TruGreen, Insight Global break atop OIDs; Quorum Health, NAPA Management revise deals

By Sara Rosenberg

New York, April 8 – TruGreen Holdings Inc. lowered pricing on its term loan B, set the issue price at the tight end of talk and extended the call protection, and Insight Global (IG Investment Holdings LLC) finalized the original issue discount on its tack-on extended term loan B at the tight end of guidance, and then both deals freed up for trading on Friday.

In more happenings, Quorum Health Corp. widened the spread and issue price on its term loan, NAPA Management Services Corp. (NMSC Holdings Inc.) upsized its term loan B, tightened pricing and original issue discount and sweetened the call premium, and Micron Technology Inc. emerged with new deal plans.

TruGreen updated, trades

TruGreen cut pricing on its $560 million term loan B to Libor plus 550 basis points from Libor plus 575 bps, finalized the original issue discount at 98.5, the tight end of the 98 to 98.5 talk, extended the 101 soft call protection to one year from six months and removed the MFN sunset, a market source remarked.

The term loan B still has a 1% Libor floor.

The company’s $706 million credit facility (B1/B) also includes a $146 million revolver.

By late Friday afternoon, the new bank debt had made its way into the secondary market, with the term loan B quoted at 99¼ bid, par offered, a trader added.

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, ING Capital Markets, Natixis, Rabobank and Goldman Sachs Bank USA are leading the deal.

TruGreen merging

Proceeds from TruGreen’s credit facility will be used to help fund its merger with Scotts LawnService, which is owned by Scotts Miracle-Gro Co.

Other funds for the transaction will come from a $200 million privately placed second-lien term loan.

TruGreen, a portfolio company of Clayton, Dubilier & Rice, is a Memphis, Tenn.-based lawn care company.

At closing, ScottsMiracle-Gro will own an equity stake of about 30% in the combined business, and Clayton, Dubilier & Rice will own the controlling interest.

Closing on the merger is subject to customary conditions.

Insight sets OID, breaks

Insight Global firmed the original issue discount on its fungible $37.5 million tack-on extended term loan B due Oct. 31, 2021 at 99, the tight end of the 98.79 to 99 talk, according to a market source.

As before, the loan is priced at Libor plus 500 bps with a 1% Libor floor and has 101 soft call protection for one year from the effective date of a planned privately placed second-lien term loan.

With terms finalized, the tack-on began trading, and levels were seen at 99½ bid, par offered, a trader said.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Wells Fargo Securities LLC, RBC Capital Markets and SunTrust Robinson Humphrey Inc. are leading the loan that will repay non-extended term debt.

The company recently received approval of an amendment to its first-lien credit facility allowing for the incurrence of incremental debt and the payment of a roughly $685 million shareholder distribution that will be funded in part with proceeds from the privately placed second-lien term loan.

The amendment, for which lenders were offered a 50 bps consent fee, was sought in connection with a minority equity purchase by Leonard Green & Partners and Crescent Capital from Ares Management and others.

Insight Global is an Atlanta-based temporary staffing firm for the information technology sector.

Quorum flexes higher

Quorum Health lifted pricing on its $880 million six-year first-lien term loan (B1/B) to Libor plus 575 bps from talk of Libor plus 500 bps to 525 bps and moved the original issue discount to 98 from 98.5, a market source remarked.

As before, the term loan has a 1% Libor floor and 101 soft call protection for six months.

Commitments were due at 5 p.m. ET on Friday, the source added.

The company’s $1,105,000,000 secured credit facility also includes a $100 million five-year revolver (B1/B) and a $125 million ABL revolver.

Credit Suisse Securities (USA) LLC is leading the deal that will be used with $400 million of senior notes to help fund the spinoff of the company from Community Health Systems Inc. and for general corporate purposes.

Quorum is a Brentwood, Tenn.-based operator and manager of general acute care hospitals and outpatient services.

NAPA changes surface

NAPA Management Services raised its covenant-light term loan B (B1/B) to $340 million from $320 million, trimmed pricing to Libor plus 500 bps from talk of Libor plus 525 bps to 550 bps, revised the original issue discount to 99 from 98 and pushed out the 101 soft call protection to one year from six months, according to a market source.

The term loan B still has a 1% Libor floor.

In addition to the term loan B, the company is getting a $40 million revolver (B1/B).

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets LLC and BMO Capital Markets Corp. are leading the deal that will be used to help fund the buyout of the company by American Securities LLC.

Other funds for the transaction will come from equity, which was reduced by $10 million, and a $150 million privately placed second-lien term loan, which was downsized from $160 million. The equity and second-lien reductions were done as a result of the term loan B upsizing, the source added.

NAPA is a Melville, N.Y.-based outsourced anesthesia and perioperative management services company.

Micron readies loan

Also in the primary market, Micron Technology set a bank meeting for 11 a.m. ET in New York on Monday to launch a $500 million senior secured term loan B, a market source said.

The company disclosed in an 8-K filed with the Securities and Exchange Commission on Friday that the term loan B is expected to have a maturity of six years and be secured by a substantial portion of its assets.

Morgan Stanley Senior Funding Inc., Citigroup Global Markets Inc., HSBC Holdings plc and J.P. Morgan Securities LLC are leading the debt that will be used for general corporate purposes, including working capital, capital expenditures and to pay related fees and expenses.

Closing is subject to, among other things, successful syndication, negotiation, execution and delivery of definitive loan documentation and various customary conditions.

Along with the term loan B, the company is considering issuing up to $1 billion in senior secured notes.

Micron is a Boise, Idaho-based semiconductor company.

Sears wraps loan

In other news, Sears Holdings Corp. closed on Friday on its $750 million incremental senior secured ABL term loan (B) due July 20, 2020, according to a news release.

Pricing on the term loan is Libor plus 750 bps with a 1% Libor floor and it was sold at an original issue discount of 97. The debt includes hard call protection of 102 in year one and 101 in year two.

During syndication the spread on the term loan was reduced from Libor plus 800 bps and the discount firmed at the tight end of the 96 to 97 talk.

Bank of America Merrill Lynch and Wells Fargo Securities LLC are leading the loan that was used to reduce borrowings under the company’s asset-based revolver.

The borrowers are Sears Roebuck Acceptance Corp. and Kmart Corp.

Sears is a Hoffman Estates, Ill.-based retailer.

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