Hilton frees to trade; Restaurant Brands better; Lifetime updated; Augusta talk surfaces

By Sara Rosenberg

New York, Nov. 3 – Hilton Worldwide Finance LLC saw its term loans make their way into the secondary market on Friday, and Restaurant Brands International Inc.’s term loan B was a little higher after the release of third quarter numbers, although general strength in the market was more likely the catalyst for the move than the earnings news.

Moving to the primary market, Lifetime Brands Inc. firmed the spread on its term loan B at the high end of guidance, and price talk emerged on Augusta Sportswear Brands’s term loan.

Also, Buckeye Partners LP, Culligan International Co. (Osmosis Buyer Ltd.), Veritiv Corp. and ArchKey Holdings Inc. joined the near-term new issue calendar.

Hilton breaks

Hilton Worldwide’s $2.119 billion seven-year covenant-lite term loan B freed to trade on Friday, with levels quoted at par bid, par ½ offered, a market source said.

The seven-year term loan is priced at SOFR+10 basis points CSA plus 200 bps with a 0% floor and it was sold at an original issue discount of 99.75.

During syndication, the seven-year loan was upsized from $1.619 billion and the discount was tightened from 99.5.

The company is also getting a $1 billion covenant-lite amended and extended term loan B due June 2028 priced at SOFR+10 bps CSA plus 175 bps with a 0% floor. This tranche, which allocated on Friday as well, was sold at an original issue discount of 99.5.

Both term loans (Baa2/BBB-) have 101 soft call protection for six months.

Hilton lead banks

Deutsche Bank Securities Inc., BofA Securities Inc., JPMorgan Chase Bank, Wells Fargo Securities LLC, Barclays, Citigroup Global Markets Inc., Goldman Sachs Bank USA and Truist are the bookrunners on Hilton’s term loans. Capital One, PNC, Standard Charter and U.S. Bank are the documentation agents. Bank of Nova Scotia, Fifth Third, HSBC Securities (USA) Inc., NatWest and Santander are senior managing agents.

Proceeds will be used to refinance an existing term loan B through a partial two-year extension with the 2028 term loan and the new seven-year term loan, and the funds from the recent upsizing will be used for general corporate purposes, including to add cash to the balance sheet.

Hilton, a McLean, Va.-based hospitality company, expects to close on the loans on Thursday.

Restaurant Brands rises

Restaurant Brands’ term loan B was quoted at 99½ bid, par offered on Friday, up from 99¼ bid, 99¾ offered on Thursday, according to a market source.

Although the company did release quarterly results in the morning, the move higher was likely a function of the general market being up by about a quarter to a half a point on the day, the source explained.

For the third quarter, the company reported total revenues of $1.837 billion, up from $1.726 billion in the same period last year, and net income of $364 million, or $0.79 per diluted share, compared to $530 million, or $1.17 per diluted share, in the third quarter of 2022.

Adjusted EBITDA for the quarter was $298 million, versus $262 million in the comparable period last year.

As of Sept. 30, the company’s total debt was $13.4 billion, net debt was $12.1 billion, net income net leverage was 9.1x and adjusted EBITDA net leverage was 4.8x.

Restaurant Brands is a Toronto-based quick service restaurant company.

Lifetime sets spread

Switching to the primary market, Lifetime Brands finalized pricing on its $150 million term loan B (B3/BB-) due August 2027 at SOFR plus 550 bps, the high end of the SOFR plus 525 bps to 550 bps talk, a market source remarked.

As before, the term loan has a 1% floor, an original issue discount of 96, and call protection of non-callable for one year, then at 101 in year two.

JPMorgan Chase Bank is leading the deal that will be used with revolver borrowings to refinance/extend an existing $198.7 million covenant-lite term loan B due February 2025 priced at SOFR+CSA plus 350 bps with a 1% floor.

Lifetime Brands is a Garden City, N.Y.-based provider of kitchenware, tableware and other products used in the home.

Augusta guidance

Talk surfaced on Augusta Sportswear Brands’ $340 million six-year covenant-lite term loan at SOFR plus 600 bps with a 1% floor, an original issue discount of 98 and hard call protection of 102 in year one and 101 in year two, a market source said.

The company’s $390 million of senior secured credit facilities, which launched with a lender call on Thursday, also includes a $50 million revolver.

Commitments are due on Nov. 16, the source added.

Antares Capital LP is leading the deal that will be used to support the buyout of the company by Platinum Equity.

Augusta Sportswear is a Grovetown, Ga.-based supplier of team uniforms and off-field performance wear primarily serving youth and recreational segments.

Buckeye joins calendar

Buckeye Partners will hold a lender call at 1 p.m. ET on Monday to launch a $1 billion term loan B, according to a market source.

The term loan has 101 soft call protection for six months.

Commitments are due at 5 p.m. ET on Nov. 16, the source added.

MUFG is the left lead on the deal that will be used to fund a partial refinancing of the company’s term loan B due 2026 priced at SOFR plus 225 bps with a 0% floor and revolver.

Buckeye is a Houston-based owner and operator of integrated midstream assets.

Culligan on deck

Culligan set a lender call for noon ET on Tuesday to launch a $950 million senior secured first-lien term loan B, a market source said.

Morgan Stanley Senior Funding Inc. is the left lead on the deal that will be used to fund the acquisition of Primo Water Corp.’s international businesses (Primo Europe) in an all-cash transaction valued at up to $575 million, to fully pay down revolver borrowings and to add cash to the balance sheet.

Culligan is a Rosemont, Ill.-based provider of water treatment products and services.

Veritiv timing emerges

Veritiv surfaced with plans to hold a lender call at noon ET on Monday to launch its $700 million seven-year term loan B (B2/B+), a market source remarked.

The company’s $1.525 billion of credit facilities also include an $825 million five-year ABL revolver.

RBC Capital Markets, Goldman Sachs Bank USA, Wells Fargo Securities LLC, BMO Capital Markets, UBS Investment Bank, BNP Paribas Securities Corp., Mizuho Bank, TD Securities (USA) LLC, Natixis, Rabobank, Regions Capital Markets, Citizens Bank, ING Capital LLC, Stifel and the Bank of Nova Scotia are leading the deal that will be used to help fund the buyout of the company by Clayton, Dubilier & Rice LLC for $170 per share in a transaction with an enterprise value of $2.6 billion.

Other funds for the transaction are expected to come from $600 million of other seven-year senior secured debt and $1.12 billion of equity.

Closing is expected in the fourth quarter, subject to shareholder approval and regulatory approvals.

Veritiv is an Atlanta-based distributor of packaging, facility solutions and print products.

ArchKey on deck

ArchKey scheduled a lender call for 11 a.m. ET on Monday to launch a $100 million delayed-draw term loan due June 29, 2028, according to a market source.

Pricing on the delayed-draw term loan is SOFR+CSA plus 525 bps with a 0.75% floor, in line with existing term loan pricing. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

Original issue discount talk on the delayed-draw term loan is not yet available.

Commitments are due at 2 p.m. ET on Thursday, the source added.

Deutsche Bank Securities Inc. is the left lead on the deal that will be used to fund a distribution to equity holders.

ArchKey is a St. Louis-based electrical and technologies service provider.

Fund flows

In other news, actively managed loan fund flows on Thursday were positive $8 million and loan ETFs were positive $154 million, sources said.

Loan funds reported weekly inflows totaling $126 million, with positive $133 million ETFs, which were the first inflows in six weeks.

Year to date, outflows for loan funds total $19.1 billion, with positive $666 million ETFs, sources added.

Loan indices rise

S&P Global’s iBoxx loan indices were stronger on Thursday, with the Leveraged Loan index (MiLLi) closing up 0.16% and the Liquid Leveraged Loan index (LLLi) closing up 0.26%.

Month to date, the MiLLi is up 0.09% and year to date it is up 9.88%, and the LLLi is up 0.1% month to date and up 8.93% year to date.

Average secondary market bids in the United States on Thursday were 92.95, up 0.08% from the previous day and up 1.18% year to date.

According to the S&P Global data, some of the top advancers on Thursday were Cyxtera’s May 2017 covenant-lite term loan at 64.25, up from 57.79, CPV Shore’s December 2018 term loan B at 88.83, up from 84, and CommScope’s April 2019 covenant-lite term loan B at 85.19, up from 83.

Some top decliners on Thursday were McAfee/Magenta’s May 2021 second-lien covenant-lite term loan at 40.6, down from 43, Cano Health’s January 2022 covenant-lite term loan at 56, down from 57.81, and Radiology Partners’ July 2018 covenant-lite term loan at 72.57, down from 73.73.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.