Quanex, Foundation Building, Allied Security break; Platform falls with updated guidance

By Sara Rosenberg

New York, Oct. 7 – Quanex Building Products Corp., Foundation Building Materials LLC and Allied Security Holdings LLC (AlliedBarton) saw their deals hit the secondary market on Wednesday, and Platform Specialty Products Corp.’s term loan weakened as the company modified adjusted EBITDA guidance for the year.

Moving to the primary market, AssuredPartners Inc. released price talk with launch, and Computer Sciences Government Services Inc. is expected to bring its term loan B to market next week.

Quanex frees up

Quanex Building Products’ credit facility broke for trading on Wednesday, with the $310 million seven-year term loan B (B2/BB) quoted at 98½ bid, 99½ offered, according to a trader.

Pricing on the term loan is Libor plus 525 basis points with a 1% Libor floor, and it was sold at an original issue discount of 98. The debt has 101 hard call protection for one year.

During syndication, pricing on the term B was increased from Libor plus 375 bps, the discount widened from 99, the call protection was revised from a 101 soft call for six months and a total leverage covenant was added to the initially covenant-light loan.

The company’s $410 million senior secured credit facility also includes a $100 million five-year asset-based revolver.

Quanex buying Woodcraft

Proceeds from Quanex’s credit facility and cash on hand will be used to fund the acquisition of Woodcraft Industries for about $248.5 million, to refinance existing debt and for general corporate purposes.

Wells Fargo Securities LLC is leading the credit facility.

Pro forma debt to EBITDA at close is expected to be 3.2 times.

Closing is targeted for the fourth quarter.

Quanex is a Houston-based supplier of window and door components. Woodcraft is a St. Cloud, Minn.-based supplier of doors and components to original equipment manufacturers in the kitchen and bathroom cabinet industry.

Foundation hits secondary

Foundation Building Materials’ credit facility freed up as well, with the $245 million seven-year first-lien term B (B3/B+) quoted at 95½ bid, 96½ offered and the $80 million eight-year second-lien term loan (Caa2/CCC+) quoted at 94 bid, 95 offered, a trader said.

Pricing on the first-lien term loan is Libor plus 625 bps with a 1% Libor floor, and it was sold at an original issue discount of 95. The debt has 101 soft call protection for one year.

The second-lien term loan is priced at Libor plus 1,050 bps with a 1% Libor floor and was issued at a discount of 94. This tranche has call protection of 102 in year one and 101 in year two.

During syndication, the spread on the first-lien term loan was increased from talk of Libor plus 550 bps to 575 bps, the discount was modified from revised talk of 97 and initial talk of 99, and the call protection was extended from six months, and pricing on the second-lien term loan was lifted from talk of Libor plus 975 bps to 1,000 bps, and the discount was changed from 97.5. Also, the MFN was set for life and a total leverage covenant step-down to 5 times in December 2017 was added.

Foundation getting revolver

Along with the first- and second-lien term loans, Foundation Building’s $375 million credit facility includes a $50 million ABL revolver.

RBC Capital Markets, Credit Suisse Securities (USA) LLC, Jefferies Finance LLC and SunTrust Robinson Humphrey Inc. are leading the deal.

Proceeds will be used to help fund the buyout of the company by Lone Star Funds.

Foundation Building is a Tustin, Calif.-based building material company.

Allied Security breaks

Allied Security’s new debt began trading too, with the $84 million add-on covenant-light first-lien term loan (B1/B+) due February 2021 seen at 97½ bid, 98½ offered and the $30 million add-on covenant-light second-lien term loan (Caa2/CCC+) due August 2021 seen at 96½ bid, 97½ offered, a trader remarked.

Pricing on the add-on first-lien loan is Libor plus 325 bps with a 1% Libor floor, which matches existing first-lien loan pricing, and it was issued at a discount of 97.5, after firming at the wide end of the 97.5 to 98 talk, a source said.

The add-on second-lien term loan is priced at Libor plus 700 bps with a 1% Libor floor, in line with the existing second-lien term loan, and it was issued at 96.5, after finalizing at the wide end of the 96.5 to 97 talk, the source added. This tranche has 101 call protection through Feb. 14, 2016.

Ticking fees on the new debt are the full spread plus the floor starting on day 31.

Allied being acquired

Proceeds from Allied Security’s term loans will be used to help fund its buyout by Wendel Group from Blackstone for about $1.67 billion.

Credit Suisse Securities (USA) LLC is the lead bank on the debt.

As part of the buyout, Wendel will make an equity investment of around $670 million, for a 96% ownership in the company, alongside Allied Security’s management team.

Allied Security is a Conshohocken, Pa.-based security officer services company.

Platforms Specialty softens

Also in the secondary market, Platform Specialty Products’ term loans retreated after the company lowered its full-year 2015 adjusted EBITDA guidance to $550 million to $570 million from $620 million to $650 million, according to traders.

The term loan B-1 and term loan B-2 were quoted by one trader at 95 bid, 96 offered, down about 1½ points on the day, and by a second trader at 94¾ bid, 95¾ offered, down from 97 bid, 97½ offered.

The company said in a news release that the downward revision to adjusted EBITDA guidance reflects further foreign exchange volatility, continued weakness in certain agricultural end markets, and a decision to limit “pre-season” selling activity in its Agricultural Solutions business segment.

Platform is a Miami-based specialty chemicals company.

AssuredPartners discloses talk

Switching to the primary market, AssuredPartners held its bank meeting on Wednesday morning, and with the event, price talk on its first-and second-lien term loans was announced, sources said.

The $762 million seven-year covenant-light first-lien term loan (B1/B) is talked at Libor plus 450 bps to 475 bps with a 1% Libor floor, an original issue discount of 98.5 and 101 soft call protection for one year, and the $337 million eight-year covenant-light second-lien term loan (Caa2/CCC+) is talked at Libor plus 900 bps with a 1% Libor floor, a discount of 96 to 97, and call protection of non-callable for one year, then at 102 in year two and 101 in year three.

The company’s $1,226,500,000 credit facility also includes a $127.5 million five-year revolver (B1/B).

Commitments are due at noon ET on Oct. 16, sources added.

Bank of America Merrill Lynch, RBC Capital Markets, Morgan Stanley Senior Funding Inc., Macquarie Capital (USA) Inc. and Barclays are leading the deal that will help fund the buyout of the Lake Mary, Fla.-based insurance brokerage services company by Apax Partners from GTCR.

Computer Sciences coming soon

Computer Sciences Government Services is eyeing Oct. 15 as the date to hold the bank meeting for its proposed $1.25 billion seven-year term loan B, according to a market source.

The company’s $3.5 billion senior secured credit facility (Ba2/BB+/BBB) also includes a $500 million five-year revolver, a $500 million three-year term loan A-1 and a $1.25 billion five-year term loan A-2 that launched to bank investors on Tuesday.

Revolver and term loan A-2 talk is Libor plus 175 bps, and term loan A-1 talk is Libor plus 162.5 bps, the source said. Term loan B talk is not yet available.

Mitsubishi UFJ Financial Group (MUFG) and RBC Capital Markets are leading the deal that will help fund the company’s spin-off from Computer Sciences Corp., finance the $390 million acquisition of SRA from Providence Equity Partners and management, and refinance SRA’s existing $1 billion of net debt.

Falls Church, Va.-based Computer Sciences Government and Fairfax, Va.-based SRA are providers of IT services to the U.S. federal government.

Technicolor wraps

Technicolor completed syndication of its €375 million-equivalent incremental senior secured term loan due in 2020 priced at Libor/Euribor plus 400 bps with a 1% floor, according to a news release.

The term loan is split between a $200 million tranche and a €197 million tranche.

Goldman Sachs International is leading the deal that will be used with the capital increase with preferential subscription rights announced on Sept. 15 and cash on hand to fund the acquisition of the Connected Devices division of Cisco and The Mill.

Technicolor is a France-based technology company focused on the media and entertainment sector.

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