Walgreens Infusion hits secondary; Heinz rises; Hyperion, Regal, Townsquare revise deals

By Sara Rosenberg

New York, March 25 – Walgreens Infusion Services’ credit facility freed up for trading on Wednesday with the term loan B bid above par, and H.J. Heinz Co. saw its term debt creep higher with news of a merger with Kraft Foods Group Inc.

Moving to the primary market, Hyperion Insurance Group Ltd. upsized its term loan, set pricing at the low end of guidance, added a step-down, tightened the offer price and sweetened the call premium.

Also, Regal Cinemas Corp. cut the spread on its term loan, adjusted the original issue discount and shortened the call protection, and Townsquare Media Inc. lowered pricing on its term loan B and extended the call protection.

Furthermore, Nortek Inc. and Top Right Group (Eden Bidco Ltd.) disclosed price talk with launch, timing and structure surfaced on Concordia Healthcare Corp.’s proposed credit facility, and Advantage Sales & Marketing LLC and Monitronics International Inc. joined this week’s new deal calendar.

Walgreens Infusion breaks

Walgreens Infusion Services’ credit facility made its way into the secondary market on Wednesday with the $415 million seven-year term loan B quoted at par ¼ bid, 101 offered, according to a trader.

Pricing on the term loan is Libor plus 500 basis points with a 1% Libor floor, and it was sold at an original issue discount of 99½. The debt has a step-down to Libor plus 475 bps at 3.5 times first-lien leverage and 101 soft call protection for one year.

Earlier in the week, the discount on the B loan was tightened from 99 and the step-down was added.

The company’s $495 million credit facility (B2/B) also includes an $80 million revolver.

Bank of America Merrill Lynch, Barclays, Deutsche Bank Securities Inc. and Goldman Sachs Bank USA are leading the deal that will be used with $150 million of second-lien debt placed with Goldman Sachs Mezzanine and equity to fund the buyout of the company by Madison Dearborn Partners from Walgreen Co.

Closing is expected in the second quarter, subject to regulatory approvals and other conditions.

Walgreens Infusion Services is a provider of home and alternate treatment site infusion services.

Heinz inches up

Also in trading, H.J. Heinz’s term loan B-1 and term loan B-2 moved up to par ¼ bid, par ½ offered from par 1/8 bid, par 3/8 offered following an announcement that the Pittsburgh-based company is merging with Northfield, Ill.-based Kraft Foods, a trader said.

The trader explained that although the debt is expected to be refinanced at par, the merger won’t close until the second half of the year, so the loans were stronger on Wednesday because investors were making a yield play.

The companies anticipate refinancing $9.5 billion of existing secured Heinz high-yield debt with new investment grade debt at the transaction close and refinancing the remaining existing secured Heinz high-yield debt with new investment grade debt as soon as practicable, according to a presentation about the merger.

In addition, it is expected that $8 billion of preferred equity will be refinanced as soon as it is callable in June 2016 with new investment grade debt.

Heinz merger details

Under the agreement, Heinz shareholders will own 51% of the combined company, named The Kraft Heinz Co., and Kraft shareholders will own 49%.

Kraft shareholders will receive stock in the combined company and a special cash dividend of $16.50 per share. The aggregate special dividend payment of about $10 billion is being fully funded by an equity contribution by Berkshire Hathaway and 3G Capital.

Closing is subject to approval by Kraft shareholders, receipt of regulatory approvals and other customary conditions.

Kraft Heinz is a food and beverage company that will be co-headquartered in Pittsburgh and the Chicago area.

Hyperion reworks deal

Shifting to the primary market, Hyperion Insurance Group lifted its seven-year term loan B to $750 million from $725 million, firmed pricing at Libor plus 450 bps, the tight end of the Libor plus 450 bps to 475 bps talk, added a step-down to Libor plus 425 bps at 3.25 times net secured leverage, moved the original issue discount to 99½ from 99, extended the 101 soft call protection to one year from six months and removed the MFN sunset, a market source said.

As before, the term loan has a 1% Libor floor.

The company’s senior secured credit facility (B1) also includes an £85 million five-year revolver.

Recommitments were due on Wednesday and allocations are expected on Thursday, the source remarked.

Morgan Stanley Senior Funding Inc., HSBC Securities (USA) Inc. and RBC Capital Markets LLC are the bookrunners on the deal and joint lead arrangers with Lloyds Securities Inc.

Hyperion buying RK

Proceeds from Hyperion’s credit facility will be used with equity to fund the acquisition of RK Harrison Holdings Ltd. and repay existing Hyperion debt. The additional proceeds from the term loan upsizing will be used for deferred equity consideration, the source added.

The combined group will be 70% owned by its employees, with Hyperion’s external shareholder, General Atlantic, remaining in place with its share of 30%.

Closing is expected in April.

Hyperion is a London-based insurance intermediary group. RK is a London-based insurance and reinsurance broker.

Regal changes emerge

Regal Cinemas reduced pricing on its $966 million senior secured covenant-light term loan due in 2022 (Ba1/BB) to Libor plus 300 bps from Libor plus 325 bps, modified the original issue discount to 99¾ from 99 and shortened the 101 soft call protection to six months from one year, according to a market source.

The term loan still has a 0.75% Libor floor.

Recommitments are due at 2 p.m. ET on Thursday, the source said.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Barclays, Morgan Stanley Senior Funding Inc. and Wells Fargo Securities LLC are leading the deal that will be used to refinance an existing term loan.

Regal Cinemas is a subsidiary of Regal Entertainment Group, a Knoxville, Tenn.-based motion picture exhibitor.

Townsquare trims spread

Townsquare Media cut pricing on its $275 million seven-year term loan B to Libor plus 325 bps from Libor plus 375 bps, pushed out the 101 soft call protection to one year from six months and eliminated the MFN sunset, according to a market source.

As before, the term loan B has a 1% Libor floor and an original issue discount of 99½.

The term loan B was recently upsized from $255 million in connection with the company’s bond offering being reduced to $300 million from $320 million.

Along with the term loan B, the company’s $325 million senior secured credit facility (Ba2/BB-) includes a $50 million five-year revolver.

Recommitments were due at 5 p.m. ET on Wednesday and allocations are expected on Friday, the source added.

Townsquare lead banks

RBC Capital Markets LLC, Bank of America Merrill Lynch, SunTrust Robinson Humphrey Inc., Macquarie Capital (USA) Inc. and Jefferies Finance LLC are leading Townsquare Media’s credit facility.

Proceeds from the credit facility and the recently priced 6½% senior notes will be used to refinance the company’s existing senior secured credit facility and $410.9 million of 9% senior notes due 2019 issued by Townsquare Radio LLC and Townsquare Radio Inc.

Townsquare Media is a Greenwich, Conn.-based diversified media and entertainment and digital marketing services company.

Nortek sets talk

In more primary happenings, Nortek came out with talk of Libor plus 300 bps with a 0.75% Libor floor, an original issue discount of 98¼ and 101 soft call protection for six months on its $250 million add-on term loan B (BB-) that launched with a call during the session, a market source remarked.

Commitments are due on April 1, the source added.

Wells Fargo Securities LLC, RBC Capital Markets, UBS AG and Jefferies Finance LLC are leading the deal that will be used to refinance 10% notes.

Nortek is a Providence, R.I.-based manufacturer of air management and technology-driven products and services for residential and commercial applications.

Top Right guidance

Top Right Group held its London bank meeting, and with the event talk on its $325 million seven-year covenant-light term loan B and €305 million seven-year covenant-light term loan B emerged at Libor/Euribor plus 475 bps to 500 bps with a 1% floor and an original issue discount of 99, according to a market source.

As previously reported, the term loans have 101 soft call protection for six months.

The company’s new credit facility (B2) also provides for a £75 million six-year revolver.

A bank meeting for U.S. investors will take place in New York at 10 a.m. ET on Thursday.

Commitments are due on April 8.

Deutsche Bank Securities Inc., HSBC Securities, Lloyds Securities LLC and BNP Paribas Securities Corp. are leading the deal that will be used by the London-based B2B media company to refinance all existing senior and mezzanine facilities and for general corporate purposes.

Concordia on deck

Concordia Healthcare set a bank meeting for 2 p.m. ET in New York on Monday to launch its proposed credit facility, which is now known to be sized at $750 million, split between a $100 million revolver and a $650 million term loan B, according to a market source.

RBC Capital Markets is leading the deal.

Proceeds will be used with bonds and equity to fund the acquisition of Covis for $1.2 billion in cash and to refinance existing debt.

Closing is expected in the second quarter, subject to customary conditions including receipt of required regulatory approvals.

Concordia is an Oakville, Ont.-based health-care company focused on legacy pharmaceutical products, orphan drugs and medical devices for the diabetic population. Covis is a Zug, Switzerland-based specialty pharmaceutical company providing therapeutic services to patients.

Advantage Sales readies loan

Advantage Sales & Marketing LLC scheduled a lender call for Thursday to launch a fungible $150 million add-on term loan that is talked at Libor plus 325 bps with a 1% Libor floor, in line with the existing term loan, and an original issue discount that is still to be determined, a market source said.

Jefferies Finance LLC is leading the deal.

The Irvine, Calif.-based sales and marketing agency will use the new debt for acquisition financing, the source added.

Monitronics coming soon

Monitronics emerged with plans to hold a lender call on Thursday to launch a $350 million incremental seven-year term loan (B), according to a market source.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC are leading the deal that will be used to repay revolver debt as well as some of the company’s term loan due in 2018.

Monitronics is a Dallas-based home security alarm monitoring company.

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