SunEdison second-lien debt surfaces in trading; Stratose releases talk; PGT, Gray on deck

By Sara Rosenberg

New York, Jan. 7 – SunEdison Inc. finalized terms on its second-lien term loan debt, and levels on the term loan A2 tranche emerged in the secondary market on Thursday well below its issue price.

Moving to the primary market, Stratose Inc. disclosed price talk on its first-lien term loan with launch, and PGT Inc. and Gray Television Inc. joined the near-term new issue calendar.

SunEdison frees up

SunEdison’s second-lien term loan began trading on Thursday, with the $225 million second-lien term loan A2 due July 2, 2018 quoted at 71 bid, 78 offered, according to one trader.

Pricing on the term loan A2, as well as on a $500 million second-lien term loan A1 due July 2, 2018, is Libor plus 1,000 basis points with a 1% Libor floor. The term loan A2 was issued at par, and the term loan A1 was sold at an original issue discount of 96. The loans are non-callable for one year, then at 105 in year two.

Lenders under the A2 loan will receive warrants exercisable at any time for an aggregate of 8.9 million shares of common stock, in each case at an exercise price of $0.01 per share, and lenders under the term loan A1 will receive warrants exercisable at any time for an aggregate of 19.8 million shares of common stock.

The trader explained that the term loan A2 was quoted so far below its issue price because of the levels at which the company is doing its convertibles exchange.

SunEdison exchange offer

Under the convertibles exchange, SunEdison is issuing $225 million of new senior secured convertible notes due 2018 in exchange for $40.5 million of its 2020 notes, $106.9 million of its 2022 notes, $97 million of its 2023 notes and $91.4 million of its 2025 notes.

The company is also issuing an estimated 28 million shares of common stock in exchange for $44.3 million of its 2018 notes, $71 million of its 2020 notes, $10.5 million of its 2021 notes, $37 million of its 2022 notes, $43 million of its 2023 notes and $38.5 million of its 2025 notes.

Furthermore, an estimated 11.8 million shares of common stock will be issued in exchange for $158.3 million of the company’s preferred stock.

SunEdison lead banks

Deutsche Bank Securities Inc., Barclays, BBVA, Keybanc Capital Markets and Macquarie Capital (USA) Inc. are leading SunEdison’s second-lien term loans.

Proceeds will be used to repay an existing 2017 margin loan, to refinance an existing 2016 second-lien term loan and for general corporate purposes.

Closing is expected on Monday.

SunEdison is a Maryland Heights, Mo.-based renewable energy development company.

Stratose sets talk

Switching to the primary market, Stratose held its bank meeting on Thursday, launching its $265 million first-lien term loan with price talk of Libor plus 500 bps to 525 bps with a 1% Libor floor and an original issue discount of 98.5 to 99, market sources remarked.

The loan has 101 soft call protection for six months, sources continued.

Commitments are due on Jan. 21.

SunTrust Robinson Humphrey Inc., Capital One and BMO Capital Markets are leading the deal.

Proceeds will be used with a second-lien term loan that was privately placed to refinance existing debt and fund an add-on acquisition.

Closing is expected late this month.

Stratose is an Atlanta-based provider of health care cost containment solutions for medical, dental and workers’ compensation payers, third-party administrators, self-funded entities and risk-bearing providers.

PGT on deck

PGT is set to hold a bank meeting at 2 p.m. ET in New York on Monday to launch a $310 million seven-year covenant-light term loan B, according to a market source.

Commitments are due on Jan. 26, the source said.

Deutsche Bank Securities Inc. and SunTrust Robinson Humphrey Inc. are leading the loan that will be used to fund the acquisition of WinDoor Inc. for about $102 million and to refinance existing debt.

Closing is expected in the middle of this quarter, subject to customary conditions.

PGT is a Venice, Fla.-based manufacturer and supplier of residential impact-resistant windows and doors. WinDoor is an Orlando, Fla.-based provider of high-performance, impact-resistant windows and doors for five-star resorts, luxury high-rise condominiums, hotels and custom residential homes.

Gray Television coming soon

Gray Television scheduled a bank meeting for 10 a.m. ET in New York on Tuesday to launch a $400 million senior secured term loan, a market source said.

Wells Fargo Securities LLC and Bank of America Merrill Lynch are leading the deal that will be used to help fund the $442.5 million acquisition of all of the television and radio stations of Schurz Communications Inc.

Closing is expected early this year.

Gray Television is an Atlanta-based television broadcast company.

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