a $500 million seven-year covenant-light term loan, the source added.

SunTrust Robinson Humphrey Inc. is the left lead on the deal that will be used to fund the acquisition of Alexandria Moulding and refinance existing debt.

Closing is expected in October, subject to customary conditions.

U.S. Lumber, a Madison Dearborn Partners portfolio company, is an Atlanta-based two-step distributor of specialty building products. Alexandria Moulding is an Alexandria, Ont.-based provider of mouldings and millwork to the residential and commercial markets.

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