NVA Holdings, Sedgwick Claims surface in secondary; Applied Systems loan details emerge

By Sara Rosenberg

New York, Nov. 6 – NVA Holdings Inc. widened the original issue discount on its add-on term loan B-3 before freeing up for trading on Tuesday, and Sedgwick Claims Management Services Inc.’s term loan B hit the secondary market as well.

In more happenings, Applied Systems Inc. released size and price talk on its incremental first-lien term loan with launch, and Ducommun Inc. and SMB Shipping Logistics LLC joined this week’s primary calendar.

NVA tweaked, breaks

NVA Holdings changed the original issue discount on its fungible $200 million add-on covenant-light first-lien term loan B-3 (B2/B) due Feb. 2, 2025 to 98.57 from 98.75, according to a market source.

Pricing on the add-on loan is Libor plus 275 basis points, which matches existing term loan B-3 pricing.

After terms finalized, the add-on loan began trading on Tuesday and levels were quoted at 98¾ bid, 99¼ offered, a trader added.

Bank of America Merrill Lynch, RBC Capital Markets, Jefferies LLC and Nomura are leading the deal that will be used to fund acquisitions under signed letters of intent, to refinance revolver borrowings and to fund cash to the balance sheet for future acquisitions.

NVA is an Agoura Hills, Calif.-based owner of independent freestanding veterinary hospitals.

Sedgwick tops OID

Sedgwick Claims Management Services’ $2.34 billion seven-year covenant-light term loan B (B2/B) also freed to trade, with levels seen at 99 7/8 bid, par 1/8 offered, a trader said.

Pricing on the term loan B is Libor plus 325 bps with a step-down to Libor plus 300 bps at 4.5 times net first-lien leverage and a 0% Libor floor. The loan was sold at an original issue discount of 99.75 and has 101 soft call protection for six months.

On Monday, pricing on the term loan firmed at the low end of the Libor plus 325 bps to 350 bps talk, the step-down was added and the discount was tightened from 99.5.

Bank of America Merrill Lynch, KKR Capital Markets, Morgan Stanley Senior Funding Inc. and SunTrust Robinson Humphrey Inc. are leading the deal.

Sedgwick being acquired

Proceeds from Sedgwick’s term loan B will be used with equity to fund its buyout by the Carlyle Group from KKR in a transaction valued at about $6.7 billion.

Stone Point Capital LLC and Caisse de depot et placement du Quebec (CDPQ), together with Sedgwick management, will remain minority investors in the company.

Closing is expected later this year, subject to customary conditions, including regulatory approvals.

Sedgwick is a Memphis, Tenn.-based provider of claims management solutions to corporations, public entities and insurance carriers.

Applied Systems launches

Back in the primary market, Applied Systems held its call on Tuesday afternoon and launched a fungible $210 million incremental first-lien term loan (B2/B-) talked with an original issue discount in the range of 99.5 to 99.75, according to a market source.

Like the existing first-lien term loan, the incremental loan is priced at Libor plus 300 bps with a 1% Libor floor and is subject to a grid upon the delivery of financials to lenders for the quarter ending Dec. 31, 2018. The grid calls for pricing of Libor plus 300 bps at less than 4.75 times first-lien net leverage and Libor plus 325 bps at more than 4.75 times first-lien net leverage.

Commitments are due at noon ET on Nov. 13, the source said.

Nomura is the left lead on the deal that will be used with a privately placed incremental second-lien term loan to fund a distribution to shareholders and put cash on the balance sheet.

Closing is targeted for the week of Nov. 19.

Applied Systems is a University Park, Ill.-based cloud software provider to the property & casualty and benefits insurance industry.

Ducommun on deck

Ducommun set a bank meeting for 2 p.m. ET in New York on Wednesday to launch a $240 million seven-year covenant-light term loan B, a market source remarked.

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

Ducommun is a Santa Ana, Calif.-based provider of engineering and manufacturing services to aerospace, defense, and diverse technology-driven markets.

SMB joins calendar

SMB Shipping Logistics scheduled a lender call for Wednesday afternoon to launch a $60 million incremental first-lien term loan, which will be fungible with its existing $434 million first-lien term loan, according to a market source.

Antares Capital, Deutsche Bank Securities Inc., Citizens Bank and J.P. Morgan Securities LLC are leading the debt that will be used with a $100 million privately placed incremental second-lien term loan to fund a distribution to existing shareholders.

SMB, a Ridgemont Equity Partners portfolio company, is a Dallas-based provider of small parcel and freight services to the small and medium-sized business market.

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