Compuware, RentPath, Royalty Pharma, Sage Products, Distribution International break

By Sara Rosenberg

New York, Dec. 11 – Compuware Corp.’s credit facility emerged in the secondary market during Thursday’s session, as did deals from RentPath Inc., Royalty Pharma, Sage Products Holdings III LLC and Distribution International Inc.

Moving to the primary market, Accuvant widened price talk and the original issue discount on its first-lien term loan while also extending the call protection, and Douglas Dynamics Inc. reduced the spread on its term loan B.

In addition, Siemens Audiology Systems (Auris Luxembourg III Sarl) set pricing on its term loan B at the tight end of talk and revised the offer price on the euro piece, and Cengage Learning Acquisitions Inc. added an amendment fee to its transaction.

Compuware starts trading

Compuware’s credit facility broke for trading on Thursday with the $340 million five-year first-lien covenant-light term loan B-1 quoted at 98¼ bid, 98¾ offered, the $950 million seven-year first-lien covenant-light term loan B-2 quoted at 95¼ bid, 95¾ offered, the $145 million one-year asset sale covenant-light bridge loan quoted at 99½ bid, and the $460 million eight-year second-lien covenant-light term loan quoted at 92¼ bid, 92¾ offered, according to a trader.

Pricing on the term loan B-1, term loan B-2 and asset sale loan is Libor plus 525 basis points with a 1% Libor floor, and pricing on the second-lien term loan is Libor plus 825 bps with a 1% Libor floor. The term loan B-1 was issued at a discount of 98, the B-2 loan was issued at 95, the asset sale loan was issued at 99½ and the second-lien term loan was issued at 92.

Included in the B-1 and B-2 loans is 101 soft call protection for one year, and the second-lien loan is non-callable for one year, then at 102 in year two and 101 in year three.

Compuware getting revolver

Compuware’s $1,995,000,000 senior secured credit facility also provides for a $100 million revolver that is priced at Libor plus 500 bps.

During syndication, pricing on the revolver was increased from Libor plus 450 bps, the term loan B-1 was upsized from $300 million, pricing was raised from Libor plus 450 bps and the discount was revised from 99, and pricing on the B-2 loan was increased from talk of Libor plus 475 bps to 500 bps and the discount widened from 98½.

Also in syndication, the asset sale loan was upsized from $105 million and the spread was flexed from Libor plus 450 bps, and the second-lien term loan was trimmed from $550 million, pricing was lifted from Libor plus 800 bps, the discount was modified from 98, and the call protection was sweetened from 103 in year one, 102, in year two and 101 in year three.

About $50 million of the revolver will be drawn to compensate for the $10 million total reduction in the amount of term loan debt being obtained and larger original issue discounts.

Compuware being acquired

Proceeds from Compuware’s credit facility an equity will be used to fund its buyout by Thoma Bravo LLC for about $10.92 per share in a transaction valued at around $2.5 billion.

Jefferies Finance LLC, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are leading the debt.

Net total leverage is about 5.5 times, based on $308 million of EBITDA.

Closing is expected by early 2015, subject to regulatory approvals, the completion of a disposition of Covisint and other customary conditions.

Compuware is a Detroit-based technology performance company.

RentPath hits secondary

RentPath’s credit facility freed up as well, with the $505 million seven-year first-lien term loan seen at 98¼ bid 98¾ offered and the $170 million eight-year second-lien term loan seen at 91 bid, 92 offered, a trader remarked.

Pricing on the first-lien term loan is Libor plus 525 bps with a 1% Libor floor and it was sold at an original issue discount of 98. There is 101 soft call protection for one year.

The second-lien term loan is priced at Libor plus 900 bps with a 1% Libor floor and was issued at 91. This debt is non-callable for one year, then at 103 in year two and 101.5 in year three.

During syndication, the first-lien term loan was upsized from $475 million, pricing was raised from Libor plus 475 bps, the discount as revised from 99 and the call protection was extended from six months, and the second-lien term loan was downsized from $200 million, pricing was flexed from Libor plus 850 bps, the discount widened from modified talk of 96 and initial talk of 98, and the call protection was changed from 102 in year one and 101 in year two.

Also, the excess cash flow sweep on the first-lien term loan was increased to 75% with step-downs, the 50 bps MFN provision was set for life, and accordion feature was adjusted.

RentPath stake to be bought

Proceeds from RentPath’s credit facility will be used to help fund Providence Equity Partners’ purchase of a stake in the company from TPG and to refinance existing debt. At closings, Providence and TPG will own equal shares of the company, with management continuing to also have a stake.

RBC Capital Markets Inc., UBS AG, Nomura and Macquarie Capital (USA) Inc. are leading RentPath’s $725 million credit facility, which also includes a $50 million five-year revolver.

First-lien leverage is 4.4 times based on 2014 estimated EBITDA.

Closing is expected around mid-December.

RentPath is a Norcross, Ga.-based vertical search company for apartment and home renters.

Royalty Pharma frees up

Royalty Pharma’s $700 million term loan B-4 began trading too, with levels seen at 99 5/8 bid, par 1/8 offered, according to a trader.

Pricing on the B-4 loan is Libor plus 275 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.

Recently, the term loan B-4 size was reduced from $1.5 billion and pricing was cut from talk of Libor plus 300 bps to 325 bps.

The company is also getting a $2 billion term loan A that was upsized from $1 billion when the B-4 loan was downsized.

Bank of America Merrill Lynch, Goldman Sachs Bank USA and J.P. Morgan Securities LLC are leading the deal that will be used to repay short-term debt that was used to fund the $3.3 billion acquisition of royalties on Vertex Pharmaceuticals’ cystic fibrosis treatments owned by Cystic Fibrosis Foundation Therapeutics.

Royalty Pharma is a New York-based acquirer of royalty interests in marketed and late-stage biopharmaceutical products.

Sage Products breaks

Sage Products’ bank debt also made its way into the secondary market, with the fungible $315 million incremental first-lien covenant-light term loan (B) due December 2019 quoted at 99 5/8 bid, par 1/8 offered and the fungible $65 million incremental second-lien covenant-light term loan (CCC+) due June 2020 quoted at 99¾ bid, a trader said.

Pricing on the incremental first-lien term loan is Libor plus 400 bps with a step-down to Libor plus 375 bps when first-lien leverage is 3.25 times and a 1% Libor floor. The debt was sold at an original issue discount of 99½ and has 101 soft call protection for six months.

The second-lien term loan is priced at Libor plus 800 bps with a 1.25% Libor floor and was issued at a discount of 99½. This tranche has 101 hard call protection until Dec. 13, 2015.

During syndication, pricing on the first-lien loan was lowered from Libor plus 425 bps and the step-down was added, and the discount on both the first- and second-lien term loan was tightened from 99.

Sage funding dividend

Proceeds from Sage Products’ $380 million in incremental term loans will be used to pay a shareholder distribution and pay related fees and expenses.

In connection with the incremental loan, the company is repricing its existing $274.3 million first-lien term loan to match the incremental pricing from Libor plus 325 bps with a 1% Libor floor. The spread and floor on the incremental second-lien term loan already match current pricing on the existing $200 million second-lien term loan.

Also, the company sought an amendment to its existing credit facility to allow for the incremental debt and the one-time restricted payment, and first- and second-lien lenders were offered a 25 bps amendment fee.

Barclays and Deutsche Bank Securities Inc. are leading the deal.

Net first-lien leverage is 4.2 times and net total leverage is 6.1 times.

Sage Products is a Cary, Ill.-based developer of products primarily for hospital intensive care units, which help prevent hospital-acquired conditions.

Distribution tops OID

Another deal to break was Distribution International’s $215.5 million seven-year covenant-light term loan B (B3/B), with levels quoted at 99¼ bid, 99¾ offered, according to a trader.

The loan is priced at Libor plus 500 bps with a 1% Libor floor and was sold at an original issue discount of 99. This debt has 101 soft call protection for six months.

Bank of America Merrill Lynch, RBC Capital Markets LLC and BMO Capital Markets Corp. are leading the deal that will be used to help fund the buyout of the company by Advent International Inc. from Audax Private Equity.

Distribution International is a Houston-based distributor of insulation, related specialty fabricated products, and safety supplies.

Accuvant tweaks deal

Switching to the primary, Accuvant increased price talk on its $300 million seven-year first-lien covenant-light term loan (B1/B) to Libor plus 500 bps to 525 bps from Libor plus 450 bps to 475 bps, moved the original issue discount to 98½ from 99 and pushed out the 101 soft call protection to one year from six months, a market source said.

As before, the first-lien term loan has a 1% Libor floor.

Talk on the company’s $125 million eight-year second-lien covenant-light term loan (Caa1/CCC+) was unchanged at Libor plus 875 bps to 900 bps with a 1% Libor floor, a discount of 99 and hard call protection of 102 in year one and 101 in year two

Goldman Sachs Bank USA and Societe Generale are leading the $425 million of term loans for which commitments are due on Friday.

Accuvant funding merger

Proceeds from Accuvant’s term loans will be used to help finance its merger with FishNet Security, which is expected to close in the first quarter of 2015, subject to regulatory approvals.

Blackstone private equity funds will maintain majority ownership in the combined company, and current investors of both organizations, including existing management, the private equity firm Sverica International and FishNet Security’s corporate owner, Investcorp, are maintaining minority equity interests.

Denver-based Accuvant and Overland Park, Kan.-based are providers of information security services.

Douglas Dynamics cuts spread

Douglas Dynamics trimmed pricing on its $190 million seven-year term loan B (B1/BB-) to Libor plus 425 bps from talk of Libor plus 450 bps to 475 bps, and left the 1% Libor floor, original issue discount of 99 and 101 soft call protection for one year unchanged, according to a market source.

The company’s $290 million credit facility also provides for a $100 million five-year revolver.

Commitments were due on Thursday, the source added.

J.P. Morgan Securities LLC is leading the deal that will be used with cash on hand fund the acquisition of Henderson for $95 million, subject to working capital, cash and other adjustments, to refinance existing debt and for general corporate purposes.

Closing is expected by year-end, subject to customary regulatory approvals and conditions.

Douglas Dynamics is a Milwaukee-based manufacturer of vehicle attachments and equipment. Henderson is a Manchester, Iowa-based manufacturer of customized, turnkey snow and ice control products ions for heavy-duty trucks.

Siemens updates emerge

Siemens Audiology Systems finalized pricing on its €300 million and $600 million seven-year covenant-light term loan B debt at Libor/Euribor plus 450 bps, the low end of the Libor/Euribor plus 450 bps to 475 bps talk, modified the original issue discount on the euro tranche to 99¾ from 99 and eliminated the MFN sunset provision, according to a market source.

Both tranches still have a 1% floor and 101 soft call protection for six months, and the discount on the U.S. loan remained at 99.

Previously, the €785 million equivalent U.S. dollar and euro term B was upsized from €745 million equivalent as the company downsized its bond offering to €275 million from €315 million.

Commitments were due at the close of business on Thursday.

Siemens lead banks

Deutsche Bank Securities Inc., Goldman Sachs Bank USA and UBS AG are the physical bookrunners on Siemens Audiology’s term loan B, with UniCredit a joint bookrunner. Goldman Sachs is the left lead on the U.S. debt, and Deutsche Bank is the left lead on the euro debt as well as the administrative agent.

Proceeds will be used to help fund the buyout of the company by EQT VI and Santo Holding from Siemens AG.

Siemens Audiology is a Singapore-based manufacturer and wholesaler of hearing aid devices.

Cengage adds fee

Cengage Learning is now offering lenders a 25 bps amendment fee with its fungible $300 million tack-on covenant-light senior secured term loan due March 31, 2020, according to a market source.

The tack-on is still talked at Libor plus 600 bps with a 1% Libor floor, in line with the existing term loan, and is still being offered at an original issue discount of 99.

Also, as before, the tack-on loan, as well as the existing $1,741,000,000 term loan, will get 101 soft call protection for six months.

Commitments are due at 5 p.m. ET on Friday.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to fund a dividend to shareholders that is expected to be paid on Dec. 30.

Cengage is a Stamford, Conn.-based provider of teaching, learning and research services for the academic, professional and library markets.

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