Insight Global, Mitchell break; Ocwen trades down; Platform Specialty, Alliant update deals

By Sara Rosenberg

New York, Jan. 23 – Insight Global (IG Investments Holdings LLC) and Mitchell International Inc. saw their term loan debt hit the secondary market on Friday, and Ocwen Financial Corp.’s term loan was softer with a debt default accusation.

Over in the primary, Platform Specialty Products Corp./MacDermid Inc. reduced the size of its U.S. term loan B-2 and set the spread at the low end of talk and lowered pricing on its add-on euro term loan as well as on the repricing of its existing U.S. term debt.

Also, Alliant Holdings increased the size of its add-on first-lien term loan, and Dollar Tree Inc. and Targa Resources Corp. joined the near-term calendar.

Insight Global frees up

Insight Global’s $210 million first-lien tack-on covenant-light term loan B (B1/B) due October 2021 and $503 million extended term loan B due October 2021 began trading on Friday, with levels quoted at 99¼ bid, 99¾ offered, according to a trader.

Pricing on the tack-on loan and extended term loan B is Libor plus 500 basis points with a 1% Libor floor and they have 101 soft call protection for one year. The tack-on debt was sold at an original issue discount of 99.

Recently, the spread on the tack-on loan and the extended loan flexed up from Libor plus 475 bps.

Proceeds from the tack-on loan will be used to fund a distribution to the sponsor and minority shareholders.

The company’s $38 million non-extended term loan B due October 2019, which is priced at Libor plus 425 bps with a 1% Libor floor, was quoted in the secondary at 99 bid, par offered, the trader added.

Existing lenders were offered a 5 bps for the amendment and 20 bps for the extension.

Credit Suisse Securities (USA) LLC is leading the deal for the Atlanta-based temporary staffing firm.

Mitchell sets OID, trades

Mitchell International finalized the original issue discount on its fungible $55 million add-on term loan at 98.79, compared to initial talk of 98¾ to 99, according to a market source.

Pricing on the add-on loan is Libor plus 350 bps with a 1% Libor floor, which matches pricing on the company’s existing term loan.

With final terms in place, the add-on loan made its way into the secondary market and levels were quoted at 99 bid, 99½ offered, a trader remarked.

Jefferies Finance LLC and KKR Capital Markets are leading the deal that will be used to fund the acquisition of Cogent Works.

Mitchell is a San Diego-based provider of technology, connectivity and information services to the property and casualty claims and collision repair industries. Cogent Works is a Salt Lake City-based provider of pharmacy network and benefit management services to the automobile casualty and workers’ compensation markets.

Ocwen retreats

Also in trading, Ocwen’s term loan dropped to 93½ bid, 94½ offered from 94 bid, 95 offered as an accusation emerged that defaults existing under the company’s indenture for series 2012-T2 and series 2013-T3 notes issued in connection with the HLSS Servicer Advance Receivables Trust, according to a trader.

The accusation came from BlueMountain Capital Management LLC, the investment manager of funds that hold some of the notes.

BlueMountain claimed that Ocwen breached covenants to comply with applicable laws and requisite servicing obligations, breached a warranty in the senior secured term loan agreement and a subsequent amendment that it is not in violation of any law that could reasonably be expected to cause a material adverse effect on its business and financial condition, and failed a collateral test.

Additionally, BlueMountain says the default should trigger early amortization and a 3% increase in the interest rate on the notes.

Ocwen is an Atlanta-based servicer and originator of mortgage loans.

Platform reworked

Moving to the primary, Platform Specialty trimmed its non-fungible incremental covenant-light term loan B-2 due June 7, 2020 to $500 million from $1 billion, firmed pricing at Libor plus 375 bps, the tight end of the Libor plus 375 bps to 400 bps talk, and shortened the 101 soft call protection to six months from one year, according to a market source.

The U.S. term loan B-2 still has a 1% Libor floor and an original issue discount of 99.

Meanwhile, pricing on the fungible €83 million add-on covenant-light term loan due June 7, 2020 was cut to Euribor plus 325 bps from talk of Euribor plus 350 bps to 375 bps and the 101 soft call was reduced to six months from one year, while the 1% floor and discount of 98 were unchanged, the source said.

Commitments were due at noon ET on Friday.

Platform repricing

In addition, the spread on the repricing of Platform Specialty’s existing $1,172,000,000 first-lien covenant-light term loan B due June 7, 2020 firmed at Libor plus 350 bps, the low end of the Libor plus 350 bps to 375 bps talk, and the 101 soft call protection was cut to six months from one year. This tranche still has a 1% Libor floor.

The existing U.S. term loan is being repriced from Libor plus 300 bps with a 1% Libor floor.

Pricing on the existing €204.5 million first-lien covenant-light term loan B due June 7, 2020 is now remaining at Euribor plus 325 bps with a 1% floor, instead of being repriced in the area of Euribor plus 350 bps to 375 bps with a 1% floor, the source remarked, however the proposed 101 soft call protection on the this tranche was also revised to six months from one year.

Also, the leverage-based step-downs in the existing term loans will be removed as part of this amendment to the credit facility.

Platform buying Arysta

Proceeds from Platform Specialty’s new loans will be used to help fund the roughly $3.51 billion acquisition of Arysta LifeScience Ltd. from the Permira Funds.

Barclays, Credit Suisse Securities (USA) LLC, UBS AG and Nomura Securities International LLC are leading the new term loans.

The company is also getting $1 billion of bonds, upsized from $500 million with the term loan downsizing, and €350 million of bonds for the acquisition.

Closing is expected in the last week of January, subject to regulatory approval.

Platform is a Miami-based specialty chemicals company. Arysta is a Tokyo-based provider of crop services with expertise in agrochemical and biological products.

Alliant Holdings upsizes

Alliant Holdings, a Newport Beach, Calif.-based specialty insurance brokerage firm, lifted its add-on first-lien term loan to $445 million from $360 million, while pricing of Libor plus 400 bps with a 1% Libor floor and an original issue discount of 99, and the 101 soft call protection for six months were unchanged, a market source said.

Recommitments were due at the close of business on Friday and allocations are expected on Monday.

Macquarie Capital (USA) Inc. and KKR Capital Markets LLC are leading the deal, and Macquarie will be assuming the administrative agent role for the company’s full senior secured credit facilities going forward.

Proceeds will be used to fund acquisitions.

Regarding the upsizing, the source explained that management has signed a letter of intent for a yet to be disclosed incremental acquisition which would result in a leverage neutral pro forma capital structure of 4.25 times senior secured leverage and 6 times total leverage. If the acquisition is not completed, lenders will be repaid at par.

As before, with the add-on, pricing on the existing first-lien term loan will be increased to Libor plus 400 bps with a 1% Libor floor from Libor plus 325 bps with a 1% Libor floor as the debt is expected to be fungible.

Dollar Tree coming soon

Also on the new deal front, Dollar Tree surfaced with plans to hold a bank meeting at 2 p.m. ET on Monday to launch a $6.95 billion credit facility, according to a market source.

The facility consists of a $1.25 billion five-year revolver, a $500 million five-year term loan A and a $5.2 billion seven-year term loan B, the source said.

J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Bank of America Merrill Lynch, RBC Capital Markets and U.S. Bank are leading the deal that will be used to help fund the acquisition of Family Dollar Stores Inc. in a cash and stock deal valued at $8.5 billon.

Under the agreement, Family Dollar shareholders will receive $74.50 for each share they own, comprised of $59.60 in cash and $14.90 in Dollar Tree stock, subject to a collar.

The financing is expected to be completed in February and closing could be as soon as March. Family Dollar stockholders approved the transaction but it remains subject to Federal Trade Commission approval.

Chesapeake, Va.-based Dollar Tree and Matthews, N.C.-based Family Dollar are discount store operators.

Targa on deck

Targa Resources set a bank meeting for 10 a.m. ET on Tuesday to launch a $430 million seven-year senior secured covenant-light term loan, according to a market source.

The company plans on getting a $670 million revolver, a news release said.

Bank of America Merrill Lynch, RBS, Wells Fargo Securities LLC, ING, MUFG and Union Bank are leading the deal that will be used to help fund the acquisition of Atlas Energy LP following the spin-off of its non-midstream assets, to pay related fees and expenses, and to refinance existing debt.

Targa is buying Atlas Energy for $1,869,000,000, including 10.35 million shares valued at $1,259,000,000 based on the closing price of the company’s common stock on Oct. 10, 2014 and $610 million in cash.

Closing is expected this quarter, subject to the spin-off of the non-midstream assets and customary approvals and conditions.

Targa Resources is a Houston-based midstream energy company.

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