Hoffmaster breaks; Veritext, SunSource changes surface; Vantage Specialty discloses guidance

By Sara Rosenberg

New York, Aug. 13 – Hoffmaster Group Inc.’s incremental term loan B made its way into the secondary market on Monday, with levels quoted above its original issue discount.

Meanwhile, in the primary market, Veritext Corp. upsized its delayed-draw first-lien term loan, lowered pricing on its second-lien term loan and modified original issue discounts on its first-and second-lien tranches.

Also, SunSource Holdings Inc. raised pricing on its incremental first-lien term loan and is increasing the spread on its existing first-lien term loan, and Vantage Specialty Chemicals Holdings Inc. released price talk on its add-on term loan B with launch.

Hoffmaster frees up

Hoffmaster Group’s fungible $37 million incremental term loan B due November 2023 began trading on Monday, with levels quoted at par 1/8 bid, par 5/8 offered, a trader said.

The incremental term loan is priced at Libor plus 400 basis points with a 0% Libor floor, in line with the existing term loan, and was sold at an original issue discount of 99.5. Like the existing term loan, the incremental loan has 101 soft call protection until Dec. 11.

RBC Capital Markets is leading the deal that will be used to repay revolver drawings that were used to fund the acquisition of Aardvark Straws.

Closing is expected on Tuesday.

Hoffmaster is an Oshkosh, Wis.-based producer of specialty disposable tabletop products.

Veritext reworked

Switching to the primary market, Veritext lifted its delayed-draw first-lien term loan to $75 million from $50 million and changed the original issue discount on the tranche and on its $300 million seven-year first-lien term loan to 99.75 from 99.5, a market source remarked.

Additionally, pricing on the $105 million eight-year second-lien term loan was cut to Libor plus 700 bps from Libor plus 725 bps and the original issue discount was adjusted to 99.5 from 99, the source said.

As before, the first-lien term loan debt is priced at Libor plus 375 bps with a 25 bps leverage-based step-down and a 0% Libor floor, and has 101 soft call protection for six months, the second-lien term loan has a 25 bps leverage-based step-down, a 0% Libor floor and hard call protection of 102 in year one and 101 in year two, and the delayed-draw term loan has a 24-month commitment period and a ticking fee of half the spread from days 61 to 120 and the full spread thereafter.

The company’s now $520 million senior secured deal also includes a $40 million five-year revolver.

Recommitments are due at 11 a.m. ET on Tuesday, the source added.

Jefferies LLC, BNP Paribas Securities Corp. and Macquarie Capital (USA) Inc. are leading the deal that will be used to help fund the buyout of the company by Leonard Green & Partners LP.

Veritext is a Livingston, N.J.-based provider of deposition and litigation support solutions.

SunSource flexes

SunSource widened pricing on its $295 million incremental first-lien term loan (B2/B) due Dec. 11, 2024 to Libor plus 425 bps from Libor plus 375 bps and, as a result, is now lifting pricing on its existing $403 million term loan (B2/B) due Dec. 11, 2024 to Libor plus 425 bps from Libor plus 375 bps, according to a market source.

As before, all of the first-lien term loan debt has a 1% Libor floor and the incremental loan has an original issue discount of 98.75.

Also, the first-lien term loan debt has 101 soft call protection for six months.

The incremental loan and existing loan will become one $698 million fungible tranche, the source said.

Recommitments were due at 2 p.m. ET on Monday, the source added.

Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Natixis, ING and UBS Investment Bank are leading the deal that will be used with a $75 million incremental ABL revolver and $85 million of incremental equity from Clayton, Dubilier & Rice to fund the acquisition of United Distribution Group Inc.

Closing is expected this month.

SunSource is an Addison, Ill.-based distributor of fluid power and fluid process components and systems. United Distribution is a Bristol, Tenn.-based distributor of industrial supplies and services.

Vantage sets talk

Vantage Specialty Chemicals held its lender call on Monday, launching its fungible $35 million add-on senior secured covenant-light term loan B (B3) due Oct. 28, 2024 with original issue discount talk of 99.75 to par, a market source said.

The add-on term loan is priced at Libor plus 400 bps with a 1% Libor floor.

Commitments are due at noon ET on Thursday, the source added.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to repay revolver borrowings and fund a small acquisition.

Vantage is a Chicago-based manufacturer and distributor of specialty chemicals.

SS&C right leads

In other news, right leads surfaced on SS&C Technologies Inc.’s $950 million incremental first-lien term loan B-3 due April 2025 that launched with a lender call on Monday, a market remarked.

Joining left lead Credit Suisse Securities (USA) LLC is Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc. and RBC Capital Markets, the source added.

As previously reported, talk on the incremental term loan B-3 is Libor plus 250 bps with a 25 bps step-down at senior secured net leverage of less than 4.75 times, a 0% Libor floor, an original issue discount of 99 to 99.5 and 101 soft call protection until October.

Commitments are due at 5 p.m. ET on Wednesday.

Proceeds will be used to help fund the acquisition of Eze Software, a Boston-based provider of investment technology, from TPG Capital for $1.45 billion.

Closing is expected in the fourth quarter, subject to regulatory approval and other customary conditions.

SS&C is a Windsor, Conn.-based provider of investment and financial software-enabled services and software for the financial services and healthcare industries.

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