Mallinckrodt, Formula One, Sterigenics, Onsite, Ferro, CSM Bakery, Osum Production break

By Sara Rosenberg

New York, July 30 – Mallinckrodt International Finance SA firmed pricing on its term loan at the low end of talk and then freed up for trading on Wednesday, and Formula One Group (Delta 2 (Lux) Sarl), Sterigenics International LLC (STHI Holding Corp.), Onsite Rental Group, Ferro Corp., CSM Bakery Solutions LLC and Osum Production Corp. hit the secondary as well.

Moving to the primary, Houston Fuel Oil Terminal Co. set the spread on its term loan B at the low end of talk and tightened the original issue discount, CCM Merger Inc. (MotorCity Casino Hotel) lowered pricing on its term loan, widened the offer price and extended the call protection, and MD America Energy LLC revised the original issue discount on its second-lien term loan.

Also, Penn Engineering & Manufacturing Corp., Preferred Proppants (Preferred Sands LLC) and TransFirst Holdings Inc. released talk with launch, and Charter Communications Operating LLC, Cole-Parmer Instrument Co. (CPI Buyer LLC), Safe-Guard (SG Acquisition Inc.) and Constellation Brands Inc. joined this week’s calendar.

Mallinckrodt frees up

Mallinckrodt set the spread on its $700 million senior secured covenant-light term loan (Ba2/BB+) due March 19, 2021 at Libor plus 275 basis points, the tight end of the Libor plus 275 bps to 300 bps talk, and kept the 0.75% Libor floor, original issue discount of 99½ and 101 soft call protection for six months unchanged, according to market source.

With final pricing in place, the term loan made its way into the secondary market on Wednesday afternoon, with levels quoted at 99 5/8 bid, par offered, a trader said.

At the start of this week, the non-fungible term loan was upsized from $500 million as the company’s $250 million cash bridge facility was eliminated from the transaction.

Mallinckrodt lead banks

Barclays, Deutsche Bank Securities Inc., Citigroup Global Markets Inc. and Wells Fargo Securities LLC are leading Mallinckrodt’s term loan.

Proceeds from the term loan and $900 million of 5¾% senior notes will be used to help fund the acquisition of Questcor Pharmaceuticals Inc. for $30.00 per share in cash and 0.897 Mallinckrodt shares for each share of Questcor common stock, for a total consideration of about $86.10 per Questcor share. The transaction is valued at about $5.6 billion.

Closing is expected in the third quarter, subject to the approval of the shareholders of both companies and Hart-Scott-Rodino clearance.

Mallinckrodt is a Dublin-based pharmaceutical company. Questcor is an Anaheim Hills, Calif.-based biopharmaceutical company.

Formula One trades

Formula One’s debt began trading, with the $1 billion seven-year incremental first-lien covenant-light term loan (B) quoted at 99 5/8 bid, par offered and the $1 billion eight-year second-lien covenant-light term loan (CCC+) quoted at par ¼ bid, 101 offered, according to a trader.

Pricing on the first-lien term loan is Libor plus 375 bps with a 1% Libor floor and it was sold at an original issue discount of 99½. There is 101 soft call protection for six months.

The second-lien loan is priced at Libor plus 675 bps with a 1% Libor floor and was sold at a discount of 99. This debt has hard call protection of 102 in year one and 101 in year two.

During syndication, pricing on the first-lien loan firmed at the wide end of the Libor plus 350 bps to 375 bps talk and pricing on the second-lien loan was set at the tight end of the Libor plus 675 bps to 700 bps talk.

Formula One refinancing

Proceeds from Formula One’s new loans and cash on hand will be used to refinance private high-yield debt and fund a distribution to shareholders.

The company is also amending and extending $2,102,000,000 of existing first-lien covenant-light term loans so that the debt will have a seven-year maturity. Pricing on the extended debt, which is fungible with the incremental first-lien loan, matches pricing on the incremental first-lien term loan.

Existing lenders were offered a 50 bps fee for the extended first-lien term loans.

In addition, the company is amending and extending €40 million of existing first-lien covenant-light term loans so that this debt will also have a seven-year maturity.

Bank of America Merrill Lynch and RBS Securities Inc. are leading the deal.

Formula One is a sports media property, which operates and holds the commercial rights to the Formula One World Championships.

Sterigenics levels emerge

Another deal to break was Sterigenics, with its $490 million seven-year first-lien covenant-light term loan quoted at 99 5/8 bid, par offered, a source remarked.

The term loan is priced at Libor plus 350 bps with a 1% Libor floor and it was sold at an original issue discount of 99½. There is 101 soft call protection for six months.

During syndication, pricing on the term loan was cut from Libor plus 425 bps.

The company’s $565 million credit facility (B2/B) also includes a $75 million revolver.

Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, RBC Capital Markets LLC and UBS Securities LLC are leading the deal that will help fund the purchase of Nordion Inc. for $13 per share.

Closing is expected in the second half of this year, subject to Nordion shareholder approval, receipt of regulatory approvals and other customary conditions.

Sterigenics is a Deerfield, Ill.-based sterilization services company. Nordion is an Ottawa-based health science company.

Onsite hits secondary

Onsite Rental Group’s credit facility freed up too, with the $320 million seven-year first-lien covenant-light term loan seen at 98 bid, 99 offered, according to a market source.

Pricing on the term loan is Libor plus 450 bps with a 1% Libor floor and it was issued at 98. There is 101 soft call protection for one year.

Recently, the term loan was reduced from $365 million, the spread was lifted from talk of Libor plus 400 bps to 425 bps, the discount was revised from 99 and the call protection was extended from six months.

The company’s credit facility also includes a A$40 million cash flow revolver.

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

Onsite Rental is an Australian industrial rental equipment company.

Ferro starts trading

Ferro’s credit facility also broke, with the $300 million seven-year term loan B quoted at 99 ¾ bid, a trader remarked.

Pricing on the term loan B is Libor plus 325 bps with a 0.75% Libor floor and it was sold at an original issue discount of 99½. There is 101 soft call protection for one year.

During syndication, pricing on the term B finalized at the tight end of the Libor plus 325 bps to 350 bps talk, the Libor floor was trimmed from 1% and the call protection was extended from six months.

The company’s $500 million credit facility (Ba3/B+) also includes a $200 million five-year revolver.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance existing debt and for general corporate purposes.

Ferro is a Mayfield Heights, Ohio-based supplier of technology-based performance materials, including glass-based coatings, pigments and colors, and polishing materials.

CSM Bakery breaks

CSM Bakery’s bank debt began trading as well, with the $157 million first-lien covenant-light tack-on term loan due July 2020 quoted at 99½ bid, par offered and the $60 million second-lien covenant-light tack-on term loan due July 2021 quoted at 98 bid, 99 offered, according to a market source.

Pricing on the first-lien term loan is Libor plus 400 bps with a 1% Libor floor and it was sold at an original issue discount of 99. There is 101 soft call protection for six months.

The second-lien loan is priced at Libor plus 775 basis points with a 1% Libor floor and was issued at 98. This debt has call protection of 102 in year one and 101 in year two.

During syndication, the second-lien term loan was downsized from $156 million and the discoutn widened from 99.

CSM recapitalizing

Proceeds from CSM Bakery’s new loans, which are led by Credit Suisse Securities (USA) LLC and Morgan Stanley Senior Funding Inc., will be used for a dividend recapitalization.

With this transaction, pricing on the existing $693 million first-lien term loan is being increased from Libor plus 375 bps with a 1% Libor floor and pricing on the existing $150 million second-lien term loan is being increased from Libor plus 750 bps with a 1% Libor floor.

Also, an amendment is being done with this recapitalization for which lenders were offered a 15 bps consent fee.

CSM Bakery is a producer of bakery ingredients and products.

Osum tops OID

Osum Production’s credit facility emerged in the secondary, with the $210 million six-year senior secured first-lien term loan (B3/B+) quoted at 98¾ bid, 99¾ offered, a trader said.

Pricing on the term loan is Libor plus 550 bps with a 1% Libor floor and it was sold at an original issue discount of 98½. There is soft call protection of 102 in year one and 101 in year two.

During syndication, pricing on the term loan was increased from Libor plus 500 bps and the discount widened from 99.

Barclays and Goldman Sachs Bank USA are leading the loan that will be used with cash on hand as well as from existing shareholders to help fund the acquisition of Orion Oil Sands Project from Shell Canada for C$325 million.

Osum Production, an indirectly wholly owned subsidiary of Osum Oil Sands Corp., a Calgary, Alta.-based private oil sands company, has secured and and total leverage of 2.7 times.

Houston Fuel updates loan

Switching to the primary, Houston Fuel Oil Terminal set pricing on its $550 million seven-year covenant-light term loan B at Libor plus 325 bps, the tight end of the Libor plus 325 bps to 350 bps talk, and modified the original issue discount to 99½ from 99, according to a market source.

The term loan still has a 1% Libor floor and 101 soft call protection for one year.

The company’s $625 million senior secured credit facility (Ba2) also includes a $75 million five-year revolver.

Recommitments were due at 5 p.m. ET on Wednesday and allocations are targeted for Thursday.

Morgan Stanley Senior Funding Inc., Deutsche Bank Securities Inc. and Bank of America Merrill Lynch are leading the deal that will refinance Prudential notes, an existing revolver and term loan borrowings.

Houston Fuel (formerly Buffalo Gulf Coast Terminals LLC) is a Houston-based marine terminal for storage of residual fuel oil and crude oil.

CCM reworks loan

CCM Merger trimmed pricing on its $490 million seven-year senior secured term loan B (B+) to Libor plus 350 bps from Libor plus 375 bps, moved the original issue discount to 99¼ from 99½ and extended the 101 soft call protection to one year from six months, according to a market source, who said the 1% Libor floor was unchanged.

Bank of America Merrill Lynch and Wells Fargo Securities LLC are leading the deal that will be used to refinance existing senior credit facility debt.

CCM Merger is the operator of MotorCity Casino, a multi-story gaming, hotel, dining convention/conference and entertainment facility near downtown Detroit.

MD America tweaks OID

MD America Energy changed the original issue discount on its $525 million five-year second-lien term loan (Caa2/CCC+) to 95 from 98, and kept pricing at Libor plus 850 bps with a 1% Libor floor, a market source said.

As before, the loan is non-callable for one year, then at 103 in year two and 101 in year three.

Credit agreement comments are due on Thursday and allocations are expected as early as Friday, the source added.

Bank of America Merrill Lynch and Jefferies Finance LLC are leading the deal that will be used by the upstream oil and gas company to refinance existing debt.

Penn Engineering sets talk

Also in the primary, Penn Engineering came out with talk on its $220 million seven-year first-lien covenant-light term loan and $350 million seven-year euro equivalent first-lien covenant-light term loan as the debt launched with a bank meeting in London on Wednesday, according to a market source. A New York bank meeting already took place on Monday.

Both term loans are talked at Libor/Euribor plus 325 bps to 350 bps with a 1% floor, an original issue discount of 99½ and 101 soft call protection for six months, the source said.

The company’s $645 million credit facility (B1/BB) also includes a $75 million revolver.

Commitments are due on Aug. 13.

Credit Suisse Securities (USA) LLC and RBS Citizens are leading the deal that will be used to fund the acquisition of Profil and to refinance existing debt.

Penn Engineering is a Danboro, Pa.-based manufacturer of highly engineered specialty fasteners.

Preferred Proppants guidance

Preferred Proppants held a bank meeting during the session, at which time lenders were approached with a $350 million first-lien term loan that is talked at Libor plus 575 bps to 600 bps with a 1% Libor floor, an original issue discount of 99 and 101 hard call protection for 24 months, a market source said.

Commitments are due on Aug. 7, the source added.

Jefferies Finance LLC and KKR Capital Markets are leading the deal that will be used with equity to refinance the company’s entire capital structure.

Preferred Proppants is a Radnor, Pa.-based supplier of frac sand.

TransFirst launches

TransFirst held its call, launching its $100 million add-on first-lien term loan (Ba3) that will fund a dividend with talk of Libor plus 325 bps with a 1% Libor floor and an original issue discount of 99, according to a market source.

The company is also amending its existing $386 million first-lien term loan (Ba3) to increase pricing to Libor plus 325 bps with a 1% Libor floor from Libor plus 300 bps with a 1% Libor floor, and its existing $225 million second-lien term loan (Caa1) to lift pricing to Libor plus 700 bps with a 1% Libor floor from Libor plus 650 bps with a 1% Libor floor, the source said.

First-lien lenders are offered a 25 bps consent fee, and second-lien lenders are offered a 37.5 bps consent fee and 101 hard call protection for 18 months. The first-lien debt has 101 soft call protection through March 2015.

Leads, Bank of America Merrill Lynch, GE Capital Markets, Deutsche Bank Securities Inc. and SunTrust Robinson Humphrey Inc., are seeking commitments and consents by Aug. 7.

TransFirst is a Hauppauge, N.Y.-based provider of transaction processing services and payment enabling technologies.

Charter timing surfaces

Charter Communications scheduled a bank meeting for Thursday to launch $7.4 billion of institutional term loan G and term loan H debt, according to a market source.

The company also plans on getting a $1 billion incremental term loan A and a $500 million incremental revolver, the source said.

Goldman Sachs Bank USA, Bank of America Merrill Lynch, Credit Suisse Securiteis (USA) LLC and Deutsche Bank Securities Inc. are leading the deal that will be used to fund the acquisitions of customers and systems from Comcast Corp.

The acquisitions are conditioned on the completion of the merger of Comcast and Time Warner Cable, as well as receipt of Hart-Scott-Rodino, FCC and other required regulatory approvals, Charter shareholder approval, and various other matters.

Charter is a Stamford, Conn.-based broadband communications company and cable operator.

Cole-Parmer on deck

Cole-Parmer set a bank meeting for 10 a.m. ET in New York on Thursday to launch the debt financing for its $480 million buyout of the company by GTCR from Thermo Fisher Scientific Inc., according to a market source. Other funds for the transaction will come from equity.

With timing announced, it was revealed that the company is approaching lenders with a $367 million credit facility that consists of a $20 million revolver, a $240 million seven-year first-lien covenant-light term loan with 101 soft call protection for six months, and a $107 million eight-year second-lien covenant-light term loan with call protection of 102 in year one and 101 in year two, the source said.

Commitments are due on Aug. 13, the source added.

Credit Suisse Securities (USA) LLC and Goldman Sachs Bank USA are leading the deal.

Closing is subject to regulatory approval and other customary closing conditions.

Cole-Parmer is a Vernon Hills, Ill.-based manufacturer and distributor of specialty laboratory equipment, instruments and supplies.

Safe-Guard readies deal

Safe-Guard emerged with plans to hold a conference call at 11 a.m. ET on Thursday to launch a $225 million credit facility, according to a market source.

The facility consists of a $15 million revolver, and a $210 million seven-year first-lien covenant-light term loan talked at Libor plus 500 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source remarked.

Commitments are due on Aug. 14.

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

Safe-Guard is a specialty insurance company.

Constellation plans call

Constellation Brands set a call for Thursday for credit facility lenders, according to a market source.

Bank of America Merrill Lynch is leading the transaction.

Constellation Brands is a Victor, N.Y.-based wine company.

Aircell closes

In other news, Aircell Business Aviation Services LLC (Gogo) closed on its $75 million term loan B-2 due March 21, 2018, a news release said.

The loan is priced at Libor plus 650 bps with a 1% Libor floor and was sold at an original issue discount of 98. The debt is non-callable through Dec. 21, 2015 and then at 103 through Dec. 21, 2016.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used for general corporate purposes.

In addition, the company sought an amendment to its existing $238 million term loan B to provide for the new term loan B-2 that was offered pro-rata to existing lenders, extend the maturity to March 21, 2018 and extend the non-call period to Dec. 21, 2015 with a 103 premium for one year thereafter.

Aircell is a Broomfield, Colo.-based provider of in-flight connectivity equipment and services to the business aviation market.

© 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.