MKS Instruments, Precyse, Netsmart break; Ciena emerges in secondary following revisions

By Sara Rosenberg

New York, April 19 – MKS Instruments Inc.’s credit facility freed up for trading on Tuesday, with the term loan B quoted above its original issue discount, and Precyse Acquisition Corp. and Netsmart Technologies Inc. hit the secondary market as well.

In more happenings, Ciena Corp. increased the size of its term loan B, lowered pricing, added a step-down and tightened the original issue discount, and then the debt broke for trading late in the session.

Also, ATI Physical Therapy joined this week’s new issue calendar with a buyout financing transaction.

MKS frees up

MKS Instruments’ credit facility broke for trading on Tuesday, with the $780 million seven-year covenant-light term loan B quoted at 99½ bid, 100½ offered, according to a trader.

Pricing on the term loan B is Libor plus 400 basis points with a 0.75% Libor floor, and it was sold at an original issue discount of 99. The loan has 101 soft call protection for six months.

Last week, the term loan B was downsized from $800 million, the spread was reduced from Libor plus 450 bps, and the discount was modified from 98.

The company’s $830 million senior secured credit facility also includes a $50 million five-year ABL revolver.

Barclays and Deutsche Bank Securities Inc. are leading the deal, with Barclays the left lead on the term loan and Deutsche Bank the left lead on the revolver.

MKS buying Newport

Proceeds from MKS’ credit facility will be used to help fund the acquisition of Newport Corp. for $23.00 per share, or about $980 million.

The company chose to downsize the term loan B because it had cash on the balance sheet to use for the acquisition.

Closing is expected in the second quarter, subject to regulatory approval and approval by Newport’s shareholders.

MKS is an Andover, Mass.-based provider of instruments, subsystems and process control solutions that measure, control, power, monitor and analyze critical parameters of advanced manufacturing processes. Newport is an Irvine, Calif.-based supplier of advanced-technology products and systems to customers in the scientific research, microelectronics, life and health sciences, industrial manufacturing and defense/security markets.

Precyse hits secondary

Precyse Acquisition’s credit facility also began trading, with the $460 million 6.5-year first-lien covenant-light term loan (B2/B) quoted at 98¾ bid, 99½ offered, a trader said.

Pricing on the first-lien term loan is Libor plus 550 bps with a 1% Libor floor, and it was issued at a discount of 98.5. The debt has 101 soft call protection for one year.

Recently, pricing on the first-lien term loan was cut from talk of Libor plus 575 bps to 600 bps, the discount was changed from 98, the call protection was extended from six months, and the 12 month MFN sunset was removed.

The company’s $700 million credit facility also includes a $50 million five-year revolver (B2/B) and a privately placed $190 million seven-year second-lien term loan (Caa2/CCC).

Precyse lead banks

Barclays, Morgan Stanley Senior Funding Inc., J.P. Morgan Securities LLC and Jefferies Finance LLC are leading Precyse’s credit facility.

Proceeds will be used to capitalize the merger of the MedAssets Revenue Cycle Management business and Precyse.

First-lien leverage is 4.3 times, and total leverage is 6 times.

Precyse, a Pamplona Capital Management portfolio company, is a provider of end-to-end revenue cycle services, technology and education solutions in the healthcare sector.

Netsmart starts trading

Netsmart Technologies’ credit facility made its way into the secondary market in the morning, with the $395 million seven-year first-lien term loan (B2/B+) quoted at 99¾ bid, 100¼ offered, and the $167 million 7.5-year second-lien term loan (Caa2/CCC+) quoted at 98 bid, 99 offered, a source remarked, adding that by the afternoon, the second-lien loan was bid higher at 98¼ bid, 99 offered.

Pricing on the first-lien term loan is Libor plus 475 bps with a 1% Libor floor, and it was sold at an original issue discount of 99. The debt has 101 soft call protection for six months.

The second-lien term loan is priced at Libor plus 875 bps with a 1% Libor floor, and was issued at a discount of 97.5. This tranche is non-callable for one year, then at 103 in year two and 101 in year three.

The company’s $612 million senior secured credit facility also includes a $50 million five-year revolver (B2/B+) priced at Libor plus 475 bps.

Allocations on the deal went out on Monday, but the debt didn’t break for trading until Tuesday, the source added.

Netsmart being acquired

Proceeds from Netsmart’s credit facility were used to help fund its buyout by GI Partners and Allscripts Healthcare Solutions Inc., the completion of which was announced on Tuesday. As a part of the venture, Netsmart will merge the Allscripts Homecare business unit into the Netsmart CareFabric suite of solutions.

UBS Investment Bank led the deal.

During syndication, pricing on the revolver and first-lien term loan was reduced from talk of Libor plus 525 bps to 550 bps, pricing on the second-lien term loan was cut from Libor plus 950 bps, the discount on the first-lien term loan was tightened from 98.5, and the call protection on the second-lien term loan was modified from 103 in year one and 101 in year two.

Netsmart is an Overland Park, Kan.-based IT company focused on health and human services.

Ciena sets changes, breaks

Ciena raised its five-year covenant-light term loan B to $250 million from $200 million, trimmed pricing to Libor plus 350 bps from talk of Libor plus 375 bps to 400 bps, added a step-down to Libor plus 325 bps at 3 times total leverage and revised the original issue discount to 99.5 from 99, a market source said.

As before, the term loan B has a 0.75% Libor floor and 101 soft call protection for six months.

Recommitments were due at 3 p.m. ET on Tuesday, and with final terms in place, the loan freed up for trading with levels quoted at 99¾ bid, 100¼ offered, a trader added.

Bank of America Merrill Lynch and Deutsche Bank Securities Inc. are leading the loan that will be used to add cash to the balance sheet and, in the future, to help repay convertible notes due in 2017. The source explained that the additional proceeds raised from the upsizing will be used for general corporate purposes, including to address near-term convertible notes maturities.

Closing is expected on April 25.

Ciena is a Hanover, Md.-based supplier of communications networking equipment and software.

ATI readies deal

ATI Physical Therapy emerged with plans to hold a bank meeting at 10 a.m. ET on Thursday to launch a $930 million senior secured credit facility, according to a market source.

The facility consists of a $70 million five-year revolver, a $635 million seven-year first-lien term loan and a $225 million eight-year second-lien term loan, the source said.

Barclays, HSBC Securities (USA) Inc. and Jefferies Finance LLC are leading the deal that will be used to help fund the buyout of the company by Advent International from KRG Capital Partners.

At closing, ATI’s current management team, led by Dylan Bates, will retain a significant minority stake in the company.

The buyout is expected to close this quarter, subject to regulatory approval and other customary conditions.

ATI is a Bolingbrook, Ill.-based outpatient physical therapy provider.

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