Veresen Midstream frees to trade; Affinity dips on buyout; Inteva launches restructured loan

By Sara Rosenberg

New York, Aug. 23 – Veresen Midstream’s incremental term loan B made its way into the secondary market on Tuesday above its original issue discount, and Affinity Gaming’s term loan was a bit weaker following news that the company is being acquired by Z Capital Partners LLC.

Switching to the primary market, Inteva Products LLC relaunched its term loan with a smaller size, higher spread and Libor floor and sweetened call protection.

Veresen breaks

Veresen Midstream’s fungible $150 million incremental term loan B due March 31, 2022 freed up for trading on Wednesday, with levels seen at 98 7/8 bid, 99 3/8 offered, according to a trader.

Pricing on the incremental term loan B is Libor plus 425 basis points with a 1% Libor floor, and it was sold at an original issue discount of 98.79. Including the incremental loan, the term loan B will total $718 million, and all of that debt is getting 101 soft call protection for six months.

On Monday, the incremental term loan B was downsized from $300 million as the company’s expansion facility increase was upsized to C$405 million from C$250 million, and the discount was revised from talk in the range of 98.5 to 98.75.

The company is also getting a C$50 million revolver increase.

Veresen use of proceeds

Veresen plans to use its new bank financing to repay existing debt, to fund the construction of in-progress facilities/pipelines, for general partnership purposes and to pay related fees and expenses.

RBC Capital Markets, TD Securities (USA) LLC and HSBC Securities (USA) Inc. are leading the deal.

Veresen is a Calgary, Alta.-based jointly owned limited partnership between Veresen Inc. and Kohlberg Kravis Roberts & Co. LP that was formed in March 2015 to build, own and operate natural gas gathering and processing infrastructure in Western Canada.

Affinity softens

Affinity Gaming’s term loan dipped to 100¼ bid, 100¾ offered from 100½ bid, 100 7/8 offered after the company announced that it is being bought by Z Capital Partners, a trader remarked.

Z Capital, which currently own about 41% of Affinity’s outstanding shares, will acquire the remaining outstanding shares for $17.35 per share in cash. The transaction values Affinity at about $580 million.

To help fund the buyout, Affinity intends to get a $95 million eight-year second-lien term loan led by Citizens Bank that is expected at Libor plus 825 bps with a 1% Libor floor and call protection of 102 in year one and 101 in year two, according to an SC 13D/A filed with the Securities and Exchange Commission.

The company also plans to seek an amendment on or prior to Sept. 30 to its existing credit agreement, for which Credit Suisse is the administrative agent, to allow for the new second-lien term loan, add a $30 million first-lien term loan and permit restricted payments sufficient to complete the buyout.

Closing is expected in the first quarter of 2017, subject to shareholder approval, regulatory approvals and other customary conditions.

Affinity is a Las Vegas-based diversified casino gaming company.

BWICs announced

Also in trading, a $63 million Bid Wanted in Competition emerged, with bids due at noon ET on Wednesday, and a $55 million BWIC was announced, with bids due at 10 a.m. ET on Thursday, according to traders.

The $63 million BWIC includes debt from, among others, Aramark, Avis Budget Car, Commscope, Emdeon, Federal-Mogul, Landry’s, NXP Semiconductor, Revlon, Valeant and Wenner Media. There are about 26 issuers in the portfolio, traders said.

Some of the names in the $55 million BWIC are Affinion Group Inc. Avaya Inc., Dell Inc., Fontainebleau Resorts LLC, Ginn-LA CS Holding Co. LLC, Ineos Group Holdings plc, SunCal Master I LLC and TXU Energy Co. LLC, traders added. The portfolio includes about 28 issuers.

Inteva Products returns

Moving to the primary market, Inteva Products went out to lenders on Tuesday with a $180 million five-year term loan talked at Libor plus 850 bps with a 1.25% Libor floor, an original issue discount of 99 and hard call protection of 102 in year one and 101 in year two, a market source said.

The deal is a relaunch/restructuring of the company’s term loan that came to market in late July as a $250 million term loan talked at Libor plus 525 bps to 550 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

Commitments are due on Aug. 30.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Well Fargo Securities LLC and TD Securities (USA) LLC are leading the deal that will be used to refinance existing debt and to prefund capital expenditures for recent business wins.

The company eliminated plans to fund a distribution to shareholders as a result of the smaller term loan size, the source added.

Inteva is a Troy, Mich.-based designer, manufacturer and assembler of highly engineered closure systems, roof systems, interior systems and motors & electronics for leading automotive OEMs.

Headwaters closes

In other news, Headwaters Inc. closed on its $350 million covenant-light add-on term loan B (B1/BB-) due March 24, 2022, according to a news release.

The add-on term loan is priced at Libor plus 300 bps with a 1% Libor floor, in line with existing term loan pricing, and was sold at an original issue discount of 99.75, after tightening during syndication from 99.5. The debt includes 101 soft call protection for six months.

Deutsche Bank Securities Inc. and Bank of America Merrill Lynch led the deal that was used to fund the acquisition of Krestmark Industries LP for $240 million and to redeem 7.25% senior notes due 2019.

Headwaters is a South Jordan, Utah-based building products manufacturer. Krestmark is a Dallas-based manufacturer of vinyl windows.

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