RCS Capital softens again; White Birch modifies loan; Total Merchant floats spread guidance

By Sara Rosenberg

New York, Nov. 4 – RCS Capital Corp.’s first-lien term loan continued its slide in the secondary market on Tuesday on the back of news of a terminated acquisition agreement.

Moving to the primary market, White Birch Paper sweetened pricing, the original issue discount and call protection on its term loan and made some other investor-friendly changes, such as shortening the maturity and adding a financial covenant.

Also, Total Merchant Services Inc. disclosed spread talk ahead of its bank meeting, timing on Tibco Software Inc.’s credit facility surfaced, and Mueller Water Products Inc. and Multi Packaging Solutions Inc./Chesapeake MPS Merger Ltd. emerged with new loan plans.

RCS weakens some more

RCS Capital’s first-lien term loan fell in trading on Tuesday to 96 bid, 98 offered from 96½ bid, 98½ offered as investors continued to react to news that the company cancelled its plans to acquire Cole Capital Partners LLC and Cole Capital Advisors Inc. from American Realty Capital Properties Inc., according to a trader.

Prior to the news, the loan was quoted at 98¼ bid, 99½ offered.

RCS did not give a reason for the termination of the purchase agreement.

The acquisition of the Phoenix, Ariz.-based private capital business was valued at $700 million, consisting of $200 million of cash, $300 million of seller debt, and $200 million of class A common stock.

In response to RCS’ announcement, American Realty remarked in a press release that RCS had no basis for the termination and is therefore in breach of the agreement.

RCS is a New York-based full-service investment firm expressly focused on the individual retail investor.

White Birch reworks loan

Over in the primary, White Birch Paper raised pricing on its $185 million first-lien term loan (B2/B+) to Libor plus 800 basis points from revised talk of Libor plus 750 bps and initial talk of Libor plus 600 bps, moved the original issue discount to 95 from revised talk of 98 and initial talk of 99, and changed the call protection to non-callable for one year, then at 102 in year two and 101 in year three, from revised talk of 103 in year one, 102 in year two and 101 in year three and initial talk of 102 in year one and 101 in year two, according to a market source.

Additionally, the maturity was shortened to five years from six years, a maximum capital expenditures covenant was added to the previously covenant-light deal and the excess cash flow sweep was changed to 100% semi-annual from 100% annual, the source remarked.

As before, the term loan has a 1% Libor floor.

Commitments are due at 5 p.m. ET on Nov. 17, the source added.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance existing debt.

White Birch Paper is a Greenwich, Conn.-based manufacturer of newsprint, directory paper and paperboard.

Total Merchant spread talk

Total Merchant Services came out with price talk of Libor plus 500 bps on its $160 million seven-year first-lien term loan that is getting ready to launch with a 12:30 p.m. ET bank meeting on Wednesday, a market source said.

The other day, when the deal was announced, it was revealed that the term loan is also talked with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

The company’s $175 million credit facility (B2) includes a $15 million revolver too.

Commitments are due at 5 p.m. ET on Nov. 19.

Credit Suisse Securities (USA) LLC leading the deal that will be used to refinance existing debt and fund a dividend.

Total Merchant Services is a merchant acquirer for payment processing.

Tibco readies launch

Tibco Software set a bank meeting for 10:30 a.m. ET in New York on Thursday to launch its previously announced $1,775,000,000 secured credit facility, according to a market source.

The facility consists of a $125 million five-year revolver and a $1.65 billion six-year covenant-light first-lien term loan, the source said.

Along with the credit facility, the company has a commitment for a $300 million secured one-year asset-sale bridge loan, and for a $950 million unsecured bridge loan which may be replaced with senior notes.

J.P. Morgan Securities LLC and Jefferies Finance LLC are leading the debt that will be used with equity to fund the buyout of the Palo Alto, Calif.-based infrastructure and business intelligence software company by Vista Equity Partners for $24.00 per share in cash, or a total of about $4.3 billion, including the assumption of net debt.

Closing is expected in the fourth quarter, subject to approval by Tibco stockholders, regulatory approvals and other customary conditions.

Mueller joins calendar

Mueller Water Products emerged with plans to hold a bank meeting at 10 a.m. ET on Thursday to launch a $500 million seven-year covenant-light term loan B, according to a market source.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Wells Fargo Securities LLC, SunTrust Robinson Humphrey Inc., TD Securities (USA) LLC, Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC and MCS Capital are leading the deal that will be used to refinance existing debt.

Mueller Water is an Atlanta-based manufacturer and marketer of drinking water transmission, distribution and treatment facilities.

Multi Packaging on deck

Multi Packaging scheduled a call for 10 a.m. ET on Thursday to launch a $135 million non-fungible incremental term loan due Sept. 30, 2020 that is talked at Libor plus 325 bps with a 1% Libor floor and an original issue discount that is still to be determined, a market source said.

Barclays is leading the deal.

Proceeds will be used to fund the acquisition of the North American and Asian Print businesses from ASG Group

Multi Packaging/Chesapeake is a New York-based provider of value-added packaging services.

Kellermeyer closes

In other news, the buyout of Kellermeyer Bergensons Services LLC by GI Partners from Kohlberg & Co. LLC has been completed, a news release said.

For the transaction, Kellermeyer, an Oceanside, Calif., and Maumee, Ohio-based provider of integrated facilities management services to retail and grocery chains, got a new $243 million facility led by BNP Paribas Securities Corp. and CIT.

The facility consists of a $30 million revolver and a $158 million first-lien term loan, both priced at Libor plus 500 bps with a 1% Libor floor, and a $55 million second-lien term loan priced at Libor plus 850 bps with a 1% Libor floor. The first-lien term loan was sold at a discount of 99 and has 101 soft call protection for one year, and the second-lien term loan was issued at 98 and has call protection of 102 in year one and 101 in year two.

During syndication, the first-lien term loan was upsized from $148 million, pricing was raised from talk in the Libor plus 450 bps area, the discount was modified from 99½ and the call protection was extended from six months, and the second-lien term loan was downsized from $65 million, pricing was lifted from talk in the Libor plus 775 bps area and the discount widened from 99.

SourceHOV completes deal

SourceHOV LLC closed on its acquisition of BancTec Group, a news release said, and with the transaction, it got a new $1,105,000,000 credit facility that includes a $75 million revolver (B1/B), a $780 million five-year first-lien term loan B (B1/B) and a $250 million 5½-year second-lien term loan (Caa1/CCC+).

Pricing on the first-lien term loan is Libor plus 675 bps with a 1% Libor floor and it was sold at an original issue discount of 97. There is 101 soft call protection for one year.

The second-lien term loan is priced at Libor plus 1,050 bps with a 1% Libor floor and was issued at 96. This tranche is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

SourceHOV lead bank

Morgan Stanley Senior Funding Inc. led SourceHOV’s credit facility that was used to refinance existing debt, redeem certain existing SourceHOV equity holders and provide additional working capital in connection with the company’s acquisition of BancTec Group.

During syndication, pricing on the first-lien term loan firmed at the wide end of revised talk of Libor plus 650 bps to 675 bps and up from initial talk of Libor plus 525 bps, the discount widened from 99 and the maturity was shortened from six years.

Also, during syndication, pricing on the second-lien term loan finalized at the high end of revised talk of Libor plus 1,025 bps to 1,050 bps and up from initial talk of Libor plus 875 bps, the discount was modified from 98½, the maturity was shortened from 6½ years and the call protection was sweetened from 102 in year one and 101 in year two.

In addition, the incremental loan allowance, the excess cash flow sweep and the leveraged ratio calculation were adjusted.

SourceHOV and BancTec are Dallas-based providers of transaction processing services.

TOMS wraps

Bain Capital completed the purchase of a 50% interest in TOMS, according to a news release. The company’s founder and chief shoe giver, Blake Mycoskie, remained a 50% owner.

To help fund the transaction, TOMS got a $360 million credit facility that includes a $60 million ABL facility and a $300 million six-year term loan B (B2/B).

Pricing on the term loan B is Libor plus 550 bps with a 1% Libor floor and it was sold at an original issue discount of 90. There is 101 soft call protection for one year.

During syndication, pricing on the B loan was lifted from Libor plus 475 bps, the discount widened from 99 and the call protection was extended from six months.

Jefferies Finance LLC led the deal.

Pro forma leverage is about 4.2 times and net leverage is about 4 times.

TOMS is a shoe, eyewear and coffee company that matches every purchase with a charitable donation.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.