Russell breaks atop widened OID; PODS dips with add-on news; Verisk Health, Avis set talk

By Sara Rosenberg

New York, May 10 – Russell Investments modified the original issue discount on its term loan B, and then the debt made its way into the secondary market on Tuesday, and PODS LLC’s term B drifted lower as lenders were approached with an add-on loan.

In more loan happenings, Verisk Health (VCVH Holding Corp.) disclosed structure and price talk on its credit facility with launch, and Avis Budget Group Inc. came to market with a term loan B amendment and extension transaction.

Russell tweaks OID

Russell Investments changed the original issue discount on its $650 million seven-year covenant-light term loan B to 94 from revised talk of 97 and initial talk of 98.5, according to a market source.

As before, the term loan B is priced at Libor plus 575 basis points with a 1% Libor floor and has 101 soft call protection for one year.

Earlier in the syndication process, pricing on the term loan B was lifted from talk of Libor plus 450 bps to 475 bps, the call protection was extended from six months, the 18-month MFN sunset was eliminated, the incremental free and clear was reduced to $100 million from $150 million, and the incremental incurrence ratios were revised to 3.75 times first-lien net leverage and 5.25 times total net leverage, which is 0.25 times less than initially proposed.

Also, previously in syndication, the excess cash flow sweep was changed to 75% at more than 3.5 times first-lien net leverage, 50% at more than 3 times first-lien net leverage and 25% at less than 2.5 times first-lien net leverage, from opening at 50%.

Russell starts trading

With final terms in place, Russell Investments’ term loan B freed up for trading on Tuesday, and levels were quoted at 94½ bid, 95½ offered, a source said.

The company’s $700 million credit facility (Ba2/BB/BB) also includes a $50 million five-year revolver.

Barclays, Macquarie Capital (USA) Inc. and Credit Suisse Securities (USA) LLC are leading the debt that will be used to help fund the buyout of the company by TA Associates and Reverence Capital Partners from London Stock Exchange Group plc in a transaction valued at $1.15 billion, subject to customary closing adjustments.

Closing is expected in the first half of this year, conditioned on regulatory and other required approvals.

Net leverage is 3.9 times.

Russell Investments is a Seattle-based asset manager.

PODS softens

Also in the secondary market, PODS’ term loan B dropped to 99 bid, 99½ from 100 3/8 bid, 100 7/8 offered as news emerged in the morning that the company would be launching a $170 million add-on first-lien term loan B with a lender call in the afternoon, a trader remarked.

The add-on term loan due February 2022 is talked at Libor plus 350 bps with a 1% Libor floor, in line with existing term loan B pricing, and is offered at an original issue discount of 98.76, another source said.

Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA and Barclays are leading the add-on loan that will be used to repay second-lien term loan and revolver debt, and for general corporate purposes.

The company is also looking to amend its existing credit facility to allow for the one-time prepayment in full of the second-lien term loan, refresh the $60 million “free & clear” incremental loan capacity and revise the incremental first-lien net leverage ratio to 5 times, the source added.

Lenders are being offered a 25-bps amendment fee.

Commitments and amendment consents are due on May 17.

PODS is a Clearwater, Fla.-based provider of storage and moving containers.

Verisk Health launches

Back in the primary market, Verisk Health held its bank meeting on Tuesday morning, and in connection with the event tranching emerged on the $455 million senior secured credit facility, and price talk was announced on the term loan pieces, a market source said.

The facility consists of a $40 million five-year revolver, a $300 million seven-year first-lien term loan and a $115 million eight-year second-lien term loan.

Talk on the first-lien term loan is Libor plus 550 bps with a 1% Libor floor, an original issue discount of 98 and 101 soft call protection for six months, and talk on the second-lien term loan is Libor plus 950 bps with a 1% Libor floor, a discount of 97, and call protection of 103 in year one, 102 in year two and 101 in year three, the source continued.

Commitments are due on May 24.

Verisk being acquired

Proceeds from Verisk Health’s credit facility will be used to help fund its buyout by Veritas Capital from Verisk Analytics Inc. for $820 million, split between $720 million of cash consideration, a $100 million long-term subordinated promissory note with interest paid in kind, and other contingent consideration.

UBS Investment Bank is leading the new debt.

Closing is expected by June 30, subject to regulatory approvals and other customary conditions.

Verisk Health is a Waltham, Mass.-based health care services company.

Avis holds call

Avis hosted a lender call in the afternoon to launch an amendment and extension of its roughly $968 million term loan B to March 2022 from March 2019, according to a market source.

Talk on the extended term loan is Libor plus 250 bps with a 0.75% Libor floor, an original issue discount of 99.75 and 101 soft call protection for six months, the source said.

With the pushing out of the maturity, the extended loan will benefit from increased pricing when compared to the current rate on the term B of Libor plus 225 bps with a 0.75% Libor floor.

Commitments are due on Monday, the source continued.

J.P. Morgan Securities LLC is leading the deal for the Parsippany, N.J.-based provider of vehicle rental services.

Following news of the amendment and extension, the company’s term loan B was unchanged in trading at 99½ bid, 100¼ offered, a trader added.

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