Banged-up cash loans firm slightly; Schaeffler sets dual-currency deal; funds see $946 million outflows

By Paul A. Harris

Portland, Ore., Oct. 16 – Cash loans firmed a touch on Thursday but were still dramatically lower relative to prices seen earlier in the week, a bank loan trader said.

In the primary market, Schaeffler priced $1.3 billion and €750 million term loan B tranches with 350 basis points spreads to Libor and Euribor, respectively.

Pilot Travel Centers LLC term loan B was 99½ offered on Thursday, whereas it was par ½ offered on Tuesday, the trader said.

The trader attributed downward price moves in the leveraged loan market to widening credit spreads in the leverage markets in general.

Meanwhile, the LCDX 22 index of bank loan credit default swaps ended the session ¼ of a point higher at 102 5/8 bid ,103 1/8 offered, according to a hedge fund manager.

And dedicated bank loan funds saw $946 million of outflows during the week to Wednesday's close, according a market source, who was citing information reported by Lipper-AMG.

The most recent outflow follows the previous week's $825 million outflow.

The flows largely represent retail cash in the bank loan market and are believed to represent about 15% of the total cash in the market, according to an institutional bank loan investor.

Pabst sets pricing

Pabst Brewing Co. (Blue Ribbon LLC) set pricing on $525 million of terms loans, according to a market source.

A $395 million seven-year first-lien term loan is talked at Libor plus 450 to 475 basis points with a 1% Libor floor at an original issue discount of 99. The tranche has 12 months of soft call protection at 101.

A $130 million eight-year second-lien term loan is talked at Libor plus 825 to 850 bps with a 1% Libor floor, also at an OID of 99. The second-lien tranche has hard calls of 102 and 101.

Commitments are due on Oct. 30.

UBS AG is the lead bank on the deal. Barclays, BMO and Rabobank are joint bookrunners.

The $600 million facility also includes a $75 million revolver, the source said.

Proceeds will be used to help fund the acquisition of the company by Oasis Beverages from Evan, Daren and Dean Metropoulos.

As part of the transaction, TSG Consumer Partners, an equity investor in growth-oriented consumer brands, will acquire a minority stake in Pabst.

Pabst is a brewing company that is currently and will remain based in Los Angeles. Oasis is a Russian beer and soft drinks company.

Schaeffler prices

Schaeffler (INA Beteiligungsgesellschaft GmbH) loan spread came at the wide end of the 325 to 350 bps spread talk.

The dollar-denominated tranche priced at 99, at the cheap end of the 99 to 99.5 price talk.

The euro-denominated tranche priced at 99.5.

All of the term loan B debt (Ba2) due May 15, 2020 still has a 0.75% floor and 101 soft call protection for six months.

Initially, the loan was launched as a €1.8 billion-equivalent term loan B with the breakdown of the euro and dollar tranches to be determined.

Covenants include leverage and interest coverage ratios.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and HSBC Securities are the global coordinators on the deal, with Citigroup the left lead on the U.S. debt and Deutsche the left lead on the euro debt. Other bookrunners include Commerzbank, J.P. Morgan Securities LLC and UniCredit.

Proceeds will be used to refinance existing term loans.

Schaeffler is a Herzogenaurach, Germany-based manufacturer of bearings for autos and industrial OEMs.

BBB Industries ups pricing

BBB Industries increased pricing and resized the tranches of its $395 million two-part term loan offer, shifting $20 million to the first-lien tranche from the second-lien tranche, according to a market source.

Talk on an upsized $295 million seven-year first-lien term loan (B1/B) widened to Libor plus 500 basis points, from earlier talk of 400 to 425 bps. The tranche was upsized from $275 million. The 99 original issue discount and 1% Libor floor remain unchanged. The 101 soft call protection was increased to one year from six-months.

A downsized $100 million eight-year second-lien term loan (Caa1/CCC+) saw spread talk widen to 875 bps from earlier talk of 750 bps to 775 bps. The tranche was downsized from $120 million.

The deal, which is talked at 94, has a 1% Libor floor. Hard call protection the first hard call premium increased to 103 from 102, the second premium increased to 102 from 101, and the third increased to 101 from par.

J.P. Morgan Securities LLC is the lead bank on the deal.

The $465 million credit facility also has a $70 million five-year revolver.

Proceeds will be used to help fund the buyout of the company by Pamplona Capital Management LLP.

Closing is expected in the fourth quarter, subject to customary conditions, including expiration of the applicable waiting period under the Hart-Scott-Rodino Act.

BBB is a Mobile, Ala.-based remanufacturer of automotive products for the North American aftermarket.

Mangum hikes spread talk

Magnum Hunter Resources Corp. revised price talk for its $340 million five-year second-lien term loan (B1/B), according to a market source.

New talk hikes the Libor spread to 750 basis points from 500 bps and deepens discount talk to a range of 96 to 97 from earlier talk of 98.5.

The Libor floor remains unchanged at 1%.

The loan remains callable at par for 18 months, following which the first call premium is 101, decreased from 102, and the second call premium is 102, increased from 101.

Commitments under the revised terms were due at 5 p.m. ET on Thursday.

Credit Suisse Securities (USA) LLC and BMO Capital Markets are the lead banks on the deal.

Proceeds will be used to refinance existing debt and for general corporate purposes.

Along with the term loan, the company is planning a $50 million four-year senior secured first-lien reserve-based revolving credit facility.

Magnum is a Houston-based oil and gas exploration and development company.

Pro Mach oversubscribed

Pro Mach Inc.'s $405 million seven-year covenant-light first-lien term loan is oversubscribed, according to a market source, who added that commitments were due Thursday.

The deal is expected to allocate on Friday. It comes with price talk of Libor plus 425 basis points to 450 bps with a 1% Libor floor and an original issue discount of 99, according to a market source.

The term loan has 101 soft call protection for six months, the source said.

The company’s $465 million credit facility (B2) also includes a $60 million five-year revolver.

Goldman Sachs Bank USA and GE Capital Markets are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by AEA Investors LP from the Jordan Co.

Access prices first-lien loan

Access CIG LLC priced a $342 million seven-year first-lien covenant-light term loan (B1/B) at Libor plus 500 basis points with a 1% Libor floor at 99, according to a market source.

The spread came 75 bps wide of the 425 bps spread talk. The reoffer price came on top of price talk. The 101 soft call protection was increased to 12 months form six months.

Deutsche Bank Securities Inc. was the lead left bookrunner. Goldman Sachs Bank USA and Bank of America Merrill Lynch were lead banks.

Proceeds will be used to help fund the buyout of the company by Berkshire Partners.

Access CIB is a Pleasanton, Calif.-based provider of records and information management services.

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