McGraw, Cengage trade higher; PlayPower, ION revised; PCI Gaming, Alliant release price talk

By Sara Rosenberg

New York, May 1 – McGraw-Hill Global Education Holdings LLC and Cengage Learning Inc. saw their term loans rise in the secondary market on Wednesday after news surfaced that the companies will merge and will seek to amend and extend their first-lien term loan debt.

Meanwhile, over in the primary market, PlayPower Inc. increased the size of its first-lien term and widened the spread, and terminated plans for a second-lien term loan, and ION Investment Group downsized its seven-year term loan.

Also, PCI Gaming Authority (Wind Creek Hospitality) and Alliant Holdings Intermediate LLC announced price talk with launch, and Liqui-Box joined the near-term primary calendar.

McGraw/Cengage gain

McGraw-Hill and Cengage both saw their first-lien term loans trade higher on Wednesday after an amendment and extension proposal for their debt was announced along with plans for the two companies to merge in an all-stock transaction, according to a trader.

McGraw-Hill’s term loan was quoted at 97¾ bid, 98¾ offered, up from 95½ bid, 96½ offered, and Cengage’s term loan was quoted at 97 5/8 bid, 98 3/8 offered, up from 96 3/8 bid, 97 1/8 offered, the trader said.

The companies will hold a bank meeting at 10 a.m. ET in New York on Monday to launch a $3,342,000,000 covenant-lite first-lien term loan due May 2024 talked at Libor plus 500 basis points with a 1% Libor floor and 101 soft call protection for six months, a market source remarked.

Credit Suisse Securities (USA) LLC is the left lead on the new loan that will be used to amend and extend McGraw-Hill’s $1,679,000,000 first-lien term loan due May 2022 priced at Libor plus 400 bps with a 1% Libor floor and Cengage’s $1,663,000,000 first-lien term loan due June 2023 priced at Libor plus 425 bps with a 1% Libor floor.

McGraw/Cengage fee

The McGraw-Hill/Cengage amended and extended term loan will be offered to lenders with a 25 bps extension fee and there is a 90% minimum consent threshold.

Commitments are due at noon ET on May 16, the market source added.

The borrower of the new loan is McGraw-Hill Global Education Holdings LLC.

Closing on the merger is expected by early 2020, subject to customary conditions, including regulatory approvals.

McGraw-Hill is a New York-based provider of education materials. Cengage is a Boston-based educational content, technology and services company for the higher education and K-12, professional, library and workforce training markets.

PlayPower reworked

In other news, PlayPower raised its seven-year covenant-lite first-lien term loan to $400 million from $340 million and increased pricing to Libor plus 550 bps from Libor plus 475 bps, a market source said.

With the first-lien upsizing, the company cancelled plans for a $100 million privately placed 7.5-year second-lien term loan.

As before, the first-lien term loan has a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

The company’s now $445 million of credit facilities also include a $45 million revolver.

Recommitments are due on Monday, the source added.

SG Americas Securities LLC is leading the deal that will be used to fund a dividend and refinance existing debt.

PlayPower is a Huntersville, N.C.-based manufacturer of commercial playground equipment, shade structures and floating dock systems.

ION downsizes

ION Investment Group reduced its U.S. and euro seven-year term loan to $1.56 billion equivalent from $1.81 billion equivalent, and left talk at Libor plus 550 bps with a 0% Libor floor and an original issue discount of 98.5 on the U.S. piece and at Euribor plus 500 bps with a 1% floor and a discount of 98.5 on the euro piece, a market source remarked.

The company is still seeking a $400 million equivalent U.S. and euro four-year term loan. The U.S. tranche is talked at Libor plus 475 bps with a 0% Libor floor and a discount of 99, and the euro tranche is talked at Euribor plus 425 bps with a 1% floor and a discount of 99.

The term debt has 101 soft call protection for one year.

Earlier in syndication, the deal was revised to add the four-year tranche and downsize the seven-year tranche from $2.2 billion equivalent, the call protection was extended from six months, amortization was increased, and the company added an 18-month limitation on debt funded acquisitions, incremental leverage that requires an amendment and additional dividends.

ION cancels dividend

Proceeds from the term loans will still be used for the refinancing of ION’s corporates division, which include Openlink Financial LLC, Wall Street Systems, Triple Point Technology and Allegro, however, due to the downsizing, plans for a dividend payment were terminated, the source added.

Commitments continue to be due at the close of business on Friday.

UBS Investment Bank is leading the deal.

ION is a provider of mission-critical trading and workflow automation software solutions to financial institutions, central banks, governments and corporations.

PCI discloses talk

PCI Gaming Authority held its bank meeting on Wednesday and announced talk for its $1.3 billion seven-year first-lien term loan at Libor plus 300 bps to 325 bps with a 0% Libor floor and an original issue discount of 99, according to a market source.

The term loan has 101 soft call protection for six months.

The company’s $1.4 billion of credit facilities (Ba3/BB+/BBB-) also include a $100 million revolver.

Commitments are due at 5 p.m. ET on May 15.

Credit Suisse Securities (USA) LLC, KeyBanc Capital Markets and Capital One are leading the deal that will be used to fund the acquisition of Sands Casino Resort in Bethlehem, Pa., from Las Vegas Sands Corp. for a total enterprise value of $1.3 billion.

Closing is subject to regulatory review and other customary conditions.

PCI Gaming, an authority of the Poarch Band of Creek Indians, is an Atmore, Ala.-based owner and operator of gaming and entertainment facilities.

Alliant floats guidance

Alliant Holdings released talk of Libor plus 325 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months on its $505 million incremental senior secured covenant-lite term loan B due May 2025 that launched with a morning call, a market source remarked.

Commitments are due at 5 p.m. ET on May 9, the source added.

Morgan Stanley Senior Funding Inc. is the left lead on the deal, which will be used to fund a distribution, repay outstanding revolver borrowings, fund general corporate purposes and pay related fees and expenses.

Alliant is a Newport Beach, Calif.-based specialty insurance brokerage firm.

Liqui-Box joins calendar

Liqui-Box will hold a lender meeting in New York on Tuesday to launch $605 million of senior secured credit facilities, a market source said.

The facilities consist of a $75 million five-year revolver and a $530 million seven-year term loan B, the source added.

Antares Capital is leading the deal that will be used to refinance existing debt and support the acquisition of DS Smith’s plastics division, a provider of Bag-in-Box and dispensing solutions, fitments and returnable rigid plastic packaging.

Liqui-Box, an Olympus Partners portfolio company, is a Richmond, Va.-based provider of liquid packaging solutions to a variety of blue-chip customers across the beverage, dairy and foodservice end markets.

BCP Renaissance allocates

BCP Renaissance Parent LLC allocated on Wednesday a $65 million senior secured term loan B-2 due 2024 that priced at Libor plus 350 bps with a 0% Libor floor and an original issue discount of 97.5, according to a market source.

The term loan B-2 has 101 soft call protection for six months, the source said.

Jefferies LLC, Morgan Stanley Senior Funding Inc. and Blackstone Capital Markets are leading the deal, which will be used to fund cash to the balance sheet to support ongoing distributions and to fund a dividend.

BCP Renaissance is the owner of Blackstone’s interest in Rover Pipeline LLC, which transports natural gas from the Marcellus and Utica Shale production areas.

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