Laureate gains as amendment launches; Verisk tweaks deal; repricings, refinancings pile on

By Sara Rosenberg

New York, May 23 – Laureate Education Inc. saw its term loan B jump higher by a couple of points in the secondary market on Monday after the company approached lenders with an amendment and extension of the debt.

In more happenings, Verisk Health (VCVH Holding Corp.) shifted some funds between its first- and second-lien term loans and tightened spreads and original issue discounts on both tranches.

Also, Regal Cinemas Corp. and Zebra Technologies Corp. brought repricing proposals to market, and Albertsons Cos. LLC and Presidio Inc. launched refinancing transactions.

Furthermore, Yum! Brands Inc. and Zekelman Industries released price talk on their term loan B’s in connection with their bank meetings, and J.D. Power came out with timing and structure on its proposed credit facility.

In addition, Leidos Holdings Inc./Abacus Innovations Corp. set a bank meeting date for its term loan B, and Aspen Dental Management Inc. joined this week’s new issue calendar.

Laureate rises

Laureate Education’s term loan B strengthened in trading on Monday to 97 bid, 98 offered from 93 bid, 94 offered with the launch of an amendment and extension transaction, according to a trader.

The company held a lender call at 11 a.m. ET, launching an extended $1.81 billion senior secured term loan B due March 2021 at talk of Libor plus 750 basis points with no Libor floor, a par issue price and 101 hard call protection for one year, excluding scheduled principal amortization, a market source said.

The amendment and extension will push out the term loan B maturity from June 2018 and increase pricing from the current rate of Libor plus 375 bps with a 1.25% Libor floor.

Pricing on the extended loan will step-up by 50 bps each quarter, commencing on Sept. 30, 2016, up to a maximum rate of Libor plus 850 bps. The spread will step down to Libor plus 750 bps upon consummation of a qualified initial public offering or qualified equity issuance.

Also, the maturity on the extended loan will accelerate to 91 days before the maturity of the company’s 9.25% senior notes due September 2019 if more than $250 million of the notes are outstanding on such date.

Commitments are due on May 31.

Laureate lead banks

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are leading the amendment and extension proposal for Laureate, a Baltimore-based network of degree-granting higher education institutions.

As part of the amendment, the company is seeking permission for a direct voluntary prepayment to extending term loan lenders, to treat the term loan prepayment as a reinvestment under the net cash proceeds definition, to refinance 9.25% notes with second-lien debt and to extend its revolver. Also, the definition of consolidated interest expense would be revised to be net of interest income.

Prepayments to the extended term loan are $300 million and an additional $62.5 million if a qualified initial public offering of common stock that generates gross proceeds of at least $400 million or 10% of the equity value of the company or a qualified equity issuance of common or preferred stock of at least $400 million is not executed by Aug. 15, 2017.

The amendment and extension is conditioned on a majority vote of all lenders, a minimum term loan extension participation rate of 70%, closing and receipt of net proceeds from announced asset sales and the extension of the revolver on terms acceptable to the borrower, the source added.

Verisk changes emerge

Verisk Health upsized its seven-year first-lien term loan (B1) to $315 million from $300 million, cut pricing to Libor plus 500 bps from Libor plus 550 bps and moved the original issue discount to 99 from 98, while keeping the 1% Libor floor and 101 soft call protection for six months unchanged, according to a market source.

Additionally, the company’s eight-year second-lien term loan (Caa1) was downsized to $100 million from $115 million, pricing was lowered to Libor plus 925 bps from Libor plus 950 bps, the discount was modified to 97.5 from 97, and the hard call protection was revised to 102 in year one and 101 in year two from 103 in year one, 102 in year two and 101 in year three, the source said. This tranche still has a 1% Libor floor.

As before, the company’s $455 million senior secured credit facility also includes a $40 million five-year revolver (B1).

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

Verisk being acquired

Proceeds from Verisk Health’s credit facility will be used to help fund its buyout by Veritas Capital from Verisk Analytics Inc. for $820 million, split between $720 million of cash consideration, a $100 million long-term subordinated promissory note with interest paid in kind and other contingent consideration.

UBS Investment Bank is leading the new debt.

Closing on the buyout is expected by June 30, subject to regulatory approvals and other customary conditions.

Verisk Health is a Waltham, Mass.-based health care services company.

Regal holds call

Also on the primary front, Regal Cinemas emerged in the morning with plans to host a lender call at 1:30 p.m. ET on Monday to launch a repricing of its $959 million first-lien covenant-light term loan due April 2022 at talk of Libor plus 275 bps with a 0.75% Libor floor, a par issue price and 101 soft call protection for six months, according to a market source.

The repricing will take the term loan down from current pricing of Libor plus 300 bps with a 0.75% Libor floor.

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

Credit Suisse Securities (USA) LLC is leading the deal.

Regal Cinemas is a subsidiary of Regal Entertainment Group, a Knoxville, Tenn.-based motion picture exhibitor.

Zebra repricing

Zebra Technologies held a lender call at 11 a.m. ET on Monday to launch a repricing of its $1,955,000,000 senior secured covenant-light term loan B due Dec. 27, 2021 that is talked at Libor plus 325 bps to 350 bps with a 0.75% Libor floor, an original issue discount of 99.75 and a repricing premium of 101 for six months, according to a market source.

Commitments are due on Thursday, the source said.

Morgan Stanley Senior Funding, Inc., and J.P. Morgan Securities LLC are leading the deal.

Zebra is a Lincolnshire, Ill.-based provider of marking and printing technologies.

Albertsons refinancing

Albertsons hosted a lender call at 2 p.m. ET on Monday to launch a $1.5 billion seven-year covenant-light term loan B-6 that will be used to refinance existing term loan B-2 and term loan B-3 borrowings, a market source said.

The term loan B-6 is talked at Libor plus 375 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, the source continued.

Commitments are due at noon ET on June 1.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., Goldman Sachs & Co., Deutsche Bank Securities Inc. and Barclays are leading the deal.

Also, on Monday, the company announced plans to issue $1.25 billion of senior notes due 2024 to repay some amounts outstanding under its existing term loan facility and to redeem 7.75% senior secured notes due 2022.

Albertsons is a Boise, Idaho-based food and drug retailer.

Presidio seeks incremental

Presidio launched with a lender call at 1 p.m. ET a fungible $115 million incremental first-lien term loan due February 2022 talked at Libor plus 425 bps with a 1% Libor floor and an original issue discount of 99, a market source remarked.

The spread and floor on the incremental term loan matches existing first-lien term loan pricing.

Commitments are due at 5 p.m. ET on May 25, the source added.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance an existing secured bridge facility.

Presidio is a New York-based IT infrastructure solutions provider.

Yum! reveals guidance

Yum! Brands held its bank meeting on Monday afternoon, launching its $1.5 billion seven-year senior secured term loan B with talk of Libor plus 300 bps with a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for one year, according to a market source.

The company’s $3.3 billion credit facility (BBB-) also includes a $1 billion revolver and an $800 million term loan A.

Commitments are due at 5 p.m. ET on June 1, the source said.

Goldman Sachs & Co., J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are leading the deal, with Goldman left lead on the term loan B and JPMorgan left lead on the revolver and term loan A.

Proceeds will be used with $2.3 billion of senior unsecured notes to fund a return of capital to shareholders, repay revolver borrowings, pay associated transaction fees and expenses and support general corporate purposes.

Yum! Brands is a Louisville, Ky.-based quick-service restaurant operator.

Zekelman sets talk

Zekelman Industries came out with talk of Libor plus 500 bps to 525 bps with a 1% Libor floor, an original issue discount of 98.5 and 101 soft call protection for six months on its $800 million senior secured term loan B (BB-) due June 2021 that launched with a morning bank meeting, a market source said.

Commitments are due at 3 p.m. ET on June 3, the source added.

Goldman Sachs & Co. and J.P. Morgan Securities LLC are leading the loan that will be used to refinance existing debt.

Zekelman Industries, formerly known as JMC Steel, is a Chicago-based manufacturer of industrial steel pipe and tubular products.

J.D. Power readies launch

In other news, J.D. Power set a bank meeting for 2:30 p.m. ET in New York on Tuesday to launch its credit facility that is now known to be sized at $540 million credit facility, and include a $35 million revolver, a $385 million seven-year first-lien covenant-light term loan and a $120 million eight-year second-lien covenant-light term loan, according to a market source.

Both term loans have a 1% Libor floor, the source said, adding that spreads, original issue discounts and call premiums are not yet available.

Commitments are due at 5 p.m. ET on June 6.

As previously reported, Credit Suisse Securities (USA) LLC is leading the deal that will be used to help fund the $1.1 billion acquisition of the company by XIO Group from McGraw Hill Financial Inc.

Closing is expected in the third quarter, subject to regulatory approvals and customary conditions.

J.D. Power is a Costa Mesa, Calif.-based consumer data and analytics company.

Leidos term B coming soon

Leidos/Abacus will hold a bank meeting at 2 p.m. ET in New York on Wednesday to launch its previously announced $1,131,000,000 seven-year term loan B at Abacus, a market source said.

The company already launched with a bank meeting during the week of May 16 a $750 million five-year revolver at Leidos, a $690 million five-year term loan A at Leidos, a $400 million three-year term loan A at Abacus and a $310 million five-year term loan A at Abacus, all talked at Libor plus 225 bps.

Citigroup Global Markets Inc., MUFG, Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Goldman Sachs & Co., Scotiabank and Wells Fargo Securities LLC are leading the $3,281,000,000 senior secured credit facility (BBB-).

Leidos/Abacus merging

The credit facility is being done in connection with the merger of Leidos with Lockheed Martin Corp.’s Bethesda, Md.-based realigned information systems & global solutions business (Abacus).

Proceeds from the Leidos credit facility will be used with cash on hand to pay a special dividend to Leidos stockholders in an amount not to exceed about $1.03 billion and to repay existing debt, and the Abacus credit facility will be used to make a special cash payment of $1.8 billion to Lockheed Martin.

Upon completion, Lockheed Martin shareholders will receive about 50.5% of the combined company on a fully diluted basis, with pre-transaction Leidos shareholders owning the balance.

Closing is expected in the second half of this year, subject to approval by the shareholders of Leidos, as well as regulatory approvals and customary conditions.

Leidos is a Reston, Va.-based provider of technology and sector expertise to customers in national security, health and engineering.

Aspen Dental on deck

Aspen Dental Management scheduled a lender call for 1 p.m. ET on Tuesday to launch a $45 million add-on term loan B, a market source remarked.

RBC Capital Markets LLC is leading the deal.

Aspen Dental is an East Syracuse, N.Y.-based dental support organization.

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