Western Digital up on outlook change; Allison, Monitronics, Blackboard react to new deals

By Sara Rosenberg

New York, Sept. 7 – Western Digital Corp.’s term loan B headed higher in the secondary market on Wednesday after the company updated its first fiscal quarter guidance, Allison Transmission Inc.’s term loan softened with the launch of its new term loan B, and Monitronics International Inc.’s 2022 term loan and Blackboard Inc.’s term loan B-3 rose with refinancing news.

Over in the primary market, Intellectual Property & Science (IP&S) (Camelot Finance LP), Ineos Styrolution Group GmbH, Redbox Automated Retail LLC, Dunn Paper Inc., Horizon Global Corp., Insight Global (IG Investment Holdings LLC), Avantor Performance Materials, Air Canada and Golden Nugget Inc. released price talk on their new deals.

Furthermore, Versum Materials, Consolidated Communications Inc., Neustar Inc., SIG Combibloc (Onex Wizard US Acquisition Inc./SIG Combibloc Purchase Co Sarl) and Smart & Final Stores Inc. all joined the near-term calendar, and Floor & Decor set timing on the launch of its credit facility.

Western Digital rises

Western Digital’s term loan B was stronger in trading on Wednesday in reaction to the company’s release of revised expectations for the first fiscal quarter of 2017 ending Sept. 30, 2016, a trader remarked.

The term loan was quoted at 101 bid, 101 3/8 offered, up from 100 5/8 bid, 101 offered, the trader added.

For the quarter, the company now expects revenue to be in the range of $4.45 billion to $4.55 billion compared to its earlier forecast of $4.4 billion to $4.5 billion, and earnings per share on a non-GAAP basis to be in the range of $1.00 to $1.05, versus the prior forecast in the range of $0.85 to $0.90.

The guidance change was attributed to a better-than-expected product mix following the recent acquisition of SanDisk and the continued progress in integrating its WD and HGST subsidiaries.

The company also said that its net interest expense is anticipated to be lower than previously expected due to the recently completed repricing of its U.S. term loan B.

Western Digital is an Irvine, Calif.-based developer and manufacturer of storage solutions that enable people to create, manage, experience and preserve digital content.

Allison dips in trading

Allison Transmission’s term loan B fell to par bid, 100½ offered from 100 3/8 bid, 100 5/8 offered as the company launched on its lender call on Wednesday an amendment and extension transaction, according to a trader.

Specifically, the company approached lenders with a new $1.7 billion senior secured covenant-light term loan B due September 2022 that is talked at Libor plus 250 basis points to 275 bps with a 1% Libor floor, a 25-bps extension fee and 101 soft call protection for six months, a market source said.

Proceeds will be used to amend and extend the existing term loan B that matures in August 2019, and, with the transaction, the company plans to issue up to $1 billion of senior unsecured notes due 2024 that will be used with cash on hand to repay a portion of the existing term loan and pay related transaction fees and expenses.

As of June 30, there was $2.39 billion of term loan B debt outstanding.

Commitments for the new term loan are due at 5 p.m. ET on Sept. 14, with closing targeted for Sept. 23.

Additionally, the company is looking to extend its $450 million revolver to 2021 from January 2019.

Citigroup Global Markets Inc. is leading the deal for Allison Transmission, an Indianapolis-based automatic transmission company and supplier of hybrid-propulsion systems.

Monitronics gains

Monitronics’ term loan due in 2022 moved up to 99¾ bid, 100½ offered from 97½ bid, 98½ offered with news that the company will refinance the debt with a new $700 million six-year term loan and a notes offering, according to a trader.

Proceeds from the new debt will also refinance revolver borrowings and a term loan due in 2018.

The 2018 term loan was quoted at 99 7/8 bid, 100 3/8 offered, versus 99¾ bid, 100¼ offered previously, the trader added.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC are leading the new term loan that will launch with a bank meeting on Thursday.

Monitronics is a Dallas-based home security alarm monitoring company.

Blackboard strengthens

Blackboard’s term loan B-3 due 2018 rose to 99¼ bid, par offered from 98 7/8 bid, 99 5/8 offered as the company launched with a morning lender call a new $984 million covenant-light term loan B-4 due 2021 that will be used to refinance/extend the existing B-3 debt and to repay some other debt, a trader said.

Talk on the proposed term loan B-4 is Libor plus 475 bps to 500 bps with a 1% Libor floor, an original issue discount/consent fee of 50 bps and 101 soft call protection for six months, a source added.

Commitments are due at 5 p.m. ET on Sept. 16.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc. and Citizens Bank are leading the new loan.

Blackboard is a Washington, D.C.-based education technology company.

BWIC announced

Also in trading, a $136.9 million Bid Wanted In Competition surfaced, with bids due at noon ET on Thursday, a trader remarked.

Some of the names in the portfolio include AdvancePierre Foods Inc., Citgo Group Ltd., Eddie Bauer Holdings Inc., Epicor Software Corp., Greenway Medical Technologies, iParadigms Holdings LLC, Manitowoc Foodservice Inc., Neiman Marcus Group LLC, SRS Distribution Inc., Triple Point Technology Inc. and XPO Logistics Inc.

There are about 67 issuers in the BWIC, the trader added.

IP&S guidance surfaces

Moving to the primary market, Intellectual Property & Science held its bank meeting on Wednesday morning, launching its $1.45 billion seven-year covenant-light first-lien term loan with price talk of Libor plus 425 bps to 450 bps with a 1% Libor floor and an original issue discount of 99.5, a market source said.

Included in the term loan is 101 soft call protection for six months.

The company’s $1,625,000,000 credit facility (B2/BB-) also provides for a $175 million revolver.

Commitments are due at 5 p.m. ET on Sept. 15.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, RBC Capital Markets LLC, Citigroup Global Markets Inc., Barclays, Goldman Sachs Bank USA and Guggenheim are leading the deal that will be used with bonds and about $1.6 billion in equity to fund the acquisition of the company by Onex Corp. and Baring Private Equity Asia from Thomson Reuters for $3.55 billion in cash.

Closing is expected in the next few months, subject to regulatory approval and customary conditions.

Intellectual Property & Science is a Philadelphia-based provider of comprehensive intellectual property and scientific information, decision support tools and services.

Styrolution sets talk

Ineos Styrolution came out with talk of Libor/Euribor plus 400 bps with a 1% floor, an original issue discount of 99 and 101 soft call protection for six months on its €1,102,000,000-equivalent U.S. dollar and euro five-year term loan B that launched with a lender call during the session, according to a market source.

As previously reported, the term loan’s U.S. dollar and euro split is still to be determined.

Commitments are due at 5 p.m. ET on Sept. 14, the source said.

Barclays and J.P. Morgan Securities LLC are leading the deal that will be used with balance sheet cash to refinance the company’s existing senior secured term loans, to repay its second-lien PIK toggle loan held by Ineos and to pay related fees and expenses.

Ineos Styrolution is a Frankfurt, Germany-based styrenics supplier with a focus on styrene monomer, polystyrene, ABS Standard and styrenic specialties.

Redbox terms emerge

Redbox released talk of Libor plus 725 bps to 750 bps with a 1% Libor floor, an original issue discount of 98.5 and 101 soft call protection for one year on its $400 million five-year first-lien term loan that launched with a bank meeting on Wednesday, according to a market source.

The company’s $440 million senior secured credit facility (Ba3/B+) also includes a $40 million 4.5-year revolver.

Commitments are due on Sept. 23, the source said.

Jefferies Finance LLC, Bank of America Merrill Lynch and Credit Suisse Securities (USA) LLC are leading the deal that is being done in connection with the buyout of Redbox’s parent company, Outerwall Inc., by Apollo Global Management LLC for $52.00 per share in cash, or about $1.6 billion, including net debt.

Closing on the buyout is expected during the third quarter, subject to satisfaction of a minimum tender condition, the receipt of regulatory approvals and other customary conditions.

Redbox is a provider of DVD, Blu-ray and video game rentals via automated retail kiosks.

Dunn price talk

Dunn Paper held its bank meeting, and with the event, talk on its first-and second-lien term loans was announced, a source said.

The $228 million first-lien term loan B (B2) is talked at Libor plus 475 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and the $57 million second-lien term loan (Caa1) is talked at Libor plus 875 bps with a 1% Libor floor, a discount of 98 and call protection of 102 in year one and 101 in year two on the second-lien term loan, the source continued.

The company’s $315 million credit facility also includes a $30 million revolver (B2).

Commitments are due in two weeks, the source added.

BNP Paribas Securities Corp. and Bank of Ireland are leading the deal that backs the recently completed buyout of the company by Arbor Investments from Wingate Partners.

Dunn Paper is a Port Huron, Mich.-based manufacturer of lightweight paper and tissue products.

Horizon Global launches

Horizon Global held a lender meeting in the morning, launching its $152 million add-on term loan B with original issue discount talk of 99 to 99.5, a market source remarked.

The add-on term loan B is priced at Libor plus 600 bps with a 1% Libor floor.

J.P. Morgan Securities LLC is leading the deal that will be used to help fund the acquisition of Westfalia Group from an investor consortium led by DPE Deutsche Private Equity for about €89 million cash and assumed net debt of €42 million that will be refinanced.

The transaction will also be funded with the issuance of €36 million in Horizon Global common stock to the sellers.

Closing is expected in the fourth quarter, subject to the satisfaction of customary conditions.

Horizon Global is a Troy, Mich.-based manufacturer of branded towing and trailering equipment. Westfalia is a Rheda-Wiedenbrück, Germany-based towing company.

Insight holds call

Insight Global surfaced in the morning with plans to hold a lender call at 3 p.m. ET to launch a $170 million tack-on first-lien term loan (B1) due October 2021, according to a market source.

Pricing on the loan is Libor plus 500 bps with a 1% Libor floor, in line with existing first-lien term loan pricing, and the debt is offered at original issue discount talk of 99 to 99.5, the source said.

Like the existing loan, the tack-on first-lien term loan has 101 soft call protection through April 22, 2017.

Commitments are due at 5 p.m. ET on Sept. 14, the source added.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Wells Fargo Securities LLC, RBC Capital Markets and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to repay an existing $170 million second-lien term loan.

Insight Global is an Atlanta-based temporary staffing firm for the information technology sector.

Avantor sets meeting

In more primary news, Avantor Performance Materials will hold a bank meeting at 9:30 a.m. ET in New York on Thursday to launch $595 million of bank debt comprised of a $25 million revolver, a $400 million incremental first-lien term loan due 2023 and a $170 million delayed-draw first-lien term loan due 2023, according to a market source.

Talk on the term loans, which will trade as a strip, is Libor plus 500 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection through June 21, 2017, the source said. The delayed-draw term loan has a ticking fee of the full spread starting on day 31.

The spread, floor and call protection on the new term loans matches the existing first-lien term loan.

Commitments are due at 5 p.m. ET on Sept. 20, the source added.

Avantor lead banks

Credit Suisse Securities (USA) LLC, Jefferies Finance LLC and KeyBanc Capital Markets are leading Avantor’s new bank debt.

Proceeds will be used to fund the merger of Center Valley, Pa.-based Avantor Performance Materials and Carpinteria, Calif.-based NuSil Technology LLC, both portfolio companies of New Mountain Capital LLC, and to fund a future acquisition.

Closing on the merger is expected late this month, subject to customary conditions.

The combined company, to be named Avantor, will provide performance materials and solutions for the life sciences and advanced technology markets.

Air Canada new deal

Air Canada scheduled a bank meeting for Thursday to launch a $720 million seven-year term loan B (Ba3/BB+) talked at Libor plus 300 bps to 325 bps with a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, according to a market source.

J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are leading the deal that will be used with cash on hand to help refinance the company’s existing senior secured credit facility and $400 million of 6.75% senior secured notes due 2019, C$300 million of 7.625% senior secured notes due 2019 and $300 million 8.75% senior second-lien notes due 2020.

The notes redemption is expected to occur on Oct. 6.

Air Canada is a Montreal-based airline company.

Golden Nugget joins calendar

Golden Nugget set a lender call for Thursday to launch a repricing of its $457.6 million of term loan debt that is talked at Libor plus 350 bps with a 1% Libor floor, a par issue price and 101 soft call protection for one year, a source remarked.

The repricing will take the debt down from Libor plus 450 bps with a 1% Libor floor.

The term loan debt is split between a $320.3 million term loan and a $137.3 million delayed-draw term loan.

Signatures are due on Sept. 14, the source added.

Jefferies Finance LLC is leading the deal for the hotel and casino operator.

Versum coming soon

Versum Materials plans to hold a bank meeting at 10:30 a.m. ET in New York on Friday to launch a new loan deal led by Citigroup Global Markets Inc., a market source said.

According to a 10-12B/A filed with the Securities and Exchange Commission on Wednesday, the company plans on getting a $775 million senior secured credit facility, consisting of a $200 million five-year revolver and a $575 million seven-year term loan B, to help fund a distribution in connection with its spin-off from Air Products.

The company will also distribute in-kind to Air Products up to $425 million of unsecured senior notes.

Versum Materials is a Tempe, Ariz.-based producer of critical materials, including high purity process materials, cleaners and etchants, slurries, organosilanes and organometallics and equipment for the semiconductor and display industries.

Consolidated Communications refi

Consolidated Communications set a bank meeting for 10 a.m. ET on Tuesday to launch a $1 billion credit facility that will be used to refinance existing debt, according to a market source.

The facility consists of a $100 million five-year revolver, and a $900 million seven-year term loan B that has 101 soft call protection for six months, the source said.

Commitments are due on Sept. 27.

Wells Fargo Securities LLC is leading the deal.

Secured leverage is 2.8 times, and total leverage is 4.3 times, the source added.

Consolidated Communications is a Mattoon, Ill.-based communications provider.

Neustar on deck

Neustar will host a lenders’ presentation at 11 a.m. ET on Thursday to launch an amendment and extension of its $699 million senior secured credit facility, a market source said.

The facility is comprised of a $200 million revolver, a $199 million term loan A and a $300 million incremental term loan A, the source added.

Morgan Stanley Senior Funding Inc. is leading the deal.

Neustar is a Sterling, Va.-based real-time provider of cloud-based information services.

SIG Combibloc readies call

SIG Combibloc scheduled a lender call for 9:30 a.m. ET on Thursday to launch a loan transaction that is being led by Barclays, according to a market source.

The company currently has a $1,225,000,000 term loan due March 13, 2022 and a €1.05 billion term loan due March 13, 2022, with pricing of Libor/Euribor plus 325 basis points with a 1% floor.

SIG Combibloc is a Switzerland-based supplier of carton packaging and filling machines for beverages and food.

Smart & Final extending

Smart & Final Stores will hold a lender call at 10:30 a.m. ET on Thursday to launch an extension of its $594.9 million senior secured term loan B that currently matures in November 2019, a market source said.

Morgan Stanley Senior Funding Inc. is leading the deal.

Smart & Final is a Commerce, Calif.-based warehouse-style, no membership fee, multi-format retailer serving households and smaller businesses.

Floor & Decor timing

Floor & Decor scheduled a bank meeting for 10:30 a.m. ET in New York on Sept. 14 to launch its senior secured credit facility, according to a market source.

Previously, the deal was expected to launch next week, but a specific date was unavailable.

UBS Investment Bank is leading the debt.

Floor & Decor is an Atlanta-based specialty retailer in the hard surface flooring market.

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