Kontoor, II-VI, Wells Enterprises free up; ThoughtWorks revised; Jefferies, Sirius set talk

By Sara Rosenberg

New York, May 8 – Kontoor Brands Inc. set the spread on its term loan B at the low end of guidance before breaking for trading on Wednesday, and deals from II-VI Inc. and Wells Enterprises Inc. began trading as well.

Also, ThoughtWorks Inc. modified the original issue discount on its incremental first-lien term loan, Jefferies Finance LLC, Sirius Computer Solutions Inc., Hargray Communications Group Inc. and Medallion Midland Acquisition LP released price talk with launch, and Horizon Therapeutics plc emerged with new deal plans.

Kontoor updated, breaks

Kontoor Brands firmed pricing on its $300 million seven-year covenant-lite term loan B at Libor plus 425 basis points, the low end of the Libor plus 425 bps to 450 bps talk, and removed the MFN sunset, according to a market source.

The term loan B still has a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

The company’s $1.55 billion of credit facilities (Ba2/BB-) also include a $500 million five-year revolver and a $750 million five-year term loan A.

Late Wednesday, the term loan B surfaced in the secondary market and was quoted at 99¾ bid, a trader added.

J.P. Morgan Securities, Barclays, Bank of America Merrill Lynch, Wells Fargo Securities and HSBC Securities (USA) are leading the deal that will be used to help fund the company’s spinoff from VF Corp. and for general corporate purposes.

Closing is expected in the first half of this year, subject to customary conditions.

Kontoor Brands is a Greensboro, N.C.-based jeanswear company.

II-VI hits secondary

II-VI’s $720 million seven-year covenant-lite term loan B (B1/BB-/BB+) also broke for trading, with levels quoted at 99½ bid, par offered, a trader said.

Pricing on the term loan B is Libor plus 350 bps with a 0% Libor floor, and it was sold at an original issue discount of 99. The debt has 101 soft call protection for one year and a ticking fee of half the margin from days 31 to 60, the full margin from days 61 to 90 and the full margin plus Libor thereafter.

During syndication, the term loan B was downsized from $800 million, pricing was increased from Libor plus 300 bps, the call protection was extended from six months, and the ticking fee was changed from half the margin from days 46 to 75, the full margin from days 76 to 100 and the full margin plus Libor thereafter.

The company is also getting a $450 million five-year revolver and a $1,255,000,000 five-year term loan A, which was upsized from $1,175,000,000 with the recent term loan B downsizing.

II-VI lead banks

Bank of America Merrill Lynch, PNC Bank, BMO Capital Markets, Citizens Bank, Fifth Third, MUFG, SunTrust Robinson Humphrey and TD Securities (USA) are leading II-VI’s credit facilities.

Proceeds will be used with $1 billion of combined balance sheet cash to fund the acquisition of Finisar Corp. for $15.60 in cash and 0.2218 shares of II-VI common stock per share. The transaction is valued at about $3.2 billion.

Net total leverage at close is expected to be around 3.5 times.

Closing is targeted around mid-year, subject to regulatory approvals and other customary conditions.

II-VI is a Saxonburg, Pa.-based engineered materials and optoelectronic components company. Finisar is a Sunnyvale, Calif.-based optical communications company.

Wells Enterprises frees up

Wells Enterprises’ fungible $100 million add-on covenant-lite term loan (B1/BB) due 2025 began trading as well, with levels quoted at 99 7/8 bid, 100 3/8 offered, a trader remarked.

Pricing on the add-on term loan is Libor plus 275 bps with a 0% Libor floor and it was sold at an original issue discount of 99.75. The add-on loan and the company’s existing roughly $173 million term loan are getting 101 soft call protection for six months.

During syndication, the discount on the add-on term loan was revised from talk in the range of 99 to 99.5.

BMO Capital Markets is leading the deal that will be used to fund the acquisition of Fieldbrook Foods from Arbor Investments.

Wells Enterprises is a Le Mars, Iowa-based owned ice cream and frozen treat manufacturer. Fieldbrook Foods is a Dunkirk, N.Y.-based ice cream producer.

ThoughtWorks tweaked

Back in the primary market, ThoughtWorks adjusted the original issue discount on its fungible $185 million incremental first-lien term loan (B2/B) due October 2024 to 99.5 from 99, a market source said.

The incremental term loan is priced at Libor plus 400 bps with a 1% Libor floor, in line with the existing first-lien term loan, and has 101 soft call protection for six months.

Recommitments were due at 5 p.m. ET on Wednesday, the source added.

Credit Suisse Securities (USA) is the left lead on the deal that will be used to fund a shareholder distribution.

ThoughtWorks is a Chicago-based pure play digital transformation services provider.

Jefferies sets guidance

Jefferies Finance held its bank meeting on Wednesday and announced price talk on its $700 million seven-year senior secured first-lien term loan at Libor plus 375 bps with a 0% Libor floor and an original issue discount of 99, according to a market source.

The term loan has 101 soft call protection for six months.

The company’s $975 million of credit facilities also include a $275 million three-year priority revolver.

Commitments are due on May 21, the source said.

Jefferies, Citigroup Global Markets and HSBC Securities (USA) are leading the deal that will be used with cash on hand and a planned high-yield issuance to refinance existing debt and reduce non-funding debt.

Jefferies is a New York-based leveraged loan arranger and investor with over $11 billion of managed capital equally owned by Jefferies Group LLC and Massachusetts Mutual Life Insurance Co.

Sirius proposed terms

Sirius Computer Solutions disclosed price talk of Libor plus 425 bps to 450 bps with a 0% Libor floor and an original issue discount of 99.5 on its $750 million seven-year covenant-lite first-lien term loan that launched with a morning bank meeting, a market source remarked.

The term loan has 101 soft call protection for six months.

The company’s $940 million of credit facilities also include a $190 million revolver.

Commitments are due at 5 p.m. ET on May 20.

Credit Suisse Securities (USA), Citigroup Global Markets, UBS Investment Bank, Barclays, Deutsche Bank Securities, Goldman Sachs Bank USA, ING, Macquarie Capital (USA), MUFG, Natixis, Nomura, RBC Capital Markets and SunTrust Robinson Humphrey are leading the deal, which will be used to help fund the buyout of the company by Clayton, Dubilier & Rice from Kelso & Co.

Closing is expected late this quarter, subject to regulatory approvals and other customary conditions.

Sirius is a San Antonio-based provider of mission-critical IT infrastructure solutions.

Hargray holds call

Hargray Communications emerged early in the morning with plans to hold a lender call at 11 a.m. ET to launch a fungible $45 million incremental first-lien term loan B (B2/B+) due May 2024 talked with an original issue discount in the range of 99 to 99.25, according to a market source.

The incremental loan is priced at Libor plus 275 bps with a step-up to Libor plus 300 bps at 4.75 times first-lien net leverage and a 1% Libor floor, in line with existing term loan pricing.

Commitments are due at 5 p.m. ET on Thursday, the source said.

Credit Suisse Securities (USA), SunTrust Robinson Humphrey and Antares Capital are leading the debt that will be used to refinance a revolver draw and add cash to the balance sheet.

Hargray is a Hilton Head Island, S.C.-based broadband communications and entertainment provider.

Medallion seeks add-on

Medallion Midland hosted a lender call at 2 p.m. ET to launch a $50 million add-on first-lien term loan due Oct. 30, 2024 talked with an original issue discount of 98.79, a market source remarked.

Like the existing first-lien term loan, the add-on term loan is priced at Libor plus 325 bps with a 1% Libor floor.

Commitments are due at 5 p.m. ET on Monday, the source added.

Jefferies is the left lead on the deal that will be used for general corporate purposes including the funding of capital expenditures associated with a recently executed commercial arrangement entered into with a Permian Midstream peer.

Medallion is an Irving, Texas-based privately-held crude oil gathering and intra-basin transportation system in the Midland Basin, within the eastern half of the prolific Permian Basin.

Horizon joins calendar

Horizon Therapeutics set a call for 11 a.m. ET on Thursday to launch a new loan transaction to current and prospective lenders, a market source said.

Citigroup Global Markets is leading the deal.

Horizon Therapeutics, formerly known as Horizon Pharma, is a Dublin-based biopharmaceutical company.

Mister Car allocates

Mister Car Wash Holdings Inc.’s $800 million seven-year first-lien term loan and $40 million delayed-draw first-lien term loan allocated on Wednesday, according to a market source.

Pricing on the first-lien term loan debt is Libor plus 350 bps with one leverage-based step-down and a 0% Libor floor. The debt was sold at an original issue discount of 99.75 and has 101 soft call protection for six months. Delayed-draw term loan availability is for 24 months and the delayed-draw ticking fee is half the spread for days 46 to 90 and the full spread onwards.

During syndication, the funded first-lien term loan was upsized from $775 million as the company downsized its privately placed eight-year second-lien term loan to $225 million from $250 million, pricing was reduced from talk in the range of Libor plus 375 bps to 400 bps, one leverage-based step-down was removed and the discount was tightened from 99.5.

The company’s $1.14 billion of credit facilities also include a $75 million revolver.

Jefferies, BMO Capital Markets, Nomura and UBS Investment Bank are leading the deal that will be used by the Tucson-based car wash company to refinance existing debt and pay a distribution to shareholders.

Closing is expected on Friday.

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