Cision to launch $1.1 billion term loan on Thursday; NBTY, PQ tighten pricing on deals

By Paul A. Harris

Portland, Ore., April 25 – Bank loans continued to put in strong secondary market showings during a quiet Monday session, a trader said.

Loan paper of Chemours Co. was 97½ bid, 98 offered, unchanged, on news that the company has agreed to sell several business lines of its chemical solutions segment to specialty chemicals group Lanxess, the source noted.

High yield accounts playing in the loan space took some profits last week, the trader remarked.

And the bid from CLOs remains OK but pales in comparison to what it was a year ago at this time.

Bank loan accounts have cash to put to work, the source trader said.

The most recent numbers available at press time were Friday’s daily fund flows, which saw bank loan ETFs take in $23 million while actively managed accounts saw $32 million of daily inflows.

Meanwhile, in the primary market, Cision announced a Thursday launch for a $1.1 billion deal. And NBTY and PQ Corp. tightened pricing on deals in the market.

Cision sets bank meeting

Cision set a Thursday bank meeting to launch a $1.1 billion seven-year term loan B to investors, according to a market source.

Deutsche Bank Securities Inc. is the left bookrunner. Barclays and RBC Capital Markets are the joint bookrunners.

Commitments will be due on May 11.

Proceeds will be used to fund the acquisition of PR Newswire from UBM plc.

Under the agreement, PR Newswire is being bought for $841 million, comprised of $810 million in cash and $31 million in preferred equity.

Closing is expected late in the first quarter of 2016, subject to approval by UBM shareholders and regulatory approvals.

Cision, a GTCR portfolio company, is a Chicago-based media intelligence company. PR Newswire is a New York-based PR and investor relations communications company.

PQ tightens talk

PQ Corp. tightened the terms on its $900 million 6.5-year senior secured covenant-light term loan (B2/B+), a market source said on Monday.

The spread to Libor tightened to 500 basis points from 550 bps.

The discount was cut by a dollar to 99 from the rich end of the earlier 97.5 to 98 discount talk.

The 101 soft call protection from repricing was cut to six months from a year.

Commitments are due at 5 p.m. ET on Tuesday, and the loan is expected to allocate on Wednesday.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., J.P. Morgan Securities LLC, Jefferies Finance LLC, Goldman Sachs Bank USA, Deutsche Bank Securities Inc. and Keybanc Capital Markets are the joint lead arrangers on the deal, with Citigroup the left lead and Credit Suisse the administrative agent.

The term loan has a springing maturity six months inside the existing notes at Eco Services Operations LLC if the notes have not been refinanced.

Amortization on the term loan is 1% per annum.

Mandatory prepayments are from 50% of excess cash flow with leverage-based step-downs, 100% of asset sale proceeds subject to reinvestment rights and certain other exceptions and 100% of debt issuance subject to permitted debt, the source continued.

The company also plans on getting a $300 million equivalent euro-denominated senior secured covenant-light term loan.

Proceeds will be used to refinance credit facilities at PQ and Eco Services and PQ’s second-lien notes concurrent with the merger of the two companies.

Closing is expected in early May.

PQ is a Malvern, Pa.-based producer of specialty inorganic performance chemicals and catalysts. Eco Services is a Woodlands, Texas-based producer of sulfuric acid.

NBTY shifts proceeds, tightens

NBTY shifted about $70 million equivalent to the sterling tranche of its covenant-light term loan B (B1/B+) from the dollar tranche, a trader said.

The dollar tranche was downsized to $1.33 billion from $1.4 billion, while the sterling tranche was upsized to £350 million from £300 million.

Pricing on the downsized dollar tranche tightened. The Libor spread was reduced to 400 bps from 425 to 450 bps. The discount was reduced, as the price moved to 99.5 from earlier discount talk of 98.5 to 99.

Both tranches have 101 soft call protection for six months.

The deal is expected to allocate on Tuesday.

Bank of America Merrill Lynch and Barclays are the lead banks.

Commitments are due on April 27, the source added.

Proceeds will be used to help fund the redemption of all of the outstanding 7.75%/8.5% contingent cash pay senior notes due 2017 issued by NBTY’s parent company, Alphabet Holding Co. Inc., to redeem all of NBTY’s 9% senior notes due 2018 and to repay all outstanding borrowings under NBTY’s existing senior secured credit facilities.

Other funds for the refinancing are expected to come from borrowings under a new $400 million asset-based credit facility, $1,075,000,000 of senior notes and cash on hand.

NBTY is a Ronkonkoma, N.Y.-based manufacturer, marketer, distributor and retailer of vitamins and nutritional supplements.

KinderCare tack-on

KinderCare Education, LLC set pricing for a $25 million tack-on to its first-lien term loan due Aug. 13, 2022 (B1/B) at a 500-bps spread to Libor, with a step-down, at 98.51, according to a market source.

Credit Suisse Securities (USA) LLC is the arranger.

A lender call was scheduled to take place on Monday, and commitments are due at 5 p.m. ET on Tuesday.

The spread will float atop a 1% Libor floor.

The spread to Libor is the same as that of the existing $642 million loan, as is the 101 soft call through August.

Proceeds will be used to fund the early buyout of leases on closed properties.

KinderCare, formerly known as Knowledge Universe, is a for-profit provider of early childhood education in the United States and the parent company of KinderCare Learning Centers, as well as the brands Children’s Creative Learning Centers and Champions.

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