Energy Transfer, Panda Temple break; Community Health, American Beacon reveal deal changes

By Sara Rosenberg

New York, March 4 – Energy Transfer Equity LP’s first-lien term loan made its way into the secondary market on Wednesday with levels seen above its original issue discount, and Panda Temple I began trading as well.

Switching to the primary, Community Health Systems Inc. increased the size of its term loan F and modified the original issue discount, and American Beacon Advisors Inc. moved some funds between its first- and second-lien term loans and tightened the spread and offer price on its first-lien debt.

Furthermore, C&J Energy Services Inc. postponed the launch of its new loan transaction, ServiceMaster Co. LLC launched its incremental term loan, and E.W. Scripps Co. emerged with new deal plans.

Energy Transfer frees up

Energy Transfer Equity’s $850 million first-lien term loan (Ba2/BB/BB+) due Dec. 2, 2019 broke for trading on Wednesday with levels quoted at 99½ bid, par offered on the open, according to a market source. The debt then moved up to 99¾ bid, par ¼ offered by the afternoon, another source remarked.

Pricing on the loan is Libor plus 325 basis points with a 0.75% Libor floor and it was sold at an original issue discount of 99. There is 101 soft call protection for six months.

Earlier this week, the term loan was upsized from $500 million, the spread was reduced from talk of Libor plus 350 bps to 375 bps and the call protection was shortened from one year.

As a result of the upsizing, the Dallas-based midstream oil and gas company will use a portion of the proceeds from the new term loan to pay down revolver borrowings.

Energy Transfer lead banks

Credit Suisse Securities (USA) LLC, Bank of Tokyo-Mitsubishi, BBVA Compass, BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., DNB Bank, Mizuho Securities USA Inc., Sumitomo Mitsui Banking Corp., Intesa Sanpaolo, Natixis Securities North America Inc., ING Capital LLC, ABN Amro Inc., SunTrust Robinson Humphrey Inc., PNC Capital Markets LLC and HSBC Securities (USA) Inc. are leading Energy Transfer’s term loan.

Along with the revolver paydown, proceeds from the loan will be used to help fund the transfer of 30.8 million Energy Transfer Partners LP common units, Energy Transfer Equity’s 45% interest in the Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline (the Bakken pipeline project) and $879 million in cash (less amounts funded prior to closing for capital expenditures for the Bakken pipeline project) in exchange for 30.8 million newly issued class H units of Energy Transfer Partners.

Closing is expected this month.

Panda Temple tops OID

Panda Temple I’s $380 million seven-year term loan B began trading too, with levels seen at 98½ bid, 99½ offered, a source remarked.

Pricing on the B loan is Libor plus 625 bps with a 1% Libor floor, and it was sold at an original issue discount of 98. There is call protection of 102 in year one and 101 in year two.

During syndication, the term loan B was upsized from $375 million, pricing was lifted from talk of Libor plus 550 bps to 575 bps and the discount widened from guidance of 98½ to 99.

Along with the term loan B, the company is getting $30 million of working capital facilities.

Goldman Sachs Bank USA and Credit Suisse Securities (USA) LLC are leading the deal that will be used to refinance existing bank and mezzanine debt.

Panda Temple I is a clean natural gas-fueled, 758-megawatt combined-cycle facility located in Temple, Texas.

Community Health revised

Moving to the primary market, Community Health Systems lifted its term loan F due December 2018 to $1.7 billion from $1.66 billion and moved the original issue discount to 99¼ from 99, according to a market source, who said the loan is still priced at Libor plus 325 bps with no Libor floor and still has 101 soft call protection for six months.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance/extend an existing $1.66 billion term loan E due in January 2017 and priced at Libor plus 325 bps with no Libor floor.

The additional funds being raised through the term loan upsizing will be used to finance the original issue discount and other fees and expenses, and for general corporate purposes, the source added.

The Nashville, Tenn.-based hospital company is still also seeking to amend its existing credit agreement to change the springing maturity to three months prior to any material debt maturity and is offering consenting term loan D lenders a 5 bps amendment fee.

Recommitments and consents are due at noon ET on Thursday.

American Beacon updates deal

American Beacon Advisors raised its first-lien term loan to $230 million from $220 million, cut pricing to Libor plus 450 bps from Libor plus 475 bps and revised the original issue discount to 99½ from 99, a market source said.

As before, the first-lien term loan has a 1% Libor floor and 101 soft call protection for one year.

In connection with the first-lien term loan upsizing, the second-lien term loan was trimmed to $80 million from $90 million, the source continued.

The second-lien term loan continues to be priced at Libor plus 875 bps with a 1% Libor floor and a discount of 98, and still has call protection of 102 in year one and 101 in year two.

The company’s $350 million credit facility also includes a $40 million revolver.

Recommitments are due at 5 p.m. ET on Thursday, the source added.

American Beacon buyout

Proceeds from American Beacon’s credit facility will be used to help fund its buyout by Kelso & Co. and Estancia Capital Management from TPG Capital and Pharos Capital Group LLC.

RBC Capital Markets LLC and Barclays are leading the debt.

Total leverage is 5.5 times and equity is 50% of the capitalization.

Closing is expected in the second quarter, subject to customary conditions, including approvals of the board of trustees and shareholders of the American Beacon family of mutual funds and consents from other American Beacon clients.

American Beacon Advisors is a Fort Worth-based provider of investment advisory services to institutional and retail markets.

C&J delays launch

C&J Energy Services pushed off the call to launch its new loan to 2:15 p.m. ET on Thursday from 11 a.m. ET on Wednesday, a market source remarked.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Wells Fargo Securities LLC and J.P. Morgan Securities LLC are leading the financing.

C&J is a Houston-based provider of hydraulic fracturing, coiled tubing, cased-hole wireline, pumpdown and other oilfield services.

ServiceMaster launches

In more primary happenings, ServiceMaster launched a $175 million incremental term loan due 2021 with talk of Libor plus 325 bps with a 1% Libor floor and an original issue discount of 99½, according to a market source.

The spread and floor on the incremental term loan matches existing term loan pricing.

Commitments are due on Thursday, the source said.

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch, Jefferies Finance LLC, Natixis and RBC Capital Markets are leading the deal that will be used with about $41 million of available cash to fund the redemption of $200 million 8% senior notes due 2020 on April 1 at a premium of 106.

ServiceMaster is a Memphis-based provider of maintenance services to residential and commercial customers.

E.W. Scripps on deck

E.W. Scripps surfaced with plans to hold a call at 9:30 a.m. ET on Thursday to launch a fungible $200 million add-on term loan B that is talked at Libor plus 275 bps with a 0.75% Libor floor and an original issue discount of 99, according to a market source.

SunTrust Robinson Humphrey Inc. is leading the deal.

The company also plans on increasing its revolver by $25 million to $100 million.

Proceeds will be used to facilitate the movement of broadcast assets into E.W. Scripps and newspaper assets into Journal Communications.

Additionally, the company will launch a repricing of its existing roughly $200 million term loan B to Libor plus 275 bps with a 0.75% Libor floor from Libor plus 250 bps with a 0.75% Libor floor, the source said.

Net leverage will be about 2 times.

E.W. Scripps is a Cincinnati-based media company.

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