Ascena Retail slides some more; TeamHealth, Hearthside, Berry Plastics, Delos changes emerge

By Sara Rosenberg

New York, Jan. 11 – Ascena Retail Group Inc.’s term loan continued to retreat in trading on Wednesday on the back of sales numbers and a lowered earnings outlook, and two $300 million-plus Bid Wanted In Competition’s surfaced.

Moving to the primary market, TeamHealth Holdings Inc. increased the size of its term loan B, revised the original issue discount and extended the call protection, and Hearthside Group Holdings LLC modified the issue price on new money commitments for its term loan B.

Also, Berry Plastics Corp. changed the issue price on its term loan J, Delos Finance Sarl tightened the issue price on its term loan, and Optiv Security Inc. and SunGard Public Sector moved up the commitment deadlines on their credit facilities.

Furthermore, Grifols and KIK Custom Products Inc. disclosed price talk with launch, TransDigm Group Inc. released details on its refinancing transaction, NRG Energy Inc. approached lenders with a repricing proposal, and Shoes for Crews revealed original issue discount guidance on its add-on term loan.

Ascena softens again

Ascena Retail Group’s term loan fell some more in the secondary market on Wednesday as investors continued to react to holiday sales results and a reduction in earnings per diluted share guidance for the 52-week period ending July 29, 2017, according to a market source.

The term loan was quoted at 93½ bid, 94½ offered, down from 93¾ bid, 94¾ offered at the end of the day on Tuesday, the source said. Prior to the news, the loan was 96½ bid, 97¼ offered.

Ascena’s consolidated comparable sales over the holiday period decreased 3.1% from the prior year, and for the combined November/December fiscal periods consolidated comparable sales were down 4.4%.

Also, excluding restructuring, acquisition and integration related expenses and non-cash ANN purchase accounting adjustments, the company expects a non-GAAP EPS loss of $0.11 to $0.08 for the fiscal second quarter, ending Jan. 28, 2017, revised from prior guidance of a loss of $0.05 to $0.00 for the quarter. And, full year fiscal 2017 non-GAAP EPS was changed to $0.37 to $0.42, from previous guidance of $0.60 to $0.65.

Ascena is a Mahwah, N.J.-based specialty retailer of clothing, shoes and accessories.

BWIC’s announced

A $332.8 million cash loan Bid Wanted In Competition surfaced, with bids due at 9 a.m. ET on Thursday, and a $390 million BWIC emerged, with bids due at 10 a.m. ET on Thursday, traders said.

Some of the names in the $332.8 million BWIC are Alion Science and Technology Corp., Consolidated Precision Products, Deluxe Entertainment Services Group, FleetPride, Healogics, Monitronics International Inc., SeaWorld Parks & Entertainment Inc. and TNS Inc. There are about 50 issuers in the portfolio.

The $390 million BWIC includes debt from, among others, Alere Inc., Asurion LLC, Chrysler Group LLC, Dell International LLC, Emdeon Inc., First Data Corp., Grifols Inc., Hudson Products Holdings Inc., LPL Holdings Inc., National Vision Inc., Pinnacle Foods Finance LLC, RGIS Services LLC, Seminole Tribe of Florida, TransDigm Inc., Verifone Inc., Windstream Corp. and Ziggo BV. There are around 226 issuers in this portfolio, traders added.

TeamHealth reworks loan

Switching to the primary market, TeamHealth lifted its seven-year covenant-light term loan B to $2.75 billion from $2.6 billion, reduced pricing to Libor plus 275 bps from talk of Libor plus 325 bps to 350 bps, moved the original issue discount to 99.75 from 99.5 and extended the 101 soft call protection to one year from six months, according to a market source.

The term loan B still has a 1% Libor floor.

The company’s now $3.15 billion senior secured credit facility, up from $3 billion, also includes a $400 million revolver.

J.P. Morgan Securities LLC, Barclays, Bank of America Merrill Lynch and Morgan Stanley Senior Funding Inc. are leading the deal.

TeamHealth being acquired

Proceeds from TeamHealth’s credit facility will be used to help fund its buyout by Blackstone for $43.50 per share in cash. The transaction is valued at about $6.1 billion.

The company also plans on getting $865 million of senior unsecured notes, downsized from $1,015,000,000 with the term loan B upsizing, and $2.7 billion of equity for the buyout.

Closing is expected this quarter, subject to stockholder approval, regulatory approvals and other customary conditions. The transaction is not subject to financing.

TeamHealth is a Knoxville, Tenn.-based physician services organization.

Hearthside updated

Hearthside Group changed the issue price on new money commitments for its term loan B (B1) to par from 99.75, and left the issue price for rolled amounts at par, according to a market source.

Pricing on the term loan B debt is Libor plus 300 basis points with a 1% Libor floor, and there is 101 soft call protection for six months.

The $600.9 million term loan B includes a fungible $50 million add-on term loan B that will be used to repay revolver borrowings and to pay related fees and expenses, and a repricing of the company’s existing $550.9 million term loan B due June 2, 2021 from Libor plus 350 bps with a 1% Libor floor.

Recommitments were due at noon ET on Wednesday and the debt allocated later in the day, the source said.

Barclays and Goldman Sachs Bank USA are leading the deal.

Hearthside is a Downers Grove, Ill.-based manufacturer of grain based food and snack products.

Berry tweaks term J

Berry Plastics tightened the original issue discount on its $500 million seven-year term loan J to par from 99.5, and kept pricing at Libor plus 250 bps with no Libor floor, a market source remarked.

The company is still also getting a $1,895,000,000 term loan I due October 2022 priced at Libor plus 250 bps with no Libor floor and a par issue price.

Both term loans have 101 soft call protection for six months.

Cashless roll commitments for the term loan I were due at 5 p.m. ET on Wednesday, and new term loan commitments are due at 5 p.m. ET on Thursday.

Citigroup Global Markets Inc., Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA and Wells Fargo Securities LLC are leading the $2,395,000,000 of term loans (Ba3/BB).

Berry acquisition, repricing

Proceeds from Berry Plastics’ term loan J will be used with cash on hand to fund the cash portion of the acquisition of AEP Industries Inc. and refinance existing first-lien term loans, and the term loan I will be used to reprice an existing term loan H from Libor plus 275 bps with a 1% Libor floor.

Under the agreement, AEP is being bought for either $110 in cash or 2.5011 shares of Berry common stock per AEP share, subject to an overall 50/50 proration. The transaction is valued at $765 million, including AEP’s net debt.

The loans are expected to close during the week of Jan. 16.

Closing on the acquisition is subject to AEP shareholder approval and other customary conditions.

Berry is an Evansville, Ind.-based provider of value-added plastic consumer packaging and engineered materials. AEP is a Montvale, N.J.-based manufacturer of flexible plastic packaging films.

Delos modified

Delos Finance changed the issue price on its $1.5 billion term loan (Baa3/BBB-/BBB-) due Oct. 6, 2023 to par from 99.875, according to a market source.

As before, pricing on the loan is Libor plus 225 bps with a 0.75% Libor floor, and there is 101 soft call protection for six months.

Commitments are due at noon ET on Thursday.

Deutsche Bank Securities Inc. is leading the deal that will be used to refinance an existing term loan due March 6, 2021.

Delos is a subsidiary of AerCap Holdings NV, a Dublin-based commercial aircraft leasing company.

Optiv revises deadline

Optiv Security accelerated the commitment deadline on its $1.13 billion credit facility to 3 p.m. ET on Friday from Jan. 19, a market source said.

The deal consists of a $100 million five-year ABL revolver, a $750 million seven-year covenant-light first-lien term loan (B2/B) and a $280 million eight-year covenant-light second-lien term loan (Caa2/CCC+).

Talk on the first-lien term loan is 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, and talk on the second-lien term loan is Libor plus 850 bps with a 1% Libor floor, a discount of 98.5 and hard call protection of 102 in year one and 101 in year two.

Jefferies Finance LLC, Macquarie Capital (USA) Inc. and KKR Capital Markets are leading the deal that will be used to help fund the buyout of the company by KKR from a group of private investors, including a private equity fund managed by Blackstone, which will maintain a minority interest in Optiv along with Optiv management. Other selling shareholders include Investcorp and Sverica.

Closing is expected this quarter, subject to customary conditions.

Optiv Security is a Denver-based provider of end-to-end cyber security solutions.

SunGard shutting early

SunGard Public Sector moved up the commitment deadline on its $435 million credit facility to Friday from Jan. 19, according to a market source.

The facility includes a $40 million revolver (B2/B+), a $275 million covenant-light first-lien term loan (B2/B+) and a $120 million covenant-light second-lien term loan (Caa2/CCC+).

The first-lien term loan is talked at Libor plus 450 bps to 475 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and the second-lien term loan is talked at Libor plus 875 bps with a 1% Libor floor, a discount of 98.5 and hard call protection of 102 in year one and 101 in year two.

Antares Capital and Golub Capital are leading the deal that will be used to help fund the buyout of the company by Vista Equity Partners from Fidelity National Information Services.

Closing on the credit facility is targeted for Jan. 24.

SunGard Public Sector is a Lake Mary, Fla.-based provider of mission-critical software solutions that serve the needs of public administration and public safety officials.

Grifols reveals talk

Also on the new deal front, Grifols held its bank meeting on Wednesday, launching its $3 billion eight-year term loan B with talk of Libor plus 250 bps with no Libor floor, an original issue discount of 99.75 and 101 soft call protection for six months, according to a market source.

Commitments for the term loan B are due on Jan. 19, the source said.

The company’s $6.3 billion credit facility also includes a $300 million six-year revolver and a $3 billion six-year term loan A, both talked at Libor plus 150 bps to 175 bps, the source said.

Nomura, Bank of America Merrill Lynch, Goldman Sachs Bank USA and HSBC Securities (USA) Inc. are leading the deal, with Nomura left on the term loan B and Bank of America left on the revolver and term loan A.

The credit facility will be used with cash on the balance sheet to fund the acquisition of the Nucleic Acid Testing donor screening unit from Hologic for $1.85 billion and to refinance existing debt.

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

Grifols is a Sant Cugat del Valles, Barcelona-based health care company.

KIK sets guidance

KIK Custom Products came out with talk of Libor plus 450 bps with a 1% Libor floor, a par issue price and 101 soft call protection for six months on the repricing of its $840 million term loan B due Aug. 26, 2022, a source said.

Commitments are due at 5 p.m. ET on Jan. 18, the source added.

Barclays is leading the deal that will reprice the existing term loan down from Libor plus 500 bps with a 1% Libor floor.

KIK is an Ontario-based developer and marketer of pool and spa treatment products and a manufacturer of consumer, institutional and industrial products.

TransDigm details surface

TransDigm Group held its lender call at 10:15 a.m. ET to launch a $1,225,000,000 seven-year covenant-light first-lien term loan (Ba2/B) talked at Libor plus 275 bps with no Libor floor, an original issue discount of 99 to 99.5 and 101 soft call protection for six months, a market source said.

Commitments are due at 5 p.m. ET on Jan. 19, the source added.

Credit Suisse Securities (USA) LLC is the left lead bank on the deal that will be used to refinance a term loan C due Feb. 28, 2020 priced at Libor plus 300 bps with a 0.75% Libor floor.

The company had announced in a news release on Tuesday that it would make a presentation to lenders on Wednesday regarding a potential refinancing of a portion of its senior secured term loans, but details on the transaction had not been available.

TransDigm is a Cleveland-based designer, producer and supplier of highly engineered aircraft components for use on commercial and military aircraft.

NRG repricing

NRG Energy launched in the morning a repricing of its $1,891,000,000 covenant-light first-lien term loan B (Baa3/BB+) due June 2023 talked at Libor plus 225 bps with a 0.75% Libor floor, an original issue discount of 99.875 and 101 soft call protection for six months, according to a market source.

Commitments are due at 5 p.m. ET on Jan. 18, the source said.

Credit Suisse Securities (USA) LLC, Barclays and Citigroup Global Markets Inc. are leading the deal that will reprice the existing term loan down from Libor plus 275 bps with a 0.75% Libor floor.

NRG is a power producer with headquarters in Princeton, N.J., and Houston.

Shoes for Crews OID talk

Shoes for Crews held its lender call during the session, launching its fungible $25 million add-on first-lien term loan with original issue discount talk of 99.5, a market source said.

Pricing on the add-on loan is Libor plus 500 bps with a 1% Libor floor.

Commitments are due on Jan. 18, the source added.

Antares Capital is leading the deal that will be used to fund the acquisition of the SureGrip Footwear subsidiary of Genesco.

Shoes for Crews is a West Palm Beach, Fla.-based supplier of slip-resistant footwear for the workplace. SureGrip is a marketer of occupational, slip-resistant footwear for the hospitality, grocery, foodservice, health care and industrial industries.

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