MedAssets, GCP Applied Technologies, SterlingBackcheck free to trade following deal updates

By Sara Rosenberg

New York, Jan. 22 – MedAssets Inc. finalized the spread on its first-lien term loan at the tight end of guidance, and then the company’s first- and second-lien loan tranches broke for trading on Friday afternoon above their original issue discounts.

In more happenings, GCP Applied Technologies Inc. came out with modifications to covenants and reworked some technical items on its term loan B, and then it too saw its loan surface in the secondary market.

And, SterlingBackcheck’s add-on first-lien term loan also freed up for trading during the session, but only after undergoing a downsizing and seeing the spread and original issue discount widen from initial talk.

MedAssets firms spread, trades

MedAssets set pricing on its $1.13 billion 6.5-year first-lien covenant-light term loan (B2/B) at Libor plus 475 basis points, the low end of the Libor plus 475 bps to 500 bps talk, and left the 1% Libor floor, original issue discount of 99, with an additional 50-bps fee if the credit facility has not been repaid within six months of closing, and 101 soft call protection for six months unchanged, according to a market source.

The company’s $1.73 billion senior secured credit facility also includes a $100 million five-year revolver (B2/B) and a $500 million seven-year second-lien covenant-light term loan (Caa2/CCC+).

As before, the second-lien term loan is priced at Libor plus 950 bps with a 1% Libor floor and a discount of 97 and is non-callable for one year, then at 103 in year two and 101 in year three or par for 12 months for any prepayments with proceeds of the SCM divestiture.

With final terms in place, the debt made its way into the secondary market on Friday, with the first-lien term loan quoted at 99¼ bid, par offered and the second-lien term loan quoted at 98 bid, 99½ offered, a trader said.

MedAssets lead banks

Barclays, Morgan Stanley Senior Funding Inc., Macquarie Capital (USA) Inc. and Golub Capital Markets LLC are leading MedAsset’s credit facility that will be used with about $1,238,000,000 in equity to fund the buyout of the company by Pamplona Capital Management for $31.35 per share, or about $2.7 billion.

Pamplona has entered into a separate agreement with VHA-UHC Alliance NewCo Inc., a member-owned health care company, to divest MedAssets’ Spend and Clinical Resource Management segment to VHA-UHC Alliance following the completion of Pamplona’s acquisition of MedAssets.

Pamplona will combine MedAssets’ Revenue Cycle Management segment with Precyse, a Pamplona-owned company that provides health information management services, technology and education.

Closing is expected this quarter, subject to regulatory approvals, MedAssets’ stockholder approval and other customary conditions.

First-lien leverage is 4.5 times, and total leverage is 6.5 times.

MedAssets is an Alpharetta, Ga.-based health care performance improvement company.

GCP Applied tweaks deal

GCP Applied Technologies made some changes to incurrence/baskets under its $275 million six-year covenant-light term loan B (Ba2/BB+), including removing secured notes and junior lien debt from the early maturity carve-out so that the $100 million basket only applies to the term loan A, a market source said.

Also, the non-guarantor foreign debt basket was reduced to the greater of $90 million and 35% of EBITDA from the greater of $125 million and 50% of EBITDA, and the acquisition debt basket was reduced to the greater of $25 million and 10% of EBITDA from the greater of $62.5 million and 25% of EBITDA, the source said.

Furthermore, some technical items were revised, such as removing the MFN sunset and adding additional language further defining beneficial ownership, person and group under Securities and Exchange Commission rules.

Pricing on the term loan B was unchanged at Libor plus 450 bps with a 0.75% Libor floor and an original issue discount of 99, and the loan still has 101 soft call protection for six months.

GCP Applied breaks

After the covenant and technical updates were announced, GCP Applied Technologies’ term loan B began trading, with levels seen at 99 ¾ bid, 100¾ offered, a trader added.

Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Bank of America Merrill Lynch and Citigroup Global Markets Inc. are leading the deal that is being done in connection with the company’s spinoff from W.R. Grace & Co.

Proceeds from the B loan will be used with $525 million of senior notes to fund a distribution to W.R. Grace and for working capital.

GCP is a Cambridge, Mass.-based provider of products and technology solutions in the specialty construction chemicals, specialty building materials and packaging sealants and coating industries.

SterlingBackcheck tops OID

SterlingBackcheck’s $110 million add-on first-lien term loan broke too, with levels quoted at 98¼ bid, 99¼ offered, a trader remarked.

Pricing on the add-on first-lien term loan is Libor plus 475 bps with a 1% Libor floor, and it was sold at an original issue discount of 98. The debt has 101 soft call protection for six months.

During syndication, the add-on first-lien term loan was downsized from $120 million, pricing was lifted from talk of Libor plus 400 bps to 425 bps, and the discount was modified from talk of 98.5 to 99.

Goldman Sachs Bank USA, Keybanc Capital Markets and ING are leading the deal that will be used to help fund the acquisition of TalentWise.

SterlingBackcheck is a New York-based background screening company. TalentWise is a Seattle-based cloud solutions provider for the Human Capital Management industry.

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