McGraw-Hill $1.58 billion term loan allocates, trades higher; ATI Physical upsizes, tightens

By Paul A. Harris

Portland, Ore., May 2 – Bank loans traded with a decent tone as May got underway in the leveraged loan market on Monday, a trader said.

Being invested remains a challenge, the source added.

“We’re seeing a lot of bank loan paper trade above par, and we’re wondering whether that means there will be another round of refinancings,” the trader remarked.

The most recent fund flow numbers for the retail bank loan accounts were negative. The funds saw $35 million of daily outflows on Friday, a market source said.

In the primary market McGraw-Hill Global Education Holdings LLC’s term loan allocated and traded higher.

And ATI Physical Therapy upsized its loan and tightened talk.

McGraw-Hill allocates

McGraw-Hill priced its upsized $1,575,000,000 six-year first-lien covenant-light term loan (Ba3/BB-) with a 500-basis-points spread to Libor at 99.50, a trader said.

The deal was up a point on the break, added the trader who saw it at 100½ offered.

The loan was upsized by $270 million from $1,305,000,000.

The proceeds were shifted from the concurrent junk bond deal, which was downsized to $400 million from $670 million.

The spread came on top of spread talk that had tightened from 475 bps. The reoffer price came on top of price talk that was revised from 99.

The spread floats atop a 1% Libor floor.

Credit Suisse is the left lead bank on the deal.

The $1,925,000,000 credit facility (upsized from $1,655,000,000) also includes a $350 million five-year revolver.

Proceeds will be used to refinance existing debt, merge McGraw-Hill School Education into the McGraw-Hill Global Education credit group and fund a dividend, the source added.

Telenet talk

Telenet talked an $850 million eight-year term loan B with a 375 to 400-bps spread to Libor at 99.

The spread would float atop a 0.75% Libor floor.

The loan comes with six months of soft call protection at 101.

An investor call is set to take place at 10 a.m. ET on Tuesday.

Commitments are due at noon ET on Friday.

Goldman Sachs and BNP Paribas are the physical bookrunners. SG CIB, ING and Scotia are the joint bookrunners.

The Mechelen, Belgium-based cable operator plans to use the proceeds to refinance €300 million senior secured notes due 2021 and €400 million senior secured floating-rate notes due 2021.

ATI upsizes, tightens

ATI Physical Therapy upsized its seven-year first-lien term loan (B1/B) to $660 million from $635 million.

Spread talk tightened to Libor plus 450 bps from 500 bps. As before, the spread will float atop a 1% Libor floor.

The discount firmed at 99. Previous discount talk was 98 to 99.

The 101 soft call protection was increased to 12 months from six months.

Commitments were due at the New York close of business on Monday.

Barclays, HSBC and Jefferies are the bookrunners.

The credit facility, now sized at $955 million, also features a $70 million five-year revolver and a $225 million eight-year second-lien term loan. The second-lien loan is privately placed.

Proceeds will be used to help fund the buyout of the company by Advent International from KRG Capital Partners.

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

WideOpenWest add-on

WideOpenWest Finance, LLC talked a $382.5 million add-on to its Libor plus 350 bps first lien term loan B due April 1, 2019 at 99.51, on a Monday lender call.

The spread floats atop a 1% Libor floor.

Commitments are due at noon ET on Thursday.

Morgan Stanley and SunTrust Robinson Humphrey Inc. are the joint lead arrangers and joint bookrunners.

The loan comes with no call protection.

Credit ratings remain to be determined.

The Denver-based provider of data, video and telephone services plans to use the proceeds to repay its term loan B-1.

Calpine bringing $500 million

Calpine Corp. was scheduled to participate in a lender call on Monday.

The Houston-based energy company is seeking to syndicate a $500 million first lien term loan B-7.

Citigroup Global Markets is leading the deal.

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