Mattress Firm, Victory Capital free to trade; Halyard Health term loan B revisions emerge

By Sara Rosenberg

New York, Oct. 1 – Mattress Firm Holding Corp.’s credit facility surfaced in the secondary market on Wednesday with the term loan seen trading above its original issue discount, and Victory Capital Management broke, too.

Switching to the primary market, Halyard Health Inc. reduced pricing on its term loan B and modified the ticking fee.

Mattress Firm breaks

Mattress Firm’s credit facility freed up for trading on Wednesday, with the $720 million seven-year covenant-light term loan (B1/B) quoted at 99¼ bid, 99¾ offered and then it moved up to 99 3/8 bid, 99 7/8 offered, according to a trader.

Pricing on the term loan is Libor plus 425 basis points with a step-down after six months to Libor plus 400 bps when net total leverage is 3 times and a 1% Libor floor. The debt was sold at an original issue discount of 99 and has 101 soft call protection for one year.

Earlier this week, the spread on the term loan firmed at the high end of the Libor plus 400 bps to 425 bps talk, the step-down was added, the call protection was extended from six months and the 18 month MFN sunset provision was removed.

The company’s $845 million credit facility also includes a $125 million five-year ABL revolver.

Mattress buying Sleep Train

Proceeds from Mattress Firm’s credit facility will be used to fund the $425 million acquisition of Sleep Train Inc., a Rocklin, Calif.-based bedding specialty retailer, finance bolt-on acquisitions and refinance existing debt.

Barclays, Bank of America Merrill Lynch, J.P. Morgan Securities LLC and UBS AG are leading the deal.

Closing is expected in the 2014 fourth fiscal quarter, subject to regulatory approvals and other conditions.

Mattress Firm, a Houston-based specialty bedding company, will have net first-lien adjusted leverage and net total adjusted leverage of 3.3 times and lease adjusted leverage is 6 times.

Victory Capital frees up

Victory Capital’s credit facility began trading as well, with the $295 million seven-year term loan B quoted at 99 bid, 99½ offered, a trader said.

Pricing on the term loan is Libor plus 600 bps with a 1% Libor floor and it was sold at an original issue discount of 99. There is 101 hard call protection for one year and a ticking fee of the full spread and floor after 30 days.

Recently, the term loan B was downsized from $310 million, pricing was lifted from talk of Libor plus 450 bps to 475 bps, the call protection was changed from a 101 soft call for six months and the MFN sunset provision was eliminated.

The company’s $320 million senior secured credit facility also includes a $25 million revolver.

Morgan Stanley Senior Funding Inc. and Credit Suisse Securities (USA) LLC are leading the deal.

Victory buying Munder

Proceeds from Victory Capital’s credit facility will be used to help fund the acquisition of Munder Capital Management to create a new independent investment advisory firm based in Cleveland, Ohio.

The $15 million of funds recently removed from the term loan B had been previously earmarked for an identified acquisition.

Additional equity financing for the new company will be led by funds managed by Crestview Partners and Reverence Capital Partners.

Closing is expected on Oct. 31.

Halyard tweaks deal

Moving to the primary, Halyard Health lowered the spread on its $390 million seven-year senior secured term loan B to Libor plus 325 bps from Libor plus 350 bps and changed the ticking fee to the full spread after 30 days from half the spread from days 31 to 60 and the full spread thereafter, according to a market source, who said there is no MFN sunset on the loan.

As before, the term loan B is talked with a 0.75% Libor floor, an original issue discount of 99 to 99½ and 101 soft call protection for one year.

Commitments are due at 12:30 p.m. ET on Thursday, the source added.

Morgan Stanley Senior Funding Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and RBC Capital Markets LLC are leading the deal (Ba2/BB).

Halyard getting revolver

In addition to the term loan, Halyard Health plans on getting a $250 million senior secured revolver that is expected to be undrawn at closing.

Proceeds from the credit facility will be used with $250 million of senior unsecured notes to fund the spinoff of the company from Kimberly-Clark Corp.

The spinoff is expected to be completed at the end of this month.

Halyard Health is an Alpharetta, Ga.-based health care company focused on preventing infection, eliminating pain and speeding recovery.

Skillsoft closes

In other news, Skillsoft Ltd. completed its acquisition of SumTotal Systems LLC, a Gainesville, Fla.-based provider of integrated HR services, from Vista Equity Partners, a news release said.

For the transaction, Skillsoft got a $465 million incremental first-lien term loan due April 28, 2021 and a $185 million incremental second-lien term loan due April 28, 2022.

Pricing on the incremental first-lien term loan is Libor plus 475 bps with a 1% Libor floor and it was sold at an original issue discount of 98. There is 101 soft call protection for one year.

The incremental second-lien term loan is priced at Libor plus 825 bps with a 1% Libor floor and was issued at 97½. This debt has hard call protection of 102 through April 28, 2015 and 101 through April 28, 2016.

Barclays, Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. led the covenant-light term loans, with Barclays the left lead on the first-lien loan and Morgan Stanley the left lead on the second-lien loan.

Skillsoft repricing

Along with the new debt, Skillsoft repriced its existing $900 million first-lien term loan due April 28, 2021 from Libor plus 350 bps with a 1% Libor floor to match the incremental first-lien term loan pricing, and its existing $485 million second-lien term loan due April 28, 2022 from Libor plus 675 bps with a 1% Libor floor to match the incremental second-lien term loan pricing.

All first-lien term loans are fungible and all second-lien term loans are fungible.

During syndication, the incremental first-lien term loan was downsized from $515 million resulting in existing revolver borrowings remaining outstanding, pricing was lifted from talk of Libor plus 425 bps to 450 bps, the discount widened from talk of 99 to 99½ and the call protection was sweetened from a 101 soft call through April 28, 2015. Also, pricing on the second-lien loan was lifted from talk of Libor plus 775 bps to 800 bps, the discount was revised from talk of 98½ to 99 and the accordion feature on both term loans was modified.

Skillsoft is a Dublin-based provider of cloud-based learning services.

Sedgwick wraps acquisition

Sedgwick Inc. closed on its purchase of VeriClaim, according to a news release, for which the company got a $190 million add-on second-lien term loan.

As previously reported, pricing on the add-on is Libor plus 575 bps with a 1% Libor floor, in line with the existing second-lien term loan, and it was sold at an original issue discount of 97½.

Both the add-on and the existing loan got call protection of 102 for one year and 101 for the following year.

UBS Securities LLC, KKR Capital Markets and MCS Capital Markets led the deal.

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

Platform completes loan

Platform Specialty Products Corp. (MacDermid Inc.) closed on its fungible $300 million add-on first-lien covenant-light term loan due June 7, 2020 that was used with cash on hand to fund the acquisition of Agriphar for €300 million, a news release said.

Pricing on the add-on matches the existing term loan at Libor plus 300 bps with a 1% Libor floor, and it was sold at an original issue discount of 98½ after widening during syndication from talk of 99 to 99½.

The add-on has 101 soft call protection for six months following closing, which will then be reset to six months following the close of the Chemtura AgroSolutions acquisition.

Barclays led the deal.

Net first-lien and net total leverage is 4.3 times.

Platform is a Miami-based producer of high-technology specialty chemical products and provider of technical services. Agriphar is a European agrochemicals group.

Ranpak acquired

The buyout of Ranpak Holdings Inc. by Rhone Capital LLC from Odyssey Investment Partners LLC has closed, according to a news release.

With the transaction, Ranpak got a new $600 million-equivalent credit facility consisting of a $30 million five-year revolver, a $233,412,000 seven-year first-lien covenant-light term loan, a €157 million seven-year first-lien covenant-light term loan and a $135 million eight-year second-lien covenant-light term loan.

Pricing on the U.S. first-lien term loan is Libor plus 375 bps and pricing on the euro term loan is Euribor plus 400 bps, with both having a 1% floor, 101 soft call protection for six months and sold at an original issue discount of 99¾.

The second-lien term loan is priced at Libor plus 725 bps with a 1% Libor floor and was sold at a discount of 99½. This debt has call protection of 102 in year one and 101 in year two.

Ranpak lead banks

Credit Suisse Securities (USA) LLC and Macquarie Capital led the credit facility for the Concord Township, Ohio-based manufacturer of paper-based systems for protective packaging needs.

During syndication, the total first-lien term loan amount was increased to $435 million equivalent from $400 million equivalent, with the euro piece upsized from roughly €130 million, pricing on the U.S. first-lien term loan was cut from Libor plus 400 bps, pricing on the euro first-lien term loan was lowered from Euribor plus 425 bps and the discount on all of the first-lien term loan debt was tightened from 99.

Also, the second-lien term loan was downsized from $170 million, the spread was lowered from Libor plus 750 bps and the discount was modified from 99.

York Risk bought out

The purchase of York Risk Services Group, a Parsippany, N.J.-based provider of risk management, claims management and managed care services, by Onex Corp. from ABRY Partners has closed, a news release said.

To help fund the buyout, York Risk got a $715 million credit facility consisting of a $100 million five-year revolver, a $555 million seven-year covenant-light term loan B and a $60 million delayed-draw term loan.

Pricing on the term loan debt is Libor plus 375 bps with a 1% Libor floor and it was sold at an original issue discount of 99¼. There is 101 soft call protection for one year.

During syndication, pricing on the B loan was trimmed from Libor plus 400 bps, the discount firmed at the midpoint of the 99 to 99½ talk, the call protection was extended from six months and the delayed-draw term loan was added for acquisition financing.

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., RBC Capital Markets, Barclays, BMO Capital Markets and Nomura led the deal.

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