Warner, Horizon, Husky, Forterra, Kronos break; Serta, Suddenlink, SCA, Pro Mach revised

By Sara Rosenberg

New York, Oct. 20 – Warner Music Group increased the size of its first-lien term loan and firmed the original issue discount at the tight end of talk, and Horizon Pharma Inc. finalized the spread on its incremental term loan at the high end of revised guidance, set the issue price and extended the call protection, and then both deals made their way into the secondary market on Thursday.

Also, Husky Injection Molding Systems Ltd. tightened the original issue discount on its add-on first-lien term loan and then broke for trading, and Forterra Finance LLC and Kronos Inc. freed up too.

In other happenings, Serta Simmons Holdings LLC upsized its first-lien term B, downsized its second-lien term loan and set pricing on both tranches at the low end of talk, and Suddenlink Communications set the spread on its term loan B at the tight side of talk and modified the issue price.

Additionally, Surgical Care Affiliates Inc. (SCA) upsized its term loan, set pricing at the tight side of guidance and adjusted the issue price on the incremental portion, and Berlin Packaging LLC tightened the issue price on its incremental term loan B and added call protection.

Furthermore, Pro Mach Inc. set the original issue discount on its add-on first-lien term loan B at the tight end of guidance while shifting to a fully funded structure with the removal of delayed-draw plans, and Varsity Brands Inc. accelerated the commitment deadline on its add-on first-lien term loan.

And, Accuride Corp. and American Casino & Entertainment Properties disclosed price talk with launch, Hoffmaster Group Inc. came out with timing on its bank meeting, and Quikrete Cos., Advanced Disposal Services Inc., Safway Group Holding LLC, BroadStreet Partners Inc. and AMC Entertainment Holdings Inc. joined the near-term new issue calendar.

Warner reworked, trades

Warner Music Group raised its covenant-light first-lien term loan due November 2023 (Ba3/B) to $1,006,000,000 from $978.5 million and finalized the original issue discount at 99.5, the tight end of the 99 to 99.5 talk, according to a market source.

Pricing on the term loan is still Libor plus 275 basis points with a 1% Libor floor, and the debt still has 101 soft call protection for six months.

With final terms in place, the term loan began trading on Thursday afternoon, and levels were quoted at 99¾ bid, par offered, the source said.

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to refinance existing debt. The $27.5 million in additional debt raised through the upsizing will be used to redeem a portion of the company’s 5.625% senior secured notes due 2022, the source added.

Warner Music is a New York-based music company.

Horizon Pharma revised

Horizon Pharma set pricing on its $375 million senior secured incremental covenant-light term loan B (Ba2/BB-) due May 7, 2021 at Libor plus 450 bps, the high end of the revised Libor plus 425 bps to 450 bps talk, and wide of initial talk of Libor plus 400 bps to 425 bps, firmed the original issue discount at 99.5, the tight end of the revised 99 to 99.5 talk, but in line with initial talk of 99.5, extended the 101 soft call protection to one year from six months and removed the 18-month MFN sunset, a market source said.

The term loan still has a 1% Libor floor.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Jefferies Finance LLC, Citigroup Global Markets Inc. and Cowen and Co. are leading the deal.

Horizon Pharma frees up

Recommitments for Horizon Pharma’s term loan were due at noon ET on Thursday, and then the debt broke for trading, with levels quoted at par bid, 100 3/8 offered, a trader remarked.

Proceeds from the term loan will be used with $300 million of senior notes and cash on hand to fund the acquisition of Raptor Pharmaceutical Corp. for $9.00 per share in cash, for an implied fully diluted equity value of about $800 million.

Closing on the acquisition is expected in the fourth quarter, subject to customary conditions and regulatory approvals.

Horizon Pharma is a Dublin-based biopharmaceutical company. Raptor is a Novato, Calif.-based biopharmaceutical company.

Husky tweaked, breaks

Husky Injection Molding Systems changed the original issue discount on its fungible $160 million senior secured add-on first-lien term loan B (B2/B) due June 30, 2021 to 99.75 from talk of 99 to 99.5, according to a market source.

As before, pricing on the add-on term loan is Libor plus 325 bps with a 1% Libor floor, and the add-on debt, as well as the existing first-lien term loan, are getting 101 soft call protection for six months.

Recommitments were due at noon ET and, later in the day, the debt freed up for trading with levels quoted at par bid, 100½ offered, the source said.

Goldman Sachs Bank USA, TD Securities (USA) LLC, Barclays, Morgan Stanley Senior Funding Inc. and RBC Capital Markets LLC are leading the deal that will be used to repay second-lien borrowings.

Closing is expected during the week of Oct. 24.

Husky is a Bolton, Ont.-based supplier of injection molding equipment and services to the plastics industry.

Forterra starts trading

Forterra’s $1.05 billion seven-year covenant-light first-lien term loan (B1/B+) hit the secondary market as well, with levels quoted at par bid, 100½ offered, a market source said.

Pricing on the term loan is Libor plus 350 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.5. The debt has 101 soft call protection for six months.

During syndication, the term loan was upsized from $1 billion, the spread was reduced from Libor plus 400 bps and the discount was tightened from 99.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance existing debt.

Forterra is an Irving, Texas-based manufacturer of drainage and water transmission pipe and products.

Kronos tops OID

Kronos’ credit facility also freed up, with the $2.3 billion seven-year covenant-light first-lien term loan B (B2/B-) seen at 100½ bid, 100¾ offered, a trader remarked.

Pricing on the first-lien term loan B is Libor plus 400 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.5. The debt has 101 soft call protection for six months.

The company’s $3.4 billion credit facility also includes a $100 million five-year revolver (B2/B-) and a $1 billion eight-year covenant-light second-lien term loan (Caa2/CCC).

The second-lien term loan is priced at Libor plus 825 bps, after firming during syndication at the low end of the Libor plus 825 bps to 850 bps talk, with a 1% Libor floor, and was issued at a discount of 99. This tranche is non-callable for one year, then at 102 in year two and 101 in year three.

Nomura, Jefferies Finance LLC and Macquarie Capital (USA) Inc. are leading the deal that will be used to refinance existing debt and fund a dividend.

Kronos is a Chelmsford, Mass.-based provider of workforce management software.

OWIC, BWIC announced

Also in trading, a $148.8 million loan Offers Wanted In Competition and a $36.9 million Bids Wanted In Competition emerged, according to traders.

Some of the issuers in the OWIC are ABC Supply, BMC Software, Community Health, IMG Worldwide Inc., Level 3, Patheon Inc., Royalty Pharma, TXU Energy, Valeant Pharmaceuticals and XPO Logistics Inc. Offers are due at 10 a.m. ET on Friday.

The BWIC includes debt from, among others, Albertson’s, Ceridian Corp., Hilton, PetSmart, TransUnion and Yum Brands Inc. Bids are due at 10 a.m. ET on Friday, traders added.

Serta retranches

Back in the primary market, Serta Simmons lifted its seven-year first-lien term B to $1.95 billion from $1.9 billion and firmed the spread at Libor plus 350 bps, the low end of the Libor plus 350 bps to 375 bps talk, while keeping the 1% Libor floor, original issue discount of 99.5 and 101 soft call protection for six months unchanged, according to a market source.

As for the eight-year second-lien term loan, it was decreased to $450 million from $500 million and pricing was set at Libor plus 800 bps, the low end of the Libor plus 800 bps to 825 bps talk, the source said. This tranche still has a 1% Libor floor, a discount of 98.5, and call protection of 102 in year one and 101 in year two.

Documentation changes were made too, with the MFN revised to include all incremental pari passu term loans, including those that mature greater than two years after the term loan, and a 25% cap set on EBITDA adjustments related to cost savings and synergies, with an 18 month look forward, the source continued.

The company’s $2,625,000,000 credit facility also provides for a $225 million ABL revolver.

Serta lead banks

UBS Investment Bank, Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., Deutsche Bank Securities Inc., Barclays, Jefferies Finance LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading Serta’s credit facility, with UBS left lead on the term loan B and Goldman left lead on the second-lien loan.

Recommitments were due at 5 p.m. ET on Thursday and allocations are expected on Friday morning, the source added.

Proceeds will be used to refinance existing debt and pay a dividend.

Serta, an Advent International portfolio company, is an Atlanta-based manufacturer and distributor of mattresses.

Suddenlink modifies loan

Suddenlink Communications firmed pricing on its $815 million eight-year senior secured term loan B (Ba3/BB-) at Libor plus 300 bps, the low end of the Libor plus 300 bps to 325 bps talk, and moved the issue price to par from 99.75, according to a market source.

The term loan still has a 0.75% Libor floor and 101 soft call protection for six months.

Recommitments are due at 10:30 a.m. ET on Friday, the source said.

Goldman Sachs Bank USA and Deutsche Bank Securities Inc. are leading the deal that will be used to refinance/extend an existing $815 million term loan B.

Suddenlink is a St. Louis-based cable and broadband service provider.

Surgical Care upsized

Surgical Care Affiliates lifted its term loan to $643 million from $593 million, set pricing at Libor plus 275 bps, the low end of the Libor plus 275 bps to 300 bps talk, and changed the issue price on the incremental piece to par from talk of 99 to 99.5, according to a market source.

Of the total term loan amount $443 million will be used to refinance/reprice an existing $443 million term loan, and $200 million is incremental debt that will be used to fund ordinary course investments in ambulatory surgery centers and surgical hospitals and for working capital and other general corporate purposes.

As before, the term loan has a 1% Libor floor and 101 soft call protection for six months, and the existing debt is offered at par.

J.P. Morgan Securities LLC is leading the deal that is expected to close before the end of this month.

Surgical Care is a Deerfield, Ill.-based operator of surgical facilities.

Berlin changes surface

Berlin Packaging modified the issue price on its fungible $190 million incremental covenant-light term loan B (B2/B) due October 2021 to par from talk of 99.5 to 99.75, and added 101 soft call protection for six months to the incremental loan as well as to the existing term loan B, from no call protection offered previously, a source said.

The term loan B is priced at Libor plus 350 bps with a 1% Libor floor.

Commitments were due by the close of business on Thursday, with pricing targeted for Friday morning.

Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc. and Barclays are leading the deal that will be used to fund the acquisition of Italy-based Bruni Glass, a distributor of glass containers, bottles and special glass packaging.

Including the incremental loan, the term loan B size will total about $825 million.

Berlin Packaging is a Chicago-based hybrid packaging supplier.

Pro Mach updates deal

Pro Mach finalized the original issue discount on its $160 million senior secured add-on first-lien term loan B (B2/B-) due October 2021 at 99.5, the tight end of the 99 to 99.5 talk, and made the debt all funded, as opposed to including a $50 million delayed-draw tranche with an undrawn fee of 187.5 bps per annum and availability of 12 months, subject to 4.5 times pro forma leverage, a market source remarked.

The add-on term loan is still priced at Libor plus 375 bps with a 1% Libor floor, and the new debt and existing first-lien term loan are still getting 101 soft call protection for six months.

Recommitments were due by 5 p.m. ET on Thursday, the source added.

Goldman Sachs Bank USA and Antares Capital are leading the deal that will be used for opportunistic acquisitions and to refinance existing second-lien debt.

The company is also looking to amend its existing credit agreement, for which lenders are offered a 12.5-bps consent fee.

Pro Mach is a Covington, Ky.-based provider of packaging machinery solutions and related aftermarket products serving the food, beverage, pharmaceutical and consumer packaged goods companies.

Varsity moves deadline

Varsity Brands revised the commitment deadline on its fungible $95 million senior secured add-on first-lien term loan B (B1/B) to 5 p.m. ET on Monday from 5 p.m. ET on Tuesday, a market source said.

The first-lien add-on term loan due December 2021 is talked at Libor plus 400 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

Goldman Sachs Bank USA, Barclays and Jefferies Finance LLC are leading the deal that will be used with a privately placed $95 million add-on second-lien term loan and cash on hand to fund a distribution to existing equity holders.

Along with the add-on loans, the company is seeking an amendment to its credit agreement that will allow for a one-time shareholder distribution of about $245 million, reset the fixed incremental amount to the starting level of $190 million and waive any required excess cash flow sweep for the 2016 fiscal year.

Lenders are being offered a 25-bps consent fee.

Varsity Brands is a Memphis, Tenn.-based provider of school sports, cheerleading and achievement-related products.

Accuride releases talk

In more primary news, Accuride held its bank meeting on Thursday, launching its $235 million seven-year senior secured term loan B (B3/B) with talk of Libor plus 700 bps with a 1% Libor floor, an original issue discount of 97 and 101 soft call protection for six months, according to a market source.

The company’s $300 million credit facility also includes a $65 million five-year asset-based revolver.

Commitments are due on Nov. 3, the source said.

RBC Capital Markets is leading the deal that will be used with about $222 million in equity and cash on hand to fund the buyout of the company by Crestview Partners for $2.58 per share in cash.

Closing is expected in the fourth quarter, subject to customary conditions, including Accuride shareholder approval and antitrust approvals in the United States and Mexico.

Accuride is an Evansville, Ind.-based supplier of components to the commercial vehicle industries.

American Casino guidance

American Casino came out with talk of Libor plus 325 bps with a 1% Libor floor, a par issue price and 101 soft call protection for six months on its $226 million term loan B due July 2022 that launched with a lender call during the session, a market source said.

Commitments are due at 5 p.m. ET on Oct. 27, the source added.

Goldman Sachs Bank USA is leading the deal that will be used to reprice an existing $256 million term loan B from Libor plus 375 bps with a 1% Libor floor, and with the repricing, the company is repaying $30 million of the term loan B debt.

American Casino is a Las Vegas-based owner and operator of gaming and entertainment properties.

Hoffmaster timing emerges

Hoffmaster Group set a bank meeting for 1 p.m. ET in New York on Tuesday to launch its previously announced $565 million credit facility, a market source remarked.

The facility consists of a $50 million revolver, a $390 million first-lien term loan and a $125 million second-lien term loan.

RBC Capital Markets LLC, Jefferies Finance LLC and Macquarie Capital (USA) Inc. are leading the deal that will be used to help fund the buyout of the company by Wellspring Capital Management LLC from Metalmark Capital.

Closing is expected in November.

Hoffmaster is an Oshkosh, Wis.-based producer of specialty disposable tabletop products.

Quikrete coming soon

Quikrete scheduled a bank meeting for 2 p.m. ET on Monday to launch a $2.57 billion credit facility that is split between a $325 million five-year ABL revolver and a $2,245,000,000 seven-year covenant-light term loan B, according to a market source.

The term loan B has 101 soft call protection for six months, the source said.

Commitments are due on Nov. 4.

Wells Fargo Securities LLC is leading the deal that will be used to fund the acquisition of Contech and refinance existing debt.

Quikrete is an Atlanta-based manufacturer of packaged concrete and related products.

Advanced Disposal refinancing

Advanced Disposal Services set a lender call for 11 a.m. ET on Friday to launch a $1.54 billion seven-year covenant-light term loan B that will be used to help refinance an existing term loan B and 8.25% senior notes due 2020, a market source said.

Other funds for the refinancing will come from $425 million of senior unsecured notes.

Deutsche Bank Securities Inc. is the left lead on the loan.

Advanced Disposal is a Ponte Vedra, Fla.-based provider of non-hazardous solid waste services.

Safway on deck

Safway Group emerged with plans to hold a lender call at 11 a.m. ET on Monday to launch a $160 million senior secured incremental first-lien term loan B, according to a market source.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used with an ABL draw to fund the acquisition of SafeWorks and pay related fees and expenses.

Safway is a Waukesha, Wis.-based provider of access, scaffolding, insulation, fireproofing, surface preparation and coatings solutions.

BroadStreet joins calendar

BroadStreet Partners scheduled a bank meeting for 2 p.m. ET in New York on Monday to launch a $410 million term loan B, a market source remarked.

RBC Capital Markets, Bank of America Merrill Lynch and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to refinance existing debt.

Broadstreet is a Columbus, Ohio-based insurance broker.

AMC readies loan

AMC Entertainment will hold a bank meeting at 10 a.m. ET in New York on Monday to launch a new loan transaction to current and prospective lenders, according to a market source.

Citigroup Global Markets Inc. is leading the deal.

AMC is a Leawood, Kan.-based movie exhibitor.

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