Fortescue up with debt transaction changes; Wabash breaks; C&J, E.W. Scripps tweak deals

By Sara Rosenberg

New York, March 16 – Fortescue Resources’ term loan inched higher in trading on Monday as the company pulled its new term loan from the market with the decision to approach the high-yield market instead and modified maturity and price talk on its term loan extension proposal. Meanwhile, Wabash National Corp.’s term loan freed up in the secondary.

Over in the primary, C&J Energy Services Inc. moved some funds to its term loan B-1 from its term loan B-2, sweetened original issue discount talk on both tranches and revised the call protection on the B-2 loan.

In addition, E.W. Scripps Co. tightened the offer price on its add-on term loan B, and Murray Energy Corp. and Foresight Energy LP joined this week’s new deal calendar.

Fortescue trades up

Fortescue’s term loan was stronger in the secondary market on Monday as the company withdrew from the market its new $2.5 billion seven-year term loan and modified its term loan extension plans, according to a trader.

The term loan was quoted at 91¼ bid, 91¾ offered, up from 91 bid, 91½ offered, the trader said.

The pulled term loan was talked at Libor plus 425 basis points to 450 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

Proceeds were going to fund the redemption of 2017, 2018 and 2019 unsecured notes, which the company now plans to finance by raising $2.5 billion in senior secured notes due 2022.

Fortescue reworks extension

With news of the cancelled loan plans, Fortescue modified the extension proposal for its $4,888,000,000 senior secured term loan due June 30, 2019 so that it is now looking to push out the maturity to December 2021 instead of to 2022, market sources said.

Talk on the extended term loan is Libor plus 450 bps with a 1% Libor floor and 101 soft call protection for one year, sources continued. By comparison talk at launch had been Libor plus 425 bps to 450 bps with a 1% Libor floor, and the current spread on the term loan is Libor plus 275 bps.

Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are leading the deal.

Lenders are being offered a 5 bps consent fee and a 20 bps extension fee, sources added.

Fortescue, an East Perth, Australia, iron ore producer, is asking for consents by 3 p.m. ET on Tuesday.

Wabash frees up

Also in trading, Wabash National’s $192.8 million senior secured term loan (Ba3/BB) due 2022 broke, with levels quoted at par bid, par ½ offered, a trader said.

Pricing on the term loan is Libor plus 325 bps with a 1% Libor floor, and it was sold at an original issue discount of 99½. There is 101 soft call protection for one year.

During syndication, the spread on the term loan was reduced from Libor plus 350 bps.

Wells Fargo Securities LLC and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to repay an existing term loan due May 8, 2019.

Wabash is a Lafayette, Ind.-based diversified industrial manufacturer and a producer of semi-trailers and liquid transportation systems.

C&J restructures

Moving to the primary, C&J Energy Services increased its five-year term loan B-1 to $575 million from $510 million and changed original issue discount talk to 86 to 87 from 90, while keeping pricing at Libor plus 550 bps with a 1% Libor floor and the call protection of 104 in year one and par thereafter intact, according to a market source.

As for the seven-year covenant-light term loan B-2, it was reduced to $485 million from $550 million, offer price talk was adjusted to 84 to 85 from 88, and the call protection was modified to 105 in years one and two and par thereafter from 105 in year one, 103 in year two and par thereafter, the source said. This tranche is still priced at Libor plus 625 bps with a 1% Libor floor.

In addition, the excess cash flow sweep was set at 50% when leverage exceeds 3.25 times, instead of there being no excess cash flow sweep, and the MFN protection was described as any amendment or modification that increases pricing on the term loan B-1 cannot increase the yield differential between the term loan B-1 and the term loan B-2 by more than 50 bps unless the yield differential above 50 bps is also added to the term loan B-2.

C&J lead banks

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Wells Fargo Securities LLC and J.P. Morgan Securities LLC are the lead arrangers on C&J’s $1.66 billion senior secured credit facility (Ba3/BB+), which also includes a $600 million revolver.

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

Proceeds will be used to fund the combination with Nabors Industries’ completion and production services business.

Closing and funding is expected on March 23.

C&J Energy is a Houston-based provider of hydraulic fracturing, coiled tubing, cased-hole wireline, pumpdown and other oilfield services.

E.W. Scripps updates OID

E.W. Scripps moved the original issue discount on its fungible $200 million add-on term loan B to 99¾ from 99, a market source said, while pricing remained at Libor plus 275 bps with a 0.75% Libor floor.

Recommitments were due at 5 p.m. ET on Monday, and allocations are targeted for Tuesday, the source added.

SunTrust Robinson Humphrey Inc. is leading the deal that will be used to facilitate the movement of broadcast assets into E.W. Scripps and newspaper assets into Journal Communications.

In connection with the add-on, the company is repricing its existing roughly $200 million term loan B to Libor plus 275 bps with a 0.75% Libor floor from Libor plus 250 bps with a 0.75% Libor floor.

E.W. Scripps is a Cincinnati-based media company.

Murray/Foresight on deck

Murray Energy and Foresight Energy surfaced with plans to hold a bank meeting at 10:30 a.m. ET in New York on Friday to launch $2.25 billion in term loan B debt, according to a market source.

The debt consists of a $1.6 billion term loan B at Murray and a $650 million term loan B at Foresight, the source continued.

Deutsche Bank Securities Inc. and Goldman Sachs Bank USA are leading the deal that will be used to help fund Murray’s acquisition of a controlling interest in Foresight, to refinance Murray’s existing term loan B and to refinance Foresight’s existing term loan and revolver.

The companies said in a news release that Foresight also expects to get a $125 million asset-based revolver and Murray expects to issue about $860 million of senior secured second-lien notes for the transaction.

In addition, Murray plans to amend its existing asset-based credit facility to allow for the acquisition and related financing transactions.

St. Clairsville, Ohio-based Murray and St. Louis-based Foresight are coal companies.

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