Staples, DJO, Epiq break; HanesBrands, Securus updates surface; Compusearch shutting early

By Sara Rosenberg

New York, April 24 – Staples Inc., DJO Finance LLC and Epiq Systems Inc. all saw their deals free up for trading during Friday’s market hours, and Charter Communications Operating LLC’s term loans moved around with the termination of its acquisition agreement with Comcast Corp.

Switching to the primary, HanesBrands Inc. increased the size of its term loan B, tightened the spread and offer price and extended the call protection, Securus Technologies Holdings Inc. set pricing on its term loan B-2 at the low end of guidance, and Compusearch accelerated the commitment deadline on its credit facility.

Also, Prestige Brands Inc., Victory Capital Operating LLC and Arcade Marketing/Bioplan disclosed talk with launch, and Royalty Pharma Investments Finance Trust, Houghton Mifflin Harcourt Publishers Inc., Aria Energy Operating LLC, Acrisure and National Surgical Healthcare Inc. emerged with new deal plans.

Staples frees up

Staples’ credit facility began trading on Friday, with the $2.75 billion six-year senior secured covenant-light term loan B (Baa2/BBB) quoted at par ½ bid, par ¾ offered, according to a trader.

Pricing on the term loan is Libor plus 275 basis points with a 0.75% Libor floor, and it was sold at an original issue discount of 99½. The debt has 101 soft call protection for six months and a ticking fee of half the margin starting May 1 and the full margin plus the floor starting June 1.

During syndication, the spread on the term loan firmed at the tight end of revised talk of Libor plus 275 bps to 300 bps and down from original talk of Libor plus 350 bps, and the discount was modified from 99.

The company’s $5.75 billion credit facility also includes a $3 billion five-year asset-based revolver.

Barclays, Bank of America Merrill Lynch, Wells Fargo Securities LLC and HSBC Securities (USA) Inc. are leading the deal.

Staples buying Office Depot

Proceeds from Staples’ credit facility, $2.1 billion of stock, $500 million of cash on Staples’ balance sheet and $500 million of Office Depot Inc. debt and capital leases that will be rolled over will be used to fund the acquisition of Office Depot and to refinance some of the debt of both companies.

Under the agreement, Office Depot shareholders will receive per share $7.25 in cash and 0.2188 of a share in Staples stock at closing. The transaction values Office Depot at $6.3 billion.

Closing is expected by year-end, subject to customary conditions, including antitrust regulatory approval and Office Depot shareholder approval.

Excluding synergy, secured leverage is 2.1 times and total leverage is 2.6 times, and, including synergy, secured leverage is 1.4 times and total leverage is 1.8 times.

Staples is a Framingham, Mass.-based retailer of office supplies. Office Depot is a Boca Raton, Fla.-based provider of products, services and solutions for the workplace.

DJO tops OID

DJO Finance’s credit facility broke as well, with the $1,035,000,000 first-lien term loan (Ba3) due June 2020 quoted a par 5/8 bid, par 7/8 offered, a source said.

Pricing on the funded term loan, as well as on a $20 million delayed-draw term loan (Ba3) due June 2020, is Libor plus 325 bps with a 1% Libor floor, and the debt was sold at an original issue discount of 99½. The funded term loan has 101 soft call protection for six months.

Recently, the funded term loan was upsized from $1,005,000,000 and pricing on all of the term loan debt was lowered from talk of Libor plus 350 bps to 375 bps.

The company’s $1,205,000,000 credit facility also includes a $150 million asset-based revolver.

Macquarie Capital (USA) Inc. and Natixis are leading the deal that will be used with $1,015,000,000 of second-lien notes, downsized from $1,045,000,000 with the recent term loan upsizing, to refinance existing debt.

Also as part of the refinancing, the Vista, Calif.-based provider of medical device solutions is exchanging its existing $300 million of senior subordinated notes for $300 million of new third-lien senior notes.

Epiq Systems breaks

Another deal to hit the secondary was Epiq Systems’ $75 million term loan B, with the debt seen bid at 99¾, a trader remarked.

Pricing on the loan is Libor plus 375 bps with a 0.75% Libor floor, and it was issued at a discount of 99½.

KeyBanc Capital Markets LLC, PNC Bank and Silicon Valley Bank are leading the deal that will be used to help fund the acquisition of Iris Data Services, a provider of managed services for electronic discovery, for $134 million, subject to certain post-closing adjustments.

Epiq Systems is a Kansas City, Kan.-based provider of technology-enabled solutions for electronic discovery, bankruptcy and class action administration.

Charter moves around

In more trading news, Charter’s term loan G was quoted by one trader at 99½ bid, 99¾ offered, down from 99 5/8 bid, par 1/8 offered on Thursday, as the trader expects the loan to get “unwound at the 99½ OID,” being that the debt was supposed to fund the now-cancelled purchase of customers and systems from Comcast Corp.

Meanwhile, the company’s term loan E and term loan F were quoted at 99 5/8 bid, par offered, up from 99 3/8 bid, 99¾ offered as some are anticipating that the reduction of the amount of Charter debt in the secondary will lead to increased demand for the these loans that are remaining outstanding, the trader explained.

The acquisition of the Comcast assets, which included systems serving about 1.4 million of the prior Time Warner Cable video customers for an estimated value of $7.4 billion based on projected 2014 EBITDA, was conditioned on the successful completion of the merger of Comcast and Time Warner Cable.

However, the Comcast and Time Warner merger has been under regulatory scrutiny, and on Friday morning, Comcast announced that the Time Warner merger and the agreement with Charter were terminated.

Charter is a Stamford, Conn.-based broadband communications company and cable operator.

HanesBrands reworked

Moving to the primary market, HanesBrands raised its seven-year term loan B to $425 million from $325 million, trimmed pricing to Libor plus 250 bps from talk of Libor plus 275 bps to 300 bps, modified the offer price to par from 99½ and pushed out the 101 soft call protection to one year from six months, according to a source.

As before, the term loan B has a 0.75% Libor floor.

The company’s now $1.85 billion senior secured credit facility (Baa3/BBB-) also includes a $1 billion five-year revolver and a $425 million five-year term loan A.

Recommitments are due at 5 p.m. ET on Monday, the source said.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance existing debt, and, due to the term loan B upsizing, borrowings under the revolver will be reduced, the source added.

HanesBrands is a Winston Salem, N.C.-based marketer of everyday basic apparel.

Securus sets pricing

Securus Technologies finalized pricing on its $205 million incremental covenant-light term loan B-2 due April 2020 at Libor plus 425 bps, the tight end of the Libor plus 425 bps to 450 bps talk, and detailed the ticking fee as half the margin beginning on May 1 and the full coupon beginning on June 1, according to a market source.

As before, the term loan B-2 has a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

Recommitments were due by the close of business on Friday, and allocations are expected on Monday. Closing is expected in July, the source added.

Deutsche Bank Securities Inc. and BNP Paribas Securities Corp. are leading the deal that will be used to fund the acquisition of JPay Inc., a Miami-based provider of inmate payments, email and tablet products.

Securus is a Dallas-based provider of advanced inmate communications, investigative technologies and information management solutions to the corrections industry.

Compusearch moves deadline

Compusearch accelerated the commitment deadline on its credit facility to Monday from Thursday, a market source said.

The $181 million facility consists of a $15 million revolver, a $115 million six-year first-lien term loan B talked at Libor plus 450 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and a $51 million 6½-year second-lien term loan that was privately placed.

SunTrust Robinson Humphrey Inc. is the lead on the deal that launched with a bank meeting on April 16.

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

Compusearch is a Dulles, Va.-based provider of software and services that advance commerce and collaboration among government agencies and contractors.

Prestige discloses guidance

Prestige Brands held its call on Friday morning, launching its $853 million term loan B-3 (BB) due Sept. 3, 2021 with talk of Libor plus 275 bps to 300 bps with a 0.75% Libor floor and an offer price of 99¾ to par, according to a market source.

As previously reported, the term loan B-3 has 101 soft call protection for six months.

Barclays and Citigroup Global Markets Inc. are leading the deal that will be used to amend and reprice the company’s existing $217.5 million term loan B-1 due Jan. 31, 2019 and its $660 million term loan B-2 due Sept. 3, 2021.

Consents and commitments are due by noon ET on Thursday and closing is expected on May 8.

Prestige Brands is a Tarrytown, N.Y.-based provider of over-the-counter health-care and household consumer products.

Victory reveals talk

Victory Capital came out with original issue discount talk in the 99 area on its fungible $50 million add-on term loan B due Oct. 31, 2021 that launched with a lender call in the morning, a source remarked.

The add-on term loan is priced at Libor plus 600 bps with a 1% Libor floor, and has 101 hard call protection through October 2015, the source continued.

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

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to fund a distribution to shareholders.

As part of the transaction, existing lenders are being offered a 25 bps amendment fee.

Victory Capital is a Brooklyn, Ohio-based asset manager.

Arcade/Bioplan floats OIDs

Arcade Marketing/Bioplan launched with a call the sell-down of its $283 million first-lien term loan due Sept. 23, 2021 at discount talk of 96 and the sell-down of its $105 million second-lien term loan due Sept. 23, 2022 at discount talk of 93, according to a market source.

Pricing on the first-lien term loan is Libor plus 475 bps with a 1% Libor floor, and it has 101 soft call protection through Sept. 23, 2015; the second-lien term loan is priced at Libor plus 825 bps with a 1% Libor floor and has call protection of 103 through Sept. 23, 2015, then 102 for a year and 101 for a year.

Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, Barclays and Deutsche Bank Securities are leading the deal, with Goldman left lead on the first-lien and Credit Suisse left lead on the second-lien.

The loans funded in 2014 as Bioplan and Arcade Marketing merged, but struggled in syndication as market conditions were unfavorable.

Arcade/Bioplan is a provider of sampling and packaging solutions for the fragrance, cosmetics and skincare segments.

Royalty Pharma on deck

Also in the primary, Royalty Pharma surfaced with plans to hold a call at 1 p.m. ET on Monday to launch a $1 billion add-on term loan B-4 due Nov. 9, 2020, according to a market source.

Bank of America Merrill Lynch, Goldman Sachs Bank USA and JPMorgan are leading the deal that will be used to refinance the company’s existing term loan B-1, the source added.

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

Houghton Mifflin plans loan

Houghton Mifflin Harcourt Publishers scheduled a bank meeting for 10 a.m. ET in New York on Tuesday to launch a $500 million six-year senior secured term loan B, a market source said.

Citigroup Global Markets and Wells Fargo Securities are leading the deal that will be used to help fund the acquisition of the Educational Technology and Services business of Scholastic Corp. for $575 million in cash, subject to customary working capital adjustments, and to replace an existing $180 million term loan.

Educational Technology and Services is a provider of digital intervention curriculum, products and services as well as related implementation and assessment services and school consulting services.

Closing is expected this quarter, subject to customary conditions and regulatory approval.

Houghton Mifflin Harcourt is a Boston-based provider of pre-K–12 education content, services and technology solutions.

Aria Energy readies deal

Aria Energy set a bank meeting for Tuesday to launch a $270 million senior secured credit facility, according to a market source.

The facility consists of a $70 million revolver and a $200 million term loan B, the source said.

Barclays and M&T Bank are leading the deal that will be used for working capital requirements and general corporate purposes, to refinance existing debt, to put cash on the balance sheet and to fund a distribution to the sponsor, Ares EIF.

Aria Energy is a Novi, Mich.-based owner, operator, and developer of long-lived energy projects.

Acrisure joins calendar

Acrisure intends to hold a bank meeting on Tuesday to launch a $410 million term loan talked at Libor plus 400 bps to 425 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source remarked.

JPMorgan is leading the deal that will be used to refinance existing debt and fund an acquisition.

The new credit facility will also include a revolver.

Acrisure is a Grand Rapids, Mich.-based retail insurance brokerage.

National Surgical coming soon

National Surgical Healthcare will hold a bank meeting on Tuesday to launch a $405 million senior secured credit facility, according to a market source.

The facility consists of a $40 million revolver and a $365 million seven-year term loan B, the source said.

JPMorgan is leading the deal that will be used to fund the acquisition of a majority interest in Optim Healthcare and for general corporate purposes.

Closing is expected this quarter, subject to approval by the U.S. Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

National Surgical is a Chicago-based owner and operator of surgical hospitals and surgery centers. Optim is a Savannah, Ga.-based orthopedic-focused health system.

RCN wraps at terms

In other news, RCN Cable (RCN Services Telecom LLC) completed syndication on the repricing of its $759.2 million term loan due March 2020 at initial terms of Libor plus 325 bps with a 1% Libor floor, a par offer price and 101 soft call protection for six months, a source said.

The repricing is taking the spread on the term loan down from Libor plus 350 bps.

Allocations are targeted for Monday, the source added.

SunTrust Robinson Humphrey Inc. is leading the deal for the cable provider.

Riverbed closes

The buyout of Riverbed Technology Inc. by Thoma Bravo LLC and Teachers’ Private Capital for $21.00 per share in cash, or a total of about $3.5 billion, has been completed, a news release said.

To help fund the transaction, Riverbed got a $1,725,000,000 senior secured credit facility (B1/B) consisting of a $100 million five-year revolver and a $1,625,000,000 seven-year first-lien term.

Pricing on the term loan is Libor plus 500 bps with a step-down to Libor plus 475 bps based on total first-lien leverage and a 1% Libor floor, and the debt was sold at an original issue discount of 99½. There is 101 soft call protection for six months.

During syndication, the term loan was upsized from a revised amount of $1,575,000,000 and an initial amount of $1,525,000,000 as the company’s bonds were downsized to $525 million from a revised amount of $575 million and an initial amount of $625 million. Also, the term loan spread was cut from Libor plus 525 bps, the step-down was added, and the discount was tightened from 98½.

Riverbed lead banks

Credit Suisse Securities, Citigroup Global Markets, Barclays and Morgan Stanley Senior Funding Inc. led Riverbed’s credit facility.

In addition to the credit facility and bonds, funds for the buyout came from $614 million of cash on the balance sheet and $1,625,000,000 of equity.

Riverbed is a San Francisco-based technology company that specializes in improving the performance of networks and networked applications.

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