Communications Sales, Milacron, Sesac, NEP break; Avaya loans near par on refinancing plans

By Sara Rosenberg

New York, April 16 – Communications Sales & Leasing Inc., Milacron LLC, Sesac and NEP/NCP Holdco Inc. saw their new bank debt hit the secondary market on Thursday, and Avaya Inc.’s term loans moved closer to par with expectations of paydowns.

Meanwhile, in the primary market, Genoa, A QoL Healthcare Co. LLC shifted some funds between its first- and second-lien term loans, reduced spreads on the tranches, and revised the offer price on the first-lien debt, while Science Applications International Corp. updated pricing and original issue discount on its term loan B.

In addition, Sinclair Television Group Inc. and US LBM tightened original issue discounts on their incremental term loans, and DJO Finance LLC surfaced with plans for a new deal.

Communications Sales frees up

Communications Sales & Leasing’s credit facility began trading on Thursday, with the $2.14 billion 7.5-year term loan B quoted at 99 1/8 bid, 99½ offered, according to a trader.

Pricing on the term loan is Libor plus 400 basis points 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.

During syndication, the B loan was upsized from $2 billion, the spread was increased to Libor plus 425 bps from Libor plus 400 bps and then moved back to the original talk, the discount firmed at the wide end of revised talk of 98 to 98½ and wide of initial talk of 99, and the call protection was extended from six months.

The company’s $2.64 billion credit facility (BB) also includes a $500 million five-year revolver.

Communications Sales leads

J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Barclays, Citigroup Global Markets Inc., Credit Suisse Securities, Goldman Sachs, Morgan Stanley, RBC Capital Markets, SunTrust Robinson Humphrey Inc., Wells Fargo Securities LLC, BNP Paribas Securities Corp. and MUFG are leading Communications Sales’ credit facility.

Proceeds will be used with $1.51 billion of bonds, downsized from $1.65 billion with the recent term loan upsizing, to help fund the company’s spinoff from Windstream Holdings Inc.

Windstream expects to distribute about 80.1% of Communications Sales shares on April 24 to Windstream shareholders of record as of 5 p.m. ET on April 10. The distribution is conditioned upon satisfaction of certain customary closing conditions, including financing of the transaction.

Communications Sales is a real estate investment trust that owns fiber and copper network and other fixed real estate assets.

Milacron tops par

Milacron’s $730 million covenant-light term loan (B2) due Sept. 28, 2020 emerged in the secondary market, with levels quoted at par ¼ bid, par ¾ offered, a trader remarked.

Pricing on the term loan is Libor plus 350 bps with a 25 bps step-down at 4 times net total leverage upon a qualified initial public offering and a 1% Libor floor. The debt was sold at par and has 101 soft call protection for one year.

Earlier this week, the spread on the loan was cut from talk of Libor plus 375 bps to 400 bps, the offer price was changed from 99½, the call protection was extended from six months and the 18-month MFN sunset provision was eliminated.

Bank of America Merrill Lynch, JPMorgan, Barclays, Credit Suisse Securities, Goldman Sachs and KeyBanc Capital Markets are leading the deal that will refinance an existing term loan, repay bonds and fund a dividend.

Milacron is a Cincinnati-based provider of plastics processing technologies and industrial fluids.

Sesac starts trading

Sesac’s term loan broke as well, with the fungible $35 million add-on first-lien term loan quoted at 99¾ bid, par ½ offered and the $80 million six-year second-lien term loan quoted at 99½ bid, a source said.

The Nashville-based performing rights organization’s add-on first-lien term loan was upsized from $25 million, and the second-lien term loan was downsized from $90 million, the source remarked.

Pricing on the add-on first-lien term loan is Libor plus 425 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.26. The existing first-lien term loan is getting a pricing increase to Libor plus 425 bps with a 1% Libor floor from Libor plus 400 bps with a 1% Libor floor with the add-on, and existing lenders were offered a 25 bps amendment fee. All of the first-lien debt has 101 soft call protection for six months.

The second-lien term loan is priced at Libor plus 800 bps with a 1% Libor floor and was issued at a discount of 98½. This debt has call protection of 103 in year one and 101 in year two.

Jefferies Finance LLC is leading the new loans that will be used for a dividend recapitalization.

NEP/NCP breaks

Another deal to free up was NEP/NCP Holdco’s $75 million incremental second-lien term loan (Caa1/B-) due July 22, 2020, with levels quoted at 98¾ bid, 99¾ offered, according to a trader.

Pricing on the incremental second-lien term loan is Libor plus 875 bps with a 1.25% Libor floor, and it was sold at a discount of 98½. The company’s existing second-lien term loan is repricing to Libor plus 875 bps with a 1.25% Libor floor from Libor plus 825 bps with a 1.25% Libor floor in order to be fungible. All of the second-lien debt has call protection of 102 in year one and 101 in year two with a 101 initial public offering carve-out.

Recently, the offer price on the incremental second-lien loan was tightened from 98.

Barclays is leading the deal that will be used to fund the acquisition of Mediatec Group, fund a separate bolt-on acquisition and repay some revolving credit facility borrowings.

Net first-lien leverage is 4.5 times, and net total leverage is 5.3 times.

NEP is a Pittsburgh-based provider of outsourced teleproduction services. Mediatec is a Sweden-based provider of integrated technical solutions for event and television productions.

Avaya moves around

Also in trading, Avaya’s term loan B-3 rose to 99 5/8 bid, par 1/8 offered from 99 1/8 bid, 99 3/8 offered, and its term loan B-6 dipped to par 1/8 bid, par 5/8 offered from par ¼ bid, par ½ offered as investors are expecting some of the debt to be repaid at par, a trader remarked.

To fund the refinancing, the company launched with a call on Thursday afternoon a $1.5 billion five-year senior secured term loan B-7 talked at Libor plus 500 bps to 525 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, according to a market source.

Citigroup Global Markets is leading the deal.

The current assumption is that a pro rata paydown will occur between the B-3 and the B-6 term loans with the proceeds from the term loan B-7, the source added.

Commitments are due at 5 p.m. ET on April 23 and closing is expected on April 28.

Avaya is a Santa Clara, Calif.-based provider of business collaboration and communications services.

Genoa changes emerge

Over in the primary market, Genoa, A QoL Healthcare increased its seven-year first-lien covenant-light term loan (B1/B) to $280 million from $265 million, cut pricing to Libor plus 350 bps from Libor plus 425 bps and modified the original issue discount to 99½ from 99, while leaving the 1% Libor floor and 101 soft call protection for six months intact, according to a market source.

Regarding the eight-year second-lien covenant-light term loan (Caa1/CCC+), it was trimmed to $140 million from $155 million, and the spread was reduced to Libor plus 775 bps from Libor plus 850 bps, the source said. This tranche still has a 1% Libor floor, a discount of 99 and call protection of 102 in year one and 101 in year two.

Along with the term loans, the company’s $470 million credit facility includes a $50 million revolver (B1/B).

Genoa being acquired

Proceeds from Genoa’s credit facility will be used to help fund its buyout by Advent International, however, existing institutional investors, including Nautic Partners, and the current Genoa management team will retain ownership positions in the company.

Credit Suisse Securities, Deutsche Bank Securities Inc. and Jefferies are leading the credit facility.

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

The buyout of Genoa, a Tukwila, Wash.-based specialty pharmacy operator, is expected to close this quarter, subject to regulatory approval and other customary conditions.

Science Applications revised

Science Applications lowered pricing on its $570 million seven-year senior secured covenant-light term B (Ba2/BB) to Libor plus 300 bps from Libor plus 325 bps and moved the discount to 99¾ from 99½, a market source remarked, adding that the debt still has a 0.75% Libor floor and 101 soft call protection for six months.

As before, commitments are due at 5 p.m. ET on Friday.

Citigroup Global Markets, Bank of America Merrill Lynch, PNC Capital Markets, SunTrust Robinson Humphrey, UBS AG and Wells Fargo Securities are leading the loan that will be used to help fund the $790 million acquisition of Scitor Corp. from Leonard Green & Partners.

Closing is expected on May 4, subject to customary conditions.

Science Applications is a McLean, Va.-based technology integrator providing full life-cycle services and solutions. Scitor is a provider of systems engineering, financial and management consulting, information services and other services.

Sinclair tweaks discount

Sinclair Television changed the original issue discount on its $350 million incremental term loan B to 99 7/8 from talk of 99 to 99½, a market source said.

As before, the term loan is priced at Libor plus 275 bps with a 0.75% Libor floor and has 101 soft call protection for six months.

Recommitments were due at 2 p.m. ET on Thursday, the source added.

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

Sinclair is a Hunt Valley, Md.-based television broadcasting company.

US LBM updated

US LBM tightened the offer price on its fungible $50 million tack-on senior secured term loan due May 2020 to 99½ from 99, according to a market source.

The tack-on loan is still priced at Libor plus 700 bps with a 1% Libor floor and has call protection of 102 through November, then 101.5 for a year and 101 for a year, which all matches the existing term loan.

Recommitments are due at 11 a.m. ET on Friday, the source said.

Credit Suisse Securities is leading the deal that will be used for acquisitions.

US LBM is a Green Bay, Wis.-based owner of building material distribution businesses.

DJO on deck

DJO Finance came out with plans to hold a bank meeting on Monday to launch a $1,175,000,000 credit facility that is expected to allocate later that same week, according to a market source.

The facility consists of a $150 million asset-based revolver, a $1,005,000,000 first-lien term loan and a $20 million delayed-draw term loan, the source said.

Macquarie Capital (USA) Inc. is leading the deal, which will be used with $1,045,000,000 of second-lien senior notes to refinance existing debt.

The company is also offering to exchange its existing $300 million of senior subordinated notes for $300 million of new third-lien senior notes, and a significant percentage of holders of the senior subordinated notes have already committed to participate in the exchange offer, the source added.

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

Murray/Foresight closes

In other news, Murray Energy Corp. completed its acquisition of a significant economic interest in Foresight Energy GP LLC and Foresight Energy LP, according to a news release.

To fund the transaction, Murray Energy got $2 billion of term loans (Ba3/B+), split between a $300 million two-year term loan B-1 priced at Libor plus 600 bps with a 1% Libor floor, and issued at a discount of 99, and a $1.7 million five-year term loan B-2 priced at Libor plus 650 bps, with a1% Libor floor, and issued at a discount of 97.

The term loan B-1 has 101 soft call protection for one year, and the term loan B-2 has hard call protection of 102 in year one and 101 in year two.

During syndication, the term loan debt was restructured from a $1.6 billion term loan B at Murray Energy talked at Libor plus 575 bps with a 1% Libor floor and a discount of 98, and a $650 million term loan B at Foresight Energy talked at Libor plus 475 bps with a 1% Libor floor and a discount of 99.

Deutsche Bank Securities and Goldman Sachs led the deal.

St. Clairsville, Ohio-based Murray Energy and St. Louis-based Foresight Energy are coal companies.

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