XPO frees to trade; Community Health reacts to paydown plans; Michaels up with numbers

By Sara Rosenberg

New York, March 7 – In the secondary market on Tuesday, XPO Logistics Inc.’s term loan B broke for trading, Community Health Systems Inc.’s term loans G and H were stronger after the company announced plans to pay down a good portion of its term loan F, and Michaels Stores Inc.’s term loan B-1 headed higher with earnings news.

Switching to the primary market, Helix Generation Funding LLC upsized its term loan B while tightening the spread and original issue discount, and Avantor Performance Materials Holdings Inc. increased the sizes of its first-and second-lien term loans, reduced pricing on the first-lien tranche and modified the issue price on the second-lien tranche.

Additionally, Caraustar Industries Inc. revised the spread and original issue discount on its term loan, DuBois Chemicals trimmed pricing and added a step-down to its first-lien term loan, and Boyd Gaming Corp. firmed pricing on its term loan at the low end of guidance.

Also, Outfront Media Inc., Visteon Corp. and HUB International Ltd. released price talk with launch, and Avast Software, Greatbatch Ltd. (Integer Holdings Corp.) and Greektown Holdings LLC emerged with new deal plans.

XPO hits secondary

XPO Logistics $1,494,000,000 senior secured term loan B due Oct. 30, 2021 freed up for trading on Tuesday, with levels quoted at par 3/8 bid, par 5/8 offered, according to a trader.

Pricing on the loan is Libor plus 225 basis points with a 0% Libor floor, and it was issued at par. The debt has 101 soft call protection for six months.

On Monday, the spread on the loan firmed at the low end of the Libor plus 225 bps to 250 bps talk.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to refinance/reprice an existing term loan B that is priced at Libor plus 325 bps with a 1% Libor floor.

Closing is expected on Friday.

XPO Logistics is a Greenwich, Conn.-based provider of supply chain solutions.

Community Health rises

Also in trading, Community Health Systems’ term loan G and term loan H were better following news that the company intends to repay $1,023,000,000 of its $1,445,000,000 term loan F with a portion of the proceeds from a $1.75 billion senior secured notes offering that was later upsized to $2.2 billion, a trader said.

The term loan G was quoted at 99¾ bid, par ¼ offered, up from 99½ bid, par offered, and the term loan H was quoted at 99½ bid, par offered, up from 99¼ bid, 99¾ offered, the trader continued. The term loan F was unchanged on the news at 99 7/8 bid, par 1/8 offered.

Remaining proceeds from the notes will be used to purchase 2018 secured notes in a tender offer.

Community Health is a Franklin, Tenn.-based hospital company.

Michaels gains ground

Michaels Stores’ term loan B-1 moved up to 99 7/8 bid, par 1/8 offered from 99¾ bid, par offered after fiscal fourth quarter earnings results were announced, according to a trader.

For the fiscal fourth quarter ended Jan. 28, Michaels reported net income of $195.3 million, or $0.95 per diluted share, compared to net income of $183.7 million, or $0.87 per diluted share, in the previous year.

Also, net sales for the quarter were $1.8 billion, up 4.1% from $1.7 billion in the fourth quarter of fiscal 2015.

For full-year fiscal 2017, the company expects diluted earnings per common share to be between $2.05 and $2.17, based on diluted weighted average common shares of about 189 million and total net sales growth of 2.5% to 4%, including the impact of the 53 week, which is planned to be around $80 million.

Michaels is an Irving, Texas-based arts & crafts specialty retailer.

Helix reworks loan

Moving to the primary market, Helix Generation increased its seven-year first-lien term loan B to $1,675,000,000 from $1.54 billion, trimmed pricing to Libor plus 375 bps from Libor plus 425 bps and changed the original issue discount to 99.5 from 99, according to a market source.

As before, the term loan B still has a 1% Libor floor and 101 soft call protection for six months.

The company’s now $1.85 billion credit facility (Ba2/BB) also includes a $175 million revolver.

Commitments continue to be due at 5 p.m. ET on Wednesday, the source said.

Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, J.P. Morgan Securities LLC, RBC Capital Markets LLC, Barclays, Macquarie Capital (USA) Inc., BNP Paribas Securities Corp. and ICBC are leading the deal that will be used to help fund the $2.2 billion acquisition by LS Power of about 3,950 MW of generation resources in the Northeastern United States, through its affiliate Helix Generation, from TransCanada Corp.

Closing is expected this quarter, subject to regulatory approvals and third-party consents.

Helix Generation is an operator of power generation facilities.

Avantor sets changes

Avantor Performance Materials upsized its seven-year covenant-light first-lien term loan to $1,485,000,000 from $1,425,000,000 with the addition of a $60 million delayed-draw tranche, cut pricing to Libor plus 400 bps from Libor plus 425 bps and added a 25 bps step-down at 5.25 times total net leverage, a market source said.

The first-lien term loan still has a 1% Libor floor, an original issue discount of 99.75 on new money, a par issue price on rollover money and 101 soft call protection for six months.

Regarding the company’s eight-year covenant-light second-lien term loan, it was upsized to $475 million from $380 million, of which $20 million is now delayed-draw, and the original issue discount was tightened to 99 from 98.5, the source continued.

Pricing on the second-lien term loan is still Libor plus 825 bps with a 1% Libor floor, and the debt still has hard call protection of 102 in year one and 101 in year two.

Avantor getting revolver

In addition to the first-and second-lien term loans, Avantor’s now $2,035,000,000 credit facility includes a $75 million five-year revolver.

Recommitments were due at 5 p.m. ET on Tuesday, the source added.

Jefferies Finance LLC is leading the deal that will be used to refinance existing debt and fund a dividend, which was increased with the second-lien term loan funded amount upsizing, and the delayed-draw debt will be used to fund an acquisition.

As part of this transaction, existing first-lien term loan lenders are being paid out at a premium of 101.

Avantor is a Center Valley, Pa.-based provider of performance materials and solutions for the life sciences and advanced technology markets.

Caraustar tightens pricing

Caraustar Industries trimmed pricing on its $860 million five-year covenant-light first-lien term loan (B2/B+) to Libor plus 550 bps from Libor plus 600 bps and moved the original issue discount to 99.75 from 99, a market source remarked.

Furthermore, a new $30 million dividend basket was added, available for one year post closing subject to 4.1 times total net leverage.

As before, the term loan has a 1% Libor floor and 101 soft call protection for six months.

Recommitments are due at noon ET on Wednesday, the source added.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance existing debt.

Caraustar is an Austell, Ga.-based manufacturer of recycled paperboard and converted paperboard products.

DuBois tweaks deal

DuBois Chemicals reduced pricing on its $300 million seven-year first-lien term loan (B1/B-) to Libor plus 375 bps from talk of Libor plus 400 bps to 425 bps and added a step-down to Libor plus 350 bps based on leverage, while leaving the 1% Libor floor, original issue discount of 99.5 and 101 soft call protection for six months unchanged, according to a market source.

The company’s $555 million credit facility also provides for a $50 million six-year revolver (B1/B-), a $75 million seven-year delayed-draw first-lien term loan (B1/B-) that has a 1% undrawn fee and 12-month availability, and a $130 million eight-year second-lien term loan (Caa1/CCC).

Talk on the second-lien term loan is still Libor plus 800 bps with a 1% Libor floor, a discount of 99 and hard call protection of 102 in year one and 101 in year two.

Commitments are due on Wednesday, accelerated from Friday, the source added.

Antares Capital, BMO Capital Markets, Deutsche Bank Securities Inc. and Bank of Ireland are leading the deal that will be used to help fund the buyout of the company by funds managed by the Jordan Co. LP.

DuBois is a Sharonville, Ohio-based provider of customized chemical solutions and services for mission critical business applications.

Boyd finalizes spread

Boyd Gaming set pricing on its $1,265,000,000 term loan due September 2023 at Libor plus 250 bps, the tight end of the Libor plus 250 bps to 275 bps talk, a market source said.

The term loan has a step-down to Libor plus 225 bps when net secured leverage is less than 2.5 times, a 0% Libor floor, a par issue price and 101 soft call protection for six months.

Bank of America Merrill Lynch is the left lead on the deal that will be used to reprice an existing term loan B-2 due September 2023 from Libor plus 300 bps with a 0% Libor floor and refinance an existing term loan B-1 due Aug. 14, 2020 that is priced at Libor plus 300 bps with a 1% Libor floor.

Boyd is a Las Vegas-based operator of gaming entertainment properties.

Outfront releases guidance

In more primary news, Outfront Media held its lender call on Tuesday, and with the event, price talk on its $1.1 billion senior secured credit facility (Ba1/BB+) was announced, according to a market source.

The $430 million five-year revolver is talked at Libor plus 200 bps with a 0% Libor floor, and the $670 million seven-year covenant-light first-lien term loan B is talked at Libor plus 225 bps with a 0% Libor floor, an original issue discount of 99.75 and 101 soft call protection for six months, the source said.

Consents/commitments are due on Friday.

Morgan Stanley Senior Funding Inc., Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, Bank of America Merrill Lynch, Wells Fargo Securities LLC and MUFG are leading the deal that will be used to amend and extend an existing revolver and term loan B, upsize the term loan B by $10 million and pay related fees and expenses.

Outfront Media is a New York-based out-of-home media company.

Visteon details surface

Visteon launched on its lender call a $350 million seven-year senior secured covenant-light term loan B talked at Libor plus 225 bps with a 0% Libor floor, an original issue discount of 99.5 to 99.75 and 101 soft call protection for six months, a market source remarked.

Cashless roll commitments are due on March 16 and new money commitments are due on March 17, the source added.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Barclays, UBS Investment Bank, SMBC and US Bank are leading the deal that will be used to amend and extend an existing term loan B due 2021.

Closing is expected during the week of March 20.

Visteon is a Van Buren Township, Mich.-based designer and manufacturer of cockpit electronics products and connected car solutions for vehicle manufacturers.

HUB discloses talk

HUB International held its lender call, launching its fungible $375 million incremental covenant-light first-lien term loan B due Oct. 2, 2020 with original issue discount talk of 99.5 to 99.75, according to a market source.

Pricing on the incremental loan is Libor plus 325 bps with a step-down to Libor plus 300 bps when consolidated first-lien net leverage is 4 times and a 1% Libor floor, and the debt includes 101 soft call protection for six months, the source said.

Commitments are due on Thursday.

Morgan Stanley Senior Funding Inc., RBC Capital Markets, Macquarie Capital (USA) Inc., Bank of America Merrill Lynch and BMO Capital Markets are leading the deal that will be used to repay $60 million in borrowings under the company’s revolving credit facility and to refinance $300 million in existing 9.25% second-lien notes due 2021.

HUB is a Chicago-based insurance brokerage.

Avast joins calendar

Avast Software scheduled a lender call for 11 a.m. ET on Wednesday to launch a $1.2 billion term loan B due September 2023 and a €400 million term loan B due September 2023, a market source said.

Talk on the U.S. term loan is Libor plus 325 bps with a 1% Libor floor, and talk on the euro term loan is Euribor plus 350 bps to 375 bps with a 0% floor, with both guided with an original issue discount of 99.875 to par and 101 soft call protection for six months, the source added.

Commitments are due at noon ET on March 15.

Credit Suisse Securities (USA) LLC, Jefferies Finance LLC and Bank of America Merrill Lynch are leading the deal that will be used to reprice and extend an existing U.S. term loan due September 2022 currently priced at Libor plus 400 bps with a 1% Libor floor and an existing euro term loan due September 2022 currently priced at Euribor plus 375 bps with a 1% floor.

Avast is a Prague-based maker of security software.

Greatbatch on deck

Greatbatch will hold a lender call at 9:30 a.m. ET on Wednesday to launch a $1,015,000,000 term loan B due Oct. 27, 2022 talked at Libor plus 350 bps with a 1% Libor floor, a par issue price and 101 soft call protection for six months, a source remarked.

Commitments are due at 5 p.m. ET on March 14, the source added.

Credit Suisse Securities (USA) LLC is the left lead bank on the deal that will be used to reprice an existing term loan B down from Libor plus 425 bps with a 1% Libor floor.

Greatbatch is a Plano, Texas-based medical device company.

Greektown readies loan

Greektown Holdings set a bank meeting for 10 a.m. ET in New York on Wednesday to launch a $375 million seven-year covenant-light first-lien term loan B, according to a market source.

The term loan is talked with a 0.75% Libor floor and 101 soft call protection for six months, the source said, adding that spread and original issue discount guidance are not yet available.

Commitments are due at 5 p.m. ET on March 22.

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to refinance existing debt.

Greektown is a gaming, hotel, dining and entertainment facility in Detroit.

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