Weather rises with IBM agreement; Computer Sciences Government Services, Plaskolite set changes

By Sara Rosenberg

New York, Oct. 28 – Weather Co. (TWCC Holding Corp.) saw its first- and second-lien term loans move higher in the secondary market on Wednesday after news surfaced that IBM is acquiring certain assets of the company.

In the primary market, Computer Sciences Government Services Inc. set its term loan B and pro rata tranche sizes and updated pricing and call protection on the B loan, and Plaskolite upsized its first-lien term loan, firmed the spread at the wide end of guidance, added a pricing step-down and extended the call protection.

Also, Belk Inc., T-Mobile USA Inc., Envision Healthcare Corp., PolyOne Corp. and New Albertson’s Inc. disclosed price talk with launch, and Shoes for Crews hopped on the near-term new issue calendar.

Weather trades higher

Weather Co.’s first- and second-lien term loans were stronger on the back of an announcement that IBM is purchasing its B2B, mobile and cloud-based web properties, according to a trader.

The TV segment, the Weather Channel, will not be acquired by IBM but will license weather forecast data and analytics from IBM under a long-term contract.

Following the news, Weather Co.’s first-lien term loan was quoted at 99¾ bid, par ¼ offered, up from 99¼ bid, par offered, and its second-lien term loan was quoted around 98 bid, up from around 94 bid, the trader said.

Closing is expected in the first quarter of 2016, subject to customary closing conditions and regulatory clearance.

Weather Co., which is owned by Blackstone Group, Bain Capital and NBCUniversal, is an Atlanta-based multi-platform media and information company focused on weather.

Computer Sciences updated

Moving to the primary market, Computer Sciences Government Services firmed its seven-year covenant-light term loan B size at $750 million, compared with revised talk of up to $1 billion and an initial size of $1.25 billion, according to a market source.

On the flip side, the company upsized its five-year revolver to $700 million from $500 million, its three-year term loan A-1 to $600 million from $500 million and its five-year term loan A-2 to $1.45 billion from $1.25 billion.

Also, pricing on the term loan B was set at Libor plus 300 basis points, the low end of the Libor plus 300 bps to 325 bps talk, a step-down was added to Libor plus 275 bps when total net leverage is 2.5 times, the 101 soft call protection was extended to one year from six months and the MFN sunset provision was removed, the source said.

As before, the term loan B has a 0.75% Libor floor and an original issue discount of 99.5, pricing on the revolver and term loan A-2 is Libor plus 175 bps, and pricing on the term loan A-1 is still Libor plus 162.5 bps.

Computer Sciences leads

RBC Capital Markets LLC, Mitsubishi UFJ Financial Group, Bank of America Merrill Lynch and Scotiabank are leading Computer Sciences Government Services’ $3.5 billion senior secured credit facility (Ba2/BB+/BBB), with RBC left lead on the term loan B and Mitsubishi left lead on the revolver and term A debt.

Proceeds will be used to fund the $10.50 per share special cash dividend being paid in the spinoff of Computer Sciences Government Services from Computer Sciences Corp., to finance the $390 million acquisition of SRA by Computer Sciences Government Services from Providence Equity Partners and SRA’s founder, Ernst Volgenau, as well as members of its management team, and to refinance SRA’s existing $1 billion of net debt.

At close, total net leverage will be 3.1 times.

Computer Sciences Government Services is a Falls Church, Va., provider of IT services to the U.S. federal government. SRA is a Fairfax, Va.-based provider of IT and professional services to the U.S. federal government.

Plaskolite revises deal

Plaskolite lifted its seven-year covenant-light first-lien term loan (B1/B+) to $312.5 million from $305 million, finalized pricing at Libor plus 475 bps, the high end of the Libor plus 450 bps to 475 bps talk, added a step-down to Libor plus 450 bps when total net leverage is 5 times, pushed out the 101 soft call protection to one year from six months and removed the MFN sunset, a market source remarked.

As before, the term loan has a 1% Libor floor and an original issue discount of 99.

The company’s now $457.5 million credit facility also includes a $40 million five-year revolver (B1/B+) priced at Libor plus 450 bps with no floor and a $105 million privately placed second-lien term loan (Caa1/CCC+).

Recommitments were due by noon ET on Wednesday, allocations are targeted for Thursday, and closing is expected on Friday, the source continued.

Plaskolite being acquired

Proceeds from Plaskolite’s credit facility will be used to help fund its buyout by Charlesbank Capital Partners.

The funds from the first-lien term loan upsizing will be used to fund a roughly $7.5 million acquisition that is expected to close in November.

Being that the company was going to draw on its revolver for the acquisition, the term loan increase does not represent incremental leverage but will simply provide Plaskolite with additional ongoing liquidity, the source added.

Antares Capital and Keybanc Capital Markets are leading the financing.

Plaskolite is a Columbus, Ohio-based manufacturer of acrylics and other plastic products.

Belk launches

Also in the primary, Belk held its bank meeting on Wednesday afternoon, launching its $1.6 billion seven-year first-lien covenant-light term loan B (B2/B+) with talk of Libor plus 450 bps to 475 bps with a 1% Libor floor, an original issue discount of 98 to 98.5 and 101 soft call protection for one year, according to a market source.

Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch, Jefferies Finance LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Nomura Securities International Inc., RBC and MCS Capital Markets are leading the loan that will be used to help fund the buyout of the company by Sycamore Partners for $68.00 per share in cash. The transaction has an estimated enterprise value of about $3 billion.

Closing is expected in the fourth quarter, subject to customary conditions, including the receipt of regulatory and stockholder approval.

Belk is a Charlotte, N.C.-based department store company.

T-Mobile sets talk

T-Mobile USA revealed in connection with its bank meeting that its $1 billion seven-year covenant-light term loan B (Baa3/BBB-) is talked at Libor plus 300 bps with a 0.75% Libor floor and an original issue discount of 99.5, according to a market source.

Commitments are due at noon ET on Nov. 5.

Deutsche Bank Securities Inc., Barclays, Citigroup Global Markets Inc., Goldman Sachs Bank USA and J.P. Morgan Securities LLC are leading the deal that will be used for general corporate purposes, which may include the acquisition of additional spectrum.

T-Mobile is a Bellevue, Wash.-based provider of wireless communications.

Envision discloses terms

Envision Healthcare held its bank meeting and released talk of Libor plus 375 bps to 400 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months on its $750 million seven-year senior secured covenant-light term loan B-2, a source remarked.

Commitments are due at 5 p.m. ET on Nov. 4, and closing is expected during the week of Nov. 9.

Barclays, Goldman Sachs, Deutsche Bank, Bank of America Merrill Lynch and JPMorgan are leading the dal that will be used to fund the $620 million acquisition of Rural/Metro Corp. by Envision’s medical transportation segment American Medical Response, to repay $108 million of outstanding ABL revolver borrowings and for general corporate purposes.

Pro forma net secured leverage is 3 times and total net leverage is 4.2 times based on combined LTM Sept. 30 adjusted EBITDA of $662 million and including about $13 million of anticipated synergies.

Envision is a Greenwood Village, Colo.-based provider of health care-related services. Rural/Metro is a Scottsdale, Ariz.-based provider of emergency and non-emergency ambulance transportation and specialty fire protection services.

PolyOne reveals guidance

PolyOne came out with talk of Libor plus 325 bps to 350 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months on its $550 million seven-year senior secured covenant-light term loan B (Ba1/BB+) that launched with a morning bank meeting, a market source said.

Commitments are due at 5 p.m. ET on Nov. 6, the source added.

Citigroup, Wells Fargo Securities LLC, Goldman Sachs, HSBC Securities (USA) Inc. and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to refinance $317 million of senior notes due 2020 and other outstanding debt.

Closing is expected during the week of Nov. 9.

PolyOne is an Avon Lake, Ohio-based provider of specialized polymer materials, services and solutions.

New Albertson’s details emerge

New Albertson’s held its call in the morning, launching a $300 million add-on senior secured covenant-light term loan due June 27, 2021 with talk of Libor plus 375 bps with a 1% Libor floor and an original issue discount of 99 to 99.5, according to a market source.

Commitments are due on Nov. 6, and closing is targeted for Nov. 12, the source said.

Citigroup, Bank of America Merrill Lynch and RBC are leading the deal that will be used to complete the acquisition of A&P stores.

New Albertson’s is a Spokane, Wash.-based grocery store chain operating differentiated banners across the Mid-Atlantic and Northeast regions of the United States, including Acme, Jewel-Osco, Shaw’s and Safeway’s Eastern Division.

Shoes for Crews on deck

Shoes for Crews emerged with plans to hold a bank meeting in New York on Tuesday to launch a $258 million senior credit facility, according to a market source.

The facility consists of a $25 million six-year revolver and a $233 million seven-year covenant-light term loan, the source said.

The company is also getting a $100 million second-lien term loan that has been privately placed.

Antares Capital, Golub Capital and Macquarie Capital (USA) are leading the deal that will be used to back the recently completed buyout of the company by CCMP Capital Advisors LLC.

Shoes for Crews is a West Palm Beach, Fla.-based supplier of slip-resistant footwear for the workplace.

Greatbatch closes

In other news, Greatbatch Ltd. closed on its $1.6 billion credit facility (B1/B+) that was used to help fund the acquisition of Lake Region Medical, according to a news release.

The facility consists of a $200 million five-year revolver, a $375 million six-year term loan A and a $1,025,000,000 seven-year term loan B.

Pricing on the term loan A is Libor plus 325 bps, subject to a leverage-based grid, and it was issued at a discount of 99.75, and the term loan B is priced at Libor plus 425 bps with a 1% Libor floor, and it was sold at a discount of 99. The B loan has 101 soft call protection for six months.

During syndication, pricing on the term loan B was increased from Libor plus 375 bps, and the term loan A was upsized from $300 million as the company’s bond offering was downsized to $360 million from $435 million.

Credit Suisse, M&T Bank and Keybanc Capital Markets led the deal, with Credit Suisse left lead on the term loan B and M&T left lead on the revolver and term loan A.

Greatbatch is a Frisco, Texas-based medical device company. Lake Region is a Wilmington, Mass., provider of outsourced manufacturing and engineering services to the medical device industry.

Panda Hummel completed

Panda Hummel closed on its $710 million of term loans that are being used to fund the development of the Panda Hummel power project, a 1,124 megawatt natural gas-fueled, combined-cycle power facility in Snyder County, Pa., a news release said.

The debt consists of a $340 million funded seven-year term loan B, a $120 million delayed-draw seven-year term loan and a $250 million 6.5-year term loan A.

The funded and delayed-draw term loan B debt, led by Goldman Sachs, is priced at Libor plus 600 bps with a 1% Libor floor and was sold at an original issue discount of 96. The loans are non-callable for three years, then at 102 in year four and 101 in year five.

During syndication, the funded term loan B was downsized from $380 million, the delayed-draw loan was upsized from $75 million, pricing on the tranches was raised from talk of Libor plus 550 bps to 575 bps and the discount widened from 99.

The term loan A, led by ICBC and Investec, is priced at Libor plus 375 bps with no Libor floor.

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