Dollar Tree, Acadia Healthcare, US Farathane break; Citgo, AssuredPartners changes emerge

By Sara Rosenberg

New York, Feb. 6 – Dollar Tree Inc.’s credit facility made its way into the secondary market on Friday, with its term loan B quoted above its original issue discount, and Acadia Healthcare Co. Inc. and US Farathane Corp. began trading as well.

Moving to the primary, Citgo Holding Inc. widened the spread on its term loan for a second time and shortened the maturity, and AssuredPartners Capital Inc. upsized its incremental term loan, increased pricing, tightened the original issue discount and made the debt fungible with the existing loan.

Also, Waste Industries USA Inc. and Arctic Glacier LLC launched their deals to investors, PetSmart Inc. revealed timing on the bank meeting for its credit facility and Constantia Flexibles is getting ready to bring its new loan to market.

Dollar Tree frees up

Dollar Tree’s credit facility broke for trading on Friday, with the $3.95 billion seven-year term loan B quoted by one trader at par ½ bid, par ¾ offered and by a second trader at par 3/8 bid, par 5/8 offered.

Pricing on the term loan B is Libor plus 350 basis points 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.

The company’s $6.2 billion credit facility also includes a $1.25 billion five-year revolver and a $1 billion five-year term loan A, both priced at Libor plus 225 bps.

During syndication, the term loan B was downsized from $5.2 billion, the spread was cut from talk at launch of Libor plus 375 bps to 400 bps, the discount was changed from 99 and the call protection was extended from six months, and the term loan A was upsized from $500 million.

J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Bank of America Merrill Lynch, RBC Capital Markets LLC and U.S. Bank NA are leading the deal.

Dollar Tree funding purchase

Dollar Tree’s credit facility and $3.25 billion of bonds will be used to help fund the acquisition of Family Dollar Stores Inc. in a cash and stock deal valued at $8.5 billion, under which Family Dollar shareholders will receive $74.50 per share, comprised of $59.60 in cash and $14.90 in Dollar Tree stock, subject to a collar.

The bond offering was upsized from $2.5 billion with the term loan B downsizing.

Family Dollar stockholders already approved the transaction, but the acquisition remains subject to approval by the Federal Trade Commission.

The financing is expected to be completed this month, and closing on the acquisition could take place as early as March.

Dollar Tree is a Chesapeake, Va.-based discount store operator. Family Dollar is a Matthews, N.C.-based chain of discount stores.

Acadia starts trading

Acadia Healthcare’s $500 million seven-year covenant-light term loan B (Ba2/BB-) freed up for trading, with levels seen by one trader at 101 bid, 101½ offered and by a second trader at par ¼ bid, par ¾ offered.

Pricing on the loan is Libor plus 350 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 spread on the loan was cut from Libor plus 400 bps and the discount was changed from 99.

Bank of America Merrill Lynch, Jefferies Finance LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are leading the deal that will be used with $375 million of notes and a common stock issuance to fund the acquisition of CRC Health Group Inc. for $1,175,000,000, which is expected to close on Wednesday.

The notes were upsized the other day from $300 million, reducing the amount of revolver borrowings being used for the transaction.

Acadia is a Franklin, Tenn.-based provider of inpatient behavioral health care services. CRC is a Cupertino, Calif.-based operator of addiction recovery centers.

US Farathane breaks

US Farathane’s $390 million seven-year term loan B began trading as well, with levels quoted at 98½ bid, 99 offered, a trader said.

The loan is priced at Libor plus 575 bps with a 1% Libor floor and was issued at 98. This debt has 101 soft call protection for one year.

During syndication, pricing on the term loan firmed at the high end of the Libor plus 550 bps to 575 bps talk, the discount widened from 98½ and the call protection was extended from six months.

Bank of America Merrill Lynch, Barclays, Morgan Stanley Senior Funding Inc. and MCS Capital are leading the deal that will be used to help fund the buyout of the company by the Gores Group and several members of US Farathane’s management, including its chief executive officer, Andy Greenlee.

US Farathane is an Auburn Hills, Mich.-based provider of highly engineered plastic injection-molded components.

Citgo flexes again

Over in the primary, Citgo Holding raised pricing on its $1 billion senior secured first-lien term loan B (Caa1/B-/B+) to Libor plus 850 bps from revised talk of Libor plus 825 bps and initial talk of Libor plus 800 bps, according to a market source.

Additionally, the maturity on the loan was shortened to 3¼ years from five years, excess cash flow and asset sale paydowns will be at a premium of 101, and the excess cash flow sweep was changed to 100% initially, with step-downs to 75% and 50%, from initially being set at 75%, the source said.

Furthermore, the debt service reserve was modified to 12 months funded at all times and 18 months funded in order to make restricted payments subject to 2 times leverage, from six months of interest and principal on Citgo Holding debt, additional OpCo debt incurrence was limited to $500 million and there were enhancements to the security package.

As before, the term loan B has a 1% Libor floor, an original issue discount of 94 and is non-callable for one year, then at 102 in year two and 101 in year three.

At the time of the first pricing flex, the discount on the term loan was modified from talk of 96 to 97.

Citgo resets deadline

Recommitments for Citgo’s term loan are due at noon ET on Monday, the source said. After the first round of changes, recommitments had been scheduled to be due at noon ET on Friday.

Deutsche Bank Securities Inc. is leading the deal that will be used with a $1.5 billion pari passu high-yield offering to fund a distribution to Citgo Holding’s ultimate parent.

Citgo is a Houston-based refiner, marketer and transporter of gasoline, diesel fuel, jet fuel, lubricants, petrochemicals, and other petroleum-based industrial products.

AssuredPartners reworks loan

AssuredPartners lifted its incremental first-lien covenant-light term loan due April 1, 2021 to $150 million from $125 million, raised pricing to Libor plus 400 bps from Libor plus 362.5 bps, moved the original issue discount to 99 from 97½, and determined that the new debt will now be fungible with the existing first-lien term loan, a market source said.

The incremental term loan still has a 1% Libor floor.

In connection with the changes to the incremental loan, the company will increase pricing on its existing first-lien term loan to Libor plus 400 bps with a 1% Libor floor from Libor plus 350 bps with a 1% Libor floor, the source remarked.

All of the first-lien term loan debt will have 101 soft call protection for six months.

AssuredPartners lead banks

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, BMO Capital Markets, RBC Capital Markets and Madison Capital are leading AssuredPartners’ term loan.

Commitments are due at 5 p.m. ET on Monday, the source added.

Proceeds will be used to pay down revolver borrowings, to fund acquisitions and to add cash to the balance sheet.

AssuredPartners is a Lake Mary, Fla.-based investor in property and casualty and employee benefits brokerage firms.

Waste Industries sets talk

Also in the primary, Waste Industries held its bank meeting on Friday, launching its $700 million five-year covenant-light term loan B (B1/BB-) with talk of Libor plus 350 bps to 375 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source remarked.

Commitments are due on Feb. 18, the source added.

Bank of America Merrill Lynch, Macquarie Capital, Credit Suisse Securities (USA) LLC and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to refinance existing credit facilities, repay industrial revenue bonds, redeem class A equity units and pay a distribution to class B shareholders, the source said.

Waste Industries is a Raleigh, N.C.-based solid waste management company.

Arctic Glacier holds call

Arctic Glacier approached lenders with a fungible $35 million add-on first-lien term loan due May 2019 that was launched with a call in the morning, according to a market source.

The add-on is 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, the source said.

Jefferies Finance LLC is leading the deal that will be used to repay revolver borrowings.

With the add-on, the company will reprice its existing $275,810,000 term loan due May 2019 to Libor plus 500 bps with a 1% Libor floor from Libor plus 400 bps with a 1% Libor floor, and reset the 101 soft call protection for six months, so that all of the debt will have the same terms and create one $310,810,000 tranche.

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

Arctic Glacier is a Winnipeg-based manufacturer and distributor of packaged ice.

PetSmart timing emerges

PetSmart scheduled a bank meeting for 11 a.m. ET in New York on Monday to launch its proposed credit facility, a market source said.

The company previously said in filings with the Securities and Exchange Commission that the credit facility is sized at $5.05 billion, split between a $4.3 billion seven-year senior secured term loan B (Ba3) expected at Libor plus 450 bps with two step-downs of 25 bps each based on first-lien leverage ratios and a 1% Libor floor, and a $750 million five-year asset-based revolver expected at Libor plus 150 bps with step-downs and step-ups of 25 bps based on excess availability.

However, according to the market source, official terms on the deal are not yet out.

Citigroup Global Markets Inc., Barclays, Nomura Securities International Inc., Jefferies Finance LLC and Deutsche Bank Securities Inc. are leading the credit facility.

PetSmart being acquired

Proceeds from PetSmart’s credit facility, an expected $1.9 billion senior notes offering and up to about $1.83 billion of equity will be used to fund its buyout by a consortium led by BC Partners Inc. for $83.00 per share in cash, or about $8.7 billion.

The consortium includes funds advised by BC Partners, alongside several of its limited partners, such as La Caisse de depot et placement du Quebec and StepStone.

As a back-up for the notes, the Phoenix-based specialty pet retailer obtained a commitment for a $1.9 billion senior unsecured bridge loan priced at Libor plus 700 bps with a 1% Libor floor. The spread will increase by 50 bps every three months until it hits a specified cap.

The bridge loan was launched into syndication in late January.

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

Constantia Flexibles on deck

Constantia Flexibles scheduled a meeting in London on Monday for European investors and a call on Tuesday for U.S. investors to launch its €1,215,000,000 equivalent seven-year covenant-light term loan B, according to a market source.

The debt consists of a €300 million U.S. dollar equivalent term loan and a €915 million term loan talked at Libor/Euribor plus 425 bps to 450 bps with a 1% floor, an original issue discount of 99 and 101 soft call protection for one year, the source said.

Commitments are due on Feb. 18.

J.P. Morgan Securities LLC and UniCredit are leading the deal that will help fund the roughly €2.3 billion buyout of the company by the Wendel Group from One Equity Partners and the H. Turnauer Foundation.

Closing is expected in the first half of this year, subject to approval from antitrust authorities.

Constantia Flexibles is a Vienna-based manufacturer of flexible packaging products and labels.

Heartland Dental allocates

Heartland Dental Care LLC’s fungible $75 million add-on term loan (B) allocated on Friday, a market source told Prospect News.

Pricing on the add-on loan is Libor plus 450 bps with a 1% Libor floor, which matches existing term loan pricing, and it was sold at an original issue discount of 98½, after being revised during syndication from 99¼.

RBC Capital Markets is leading the deal that will be used to repay all of the company’s outstanding revolver borrowings.

Heartland Dental is an Effingham, Ill.-based provider of office support services to dental offices.

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