iQor prices $900 million; Stena hikes spread, trims discount; funds see $411.4 million inflows

By Paul A. Harris

Portland, Ore., Feb. 20 - A trader marked cash loans unchanged on Thursday in a quiet secondary market.

"We saw a couple of sellers on Wednesday, including a guy who was selling everything in block size to make room for the new issue calendar, and the market traded on the back of that," the trader remarked.

"But today we generally were seeing two-sided trading."

Double B loans tend to be trading in the par bid, par ¼ offered area, with single Bs not far behind, the trader added.

As six-month calls on various tranches begin to swim into view, the loans in question are impacted, the source said.

"The six-month call pushes everything back down."

Also, cash flows into loan funds are moderating, the trader said.

Dedicated bank loan funds saw $411.4 million of inflows for the week to Wednesday's close, according to a sellside source who referred to a weekly report from Lipper-AMG.

In the primary market iQor US Inc. fixed final terms for its downsized $900 million credit facility, and both term loan tranches allocated.

And Stena International SA widened the talk on its upsized $750 million seven-year covenant-light senior secured term loan B.

iQor allocates

iQor US Inc. fixed final terms for its downsized $900 million credit facility on Thursday, according to market sources.

The downsized $170 million Libor plus 875 basis points eight-year covenant-light second-lien term loan (Caa2/CCC+) price at 97.5 and allocated. It was trading at 97½ bid, 98 offered in the secondary, according to a trader. The spread came at the wide end of the Libor plus 850 bps to 875 bps talk.

The deal was downsized from $220 million maximum.

The $630 million Libor plus 500 bps seven-year covenant-light first-lien term loan (B2/B) priced at 98. It also allocated and broke at 98 bid, 98½ offered. The spread widened from earlier talk of Libor plus 450 bps to 475 bps. The reoffer price moved to 98 from 99.

Both term loans have a 1% Libor floor. The first-lien term loan has 101 soft call protection for one year, and the second-lien term loan has hard call protection of 102 in year one and 101 in year two.

The deal, which was downsized from $950 million, also provides for a $100 million five-year revolver (B2/B) that has a springing net first-lien leverage covenant.

Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC and GE Capital Markets are the leads on the deal.

Proceeds will be used to fund the acquisition of the aftermarket services business of Jabil Circuit Inc., a St. Petersburg, Fla.-based provider of aftermarket services to electronics manufacturers, retailers and service providers, for $725 million.

Following completion of the transaction, iQor will have more than $1.5 billion in revenues.

Closing is expected this quarter, subject to customary regulatory approvals.

iQor is a New York-based provider of business process outsourcing services.

Aegis sets pricing

Aegis Toxicology Corp. set pricing on its upsized $300 million two-part term loan deal on Thursday, according to a market source.

An upsized $200 million first-lien seven-year term loan B (B1/B) priced at a 450 bps Libor spread at 99. The spread came at the tight end of the 450 bps to 475 bps spread talk. The discount came on top of price talk. The tranche was upsized from $195 million.

An upsized $100 million 71/2-year second-lien term loan (Caa1/CCC+) priced at a Libor spread of 850 bps and at a reoffer price of 98.5. The spread came at the tight end of the 850 bps to 875 bps spread talk. The reoffer price came on top of price talk.

Included in the first-lien term loan is 101 soft call protection for one year, increased from six months, and the second-lien term loan has hard call protection of 102 in year one and 101 in year two.

The credit facility also includes a $40 million five-year revolver.

Morgan Stanley, SunTrust Robinson Humphrey Inc. and Fifth Third Bank are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by ABRY Partners.

Aegis is a Nashville-based forensic toxicology and health-care sciences laboratory.

Stena widens talk

Stena International SA widened the talk on its upsized $750 million seven-year covenant-light senior secured term loan B.

The drawn margin is now set at Libor plus 300 bps, which is the wide end of the earlier 275 bps to 300 bps talk.

The discount deepened by half a point to 99 from earlier price talk of 99.5.

The Libor floor increased to 1% from 0.75%.

The 101 soft call protection increased to one year from six months.

Commitments were due at the Thursday close.

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the joint lead arrangers on the deal.

Security is a first-priority lien on Drillmax and Carron Rigs, evidenced by a ship mortgage.

Proceeds will be used to refinance existing debt.

Stena is a Gothenburg, Sweden-based company that has operations in shipping and offshore oil and gas exploration.

Deluxe accelerates timing

Deluxe Entertainment Services Group Inc. accelerated the timing on its $670 million credit facility, according to a market source.

The books will close on Friday instead of Tuesday as previously expected.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Citigroup and Morgan Stanley are the lead banks on the deal.

The facility consists of a $100 million five-year ABL revolver and a $570 million six-year first-lien term loan, the source said.

Price talk on the term loan is Libor plus 650 bps with a 1% Libor floor and an original issue discount of 99, the source said.

The term loan has 101 soft call protection for one year, amortization of 2.5% per annum and a maximum total leverage covenant.

Proceeds will be used to refinance existing debt.

Deluxe is a Shoreview, Minn.-based provider of digital asset creation, management and distribution services.

KAR sets Friday meeting

KAR Auction Services Inc. plans to participate in a bank meeting on Friday to discuss its proposed $1.77 billion two-tranche term loan offer, according to a market source.

The deal, which is being led by JPMorgan, includes a $500 million three-year term loan and a $1.27 billion seven-year term loan.

The company is seeking to extend the maturity of its revolver and a portion of its existing term loan as well as lower pricing and provide greater flexibility for making capital expenditures and for making restricted payments.

KAR is a Carmel, Ind.-based provider of vehicle auction services and a provider of floorplan financing to independent and franchise used vehicle dealers.

Coinmach sets talk

Coinmach Corp. talked its $125 million Libor plus 325 bps incremental covenant-light first-lien term loan due November 2019 (B2/B) at 99.75 to par, a market source said on Thursday.

Commitments are due at 5 p.m. ET on Friday.

Deutsche Bank Securities Inc. and Morgan Stanley are the bookrunners on the deal.

As talked, the loan features a 1% Libor floor and has 101 soft call protection until July 2014, which matches the existing first-lien term loan, the source said.

Proceeds will be used to refinance a portion of the company's existing second-lien term loan.

Coinmach is a laundry equipment service provider.

Accellent restructures

Accellent Inc. restructured its $1.13 billion credit facility and cut spread- and price talk on both term loan tranches, a market source said on Thursday.

The seven-year first-lien term loan (B2/B) was upsized to $835 million from $795 million. The Libor spread was set at 350 bps, the tight end of earlier talk of 350 bps to 375 bps. A fifty-cent discount was eliminated, and the deal is set to price at par.

The eight-year second-lien term loan (Caa2/CCC+) was downsized to $220 million from $260 million. The Libor spread was cut to 650 bps from the 725 bps to 750 bps spread talked earlier. The OID was trimmed to 99.75, down 75 cents from the previous 99 price talk.

Commitments were due on Thursday, moved up from the previous Feb. 25 deadline.

Call structures were unchanged: the first-lien term loan is 101 soft call protection for six months, and the second-lien term loan has call protection of 102 in year one and 101 in year two.

Amortization on the first-lien term loan remains unchanged at 1% per annum.

The credit facility also provides for a $75 million five-year revolver.

UBS Securities LLC, Goldman Sachs Bank USA and KKR Capital Markets LLC are the bookrunners on the financing, with UBS the left lead on the first-lien debt and Goldman Sachs the left lead on the second-lien debt.

Proceeds will be used to fund the acquisition of Lake Region Medical, to refinance an existing credit facility and to repay all of Accellent's senior notes and senior subordinated notes.

Under the agreement, Lake Region, an original development manufacturer of minimally invasive devices and delivery systems to the cardiology and endovascular markets, is being bought for $315 million, plus rollover stockholders will contribute $75 million of their stock for shares of the merged company.

The merged business will be called Lake Region Medical, and the company will continue to use the Accellent brand in marketing the advanced surgical business.

Closing is expected this quarter, subject to regulatory approvals and other customary conditions.

Accellent is a Wilmington, Mass.-based provider of fully integrated outsourced manufacturing and engineering services to the medical device industry.

PVH call is Friday

Apparel company PVH set a lender call at 9:30 a.m. ET Friday to discuss an add-on term loan A and an incremental term loan B.

Barclays is the lead left bookrunner. Bank of America Merrill Lynch, Citigroup and RBC Capital Markets LLC are joint bookrunners.

The existing facilities include $750 million of multi-currency revolvers due 2018, a $1,636,000,000 term loan A due 2018 and a $939 million term loan B due 2020.

The U.S. borrower is PVH Corp. The European borrower is PVH BV.

Pricing and leverage remain to be announced.

The existing ratings for the loans are Ba2 from Moody's Investors Service and BB+ from Standard & Poor's.

The existing covenants include a minimum consolidated interest coverage covenant and a maximum consolidated total net leverage covenant.

Transtar books close early

Transtar Holding Co. closed the books early on its $80 million two-tranche term loan deal, according to a market source.

Books closed at Thursday's end of business. They had been previously expected to remain open into Friday.

RBC Capital Markets is the lead bank on the deal.

Price talk on the $50 million first-lien term loan (B1/B+) is Libor plus 450 bps with a 1.25% Libor floor and an original issue discount of 98, and talk on the $30 million second-lien term loan (Caa1/CCC+) is Libor plus 875 bps with a 1.25% floor and a discount of 97.

With this transaction, pricing on the company's existing first-lien term loan is being increased to Libor plus 450 bps from Libor plus 425 bps and pricing on the existing second-lien term loan is being increased to Libor plus 875 bps from Libor plus 850 bps, the source continued.

Proceeds from the add-on debt will be used to fund an acquisition.

Transtar is a Cleveland-based distributor of automotive aftermarket driveline services.

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