ESH Hospitality, Gulf Finance, Omnova, Bowlmor, Aclara, XPO break; Dayton changes emerge

By Sara Rosenberg

New York, Aug. 17 – ESH Hospitality Inc.’s credit facility made its way into the secondary market on Wednesday, with the term loan B quoted above its original issue discount, and Gulf Finance LLC and Omnova Solutions Inc. began trading too.

Also, Bowlmor AMF (AMF Bowling Center Inc.) saw its credit facility break for trading following revisions to the second-lien term loan that included lifting pricing, changing the original issue discount and modifying the call protection.

Furthermore, Aclara Technologies LLC’s (Meter Readings Holding LLC) term loan freed up after pricing finalized at the wide end of guidance, and XPO Logistics Inc. upsized its term loan B before breaking late in the session.

Continuing on the topic of secondary happenings, Chesapeake Energy Corp.’s term loan was noticeably higher from where it freed to trade late in the previous session.

Returning to the primary market, Dayton Power & Light Co. tightened the spread and issue price on its term loan B.

ESH hits secondary

ESH Hospitality’s credit facility began trading on Wednesday, with the $1.3 billion seven-year covenant-light term loan B quoted at par bid, 100½ offered, according to a market source.

Pricing on the term loan is Libor plus 300 basis points with a step-down to Libor plus 275 bps upon receipt of a minimum of Ba3/BB- corporate ratings and a 0.75% Libor floor. The debt was sold at an original issue discount of 99.5 and includes 101 soft call protection for six months.

On Tuesday, pricing on the term loan finalized at the low end of the Libor plus 300 bps to 325 bps talk, the step-down was added, and the discount was tightened from 99.

The company’s $1.65 billion credit facility (B1/BB+) also includes a $350 million revolver.

ESH lead banks

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Goldman Sachs Bank USA, Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., Barclays, Credit Suisse Securities (USA) LLC and Macquarie Capital (USA) Inc. are leading ESH Hospitality’s credit facility.

Proceeds will be used with cash on hand to refinance the remainder of the company’s roughly $1.5 billion CMBS loan.

ESH Hospitality is a subsidiary of Extended Stay America Inc., a Charlotte, N.C.-based owner/operator of company-branded hotels.

Gulf Finance bid at OID

Another deal to break was Gulf Finance’s $1.15 billion seven-year senior secured term loan B, with levels quoted at 97 bid, 97¾ offered, a trader said.

The term loan B is priced at Libor plus 525 bps with a 1% Libor floor, and it was sold at an original issue discount of 97. The debt has 101 soft call protection for one year.

Last week, the loan was downsized from $1.2 billion, pricing was lifted from talk of Libor plus 475 bps to 500 bps, the discount was changed from talk of 98.5 to 99, the call protection was extended from six months, the excess cash flow sweep was revised to 100% with step-downs from 75% with step-downs, the debt-service coverage ratio was modified to 1.5 times from 1.1 times, and leverage-based asset-sale step-downs were removed.

Morgan Stanley Senior Funding Inc., Barclays and Wells Fargo Securities LLC are leading the deal that will be used to refinance existing debt at Penn Products Terminals LLC and Chelsea Petroleum Products I LLC, to fund a dividend, which was decreased due to the term loan B downsizing, and for general corporate purposes.

Closing is expected during the week of Aug. 22.

Omnova frees up

Omnova Solutions’ $350 million seven-year term loan B (B1/B+) emerged in the secondary market as well, with levels seen at 99 bid, 99½ offered, a market source remarked.

The term loan B is priced at Libor plus 425 bps with a 1% Libor floor, and it was sold at an original issue discount of 99. The debt has 101 soft call protection for six months.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, KeyBanc Capital Markets and Jefferies Finance LLC are leading the debt that will be used to refinance an existing term loan and senior notes.

Closing is expected during the week of Aug. 22.

Omnova is a Beachwood, Ohio-based innovator of performance-enhancing chemistries and surfaces for commercial, industrial and residential end uses.

Bowlmor revised, trades

Bowlmor AMF raised the spread on its $130 million 7.5-year second-lien term loan (Caa2/CCC+) to Libor plus 1,000 bps from Libor plus 900 bps, changed the original issue discount to 98 from 98.5 and adjusted the call protection to 102.5 in year one, 102 in year two and 101 in year three from 102 in year one and 101 in year two, according to a market source. This tranche still has a 1% Libor floor.

The company’s $630 million credit facility also includes a $30 million revolver (B2/B+) and a $470 million seven-year first-lien term loan (B2/B+) that priced at talk at Libor plus 500 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

With final terms in place, the debt freed up for trading during the session, with the first-lien term loan quoted at 99¼ bid, 100¼ offered and the second-lien term loan quoted at 98 bid, 99 offered, the source said.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance existing first-lien debt and to repurchase capital stock.

Bowlmor AMF is a New York City-based operator of bowling centers.

Aclara updated, breaks

Aclara Technologies finalized pricing on its $345 million seven-year first-lien term loan B (B3/B) at Libor plus 575 bps, the high end of the Libor plus 550 bps to 575 bps talk, and set the original issue discount at 98.5, the wide end of the 98.5 to 99 talk, while keeping the 1% Libor floor and 101 soft call protection for one year unchanged, a market source said.

The loan then broke for trading late in the day, with levels seen at 98¾ bid, 99¾ offered, a trader added.

Morgan Stanley Senior Funding Inc. and Stephens Inc. are leading the deal that will be used to refinance existing debt and fund a sponsor dividend.

Closing is expected in late August, the source added.

Aclara is a Hazelwood, Mo.-based supplier of smart infrastructure solutions to water, gas and electric utilities.

XPO upsizes, starts trading

XPO Logistics lifted its fungible first-lien term loan B due Oct. 30, 2021 to $1,642,000,000 from $1,592,000,000, and then the debt emerged in the secondary market with levels quoted at 100¼ bid, 100¾ offered, according to sources.

Pricing on the loan is Libor plus 325 bps with a 1% Libor floor, and it was issued at par. The debt has 101 soft call protection for six months.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to refinance an existing term loan B due October 2021, and, because of the upsizing, for general corporate purposes.

On Tuesday, the issue price on the term loan was tightened from 99.5, and the closing date was changed to Aug. 25 from Nov. 1, so that existing lenders will get paid down at the 101 soft call protection with the refinancing.

The total term loan B size will be $2,042,000,000 including the $400 million term loan B that allocated earlier this month at pricing of Libor plus 325 bps with a 1% Libor floor and an original issue discount of 99.5. That initial debt will be used with $535 million of senior notes to fund the repurchase of 7 7/8% senior notes due 2019.

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

Chesapeake gains ground

Also in trading, Chesapeake Energy’s $1.5 billion five-year first-lien last-out term loan (Caa1/B-) was quoted by one trader at 102 1/8 bid, 102 5/8 offered and by a second trader at 101¾ bid, 102¼ offered, up from Tuesday’s late day breaking levels of 100 5/8 bid, 101 1/8 offered.

Pricing on the term loan is Libor plus 750 bps with a 1% Libor floor, and it was issued at par. The debt is non-callable for two years, then at par plus 50% of the coupon in year three and at par plus 25% of the coupon in year four.

On Tuesday, the loan was upsized from $1 billion, pricing was set at the low end of the Libor plus 750 bps to 775 bps talk, and the issue price was modified from 99.

Goldman Sachs Bank USA, Citigroup Global Markets Inc. and MUFG are leading the deal that will be used to fund tender offers expiring on Sept. 12 for convertible notes and senior notes.

Closing on the term loan is expected early next week.

Chesapeake Energy is an Oklahoma City-based producer of natural gas, oil and natural gas liquids.

BWIC announced

A $423.8 million Bid Wanted In Competition surfaced in the morning with bids due at 10 a.m. ET on Thursday, a trader said.

Some of the names in the portfolio are Access CIG, Ashland Water, BWAY, Ceva Group plc, Crossmark Holdings, Epicor Software Corp., KIK Custom Products Inc., Laureate Education Inc., Leidos Corp., National Vision, Red Prairie, Wheelabrator and YUM! Brands Inc.

The portfolio includes about 101 issuers, the trader added.

Dayton flexes lower

Back in the primary market, Dayton Power and Light trimmed pricing on its $445 million senior secured six-year first-lien covenant-light term loan B (Baa2/BBB-) to Libor plus 325 bps from Libor plus 350 bps and modified the original issue discount to 99.5 from 99, a market source said.

As before, the term loan B has a 0.75% Libor floor and 101 soft call protection for one year.

Commitments are due at 10 a.m. ET on Thursday. Allocations are expected thereafter, the source added.

Morgan Stanley Senior Funding Inc. and J.P. Morgan Securities LLC are leading the deal that will be used to refinance the company’s existing 1.875% first mortgage bonds due 2016.

Dayton Power is a Dayton, Ohio-based power company.

Diamond Resorts allocates

Diamond Resorts International Inc.’s $800 million senior secured credit facility allocated on Wednesday, according to a market source.

The facility consists of a $700 million seven-year covenant-light term loan B priced at Libor plus 600 bps with a 1% Libor floor, and sold at an original issue discount of 97.5, and a $100 million five-year revolver.

Included in the term loan B is 101 soft call protection for one year.

During syndication, the term loan B was downsized from a revised amount of $800 million and an initial amount of $1.2 billion, the spread was lifted from Libor plus 500 bps, the discount widened from revised talk of 98 and initial talk of 99, the call protection was extended from six months, the MFN sunset was removed, and the excess cash flow sweep was set at 75%, with step-downs to 50% and 25%, from opening at 50%.

Barclays, RBC Capital Markets LLC, Jefferies Finance LLC and Natixis are leading the deal.

Diamond funding buyout

Proceeds from Diamond Resorts’ credit facility, $600 million of senior unsecured notes, $500 million of senior secured notes and about $1.06 billion of equity will be used to finance its acquisition by Apollo Global Management LLC for $30.25 per share or about $2.2 billion.

When the first downsizing was made to the term loan B, the senior secured notes offering was added to the transaction, and with this second downsizing, the secured notes were upsized from $400 million.

Closing is subject to more than 50% of the company’s common shares being tendered, the receipt of certain regulatory approvals and other customary conditions.

Diamond Resorts is a Las Vegas-based hospitality and vacation ownership company.

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