MGM Growth, Sedgwick, AssuredPartners free to trade; Valeant better with amendment approval

By Sara Rosenberg

New York, April 7 –MGM Growth Properties Operating Partnership LP’s credit facility broke for trading during Thursday’s market hours, with the term loan quoted above its original issue discount. Deals from Sedgwick Claims Management Services Inc. and AssuredPartners Inc. began trading too.

In other secondary happenings, Valeant Pharmaceuticals International Inc.’s term loans inched higher as the company announced that its credit facility amendment and waiver request was approved.

Moving to the primary market, API Technologies Corp. widened pricing on its term loan, and Protection 1 (Prime Security Services Borrower LLC) and Novolex released price talk on their deals with launch.

Furthermore, Numericable-SFR SA and Insight Global (IG Investment Holdings LLC) approached lenders during the session with term loan transactions.

MGM hits secondary

MGM Growth Properties’ credit facility freed to trade on Thursday, with levels on the $1.85 billion seven-year covenant-light term loan B quoted by one trader at par bid, par 3/8 offered and by a second trader at par 1/8 bid, par ½ offered.

Pricing on the term loan B is Libor plus 325 basis points with a 0.75% Libor floor, and it was sold at an original issue discount of 99.75. The debt has 101 soft call protection for six months.

During syndication, the spread firmed at the low end of revised talk of Libor plus 325 bps to 350 bps and down from initial talk of Libor plus 400 bps to 425 bps, and the original issue discount was set at the tight end of revised talk of 99.5 to 99.75 and tight of initial talk of 99.

The company’s $2.75 billion senior secured credit facility (B1/BB) also includes a $600 million five-year revolver and a $300 million five-year term loan A.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc., Barclays, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are leading the deal.

MGM refinancing

Proceeds from MGM Growth Properties’ credit facility will be used to help repay about $4 billion of debt that the operating partnership is expected to assume from MGM Resorts International and some of its subsidiaries, to help pay around $150 million of fees and expenses associated with the financings and related transactions and for general corporate purposes.

At closing, $150 million is expected to be drawn under the revolver.

The company is also issuing $1.05 billion of senior unsecured notes and using $800 million of equity proceeds for the transaction.

MGM Growth Properties is a Las Vegas-based real estate investment trust that is being spun off from MGM Resorts, a Las Vegas-based operator of resorts and casinos.

Sedgwick revised, breaks

Sedgwick Claims Management Services’ incremental first-lien term loan due February 2021 made its way into the secondary market after an upsize to $325 million from $300 million and a tightening of the original issue discount to 98.75 from 98, a market source said.

As before, the loan is priced at Libor plus 425 bps with a 1% Libor floor, and includes 101 soft call protection for six months.

The loan was quoted at 99¼ bid, par offered upon breaking for trading and then it moved up to 99 5/8 bid, par 1/8 offered, the source added.

KKR Capital Markets and MCS Capital Markets are leading the debt that will be used with cash on hand to fund a $375 million dividend to the sponsors.

Sedgwick is a Memphis, Tenn.-based provider of technology-enabled claims and productivity management solutions.

AssuredPartners tops OID

AssuredPartners’ $110 million incremental first-lien term loan began trading as well, with levels quoted at 98 7/8 bid, 99 3/8 offered, a trader remarked.

Pricing on the incremental term loan is Libor plus 475 bps with a 1% Libor floor, and it was sold at an original issue discount of 98.5.

Bank of America Merrill Lynch, Macquarie Capital (USA) Inc., Barclays, RBC Capital Markets LLC and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to pay down revolver borrowings, to fund acquisitions and for general corporate purposes.

AssuredPartners is a Lake Mary, Fla.-based provider of property and casualty and employee benefits insurance brokerage services.

Valeant trades up

Also in trading, Valeant’s term loans strengthened in response to news that the necessary lender approval has been received for the company’s amendment and waiver to its credit facility, and that the amendment and waiver are expected to close next week, according to a trader.

The term loans C and D were quoted at 97 bid, 97½ offered, up from 96¾ bid, 97½ offered and the term loan E and F were quoted at 96¾ bid, 97¼ offered, up from 96½ bid, 97 offered, the trader said.

Under the waiver, the deadline for filing the company’s form 10-K is being extended to May 31 and the deadline for filing its form 10-Q for the quarter ended March 31 will be extended to July 31. Also, the cross-default to Valeant’s indentures that arose when the 10-K was not filed by March 15 is being waived.

The amendment modifies, among other things, the interest coverage covenant and certain financial definitions to give an additional cushion in the covenants, restricts the company’s ability to make certain acquisitions and other investments and to pay dividends and make other restricted payments until the financial statements are filed and certain leverage ratios are achieved, and requires net asset sale proceeds to be used to prepay its term loans.

Valeant is a Laval, Quebec-based specialty pharmaceutical company.

API lifts spread

Switching to the primary market, API Technologies increased pricing on its $115 million term loan to Libor plus 650 bps from Libor plus 600 bps, and left the 1% Libor floor and original issue discount of 98 unchanged, a market source remarked.

The book is done at the new pricing level, but terms have not yet been finalized, the source continued, adding that documents are expected to be posted shortly.

The company’s $145 million credit facility also includes a $30 million revolver.

BNP Paribas Securities Corp. is leading the deal that will be used with a subordinated debt commitment from Babson Capital Management LLC and equity to fund the buyout of the company by J. F. Lehman & Co. for $2.00 per share in cash.

Closing is expected in API’s second fiscal quarter of 2016, subject to the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and customary conditions.

API is an Orlando, Fla.-based provider of high performance RF, microwave, millimeterwave, power and security solutions.

Protection 1 talk emerges

Protection 1 held its bank meeting on Thursday, launching its $1,555,000,000 six-year covenant-light term loan with talk of Libor plus 475 bps to 500 bps with a 1% Libor floor, an original issue discount of 98 and 101 soft call protection for one year, according to a market source.

The company’s $1.81 billion incremental senior secured credit facility (Ba2/BB-) also includes a $255 million five-year revolver.

Commitments are due by 5 p.m. ET on April 20, the source said.

Proceeds will be used to help fund the buyout of ADT Corp. by Apollo Funds for $42.00 per share in cash and its merger with Protection 1, which is currently owned by Apollo. When combined with Protection 1, the aggregate transaction value is about $15 billion.

Protection 1 lead banks

Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and RBC Capital Markets LLC are leading Protection 1’s credit facility.

Along with the new bank debt, funds for the ADT transaction are expected to come from the issuance of $3.14 billion second-priority senior secured notes due 2023, of which up to $1.89 billion are anticipated to be sold in a marketed private offering and at least $1.25 billion are expected to be sold to an affiliate of the sponsor and certain other investors in a private placement, the issuance of $750 million of preferred securities to an affiliate of Koch Equity Development LLC, equity of $3,575,000,000, rollover equity of $906 million and cash on hand.

Closing is expected by June, subject to the conclusion of the applicable antitrust waiting periods in the United States and Canada, ADT stockholder approval and other customary conditions.

First-lien leverage is 2.3 times and total leverage is 3.6 times.

Protection 1 is a full-service business and home security company. ADT is a Boca Raton, Fla.-based provider of monitored security, interactive home and business automation and related monitoring services.

Novolex reveals guidance

Novolex came out with talk of Libor plus 500 bps with a 1% Libor floor and an original issue discount of 99 on its fungible $295 million incremental term loan (B1) that launched with an afternoon call, a market source said.

Commitments are due on April 19, the source added.

Antares Capital and CPPIB are leading the loan that will be used with privately placed subordinated debt to fund the acquisition of the Heritage Bag Co., a Roanoke, Texas-based producer of institutional can liners in North America.

Novolex is a Hartsville, S.C.-based provider of paper and plastic flexible packaging products.

Numericable seeks loan

Numericable-SFR went out to investors with a $2.6 billion seven-year covenant-light term loan talked at Libor plus 425 bps to 450 bps with a 0.75% Libor floor, an original issue discount of 98.5 and 101 soft call protection for one year, according to a market source.

Commitments are due on Tuesday, the source said.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance $2.6 billion of term loans due in 2020.

Recently, the company priced $5.19 billion of 10-year senior secured notes to repay $2.4 billion of existing debt due in May 2019 and the €450 million drawn under its revolver, and, following approval of certain amendments by lenders, to repay the €1.9 billion May 2020 term loans.

Numericable is a Saint Denis, France cable operator and telecommunications services company.

Insight comes to market

Insight Global launched a fungible $37.5 million tack-on extended term loan B due Oct. 31, 2021 talked at Libor plus 500 bps with a 1% Libor floor, an original issue discount of 98.79 to 99 and 101 soft call protection for one year from the effective date of a planned privately-placed second-lien term loan, market sources said.

Commitments were due at 5 p.m. ET on Thursday.

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 tack-on loan that will be used to repay existing non-extended term loan debt.

As previously reported, the privately placed second-lien term loan will be used to help fund a shareholder distribution.

Insight amendment passes

Last Friday, the company approached lenders with an amendment to its first-lien credit facility to allow for the incurrence of incremental debt, to permit the payment of a roughly $685 million shareholder distribution and to include additional permitted holders.

The amendment was approved this week, sources added.

Lenders were offered a 50 bps amendment fee.

The amendment was sought in connection with a minority equity purchase by Leonard Green & Partners and Crescent Capital from the existing equity sponsor Ares Management and other investors.

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

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