NEP loans allocate; Freedom Mortgage eliminates discount; Sally Beauty tightens pricing

By Paul A. Harris

Portland, Ore., June 23 – In Friday’s leveraged loan market NEP Group’s dollar and euro first-lien term loan debt and dollar second-lien term loan allocated.

Freedom Mortgage Corp. eliminated the discount on its fungible $250 million add-on first-lien senior secured term loan due Feb. 23, 2022 and its loan also allocated.

And Sally Beauty Holdings Inc. tightened pricing for its $850 million of seven-year term loan B debt while also shifting $50 million to the fixed-rate tranche from the floating-rate tranche

NEP allocated

NEP Group’s updated dollar- and euro-denominated first-lien term loan debt and U.S. second-lien term loan allocated on Friday.

The deal includes an up to €359.3 million equivalent two-part term loan B due 2024, split between an up to €284.3 million repricing of the existing loan and a €75 million fungible add-on tranche that was upsized from $50 million.

Spread talk remains unchanged. Talk on the dollar-denominated loan is Libor plus 325 basis points with a 1% Libor floor. Talk on the euro-denominated loan is Euribor plus 300 bps with a 0.75% floor.

For existing lenders rolling into the euro-denominated loan the reoffer price is par. New lenders are also offered the deal at par; previously new money euro lenders were being offered a 0.25 bps discount that would have rendered a reoffer price of 99.75.

For dollar-denominated lenders the reoffer price remains 99.75.

The deal also features a $105 million second-lien term loan.

Spread talk on the second lien tranche tightened to Libor plus 700 bps from earlier talk of Libor plus 700 to 725 bps. The 1% Libor floor and 99.75 reoffer price remain unchanged.

As reported, the debt also includes a $717,705,729 first-lien term loan due 2022 talked at Libor plus 325 basis points with a 1% Libor floor and an original issue discount of 99.75.

The first-lien term loans have 101 soft call protection for six months.

Barclays and Morgan Stanley Senior Funding Inc. are the bookrunners on the deal, with Barclays the global coordinator and administrative agent on the first-lien debt and Morgan Stanley the administrative agent on the second-lien loan.

Proceeds will be used to reprice the existing euro first-lien term loan and the second-lien term loan, to upsize the first-lien term loan so as to repay a portion of the company’s outstanding second-lien term loan borrowings, and to extend the U.S. first-lien term loan and the second-lien term loan by 2.5 years.

Freedom Mortgage removes OID

Freedom Mortgage eliminated the discount on its fungible $250 million add-on first-lien senior secured term loan due Feb. 23, 2022.

The deal is now set to come at par, versus previous discount talk of 99.75.

The spread remains at Libor plus 550 basis points atop a 1% Libor floor, which matches existing first-lien term loan pricing.

Barclays is the lead bank on the deal.

Commitments were due on Friday.

Proceeds will be used for general corporate purposes, including potential strategic acquisitions of Mortgage Servicing Rights.

Sally Beauty tightens

Sally Beauty Holdings Inc. tightened pricing in $850 million of seven-year term loan B debt, and shifted $50 million to the fixed-rate tranche from the floating-rate tranche.

A downsized $550 million floating-rate tranche is talked at Libor plus 250 basis points, tightened from 275 to 300 bps. The reoffer price of the floating-rate tranche, which is downsized from $600 million, is 99.5, tighter than earlier discount talk of 99. Unchanged are the 0% Libor floor and the six months of soft call protection at 101.

A upsized $300 million fixed-rate tranche is talked at 4½%, tightened from 4¾% to 5%. The fixed-rate tranche is also offered at 99.5, narrowing the discount from earlier talk of 99.

The fixed rate tranche becomes callable at 102 in year two, 101 in year three.

J.P. Morgan is the lead bank on the deal.

Proceeds from the term loan B will be used to fund the redemption of $850 million of 5¾% senior notes due 2022.

The company also intends to amend and restate its ABL revolving credit facility to extend the maturity by five years and reduce the applicable margins.

Sally Beauty is a Denton, Texas-based specialty retailer and distributor of professional beauty supplies.

Constellis launches incremental loan

Constellis Holdings LLC launched a $27.5 million Libor plus 500 basis points incremental first lien term loan due April 2024 (B2/B+).

Price talk is 98 to 98.5.

The loan has 101 soft call protection through April 2018.

The maturity, spread and call protection are unchanged from the original loan, as is the 1% Libor floor.

Credit Suisse is the lead.

The Reston, Va., provider of operational support and risk management services to government and commercial clients plans to use the proceeds to fund a tuck-in acquisition.

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