WireCo rises with planned refinancing; Bombardier breaks; MTS revised; NAPA comes to market

By Sara Rosenberg

New York, June 27 – WireCo WorldGroup’s term loan headed higher in the secondary market on Monday after the company announced an investment by Onex Corp. and an expected refinancing of its capital structure, and Bombardier Recreational Products Inc.’s term loan B freed up for trading.

Moving to the primary market, MTS Systems Corp. firmed the spread on its term loan B at the wide end of talk and extended the call protection, and NAPA Management Services Corp. (NMSC Holdings Inc.) approached lenders with an add-on term loan B.

WireCo trades up

WireCo’s term loan strengthened in trading on Monday in reaction to news that the company intends to refinance its capital structure and extend its debt maturities, according to a market source.

Post-news, the term loan was quoted at 99 bid, par offered, up from 98¼ bid, 99¼ offered last week, the source said.

The refinancing will be done in connection with the acquisition by Onex of a majority interest in the company. Funds managed by Paine & Partners LLC, which acquired WireCo in 2007, will maintain a significant minority stake.

In connection with the transaction, the company has received a commitment for financing from Goldman Sachs & Co.

Upon closing, the company expects its debt to be reduced to about $600 million from around $840 million as of March 31, and annual interest expense to be reduced by over $20 million.

Closing is expected later this year, subject to regulatory approval and customary conditions.

WireCo is a Prairie Village, Kan.-based manufacturer of wire rope, synthetic rope, electromechanical cable and highly engineered cable structures.

Bombardier hits secondary

Also in the secondary market, Bombardier Recreational Products’ $700 million amended and restated term loan B (Ba3/BB) due June 30, 2023 began trading, with levels quoted at 99 bid, 99½ offered, a trader said.

Pricing on the term loan B is Libor plus 300 basis points with a 0.75% Libor floor, and it was sold at an original issue discount of 99, after firming at the wide end of the 99 to 99.25 talk. The debt includes 101 soft call protection for six months.

In addition to the term loan, the company is getting a C$425 million amended and restated revolver (Baa3/BBB-) due 2021.

RBC Capital Markets, BMO Capital Markets, Citigroup Global Markets Inc. and TD Securities are leading the deal that will be used with cash on hand to replace an existing C$350 million revolver due 2018 and a $792 million term loan B due 2019.

Pro forma for the transaction, the borrower will have total net leverage of 1.9 times.

Bombardier Recreational is a Valcourt, Quebec-based designer, manufacturer, distributor and marketer of motorized recreational vehicles and powersports engines.

MTS tweaks deal

Over in the primary market, MTS Systems finalized pricing on its $460 million seven-year covenant-light term loan B at Libor plus 425 bps, the high end of the Libor plus 400 bps to 425 bps talk, extended the 101 soft call protection to one year from six months, and modified the incremental allowance to $75 million plus amounts up to 3.25 times senior secured leverage from $125 million plus amounts up to 3.75 times senior secured leverage, according to a market source.

As before, the term loan B has a 0.75% Libor floor and an original issue discount of 99.

The company’s $560 million credit facility (B1/BB-) also includes a $100 million five-year revolver.

Recommitments are due at noon ET on Tuesday, the source added.

J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading the deal that will be used with proceeds from a common stock offering and a tangible equity units offering to fund the $580 million acquisition of PCB Group Inc. and to repay existing revolver borrowings.

Closing is expected in MTS’ fiscal fourth quarter that ends Oct. 1, subject to regulatory approvals and other customary conditions.

MTS is an Eden Prairie, Minn.-based supplier of high-performance test systems and position sensors. PCB is a Depew, N.Y.-based designer, manufacturer and distributor of sensor technologies.

NAPA holds call

NAPA Management Services emerged in the morning with plans to hold a lender call at 3 p.m. ET to launch a $13 million add-on covenant-light term loan B due April 19, 2023, a market source said.

Talk on the add-on term loan is Libor plus 500 bps with a 1% Libor floor, an original issue discount of 99 to 99.5 and 101 soft call protection through April 2017, the source continued.

The spread and floor on the add-on term loan matches the existing term loan.

Commitments are due at noon ET on Tuesday, the source added.

Deutsche Bank Securities Inc. is leading the deal that will be used with a roughly $9 million second-lien term loan and $4 million in new equity from ownership to fund the tuck-in acquisition of Northern New Jersey Anesthesia Associates.

NAPA is a Melville, N.Y.-based independent, outsourced anesthesia and perioperative management services company.

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