SFR Group, Ancestry.com, KinderCare, Klockner, TransDigm, ConvaTec break; MGM Growth softens

By Sara Rosenberg

New York, Oct. 14 – SFR Group reduced the size of its U.S. term loan B-10 and firmed the spread at the high end of guidance, increased the size of its euro term loan while setting the spread at the low end of talk and modifying the issue price, and then freed up for trading on Friday.

Ancestry.com Operations Inc. moved funds between its first- and second-lien term loans, KinderCare Education LLC (Kuehg Corp.) finalized pricing on its first-lien term loan at the tight end of talk, and Klockner Pentaplast tightened spread and issue price on its euro term loan, and then these deals hit the secondary market as well.

Also breaking for trading were deals from TransDigm Group Inc. and ConvaTec Healthcare Inc., and MGM Growth Properties Operating Partnership LP’s term loan weakened with news of an upcoming lender call.

Back in the primary market, Universal Fiber Systems LLC upsized its well-received incremental first-lien term loan and modified the original issue discount, and Applied Systems Inc. and Mitchell International Inc. accelerated the commitment deadlines on their add-on first-lien term loans.

In addition, Cardenas Markets and Filtration Group Corp. joined the near-term new issue calendar.

SFR restructures, trades

SFR Group downsized its U.S. covenant-light term loan B-10 due January 2025 to $1.79 billion from $1.89 billion and set pricing at Libor plus 325 basis points, the high end of the Libor plus 300 bps to 325 bps talk, while leaving the 0.75% Libor floor, original issue discount of 99.75 and 101 soft call protection for six months unchanged, according to a market source.

Also, the company’s euro covenant-light term loan due January 2025 was upsized to €700 million from €500 million, the spread firmed at Euribor plus 300 bps, the low end of the Euribor plus 300 bps to 325 bps, and the issue price was revised to par from 99.75, the source said, adding that the 0.75% floor and 101 soft call protection for six months were left intact.

With terms finalized, the U.S. term loan broke for trading on Friday, and levels were quoted at 99 7/8 bid, 100 1/8 offered, a trader added.

Credit Suisse Securities (USA) LLC, Credit Agricole CIB, Natixis and Societe Generale are the bookrunners on the U.S. term loan, and BNP Paribas Securities Corp is the bookrunner on the euro term loan.

Proceeds will be used by the France-based telecommunications company to refinance existing debt.

Ancestry retranches

Ancestry.com lifted its seven-year covenant-light first-lien term loan B to $1.4 billion from $1.35 billion and trimmed its eight-year covenant-light second-lien term loan to $500 million from $550 million, a market source said.

The first-lien term loan is priced at Libor plus 425 bps with a 1% Libor floor and an original issue discount of 99.5 and has 101 soft call protection for one year, and the second-lien term loan is priced at Libor plus 825 bps with a 1% Libor floor and a discount of 99, and includes hard call protection of 102 in year one and 101 in year two.

On Thursday, pricing on the first-lien term loan was set at the low end of the Libor plus 425 bps to 450 bps talk and the call protection was extended from six months; pricing on the second-lien term loan was cut from Libor plus 850 bps and the discount was changed from 98.5; the incremental maturity carve-out amount was reduced to $125 million from $190 million; the incremental MFN carve-out amount was lowered to $125 million from $190 million; and the MFN sunset was changed to 18 months from 12 months.

Ancestry frees up

Recommitments for Ancestry.com’s term loans were due at noon ET, and then in the afternoon, the first-lien term loan emerged in the secondary market at par bid, 100½ offered and the second-lien term loan broke at 100½ bid, 101½ offered, traders added.

J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA, KKR Capital Markets, Barclays, Bank of America Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets and UBS Investment Bank are leading the $1.9 billion of term loans, with JPMorgan left on the first-lien term loan and Deutsche Bank left on the second-lien term loan.

Closing is expected on Wednesday.

Ancestry.com, a Provo, Utah-based online family history resource, will use the new loans with $88 million in cash to refinance existing debt, consisting of a $728 million term loan B, $300 million of Opco unsecured notes and $390 million of Holdco unsecured notes, to fund a return of capital to shareholders and to pay related fees and expenses.

KinderCare sets spread, breaks

KinderCare firmed pricing on its $690 million covenant-light first-lien term loan (B1/B) due Aug. 13, 2022 at Libor plus 425 bps, the low end of the Libor plus 425 bps to 450 bps talk, with the 1% Libor floor, par issue price and 101 soft call protection for six months remaining intact, according to a market source.

By late day, the term loan began trading with levels quoted at par bid, 100½ offered, another source remarked.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to reprice an existing first-lien term loan from Libor plus 500 bps with a 1% Libor floor.

KinderCare, formerly known as Knowledge Universe, is a Portland, Ore.-based provider of early childhood care and education services.

Klockner tweaked, trades

Klockner Pentaplast cut pricing on its €295 million first-lien covenant-light term loan due April 28, 2020 to Euribor plus 300 bps from Euribor plus 325 bps and revised the issue price to par from 99.875, while leaving the 1% floor and 101 soft call protection for six months unchanged, a market source said.

As for the $724 million first-lien covenant-light term loan due April 28, 2020, terms firmed in line with talk at Libor plus 325 bps with a 1% Libor floor, a discount of 99.875 and 101 soft call protection for six months.

Once pricing finalized, the U.S. term loan surfaced in the secondary with levels quoted at 100 1/8 bid, 100 3/8 offered, a trader added.

Credit Suisse Securities (USA) LLC is leading the deal (B) that will be used to refinance existing first-lien term loans priced at Libor/Euribor plus 400 bps with a 1% floor, to fund a recent acquisition in Turkey and for general corporate purposes.

The U.S. term loan size is unchanged from the current outstanding amount and the euro term loan includes €85 million of add-on debt.

Klockner is a Montabaur, Germany-based manufacturer of rigid plastic film solutions.

TransDigm hits secondary

TransDigm’s fungible $1.15 million incremental first-lien term loan F (Ba2/B) due June 2023 began trading too, with levels quoted at 99 5/8 bid, par offered, a source remarked.

Pricing on the incremental loan is Libor plus 300 bps with a 0.75% Libor floor, in line with existing term loan F pricing, and it was sold at a discount of 99.5. The debt has 101 soft call protection through June 2017.

During syndication, the incremental term loan was upsized from $650 million and the original issue discount firmed at the tight end of the 99 to 99.5 talk.

Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., UBS Investment Bank, Barclays, Credit Agricole, Goldman Sachs Bank USA, HSBC Securities (USA) Inc. and RBC Capital Markets led the deal that is being used to fund a shareholder distribution, and, due to the recent upsizing, to redeem 7½% senior subordinated notes due 2021.

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

ConvaTec starts trading

ConvaTec Healthcare’s credit facility also broke, with the $430 million seven-year senior secured term loan B seen at par bid, 101 offered, a trader said.

Pricing on the term loan B is Libor plus 250 bps with a 0.75% Libor floor, and it was sold at an original issue discount of 99.5. There is 101 soft call protection for six months.

The company’s $2 billion-equivalent credit facility (Ba3/BB) also includes a $200 million-equivalent revolver, a $770 million U.S. term loan A and a $600 million-equivalent euro term loan A.

On Thursday, the term loan B was downsized from $585 million and pricing was trimmed from Libor plus 275 bps, the U.S. term loan A was upsized from $715 million and the euro term loan A was upsized from $500 million-equivalent.

Goldman Sachs Bank USA, Bank of America Merrill Lynch, UBS Investment Bank, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Morgan Stanley Senior Funding Inc. are leading the deal that will be used with an initial public offering of shares to refinance existing debt.

ConvaTec is a Luxembourg-based medical products and technologies company.

MGM Growth retreats

Also in the secondary market, MGM Growth Properties’ term loan weakened after word surfaced that the company will be holding a lender call on Monday to launch a Bank of America Merrill Lynch-led transaction, traders said.

One trader had the loan quoted at par bid, 100½ offered, down from 100 3/8 bid, 100¾ offered, and a second trader had the loan at 100¼ bid, 100¾ offered, down from 100½ bid, 101 offered.

MGM Growth Properties is a Las Vegas-based real estate investment trust engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts.

Universal Fiber revised

Returning to the primary market, Universal Fiber Systems raised its incremental first-lien term loan to $49 million from $44 million and tightened the original issue discount to 99.75 from 99.5, according to a market source.

As before, the incremental term loan is priced at Libor plus 550 bps with a 1% Libor floor, which matches existing first-lien term loan pricing, and the debt has 101 soft call protection for six months.

Recommitments are due at noon ET on Monday, the source said.

BNP Paribas Securities Corp. is leading the deal that will be used to fund a dividend.

Universal Fiber Systems is a Bristol, Va.-based manufacturer of high-performance, specialty synthetic fibers for segments of the commercial carpet, transportation carpet and specialty textile industries.

Applied Systems shuts early

Applied Systems moved up the commitment deadline on its fungible $150 million add-on first-lien term loan (B1) to 5 p.m. ET on Friday from end of day on Monday, a source remarked.

Pricing on the add-on term loan is Libor plus 325 bps with a 1% Libor floor, in line with existing first-lien term loan pricing, and the new debt is talked with an original issue discount talk of 99.5.

Both the add-on term loan and the existing term loan will get 101 soft call protection for six months.

Jefferies Finance LLC is leading the loan that will be used to fund a distribution of capital to shareholders.

Applied Systems is a University Park, Ill.-based provider of software for the insurance industry.

Mitchell accelerated, allocates

Mitchell International revised the commitment deadline on its fungible $50 million add-on first-lien term loan to 3 p.m. ET on Friday from end of the day on Friday and then allocated by late afternoon, according to a market source.

The add-on loan is priced at Libor plus 350 bps with a 1% Libor floor, and was issued at an original issue discount of 99.5.

Jefferies Finance LLC and KKR Capital Markets are leading the deal that will be used to fund some small acquisitions and add cash to the balance sheet.

Mitchell is a San Diego-based provider of technology, connectivity and information solutions to the property and casualty claims and collision repair industries.

Cardenas on deck

Cardenas Markets scheduled a lender meeting for Tuesday to launch a $190 million credit facility, according to a market source.

The facility consists of a $25 million revolver and a $165 million term loan, the source said.

BMO Capital Markets and Citigroup Global Markets Inc. are leading the deal that will be used to fund the buyout of the company by KKR.

Cardenas is an Ontario-based grocery store chain.

Filtration readies loan

Filtration Group set a lender call for Monday to launch a $361 million incremental first-lien term loan, a market source said.

Goldman Sachs Bank USA and BMO Capital Markets are leading the deal that will be used to fund an acquisition and to pay down second-lien term loan borrowings.

Filtration Group is a Chicago-based manufacturer and distributor of filtration products to end markets.

Mohegan closes

In other news, Mohegan Tribal Gaming Authority closed on its $1.4 billion senior secured credit facility (B1/B) that includes a $170 million five-year revolver, a $445 million five-year term loan A and a $785 million seven-year term loan B, according to a news release.

Pricing on the revolver and term loan A is Libor plus 425 bps, and pricing on the term loan B is Libor plus 450 bps with a 1% Libor floor. The term loan B was sold at an original issue discount of 99 and has 101 soft call protection for six months.

During syndication, the term B was downsized from $935 million as the term A was upsized from $295 million.

Bank of America Merrill Lynch, Citizens Bank, Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc., Goldman Sachs Bank USA, KeyBanc Capital Markets and CIT Bank led the deal, with Bank of America the left lead on the term loan B and Citizens the left lead on the pro rata debt.

Proceeds were used by the Uncasville, Conn.-based operator of gaming and entertainment enterprises to repay and terminate some existing debt, including an existing credit facility.

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