Coinmach frees to trade; Tank Holding, Surgical Care revisions revealed; Valeant sets talk

By Sara Rosenberg

New York, March 9 – Coinmach (CSC Serviceworks) saw its add-on first-lien term loan make its way into the secondary market on Monday with levels quoted above its original issue discount.

Switching to the primary market, Tank Holding Corp. upsized its term loan, firmed the spread on its credit facility at the wide end of talk and tightened the original issue discount, and Surgical Care Affiliates Inc. lifted the size of its term loan as its bond offering was downsized.

Furthermore, Valeant Pharmaceuticals International Inc. disclosed price talk with launch, and Hyperion Insurance Group Ltd., Coyote Logistics LLC and Ferrara Candy Co. joined this week’s calendar.

Coinmach breaks

Coinmach’s $125 million add-on first-lien covenant-light term loan (B2) due November 2019 began trading on Monday, with levels quoted at 99½ bid, par offered, according to a trader.

The add-on term loan is priced at Libor plus 325 basis points with a 1% Libor floor, in line with the existing first-lien term loan, and was issued at an original issue discount of 99.03.

Deutsche Bank Securities Inc. and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to pay down revolver borrowings and for general corporate purposes, including potential tuck-in acquisitions.

Closing is expected on Wednesday.

Coinmach is a laundry equipment service provider.

Tank reworks deal

Over in the primary, Tank Holding lifted its seven-year covenant-light term loan B to $460 million from $440 million, firmed pricing at Libor plus 425 bps, the high end of the Libor plus 400 bps to 425 bps talk, added a step-down to Libor plus 400 bps when total net leverage is below 5.25 times and moved the original issue discount to 99½ from 99, according to a market source.

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

As for the $50 million six-year revolver, the spread was set at Libor plus 425 bps, the high end of the Libor plus 400 bps to 425 bps talk, and the discount was tightened to 99½ from 99, the source said. This tranche has step-downs to Libor plus 400 bps when total net leverage is below 5.25 times and Libor plus 375 bps when total net leverage is below 4.5 times, and no Libor floor.

Another change made to the deal was that the MFN sunset provision was eliminated, the source continued.

Tank leads

GE Capital Markets and RBC Capital Markets are leading Tank Holding’s now $510 million senior secured credit facility (B).

Proceeds will be used to refinance existing debt, including the pay down of $45 million of senior notes, and to fund a distribution to shareholders.

The notes paydown was increased from $25 million due to the term loan upsizing, the source added.

Recommitments are due at 5 p.m. ET on Tuesday, and comments on documentation are due by 5 p.m. ET on Wednesday.

Pro forma for the transaction, senior net leverage will be 4.6 times, up from 4.4 times under the original structure, and total net leverage will be 6.2 times.

Tank Holding is a St. Bonifacius, Minn., and Lincoln, Neb.-based manufacturer of proprietary rotational molded polyethylene and steel storage tanks and containers used in above-ground, below-ground and portable applications.

Surgical Care upsized

Surgical Care Affiliates raised its term loan to $450 million from $350 million and trimmed its senior unsecured notes offering to $250 million from $350 million, according to a market source.

Talk the term loan was unchanged at Libor plus 375 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

The company’s now $700 million senior secured credit facility (B1) also provides for a $250 million revolver.

J.P. Morgan Securities LLC is leading the bank debt that will be used with the bonds to refinance an existing credit facility that has a $132 million revolver and $596 million of term loans and for general corporate purposes, including acquisitions and other development activities.

Surgical Care, a Deerfield, Ill.-based operator of surgical facilities, expects to close on the financing this quarter.

Valeant discloses talk

Also in the primary, Valeant Pharmaceuticals held its bank meeting on Monday, launching its $4.55 billion seven-year senior secured first lien term loan B with talk of Libor plus 350 bps with a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source said.

The company is also getting a $1 billion incremental five-year term loan A as part of its $5.55 billion incremental term debt (Ba1/BB) package.

Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., the Bank of Tokyo-Mitsubishi UFJ Ltd., DNB Markets Inc., SunTrust Robinson Humphrey Inc., Barclays, Morgan Stanley Senior Funding Inc., RBC Capital Markets and Citigroup Global Markets Inc. are leading the debt.

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

Valeant buying Salix

Proceeds from Valeant’s term loans, $9.6 billion of senior unsecured notes and cash on hand will be used to fund the acquisition of Salix Pharmaceuticals Ltd. for $158 per share in cash, or a total enterprise value of about $14.5 billion, and repay Salix debt.

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

Net debt to adjusted pro forma EBITDA will be around 5.6 times.

Valeant is a Laval, Quebec-based specialty pharmaceutical company. Salix is a Raleigh, N.C.-based developer and marketer of prescription pharmaceutical products and medical devices for the prevention and treatment of gastrointestinal diseases.

Hyperion on deck

Hyperion Insurance Group emerged with plans to hold a bank meeting at 10:30 a.m. ET on Wednesday to launch a $725 million term loan B, according to a market source.

The company’s senior secured credit facility also includes an £85 million revolver, the source said.

Morgan Stanley Senior Funding Inc., HSBC Securities (USA) Inc., RBC Capital Markets and Lloyds Securities Inc. are leading the deal that will be used with equity to fund the acquisition of RK Harrison Holdings Ltd. and repay existing Hyperion debt.

Closing is expected in the second quarter.

Hyperion is a London-based insurance intermediary group. RK is a London-based insurance and reinsurance broker.

Coyote Logistics coming soon

Coyote Logistics set a bank meeting for Tuesday to launch a $360 million term loan, a market source remarked.

Goldman Sachs Bank USA and Wells Fargo Securities LLC are leading the deal that will be used to refinance existing debt and fund a dividend.

Coyote Logistics is a Chicago-based freight broker.

Ferrara readies add-on

Ferrara Candy scheduled a lender call for noon ET on Tuesday to launch a $40 million add-on first-lien term loan, a market source said.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to pay down ABL borrowings.

Ferrara Candy is a confectionery and candy manufacturer.

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