Broadcom breaks; Avast Software, Penn Engineering, Vantage set changes; Milk moves deadline

By Sara Rosenberg

New York, Aug. 1 – Broadcom Ltd.’s new bank debt made its way into the secondary market on Monday morning, with the term loan B-3 quoted above its issue price.

Moving to the primary market, Avast Software upsized its U.S. dollar and euro term loan, set tranche sizes, reduced spreads and tightened the original issue discount, and Penn Engineering & Manufacturing Corp. revised the issue price on its tack-on term loan.

Also, Vantage Specialty Chemicals modified the original issue discount on its add-on first-lien term loan and sweetened the amendment fee offered to existing lenders, Milk Specialties Global moved up the commitment deadline on its credit facility, and inVentiv Health Inc. cancelled its planned bank meeting and announced an agreement for a new equity investment by Advent International.

Furthermore, The Bay Club, HCA Inc. and Grosvenor Capital Management Holdings LLLP released price talk with launch, California Resources Corp. approached lenders with a loan transaction, and Hilton Worldwide Finance LLC, Bowlmor AMF (AMF Bowling Center Inc.) and Aclara Technologies LLC emerged with new deal plans.

Broadcom frees up

Broadcom’s bank debt broke for trading on Monday, with the $6,595,000,000 term loan B-3 due Feb. 1, 2023 quoted at 100¼ bid, 100½ offered, according to a trader.

Pricing on the term loan B-3 is Libor plus 300 basis points with a step-down to Libor plus 275 bps when net total leverage is 1.5 times and no floor. The debt was issued at par and has 101 soft call protection for six months.

Late last week, the term loan B-3 was upsized from $4.5 billion, the spread finalized at the low end of the Libor plus 300 bps to 325 bps talk and the step-down was added.

The company is also getting a $2.5 billion add-on term loan A, the size of which firmed from talk at launch of at least $2 billion.

Bank of America Merrill Lynch is leading the deal that will be used to refinance a portion of the company’s existing term loan B-1.

Broadcom, formerly Avago Technologies Ltd., is a designer, developer and supplier of a range of semiconductor devices based in San Jose, Calif., and Singapore.

Micro Focus holds steady

Micro Focus International plc’s repriced $1,109,100,000 senior secured term loan B due November 2021 was quoted at 100 1/8 bid, 100½ offered, in line with where it freed up for trading on Friday, a trader remarked.

The term loan B is priced at Libor plus 375 bps with a 0.75% Libor floor and was issued at par. The debt includes 101 soft call protection for six months.

The repricing is taking the term loan B down from Libor plus 425 bps with a 1% Libor floor.

Closing is expected on Wednesday.

Bank of America Merrill Lynch is the lead bank on the deal.

Micro Focus is a software company with U.S. headquarters in Rockville, Md., and U.K. headquarters in Newbury, Berkshire.

Avast Software reworked

Switching to the primary market, Avast Software raised its six-year U.S. dollar and euro term loan to about $1.64 billion-equivalent from $1.6 billion-equivalent and set the tranche sizes at $1.2 billion and €400 million from the previous description of at least 50% of the total amount being in dollars, according to a market source.

Furthermore, pricing on the U.S. term loan was cut to Libor plus 400 bps with a step-down from Libor plus 450 bps, pricing on the euro term loan was reduced to Euribor plus 375 bps with a step-down from Euribor plus 450 bps, and the original issue discount on all of the debt was revised to 99.5 from 99, the source said.

The term loan debt still has a 1% floor and 101 soft call protection for six months.

The company’s credit facility also includes an $85 million revolver.

Commitments are due at noon ET on Tuesday.

Credit Suisse Securities (USA) LLC, Jefferies Finance LLC and UBS Investment Bank are leading the deal.

Avast buying AVG

Proceeds from Avast’s credit facility, cash on hand and equity will be used to fund the acquisition of AVG Technologies NV for $25 per share in cash, for a total consideration of about $1.3 billion, and to refinance existing debt at both companies.

The company will put the extra cash raised through the term loan upsizing on the balance sheet for liquidity, the source added.

Closing is expected sometime between Sept. 15 and Oct. 15, subject to regulatory approvals, certain shareholder approvals, the tender of a specified amount of AVG’s shares and other customary conditions. The transaction is not subject to financing.

Avast is a Prague-based maker of security software. AVG is a Netherlands-based provider of software services to secure devices, data and people.

Penn Engineering updated

Penn Engineering & Manufacturing tightened the original issue discount on its fungible $100 million U.S. dollar tack-on first-lien term loan due August 2021 to 99.75 from 99.5, a market source said.

As before, the tack-on term loan is priced at Libor plus 300 bps with a 1% Libor floor, in line with the existing $216 million U.S. dollar first-lien term loan due August 2021, includes a ticking fee of half the spread from days 31 to 60 and the full spread thereafter and has 101 soft call protection for six months, which the existing loan will get as well.

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

Credit Suisse Securities (USA) LLC is leading the deal that will be used to fund the acquisition of Heyco Products Inc.

Penn Engineering is a Danboro, Pa.-based manufacturer of highly engineered specialty fasteners. Heyco is a designer and manufacturer of molded wire protection products and stamped electrical components.

Vantage tweaks OID

Vantage Specialty Chemicals changed the original issue discount on its fungible $85 million add-on first-lien term loan (B2/B-) due February 2021 to 99.25 from 99, and left pricing at Libor plus 450 bps with a 1% Libor floor, a market source remarked.

The add-on first-lien term loan still has 101 soft call protection for six months.

Commitments for the add-on first-lien term loan are due by noon ET on Tuesday, the source said.

The company is also getting a $40 million second-lien term loan (Caa1/CCC) due February 2022.

RBC Capital Markets LLC is leading the deal that will be used to fund the acquisition of Mallet and Co. Inc., a Carnegie, Pa.-based provider of baking release agents, from ICV Partners.

Vantage ups consent fee

With the acquisition, Vantage is amending and extending the maturity of its existing $60 million revolver to August 2019 and $301.5 million first-lien term loan to February 2021.

The consent fee for the amendment was lifted to 50 bps from 25 bps, the source continued.

As before, pricing on the existing first-lien term loan is being increased from Libor plus 375 bps with a 1.25% Libor floor to match the add-on pricing.

Signatures for the amendment were due by 5 p.m. ET on Monday, the source added.

Vantage, a portfolio company of Jordan Co., is a Chicago-based provider of naturally derived specialty chemicals for personal care, industrial, consumer products and food industries.

Milk moves up deadline

Milk Specialties accelerated the commitment deadline on its $525 million credit facility (B2/B+) to 5 p.m. ET on Thursday from noon ET on Aug. 9, according to a market source.

The facility consists of a $50 million revolver and a $475 million seven-year covenant-light first-lien term loan talked at Libor plus 575 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

Credit Suisse Securities (USA) LLC, RBC Capital Markets, BMO Capital Markets, KeyBanc Capital Markets and Deutsche Bank Securities Inc. are leading the deal that will be used to help fund the buyout of the company by American Securities LLC from Kainos Capital.

Milk Specialties is an Eden Prairie, Minn.-based human and animal nutrition company.

inVentiv cancels meeting

inVentiv abandoned its plans to hold a bank meeting at 3 p.m. ET on Monday to launch a new credit facility led by Citigroup Global Markets Inc., a market source said.

Structure and use of proceeds on the proposed credit facility had not been disclosed, but in late June the company said in an S-1/A filed with the Securities and Exchange Commission that it would get a new term loan B-5 due in 2023 and would amend its ABL revolver to extend the maturity to 2021 and increase the commitments in connection with a proposed initial public offering of common stock.

The term loan B-5 and IPO proceeds were expected to be used to prepay all of the $575.3 million of existing term loans outstanding and redeem all of the company’s $625 million of 9% senior secured notes due 2018 and $579.8 million 10%/12% junior lien secured notes due 2018.

inVentiv IPO called off

On Monday morning, inVentiv said in a news release that inVentiv Group Holdings Inc., the indirect parent company of inVentiv Health, does not plan to pursue an initial public offering of its common stock at this time, because an agreement was reached with Advent International for a material equity investment.

Under the agreement, Advent is joining Thomas H. Lee Partners as an equal equity owner of the company. The investment agreement values inVentiv at $3.8 billion on a cash-free, debt-free basis subject to customary adjustments.

In connection with the equity investment, the company has received a commitment for financing from Bank of America Merrill Lynch, Credit Suisse, Goldman Sachs, Morgan Stanley and Barclays.

Closing is expected in the fourth quarter, subject to regulatory approval and other customary conditions.

inVentiv is a Burlington, Mass.-based provider of clinical, consulting and commercial services to the health care industry.

Bay Club sets talk

Also on the new deal front, Bay Club came out with talk of Libor plus 500 bps to 550 bps with a 1% Libor floor on its $350 million six-year first-lien term loan and $75 million one-year asset-sale bridge loan that launched with a bank meeting on Monday, a market source remarked.

Also, the first-lien term loan is talked with an original issue discount of 99 and 101 soft call protection for one year, and the asset-sale loan is offered at a discount of 99.5, the source continued.

The company’s $445 million credit facility includes a $20 million five-year revolver as well.

Commitments are due at the close of business on Aug. 12, the source added.

Jefferies Finance LLC is leading the deal that will be used to refinance existing debt.

Bay Club is a San Francisco-based active lifestyle and hospitality company with a network of 24 country clubs across 10 campuses.

HCA shops term B-7

HCA Inc. held a lender call in the afternoon to launch a $1 billion 7.5-year term loan B-7 (Ba1/BBB-/BB+) talked at Libor plus 275 bps with no Libor floor, an original issue discount of 99.75 and 101 soft call protection for six months, according to a market source.

Commitments are due at noon ET on Thursday, the source said.

Bank of America Merrill Lynch is leading the deal that will be used to refinance some term loan B-4 debt.

HCA is a Nashville, Tenn.-based health care services provider.

Grosvenor details surface

Grosvenor Capital Management held its lender call, launching its proposed $415 million term loan B maturity extension to August 2023 from January 2021 with talk of Libor plus 300 bps with a 1% Libor floor, a 25-bps upfront fee on any extended or new lender and 101 soft call protection for six months, a source remarked.

By comparison, current pricing on the term loan B is Libor plus 275 bps with a 1% Libor floor.

With the term loan B extension, the company is asking to extend its $50 million revolver to August 2021 from 2019.

Commitments/signature pages are due at 4 p.m. ET on Aug. 9, the source added.

Goldman Sachs Bank USA is leading the deal for the Chicago-based independent alternative asset management firm.

California Resources launches

California Resources held a lender call in the morning to launch a $700 million five-year first-lien second-out term loan that is guided in the mid-to-high 11’s type yield and is non-callable for three years, then with half the coupon in year four, according to a market source.

The debt is a secured financing being done in loan form but with total return characteristics consistent with bonds, the source explained.

Pricing is expected on Friday.

Goldman Sachs Bank USA is leading the deal that will pay down existing term loan and revolver debt.

The company is also seeking an amendment to its existing first-lien secured credit agreement to allow for tender offers for its 5% senior notes due 2020, 5½% senior notes due 2021, 6% senior notes due 2024 and 8% second-lien secured notes due 2022 that can be purchased with $525 million of cash, to reduce revolver commitments to $1.4 billion from $1.6 billion and to grant a lien on assets not currently pledged to secure the existing facilities.

California Resources is a Los Angeles-based oil and natural gas exploration and production company.

Hilton coming soon

Hilton scheduled a lender call for 1:30 p.m. ET on Tuesday to launch a $3,225,000,000 covenant-light term loan B-2 due October 2023, a market source said.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading the deal that will be used to amend and extend by three years a portion of the company’s existing $4,225,000,000 term loan B.

Hilton is a McLean, Va.-based hospitality company.

Bowlmor readies deal

Bowlmor set a bank meeting for 2 p.m. ET in New York on Tuesday to launch a $630 million credit facility, according to a market source.

The facility consists of a $30 million revolver, a $470 million seven-year first-lien 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 six months and a $130 million 7.5-year second-lien term loan talked at Libor plus 900 bps with a 1% Libor floor, a discount of 98.5 and call protection of 102 in year one and 101 in year two, the source said.

Commitments are due on Aug. 15.

Credit Suisse Securities (USA) LLC is leading the deal that will be used by the New York City-based operator of bowling centers to refinance existing first-lien debt and to repurchase capital stock.

Aclara on deck

Aclara Technologies emerged with plans to hold a bank meeting at 10:30 a.m. ET in New York on Wednesday to launch a $345 million first-lien term loan B, according to a market source.

Morgan Stanley Senior Funding, Inc. and Stephens Inc. are leading the deal that will be used to refinance existing debt and fund a sponsor dividend.

Aclara is a Hazelwood, Mo.-based supplier of smart infrastructure solutions to water, gas and electric utilities.

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