Charter term G dips with acquisition worries; DJO Finance, Horizon Pharma changes emerge

By Sara Rosenberg

New York, April 23 – Charter Communications Operating LLC’s term loan G softened in the secondary market on Thursday as a result of potential roadblocks to its transaction with Comcast Corp.

Over in the primary, DJO Finance LLC increased the size of its first-lien term loan and reduced pricing on the funded and delayed-draw debt, and Horizon Pharma plc lowered the size of its term loan and tightened the spread and the original issue discount.

Also, RadNet Inc., Flying Fortress Inc. and Metaldyne Performance Group Inc. released talk with launch, and Prestige Brands Inc., Sterigenics International Inc., Black Knight InfoServ LLC, Victory Capital Management and Delachaux joined the near-term calendar.

Charter slides lower

Charter Communications’ term loan G fell to 100¼ bid, 100 5/8 offered from 100 5/8 bid, 101 1/8 offered on chatter that the Federal Communications Commission is suggesting that a hearing be held regarding the merger of Comcast and Time Warner Cable, according to a trader.

Completion of the Comcast, Time Warner merger is a condition to Charter closing on its acquisition of customers and systems from Comcast.

The term loan G was syndicated in 2014 for the purpose of funding the purchase of the Comcast assets, which includes systems serving about 1.4 million of the prior Time Warner Cable video customers for an estimated value of $7.4 billion based on projected 2014 EBITDA.

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

DJO tweaks deal

Moving to the primary market, DJO Finance lifted its funded first-lien term loan (Ba3) due June 2020 to $1,035,000,000 from $1,005,000,000 and cut pricing on the funded tranche, as well as on a $20 million delayed-draw term loan (Ba3) due June 2020, to Libor plus 325 basis points from talk of Libor plus 350 bps to 375 bps, according to a market source.

As before, all of the term loan debt has a 1% Libor floor and an original issue discount of 99½, and the funded term loan has 101 soft call protection for six months.

The company’s now $1,205,000,000 credit facility also includes a $150 million asset-based revolver.

Recommitments were due at 4 p.m. ET on Thursday and allocations are targeted for Friday, the source continued.

Macquarie Capital (USA) Inc. and Natixis are leading the deal.

DJO refinancing

Proceeds from DJO’s credit facility and $1,015,000,000 of second-lien notes will be used to refinance existing debt. The bond offering was downsized from $1,045,000,000 with the term loan upsizing, the source added.

The company is also offering to exchange its existing $300 million of senior subordinated notes for $300 million of new third-lien senior notes. Prior to the April 20 bank meeting for the credit facility, it was heard by sources that a significant percentage of holders of the existing senior subordinated notes had already committed to participate in the exchange offer.

DJO is a Vista, Calif.-based provider of medical device solutions for musculoskeletal health, vascular health and pain management.

Horizon reworks loan

Horizon Pharma trimmed its six-year senior secured covenant-light term loan B to $400 million from $500 million and lifted its senior notes offering to $475 million from $300 million, a market source remarked.

Additionally, pricing on the loan was reduced to Libor plus 350 bps from Libor plus 400 bps, and the original issue discount was changed to 99½ from 99, while the 1% Libor floor and 101 soft call protection for six months were left intact, the source said.

Commitments are due on Friday.

Citigroup Global Markets Inc. and Jefferies Finance LLC are leading the loan.

Horizon buying Hyperion

Proceed from Hyperion’s loan and bonds will be used with cash on hand to fund the acquisition of Hyperion Therapeutics Inc., a Brisbane, Calif.-based commercial-stage biopharmaceutical company, for $46.00 per share in cash, or about $1.1 billion on a fully diluted basis, and to refinance existing debt.

The $75 million of additional proceeds being raised from the bond offering will be used for general corporate purposes, the source added.

Closing is expected this quarter, subject to customary conditions, including the tender of a majority of the outstanding Hyperion Therapeutics shares and expiration or termination of the Hart-Scott-Rodino waiting period.

Horizon Pharma is a Dublin-based specialty biopharmaceutical company.

RadNet floats offer price

RadNet held its call on Thursday, launching its fungible $75 million incremental first-lien term loan (B) due Oct. 10, 2018 with original issue discount talk in the 99¾ area, according to a market source.

The incremental loan is priced in line with the existing first-lien term loan at Libor plus 325 bps with a 1% Libor floor.

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

Barclays is leading the deal that will be used to repay revolver borrowings and for general corporate purposes.

RadNet is a Los Angeles-based owner and operator of fixed-site diagnostic imaging centers.

Flying Fortress launches

Flying Fortress released original issue discount talk of 99¾ on its proposed $750 million term loan maturity extension to 2020 from 2017, a market source said.

The extended loan is priced at Libor plus 275 bps with a 0.75% Libor floor, unchanged from current term loan pricing, and has 101 soft call protection for six months.

Commitments are due at noon ET on April 30, the source added.

Bank of America Merrill Lynch and RBC Capital Markets are leading the deal.

Flying Fortress is a subsidiary of AerCap, an Amsterdam-based aircraft leasing company.

Metaldyne discloses talk

Metaldyne came out with talk of Libor plus 275 bps with a 1% Libor floor and a par offer price on the repricing of its existing U.S. senior secured covenant-light term loan B due October 2021, and with talk of Euribor plus 300 bps with a 1% floor and an original issue discount of 99½ on its new €200 million to €250 million senior secured covenant-light term loan B due October 2021, according to a market source.

The repriced term loan B and euro term loan B, which launched with a call during the session, will have 101 soft call protection for six months.

The repricing will take the U.S. term loan down from Libor plus 325 bps with a 1% Libor floor, and the euro term loan will be used to repay a portion of the existing roughly $1.33 billion U.S. term loan B.

Commitments are due on May 5 and allocations are expected on May 6.

Goldman Sachs Bank USA is leading the deal.

Metaldyne is a Plymouth, Mich.-based manufacturer of highly engineered metal-based components for engine, transmission, and driveline applications in the automotive and light truck markets.

Prestige coming soon

In more primary news, Prestige Brands scheduled a lender call for 10:30 a.m. ET on Friday to launch a new $853 million term loan B-3 due Sept. 3, 2021 that is talked with a 0.75% Libor floor and 101 soft call protection for six months, according to a market source. The spread and offer price on the loan are still to be determined.

Barclays and Citigroup Global Markets Inc. are leading the deal that will be used to amend and reprice the company’s existing $217.5 million term loan B-1 due Jan. 31, 2019 and its $660 million term loan B-2 due Sept. 3, 2021.

Consents and commitments are due by noon ET on April 30 and closings is targeted for May 8, the source said.

Prestige Brands is a Tarrytown, N.Y.-based provider of over-the-counter healthcare and household consumer products.

Sterigenics details surface

Sterigenics plans to hold a bank meeting at 10 a.m. ET on Monday to launch the debt financing for its previously announced recapitalization with Warburg Pincus and GTCR, which is now known to include a $1.2 billion credit facility, according to a market source.

The facility consists of a $150 million five-year revolver and a $1.05 billion seven-year term loan B, the source said.

J.P. Morgan Securities LLC is leading the deal that is expected to close this quarter.

Warburg Pincus’ portion of the equity for the recapitalization will come from Warburg Pincus Private Equity XI LP. GTCR purchased Sterigenics in 2011.

Sterigenics is an Oak Brook, Ill.-based provider of contract sterilization, gamma technologies and medical isotopes.

Black Knight joins calendar

Black Knight InfoServ will hold a bank meeting at 2 p.m. ET on Tuesday to launch a $1.6 billion senior secured credit facility (Ba2/BB), sources said.

The facility consists of a $400 million five-year revolver, an $800 million five-year term loan A and a $400 million seven-year term loan B, sources added.

J.P. Morgan Securities LLC is leading the deal that will be used to repay a portion of a mirror loan and intercompany loans from Fidelity National Financial Inc., the indirect parent of Black Knight InfoServ.

Closing is subject to the completion of the initial public offering of the class A common stock of Black Knight Financial Services Inc. and market conditions.

Black Knight is a Jacksonville, Fla.-based provider of integrated technology, services, data and analytics.

Victory Capital on deck

Victory Capital set a lender call for 10 a.m. ET on Friday to launch a $50 million add-on term loan B, a market source said.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to fund a distribution to shareholders.

Victory Capital is a Brooklyn, Ohio-based asset manager.

Delachaux readies call

Delachaux scheduled a lender call for Friday to launch a repricing of its existing euro covenant-light term loan B-1 due October 2021 that is talked at Euribor plus 400 bps with no floor, a repricing of its existing U.S. dollar covenant-light term loan B-2 that is talked at Libor plus 350 bps to 375 bps with a 1% Libor floor and 101 soft call protection for six months, and a new €70 million incremental covenant-light term loan due October 2021 that is talked at Euribor plus 400 bps with no floor, according to a market source.

The repriced loans and the incremental loan are being offered at par.

Upon completion of the existing loans in 2014, the term loan B-1 was priced at Euribor plus 450 bps with no floor and a 25 bps step-down at 4.25 times leverage, and the term loan B-2 was priced at Libor plus 425 bps with a 1% Libor floor and a 25 bps step-down at 3.75 times leverage.

Delachaux amending

Along with the repricing and incremental term loan, Delachaux is asking lenders to amend its existing credit facility to increase the leverage threshold for restricted payments test to 4.75 times net senior secured leverage, from 4.25 times currently, and to allow payment from any cash versus from available amount currently, the source continued.

Deutsche Bank Securities Inc. is leading the deal.

Commitments are due on May 7.

The euro incremental term loan, which will be merged with the existing term loan B-1 on June 30, will be used to pay down a portion of the term loan B-2, bringing the tranche size to $250 million, the source added.

Delachaux is a French industrial company.

IPC allocates

IPC Corp. allocated its fungible $15 million add-on to its first-lien term loan due Aug. 6, 2021 and repriced $595 million first-lien term loan, according to a market source.

The total $610 million first-lien term loan is priced at Libor plus 450 bps with a 1% Libor floor. Existing lenders were offered the repricing at par, and the add-on term loan was sold at an original issue discount of 99½. All of the debt has 101 soft call protection for six months.

The transaction is taking pricing down on the existing first-lien term loan from Libor plus 550 bps with a 1% Libor floor.

Barclays is leading the deal.

Proceeds from the add-on loan will be used to repay revolver borrowings.

IPC is a Jersey City, N.J.-based provider of mission-critical network services and trading communication technology to the financial markets community.

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