Quality Distribution, Linxens, Recorded Books, Ravn break; Prolamina, Electrical accelerated

By Sara Rosenberg

New York, July 31 – Quality Distribution Inc.’s credit facility freed up for trading on Friday, with the first-lien term loan quoted above its original issue discount, and Linxens, Recorded Books and Ravn Air Group hit the secondary too.

Moving to the primary market, Prolamina Corp./Ampac Holdings LLC (Intermediate Holdco (US)) and Electrical Components International Inc. accelerated the commitment deadlines on their loans, and Patterson Medical, C Spire and HD Supply Holdings Inc. joined the near-term calendar.

Quality Distribution frees up

Quality Distribution’s credit facility began trading on Friday, with the $415 million seven-year covenant-light first-lien term loan quoted at 99½ bid, par offered, according to a trader.

Pricing on the first-lien term loan is Libor plus 475 basis points with a 1% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

The company’s $635 million senior secured credit facility also includes a $120 million eight-year covenant-light second-lien term loan and a $100 million asset-based revolver.

The second-lien term loan is priced at Libor plus 850 bps with a 1% Libor floor and was issued at a discount of 95. This tranche is non-callable for one year, then at 103 in year two and 101 in year three.

Recently, the first-lien term loan was upsized from $400 million, pricing was raised from talk of Libor plus 400 bps to 425 bps, and the call protection was extended from six months, and the second-lien term loan was downsized from $135 million, the spread was set at the high end of the Libor plus 825 bps to 850 bps talk, the discount was modified from 98.5, and the call protection was changed from 102 in year one and 101 in year two.

Quality Distribution leads

Deutsche Bank Securities, Bank of America Merrill Lynch, Jefferies Finance LLC, Macquarie Capital (USA) Inc., SunTrust Robinson Humphrey Inc., Credit Suisse Securities and Natixis are leading Quality Distribution’s credit facility, with Deutsche left on the first-lien and Bank of America left on the second-lien.

When the size and pricing updates were announced on the credit facility, the 12-month MFN sunset provision was removed, the leverage-based step-downs from the asset sale mandatory repayment provision was eliminated, the excess cash flow sweep was increased to 75% (with step-downs) from 50%, and the unlimited restricted payments ratio was reduced to 3.75 total net leverage from 4.75 times.

Additionally, the consolidated EBITDA definition was revised to add a 25% cap on pro forma add-backs from uncapped previously and to shorten the look-forward period to 18 months from 24 months, and the incremental allowance was lowered to $60 million with the grower concept removed, from the greater of $90 million and 1 times consolidated EBITDA.

Quality being acquired

Proceeds from Quality Distribution’s credit facility will be used with up to $322 million in equity to fund its buyout by Apax Partners for about $800 million, including the assumption of debt, or $16.00 per share in cash.

Closing is expected in the third quarter, subject to customary conditions, including shareholder approval and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Quality Distribution is a Tampa, Fla.-based logistics and transportation provider.

Linxens hits secondary

Linxens’ term loans also broke for trading, with the $550 million seven-year first-lien covenant-light term loan quoted at 99¾ bid, par ¼ offered and the $200 million eight-year second-lien covenant-light term loan quoted at 99¼ bid, par offered, a market source said.

Pricing on the U.S. first-lien term loan is Libor plus 400 bps with a 25 bps step-down when first-lien leverage is 4.25 times and a 1% Libor floor, and the debt was issued at a discount of 99.5. There is 101 soft call protection for six months.

The U.S. second-lien term loan is priced at Libor plus 850 bps with a 1% Libor floor and was issued at 99. This debt has call protection of 102 in year one and 101 in year two.

The company is also getting a €200 million seven-year first-lien covenant-light term loan priced at Euribor plus 425 bps with no floor, and issued at a discount of 99.5, and a €35 million eight-year second-lien covenant-light term loan priced at Euribor plus 825 bps with a 1% floor, and issued at a discount of 99.

The euro first-lien term loan has 101 soft call protection for six months, and the euro second-lien term loan has call protection of 102 in year one and 101 in year two.

Linxens ticking fee

Linxens’ loans have a ticking fee of half the margin from days 31 to 60 and the full margin thereafter.

During syndication, the U.S. first-lien term loan was upsized from $500 million as the euro first-lien term loan was downsized from €230 million, the discount on the first-lien loans was tightened from 99, pricing on the euro first-lien loan was lowered from revised talk of Euribor plus 450 bps and initial talk of Euribor plus 475 bps, the pricing step-down was added to the U.S. tranche, and the step-down was added and then removed from the euro tranche.

Also in syndication, the second-lien term loan saw U.S. and euro tranching emerge versus the debt being described as a $256 million loan at launch, pricing on the euro second-lien loan was reduced from Euribor plus 850 bps, and the ticking fee on the new debt was outlined.

Credit Suisse Securities, Deutsche Bank Securities, HSBC Securities (USA) Inc., Natixis and Nomura are leading the deal that will be used to help fund the buyout of the company by CVC Capital.

Linxens is a France-based designer and manufacturer of smart card connectors.

Recorded Books breaks

Recorded Books’ credit facility was another deal to start trading during the session, with the $107.5 million six-year first-lien term loan seen at 99¾ bid, par ¾ offered, a trader remarked.

Pricing on the first-lien term loan is Libor plus 450 bps with a 1% Libor floor, and it was issued at a discount of 99.5. The debt has 101 soft call protection for six months.

During syndication, pricing on the first-lien term loan firmed at the low end of the Libor plus 450 bps to 475 bps talk, and the discount was modified from 99.

The company’s $160 million credit facility also includes a $20 million five-year revolver, and a $32.5 million pre-placed seven-year second-lien term loan priced at Libor plus 850 bps with a 1% Libor floor.

BNP Paribas Securities Corp. is leading the deal that will be used to help fund the buyout of the company by Shamrock Capital from Wasserstein & Co.

Recorded Books is a Prince Frederick, Md.-based publisher of unabridged audiobooks and provider of digital content to the library, school and retail markets.

Ravn Air tops OID

Ravn Air Group’s credit facility hit the secondary too, with the $95 million six-year term loan quoted at 99¾ bid, par ¾ offered, according to a trader.

Pricing on the term loan is Libor plus 450 bps with a step-down to Libor plus 425 bps and a 1% Libor floor, and it was sold at an original issue discount of 99.5. There is 101 soft call protection for six months.

During syndication, the spread on the term loan was reduced from Libor plus 475 bps, and the discount tightened from 99.

The company’s $110 million credit facility also includes a $15 million five-year revolver.

BNP Paribas Securities and Keybanc Capital Markets are leading the deal that will be used to help fund the buyout of the company by J.F. Lehman & Co.

Ravn is an Anchorage-based airline company.

Prolamina/Ampac accelerated

Switching to the primary market, Prolamina/Ampac moved up the commitment deadline on its $560 million credit facility to 5 p.m. ET on Tuesday from 5 p.m. ET on Thursday, a market source said.

The facility consists of a $50 million five-year revolver (B1/B), a $400 million seven-year first-lien term loan (B1/B) and a $110 million eight-year second-lien term loan (Caa1/CCC+).

The first-lien term loan is talked at Libor plus 375 bps to 400 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and the second-lien is talked at Libor plus 800 bps to 825 bps with a 1% Libor floor, a discount of 98.5 to 99 and call protection of 102 in year one and 101 in year two.

RBC Capital Markets LLC is leading the deal that will be used to fund the acquisition of Ampac by Wellspring Capital Management LLC and combination with Wellspring’s portfolio company Prolamina.

The combination will create a new flexible packaging company with 16 global manufacturing facilities serving over 4,900 customers.

Electrical shutting early

Electrical Components accelerated the commitment deadline on its $50 million add-on term loan B due May 2021 to Tuesday from Thursday, a source remarked.

Pricing on the add-on term loan matches existing term loan B pricing at Libor plus 475 bps with a step-down to Libor plus 450 bps when total net leverage is less than 3.5 times and a 1% Libor floor, and the add-on is talked with an original issue discount of 99.5 to 99.75.

Bank of America Merrill Lynch is leading the deal that will be used to fund a dividend.

Electrical Components is a St. Louis-based manufacturer of wire harnesses and value-added assembly services for consumer appliance and specialty-industrial applications.

Patterson on deck

Patterson Medical set a bank meeting for 10 a.m. ET in New York on Tuesday to launch a $300 million seven-year covenant-light term loan B that is talked with 101 soft call protection for six months, according to a market source.

Deutsche Bank Securities, Bank of America Merrill Lynch, Barclays and Jefferies Finance are leading the deal.

Proceeds will be used with equity to fund the buyout of the company by Madison Dearborn Partners from Patterson Cos. Inc. for gross proceeds of around $715 million in cash.

Closing is expected in the fiscal second quarter, subject to regulatory requirements and other customary conditions.

Patterson Medical is a distributor of rehabilitation supplies and non-wheelchair assistive patient products to the physical and occupational therapy markets.

C Spire coming soon

C Spire emerged with plans to hold a bank meeting on Tuesday to launch a $250 million seven-year term loan B-1, according to a market source.

Bank of America Merrill Lynch and Moelis & Co. are leading the deal that will be used to refinance existing debt and for general corporate purposes.

C Spire is a Ridgeland, Miss.-based diversified telecommunications and technology services company.

HD Supply plans call

HD Supply Holdings scheduled a lender call 1 p.m. ET on Monday for loan lenders, a market source said.

Bank of America Merrill Lynch, Barclays, Goldman Sachs Bank USA, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading the deal.

HD Supply is an Atlanta-based industrial distributor.

PLZ Aeroscience closes

In other news, the buyout of PLZ Aeroscience Corp. by Pritzker Group Private Capital has been completed, according to a news release.

For the transaction, PLZ got a new $22.5 million five-year U.S. revolver, a $315 million seven-year covenant-light term loan and a $7.5 million-equivalent standalone Canadian revolver that is permitted by, but separate from, the U.S. revolver and term loan.

The revolver is priced at Libor plus 425 bps with no floor and was issued at a discount of 99.5. Pricing on the term loan is Libor plus 425 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.5. The term loan has 101 soft call protection for six months.

During syndication, the U.S. revolver was downsized from $30 million as the Canadian revolver was added, pricing on the term loan and U.S. revolver was lowered from Libor plus 450 bps, the discount on the U.S. tranches was tightened from 99, and the MFN sunset was eliminated.

GE Capital Markets, NewStar and BMO Capital Markets led the deal.

PLZ is an Addison, Ill.-based manufacturer of specialty aerosol products.

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