Jackson Hewitt breaks; Builders FirstSource, Numericable, Peacock Engineering modify deals

By Sara Rosenberg

New York, July 24 – Jackson Hewitt Tax Service Inc.’s credit facility surfaced in the secondary market on Friday morning, with the term loan B quoted above its original issue discount.

In more happenings, Builders FirstSource Inc. increased the size of its term loan B, widened pricing, extended the call protection and made some other documentation changes.

Also, Numericable raised the amount of term loan B debt it is getting, outlined dollar and euro sizes and tightened the original issue discount on the tranches, and Peacock Engineering modified the issue price on its first-lien term loan while adding a pricing step-down.

Additionally, Stahl withdrew its term loan from the market, and Knowledge Universe Education LLC and DTZ (DTZ U.S. Borrower LLC and DTZ Aus HoldCo Pty. Ltd.) joined the near-term new issue calendar.

Jackson Hewitt breaks

Jackson Hewitt’s credit facility began trading on Friday, with the $200 million five-year term loan B seen at 99 bid, 99½ offered, a trader said.

Pricing on the term loan is Libor plus 700 basis points with a 1% Libor floor, and it was sold at an original issue discount of 98. The debt has hard call protection of 102 in year one and 101 in year two.

During syndication, the term loan was downsized from $250 million, the spread was increased from talk of Libor plus 575 bps to 600 bps and the discount widened from 99.

The company’s $230 million credit facility also includes a $30 million first-out revolver.

RBC Capital Markets LLC and Macquarie Capital (USA) Inc. are leading the deal that will be used to refinance existing debt and fund a dividend.

Jackson Hewitt is a Parsippany, N.J.-based provider of full-service individual federal and state income tax return preparation.

Builders reworked

In the primary, Builders FirstSource upsized its seven-year covenant-light term loan B (B3/BB-) to $600 million from $550 million, lifted pricing to Libor plus 500 basis points from talk of Libor plus 400 bps to 425 bps and extended the 101 soft call protection to one year from six months, according to a market source.

Also, the MFN sunset was removed, the incremental allowance was reduced to $300 million and the senior secured first-lien net leverage ratio was reduced to 3.75 times, and the threshold for unlimited restricted payments was tightened to 4 times total net leverage, the source said.

As before, the term loan has a 1% Libor floor and an original issue discount of 99.

Recommitments were due at 1 p.m. ET on Friday, the source added.

The company’s now $1.4 billion credit facility, up from $1.35 billion, also includes an $800 million ABL revolver.

Builders lead banks

Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc. and Keybanc Capital Markets are leading Builders FirstSource’s credit facility.

Proceeds will be used with $700 million of senior notes, downsized from $750 million with the term loan upsizing, and new equity via a marketed follow-on offering to fund the acquisition of ProBuild Holdings LLC for about $1.63 billion.

Pro forma net debt to adjusted EBITDA is 5.6 times.

Closing is expected on July 31, subject to customary conditions and regulatory approvals.

Builders FirstSource is a Dallas-based supplier and manufacturer of structural and related building products for residential new construction. ProBuild is a Denver-based supplier of lumber and building materials to professional builders and contractors.

Numericable revisions emerge

Numericable increased its seven-year first-lien covenant-light term loan (Ba3/B+) to include $550 million and €300 million tranches from a size of €800 million-equivalent at launch and moved the original issue discount on the tranches to 99.75 from 99.5, a market source remarked.

Pricing on the term debt remained at Libor/Euribor plus 325 bps with a 0.75% floor, and there is still 101 soft call protection for six months.

Commitments were due at 1 p.m. ET on Friday for U.S. investors and 5 p.m. ET London time on Friday for European investors, the source added.

Credit Suisse and BNP Paribas Securities Corp. are the joint physical bookrunners on the deal that will repay revolver debt. Barclays, Credit Agricole, Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., Nomura and RBC are bookrunners too.

Numericable is a Lille, France-based cable operator. The borrowers are Numericable-SFR SA and Numericable US LLC.

Peacock tweaks deal

Peacock Engineering changed the original issue discount on its $285 million seven-year first-lien term loan (B2/B+) to 99.5 from 99 and added a step-down to the loan, as well as to its $35 million five-year revolver (B2/B+), to Libor plus 400 bps when total leverage is below 4.25 times, according to a market source.

Also, the MFN sunset was eliminated, the source said.

Initial pricing on the term loan and the revolver remained at Libor plus 425 bps. The term loan has a 1% Libor floor, while the revolver has no floor.

As before, the term loan includes 101 soft call protection for six months.

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

GE Capital Markets, RBC and BMO Capital Markets Corp. are leading the deal.

Peacock second-lien loan

Along with the revolver and first-lien term loan, Peacock Engineering is getting a $55 million second-lien term loan (Caa1/CCC+) that was privately placed.

Proceeds will be used to help fund an acquisition and recapitalization. The company is buying L&L Foods, an Anaheim, Calif.-based provider of turnkey procurement and packaging services.

Leverage is 4.2 times on a senior basis and 5 times on a total basis.

Closing/funding is targeted for July 29.

Peacock is a Geneva, Ill.-based contract packager servicing blue-chip consumer packaged goods companies.

Stahl shelves loan

Stahl pulled its $600 million seven-year first-lien covenant-light term loan (B2/B+) from the market due to unfavorable conditions, a source said.

The term loan was talked at Libor plus 400 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for one year.

Credit Suisse and BNP were leading the deal that was going to be used to refinance existing debt and fund a shareholder dividend.

Stahl is a Netherlands-based specialty chemicals company providing solutions for leather products, performance coatings and polymers.

Knowledge Universe on deck

Also in the primary, Knowledge Universe Education set a bank meeting for 10:30 a.m. ET in New York on Tuesday to launch a $925 million credit facility, according to a market source.

The facility consists of an $80 million revolver, a $645 million seven-year first-lien covenant-light term loan and a $200 million eight-year second-lien covenant-light term loan, the source said, adding that both term loans have a 1% Libor floor.

Commitments are due on Aug. 11.

Credit Suisse, Barclays and BMO are leading the deal that will be used to help fund the buyout of the company by Partners Group.

Closing is expected later this year.

Knowledge Universe is a for-profit provider of early childhood education in the United States.

DTZ readies deal

DTZ emerged with plans to hold a bank meeting on Wednesday to launch a $1,805,000,000 first-lien term loan due Nov. 4, 2021 that is talked with a 1% Libor floor, according to a market source.

Of the total term loan amount, $1,055,000,000 is incremental debt that will be used to fund the acquisition of Cushman & Wakefield, which is expected to close by year’s end, subject to customary conditions, and the remainder will be used to reprice the company’s existing first-lien term loan.

Also, the company plans on getting a $175 million incremental multi-currency revolver due Nov. 4, 2019, bringing its total revolver size to $375 million, the source said.

UBS AG, J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Credit Suisse, Citigroup, Morgan Stanley, Credit Agricole Securities (USA) Inc., Mizuho Securities USA Inc. and HSBC Securities (USA) Inc. are leading the deal.

DTZ is a Chicago-based property services company. Cushman & Wakefield is a New York-based real estate services company. The combined company will operate under the Cushman & Wakefield brand.

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