KIK Custom Products frees to trade with term loan bid in line with original issue discount

By Sara Rosenberg

New York, Aug. 24 – KIK Custom Products Inc. (Kronos Acquisition Holdings Inc.) saw its credit facility make its way into the secondary market on Monday, with the term loan bid right around its original issue discount.

Specifically, the $850 million seven-year senior secured covenant-light term loan (B2/B-) was quoted at 97˝ bid, 98˝ offered, according to a market source.

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 97.5. The debt has 101 soft call protection for one year.

During syndication, pricing on the term loan was increased from talk of Libor plus 450 bps to 475 bps, the discount was revised from 99, and the call protection was extended from six months.

In addition to the term loan, the company’s $1,075,000,000 credit facility includes a $225 million five-year asset-based revolver.

Barclays, BMO Capital Markets Corp., Nomura Securities International Inc. and Macquarie Capital (USA) Inc. are leading the deal.

KIK being acquired

Proceeds from KIK’s credit facility and $390 million of senior unsecured notes will be used to help fund its buyout by Centerbridge Partners LP from CI Capital Partners.

Net first-lien leverage is 4.1 times, and net total leverage is 5.9 times.

Closing is targeted for Wednesday, subject to customary conditions and approvals.

The company’s existing first-and second-lien term loans will be repaid on Wednesday as well.

KIK is a Toronto-based developer and marketer of pool and spa treatment products and a manufacturer of household and personal care products.

Delta closes

In other news, Delta Air Lines Inc. completed its $2 billion credit facility (Baa3/BBB) that includes a $1.5 billion five-year revolver and a $500 million seven-year term loan B, according to an 8-K filed with the Securities and Exchange Commission.

Pricing on the term loan is Libor plus 250 bps with a 0.75% Libor floor, and it was sold at an original issue discount of 99.5, after firming during syndication at the tight end of the 99 to 99.5 talk. The debt has 101 soft call protection for six months.

Barclays, J.P. Morgan Securities LLC, Bank of America Merrill Lynch, BBVA, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Agricole, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Fifth Third Bank, Goldman Sachs Bank USA, Wells Fargo Securities LLC and UBS AG led the deal for the Atlanta-based airline company.

Proceeds were used with $500 million of other new debt financing and cash from the balance sheet to refinance an existing revolver due 2016 and a term loan B due 2017 and for general corporate purposes.

Total adjusted debt to EBITDAR is 1.4 times and net adjusted debt to EBITDAR is 1 times.

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