Genesis HealthCare restructures; Alkermes sets talk; ConvaTec offer price emerges

By Sara Rosenberg

New York, Sept. 10 - Genesis HealthCare LLC made a number of changes to its credit facility, including increasing the spread and discount on its term loan, while also sweetening call protection and amortization and downsizing its ABL revolver.

Also in the primary, Alkermes Inc. revealed price talk and ConvaTec Inc. announced an offer price on its term loan B-2, as the deals were presented to lenders during the session.

Furthermore, Atlantic Broadband Group LLC came out with timing and structure on its credit facility, and Samson Investment Co. surfaced with new term loan plans.

Genesis reworks deal

Genesis Healthcare revised pricing, call protection, amortization and maturity on its term loan and reduced its ABL revolver to $375 million from $425 million, according to a market source who said that commitments are now due on Sept. 17. The original deadline on the deal had been Aug. 10.

Under the changes, the $325 million term loan (B2/B) is talked at Libor plus 850 basis points with a 1.5% Libor floor and an original issue discount of 94 to 95, versus prior talk of Libor plus 650 bps with a 1.5% floor and a discount of 98, the source said.

Also, the loan is now non-callable for one year, then there is a hard call at 102 in year two and 101 in year three, compared to just 101 soft call protection for one year previously.

Furthermore, amortization was beefed up to 5% per annum from 1%, and the maturity was shortened to five years from six years, the source continued.

Genesis revolver pricing

Although there was a change in size, Genesis Healthcare's five-year ABL revolver saw pricing remain at Libor plus 275 bps to 325 bps with an unused fee of 37.5 bps to 50 bps, based on usage.

Barclays and GE Capital Markets Inc. are leading $700 million senior secured facility, with Barclays the left lead on the term loan and GE left lead on the revolver.

Proceeds will help fund the purchase of Sun Healthcare Group Inc., an Irvine, Calif.-based health care services company, for $8.50 per share of common stock in cash, resulting in a transaction value of about $275 million net of cash and debt acquired.

Closing is expected in October or November, subject to customary conditions, including approval by Sun stockholders and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, both of which have already been obtained.

Total debt to annualized pro forma adjusted EBITDA is 2.4 times and adjusted debt to annualized pro forma adjusted EBITDAR is 4.8 times, the source added.

Genesis is a Kennett Square, Pa.-based skilled nursing care provider.

Alkermes guidance surfaces

In more primary happenings, Alkermes disclosed talk of Libor plus 375 bps to 400 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year on its $375 million senior secured term loan (B1/BB) with its afternoon bank meeting, according to a market source.

Commitments are due on Sept. 20, the source added.

Morgan Stanley Senior Funding Inc, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are leading the deal that will be used to refinance existing credit facility debt.

Alkermes is a Dublin, Ireland-based biopharmaceutical company.

ConvaTec launches

Also on the price talk front, ConvaTec went out with an offer of 99½ to par on its $300 million term loan B-2 due 2016 as the deal was outlined to lenders on a conference call in the morning, according to sources.

Pricing on the term B-2 is Libor plus 425 bps with a 1.5% Libor floor, which matches the existing existing term loan B.

J.P. Morgan Securities LLC is the leading the deal that will be used to fund the acquisition of 180 Medical Holdings Inc. for $321 million.

Closing is expected late in the third quarter, subject to regulatory approval and customary conditions.

ConvaTec is a Skillman, N.J.-based developer and marketer of medical technologies. 180 Medical is an Oklahoma City-based provider of disposable, intermittent catheters and urologic medical supplies.

Atlantic Broadband on deck

Atlantic Broadband set a call for Tuesday afternoon to launch its $710 million credit facility (Ba3/BB+) that consists of a $50 million five-year revolver, a $200 million five-year term loan A and a $460 millions even-year term loan B, a market source said.

Bank of America Merrill Lynch, TD Securities (USA) LLC and BMO Capital Markets Corp. are leading the deal that will help fund the company's acquisition by Cogeco Cable Inc. for $1.36 billion from ABRY Partners IV LP and Oak Hill Capital Partners LP, and refinance existing debt.

Other funds will come from about $150 million of cash on hand and a roughly $550 million draw under Cogeco's existing revolver. The new facility at Atlantic Broadband will be non-recourse to Cogeco

Pro forma leverage at Atlantic Broadband will be 4.3 times.

Closing is expected by year-end, subject to Hart-Scott-Rodino approval, federal, state and local regulatory approvals and other customary conditions.

Atlantic Broadband is a Quincy, Mass.-based cable system operator. Cogeco is a Montreal-based telecommunications corporation.

Samson readies loan

Another company to join this week's calendar was Samson Investment, as it set a bank meeting for Wednesday to launch a $750 million covenant-light term loan, according to sources.

The term loan includes a 1.25% Libor floor and 101 soft call protection for one year, but coupon and discount talk are not yet out, sources remarked.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Barclays, RBC Capital Markets LLC, Citigroup Global Capital Markets Inc. and Mizuho Securities USA Inc. are leading the loan.

Proceeds will be used to repay revolver debt.

Samson is a Tulsa, Okla.-based private exploration and production company.

Ikaria well met

In other news, Ikaria Acquisition Inc.'s $125 million five-year first-lien term loan (B1/BB) has seen strong demand since launching last Thursday, resulting in oversubscription of the deal, according to a market source.

The term loan is talked at Libor plus 650 bps with a 1.5% Libor floor, an original issue discount of 98 and 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc. and Fifth Third Securities Inc. are leading the transaction.

Proceeds will be used for a dividend recapitalization.

Ikaria is a Hampton, N.J.-based biotherapeutics company in the critical care market.

BWIC announced

Meanwhile, over in the secondary, a roughly $18.9 million Bid-Wanted-In-Competition emerged on Monday morning, and market participants are being asked to get their bids in by noon ET on Wednesday, according to a trader.

The portfolio includes nine issuers, with some issuers offering more than one tranche of debt.

Names in the portfolio are Contec LLC, CSHM LLC, Diagnostic Imaging Group LLC, MSD Performance Inc., PDM Bridge LLC, Prommis Fin Co., Provo Craft & Novelty Inc., Research Pharmaceutical Services Inc. and Roadlink USA Inc.

In addition to the loans, there is a relatively small amount of equity being offered from Euramax Holdings Inc., Champion Series A units, CSHM LLC, MSD Performance Inc., MD Investors Corp., Provo Craft Holding LLC and MMH Media Holdings Inc., the trader added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.