Applied Systems moves up timing; Kinetic details repricing; funds see $904 million inflows

By Paul A. Harris

Portland, Ore., Jan. 9 - A news-heavy day in the bank loan market saw Applied Systems Inc. move up timing on its $1.1 billion credit facility. Commitments are now due at 5 p.m. ET on Friday.

Meanwhile, Kinetic Concepts Inc. detailed the repricing of $2.6 billion equivalent of term loans.

And dedicated bank loan funds saw $903.61 million of inflows during the week to Wednesday's close, according to a sellside source quoting from a report by Lipper-AMG.

All recent loans are now trading in the high pars to low 101s, a bank loan trader said on Thursday.

"We're starting to see things creep up to the 101 bid level."

Although the new issue market has not been gangbusters, thus far into the new year, things are starting to heat up, the trader said.

Applied Systems moves up timing

Applied Systems moved up timing on its $1.1 billion credit facility, according to a market source.

Commitments are now due at 5 p.m. ET on Friday. Books had previously been expected to remain open until Jan. 17.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Jefferies Finance LLC and UBS Securities LLC are the lead banks on the deal.

The facility consists of a $50 million revolver, a $675 million seven-year first-lien covenant-light term loan and a $375 million eight-year second-lien covenant-light term loan, the source said.

The first-lien term loan is talked at Libor plus 350 basis points to 375 bps with a 1% Libor floor and an original issue discount of 99, and the second-lien term loan is talked at Libor plus 725 bps to 750 bps with a 1% Libor floor and a discount of 99, the source continued.

Included in the first-lien loan is 101 soft call protection for six months, and the second-lien loan has call protection of 102 in year one and 101 in year two.

Proceeds will be used to help fund the buyout of the company by Hellman & Friedman LLC from Bain Capital for about $1.8 billion.

Applied Systems is a University Park, Ill.-based provider of software for the insurance industry.

Kinetic details repricing

Kinetic Concepts detailed the repricing of $2.6 billion equivalent of term loans (Ba3/BB-) on Thursday, according to a market source.

A $1,952,000,000 term loan E-1 due in May 2018 is set to reprice at a Libor spread of 300 basis points, reduced from 350 bps. The Libor floor remains unchanged at 1%.

A €246 million term loan E-1 due in May 2018 is set to reprice at a Euribor spread of 325 bps, reduced from 375 bps. The Euribor floor remains unchanged at 1%.

A $319 million term loan E-2 due in November 2016 is set to reprice at Libor plus 250 bps, reduced from 300 bps. The Libor floor remains unchanged at 1%.

All tranches are talked at par and feature 101 six-month soft calls.

Commitments are due on Wednesday.

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC, Goldman Sachs & Co., Credit Suisse, SunTrust Robinson Humphrey and UBS Investment Bank are the arrangers.

Kinetic Concepts is a San Antonio, Texas-based medical technology company.

Patheon brings euro carve-out

JLL/Delta Patheon Holdings LP restructured its $1.35 billion equivalent credit facility on Thursday by carving out a €250 million term loan B tranche from the previous $1.15 billion all-dollar term loan B.

Price talk also surfaced.

An $840 million seven-year term B is talked with a 400 bps to 425 bps spread to Libor at 99.5.

The carved-out €250 million seven-year term loan B is talked with a 425 bps to 450 bps spread to Euribor also at 99.5.

Both tranches have 1% Libor/Euribor floors, 101 six-month soft calls and amortize at 1% annually.

The facility also includes a $200 million five-year revolver.

UBS Securities, J.P. Morgan Securities LLC, Jefferies, KeyBanc Capital Markets and Morgan Stanley Senior Funding Inc. are the joint bookrunners on the deal.

Proceeds will be used to form the company through the combination of DSM Pharmaceutical Products with Patheon Inc.

Other funds for the creation of the new company will come from $772 million of equity.

Under the agreement, JLL Partners and Royal DSM will acquire Patheon for $9.32 per share, implying an equity value of about $1.4 billion and a total enterprise value of $1.95 billion.

Patheon will then be merged with DSM Pharmaceutical Products, and the combined company will be 51% owned by JLL and 49% by DSM.

DSM will receive a seller note of $200 million, thereby valuing DSM Pharmaceutical Products at $670 million.

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

JLL/Delta Patheon will be a contract development and manufacturing organization for the pharmaceutical industry with anticipated sales of around $2 billion.

SNL launches repricing

SNL Financial launched a repricing of its $269 million covenant-light term loan (B2/B) on Thursday, according to a market source.

The Libor spread dropped to 350 bps from 425 bps.

The Libor floor dropped to 1% from 1.25%.

The loan is set to price at par.

It features a six-month 101 soft call.

Commitments are due on Jan. 16.

Credit Suisse is the lead.

The financial information services company also has in place a $30 million revolver.

W.R. Grace talks term loan

W.R. Grace & Co. talked its $900 million seven-year term loan with a 250 bps spread to Libor at 99.5 on Thursday, according to a market source.

The loan features a 0.75% Libor floor.

Commitments are due Jan. 22.

The $1.55 billion credit facility also has a $400 million five-year revolver and a $250 million seven-year final maturity, delayed-draw term loan.

Goldman Sachs Bank USA, Deutsche Bank Securities, Bank of America Merrill Lynch and HSBC Securities (USA) Inc. are the lead banks on the deal.

Proceeds will be used to help fund the company's emergence from Chapter 11 bankruptcy.

W.R. Grace, a Columbia, Md.-based specialty chemicals company, filed for bankruptcy on April 2, 2001. Its Chapter 11 case number is 01-01139.

Sophos sets talk

Sophos Ltd. (Shield Finance Co. Sarl) talked its $400 million seven-year covenant-light term loan (expected B2/confirmed B) with a 450 bps spread to Libor at 99 on Thursday, according to a market source.

There is a Libor floor at 1%.

Commitments are due on Jan. 23.

Deutsche Bank the bookrunner on the deal.

The term loan has 101 soft call protection for six months, the source said.

Proceeds will be used to refinance an existing term loan.

Sophos is an IT security and data protection firm that has headquarters in Burlington, Mass., and Oxford, England.

Axalta launches repricing

Axalta Coating Systems (previously known as DuPont Performance Coatings) launched a repricing of its $2,283,000,000 covenant-light term loan due Feb. 1, 2020 and its €397 million covenant-light term loan due Feb. 1, 2020 on Thursday, according to a market source.

The Libor spread on the dollar-denominated loan was reduced to 300 bps from 350 bps.

The Euribor spread on the euro-denominated loan was reduced to 325 bps from 400 bps.

The Libor floors on both tranches dropped to 1% from 1.25%.

Both tranches are offered at par.

Both have 101 six-month soft calls.

Commitments are due on Jan. 16.

Barclays, Credit Suisse, Citigroup Global Markets Inc., Deutsche Bank, Morgan Stanley, UBS Securities, Jeffries and SMBC are the bookrunners on the deal.

Axalta is a Wilmington, Del.-based supplier of vehicle and industrial coating systems.

BATS sets price talk

BATS Global Markets Inc. set pricing on its $450 million six-year term loan B (/BB-/) on Thursday, according to a market source.

The loan is talked with a 425 bps spread to Libor, a 1% Libor floor, an original issue discount of 99 and 101 six-month soft call protection.

Commitments are due on Jan. 22.

The $550 million credit facility also features a $100 million three-year revolver.

Bank of America Merrill Lynch, JPMorgan and Credit Suisse are the lead banks on the deal.

The term loan has 5% amortization and a maximum total leverage covenant.

Proceeds will be used to refinance existing debt, to fund a distribution to BATS shareholders and for general corporate purposes.

The credit facility is contingent on the completion of the company's merger with Direct Edge Holdings LLC, which is expected to close in the first half of this year.

BATS is a Kansas City, Mo.-based operator of securities markets. Direct Edge is a Jersey City, N.J.-based stock exchange operator.

VAT bank meeting is Monday

Swiss vacuum valve-maker VAT Inc. will roll out a $405 million seven-year first-lien covenant-light term loan at a bank meeting on Monday, according to a market source.

Credit Suisse is the lead.

Price talk is Libor plus 425 bps with a 1% Libor floor at 99 and 101 soft call protection for one year.

Commitments are due on Jan. 27.

The credit facility also includes a CHF 30 million five-year revolver.

Proceeds will be used to fund the leveraged buyout of the Sennwald, Switzerland-based company by Capvis and Partners Group.

Atrium starts Tuesday

Dealers will roll out $700 million equivalent of bank debt backing the leveraged buyout of Atrium Innovations on Tuesday, according to a market source.

The deal includes a $300 million seven-year first-lien term loan, a $125 million equivalent euro-denominated seven-year first-lien term loan, a $200 million 7.5-year second-lien term loan and a $75 million revolver.

RBC Capital Markets is the left lead in a syndicate of banks that includes Deutsche Bank, National Bank Financial Markets and Toronto-Dominion Bank.

Proceeds will be used to fund the buyout by of Atrium Innovations, a dietary supplements developer and manufacturer, by Premira Advisers.

Viskase talks term loan

Viskase Cos. Inc. talked its $275 million seven-year term loan B (B2//) at a 325 bps spread to Libor at 99.5 on Thursday, according to a market source.

The deal is talked with a 1% Libor floor, 101 soft call protection and amortization of 1% per annum.

Commitments are due on Jan. 23.

UBS Securities is the lead bank on the deal.

Proceeds will be used to refinance existing debt.

Viskase is a Darien, Ill.-based producer and seller of cellulosic, fibrous and plastic casings for the processed meat and poultry industry.

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