K&N Engineering, CommScope break; Tweddle Group, Horizon Pharma deal changes surface

By Sara Rosenberg

New York, Oct. 19 – K&N Engineering Inc. upsized its first-lien term loan B (B2/B+), downsized its second-lien term loan, firmed the spread on both tranches at the high end of guidance and then freed up for trading on Wednesday, and CommScope Inc. set the spread on its term loan B at the low end of talk before hitting the secondary market as well.

In more happenings, Tweddle Group lifted pricing on its term loan B, revised the original issue discount, sweetened the call protection, shortened the maturity and made a number of other changes, and Horizon Pharma Inc. modified spread and original issue discount talk on its incremental term loan B.

Also on the new deal front, Harsco Corp., Infoblox Inc. and Expera Specialty Solutions LLC released price talk with launch, and Strike LLC came out with guidance on its term loan B ahead of its lender meeting.

Furthermore, American Casino & Entertainment Properties and CSRA Inc. joined this week’s primary calendar, and Tessera Technologies Inc. and Western Generation Partners (WGP Acquisition LLC) firmed timing on the bank meetings for their new loan deals.

K&N reworked

K&N Engineering raised its seven-year first-lien term loan B (B2/B+) to $245 million from $235 million, set pricing at Libor plus 475 basis points, the high end of the Libor plus 450 bps to 475 bps talk, and extended the 101 soft call protection to one year from six months, according to a market source.

The first-lien term loan B still has a 1% Libor floor and an original issue discount of 99.

As for the company’s eight-year second-lien term loan (Caa2/CCC+), it was trimmed to $100 million from $110 million and the spread firmed at Libor plus 875 bps, the high end of the Libor plus 850 bps to 875 bps talk, the source said, adding that the 1% Libor floor, discount of 98 and call protection of 102 in year one and 101 in year two were unchanged.

The company’s $385 million senior secured credit facility also includes a $40 million revolver (B2/B+).

K&N starts trading

Recommitments for K&N Engineering’s credit facility were due at 2 p.m. ET on Wednesday, and by late afternoon, the debt broke for trading, with the first-lien term loan quoted at 99¼ bid and the second-lien term loan quoted at 98 bid, the source continued.

Goldman Sachs Bank USA, UBS Investment Bank and KeyBanc Capital Markets are leading the deal that will be used to help fund the buyout of the company by GS Merchant Bank.

K&N is a Riverside, Calif.-based designer and manufacturer of high performance automotive and powersports aftermarket products.

CommScope tops OID

CommScope finalized pricing on its $1,238,000,000 term loan B due 2022 at Libor plus 250 bps, the low end of the Libor plus 250 bps to 275 bps talk, and left the 0.75% Libor floor, original issue discount of 99.75 and 101 soft call protection for six months intact, according to a market source.

The debt then began trading during the session, with levels quoted at 100 1/8 bid, 100 3/8 offered, the source added.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance an existing loan.

CommScope is a Hickory, N.C.-based provider of infrastructure services for communication networks.

Tweddle revised

In other primary news, Tweddle Group raised pricing on its $225 million senior secured term loan B (B2/B) to Libor plus 600 bps from talk of Libor plus 525 bps to 550 bps and moved the original issue discount to 98 from 99, according to a market source.

In addition, the company extended the 101 soft call protection on the term loan to one year from six months, shortened the maturity to six years from seven years and revised the amortization to 5% in years one and two and 7.5% in year three, from 1% per annum, the source remarked.

Also, while the first-lien net leverage covenant is still set at 5.5 times for fourth quarter 2016 and 5.25 times for 2017, it now steps to 4.75 times in 2018, revised from 5 times, 4.25 times in 2019, changed from 4.5 times, and 3.75 times in 2020, modified from 4 times.

The term loan still has a 1% Libor floor.

Tweddle additional changes

Other changes to Tweddle’s loan included adding a $15 million cap to covenant cash net, whereas before there was no cap, revising the incremental to no free and clear plus unlimited up to 3.5 times total net leverage with a $15 million cash netting cap from $50 million free and clear plus unlimited up to closing date leverage, and modifying the excess cash flow sweep to 75% with a step-down to 50% at less than 3 times total net leverage from 50% with additional step-downs, the source said.

Furthermore, the 18-month MFN sunset was removed, with the MFN applying to all pari passu debt, the restricted payments general basket was changed to none from $10 million plus a 10% EBITDA grower, the restricted payments available amount was changed to none from $10 million starter plus retained excess cash flow subject to 4 times total net leverage and the restricted payments unlimited ratio basket was revised to none from unlimited up to 2.25 times total net leverage, and the EBITDA definition was revised to run-rate and cost savings add-backs capped at 10% with an 18 month look forward period from add-backs capped at 20%, the source added.

Tweddle lead banks

Goldman Sachs Bank USA, Jefferies Finance LLC and Credit Suisse Securities (USA) LLC are leading Tweddle’s term loan.

Proceeds will be used to refinance existing debt and to fund a dividend.

Tweddle is a Clinton Township, Mich.-based author, manager and deliverer of written content to automotive vehicles, delivered via both print (manuals) and electronic media.

Horizon modifies talk

Horizon Pharma changed price talk on its $375 million senior secured incremental covenant-light term loan B (Ba2/BB-) due May 7, 2021 to Libor plus 425 bps to 450 bps from Libor plus 400 bps to 425 bps and original issue discount guidance to 99 to 99.5 from just 99.5, a market source said.

The term loan still has a 1% Libor floor and 101 soft call protection for six months.

Commitments were due at 5 p.m. ET on Wednesday, the source added.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Jefferies Finance LLC, Citigroup Global Markets Inc. and Cowen and Co. are leading the deal that will be used with $300 million in senior notes and cash on hand to fund the acquisition of Raptor Pharmaceutical Corp. for $9.00 per share in cash, for an implied fully diluted equity value of about $800 million.

Closing is expected in the fourth quarter, subject to customary conditions and regulatory approvals.

Horizon Pharma is a Dublin, Ireland-based biopharmaceutical company. Raptor is a Novato, Calif.-based biopharmaceutical company.

Harsco sets guidance

Also in the primary market, Harsco held its bank meeting on Wednesday, launching its $550 million seven-year term loan B with talk of Libor plus 550 bps with a 1% Libor floor, an original issue discount of 98 and 101 soft call protection for one year, according to a market source.

The company’s $950 million senior secured credit facility (Ba1/BB) also includes a $400 million five-year revolver.

Commitments are due on Nov. 1, the source said.

Goldman Sachs Bank USA, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Bank of America Merrill Lynch, RBC Capital Markets, US Bank and KeyBanc Capital Markets are leading the deal that will be used to amend and extend an existing credit facility and redeem 5¾% senior notes due 2018.

Harsco is a Camp Hill, Pa.-based diversified engineered products and services company.

Infoblox launches

Infoblox came out with price talk on its first- and second-lien term loans with its bank meeting, market sources said.

The $500 million seven-year covenant-light first-lien term loan (B1/B-) is talked at Libor plus 450 bps with a 1% Libor floor, an original issue discount of 99 to 99.5 and 101 soft call protection for six months, and the $250 million eight-year covenant-light second-lien term loan (Caa1/CCC) is talked at Libor plus 825 bps with a 1% Libor floor, a discount of 98.5 to 99 and call protection of 102 in year one and 101 in year two, sources continued.

By comparison, in previous filings with the Securities and Exchange Commission, the company outlined expected first-lien term loan pricing at Libor plus 400 bps with a 1% Libor floor and expected second-lien term loan pricing at Libor plus 800 bps with a 1% Libor floor.

The company’s $800 million senior secured credit facility also includes a $50 million five-year revolver (B1/B-).

Infoblox being acquired

Proceeds from Infoblox’s credit facility will be used with $755 million of equity to fund its buyout by Vista Equity Partners for $26.50 per share of common stock in cash, or about $1.6 billion.

Bank of America Merrill Lynch, RBC Capital Markets LLC, Barclays, Deutsche Bank Securities Inc. and Macquarie Capital (USA) Inc. are leading the credit facility, with Bank of America left lead on the first-lien loan and RBC left lead on the second-lien loan.

Commitments are due at noon ET on Nov. 1, sources added.

Closing on the buyout is expected in the company’s fiscal second quarter, subject to customary conditions and regulatory approvals.

Infoblox is a Santa Clara, Calif.-based provider of Actionable Network Intelligence to enterprise, government and service provider customers.

Expera holds meeting

Expera Specialty Solutions held its bank meeting in the afternoon, launching its $285 million seven-year term loan B with talk of Libor plus 475 bps to 500 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source remarked.

The company’s $335 million credit facility (B2/BB-) also includes a $50 million revolver.

Commitments are due at noon ET on Oct. 28, the source added.

Deutsche Bank Securities Inc. and Barclays are leading the deal that will be used to refinance existing debt and fund a distribution to shareholders.

Expera, a KPS Capital Partners LP portfolio company, is a Kaukauna, Wis.-based manufacturer of specialty paper and protective packaging products for the industrial & technical, food and pressure-sensitive release liner segments.

Strike floats talk

Strike LLC released talk of Libor plus 700 bps with a 1% Libor floor, an original issue discount of 98 to 99 and call protection of 102 in year one and 101 in year two on its $250 million six-year covenant-light term loan B that will launch with a lender meeting on Thursday, according to a market source.

Commitments are due at 5 p.m. ET on Nov. 2, the source said.

In addition to the term loan B, the company is planning to get an up to $100 million letter-of-credit facility and a $100 million asset-based revolver.

Bank of America Merrill Lynch and BBVA are leading the deal that will be used to refinance existing bank debt and for working capital purposes.

Strike is a The Woodlands, Texas-based provider of pipeline, facilities, fabrication, maintenance and integrity services to companies.

American Casino repricing

American Casino set a lender call for 11:30 a.m. ET on Thursday to launch a repricing of its $256 million term loan B from Libor plus 375 bps with a 1% Libor floor, a market source remarked.

Goldman Sachs Bank USA is leading the deal.

American Casino is a Las Vegas-based owner and operator of gaming and entertainment properties.

CSRA on deck

CSRA emerged with plans to hold a lender call at 3 p.m. ET on Thursday to launch a loan transaction, a market source said.

MUFG is leading the deal.

CSRA is a Falls Church, Va.-based provider of IT solutions and professional services to U.S. federal and local government agencies.

Tessera readies loan

Tessera Technologies set a bank meeting for Tuesday in New York to launch its previously announced $600 million seven-year senior secured term loan B, a market source remarked.

According to the commitment letter filed recently with the Securities and Exchange Commission, expected pricing on the loan is Libor plus 300 bps with a 0.75% Libor floor, and the debt has 101 soft call protection for six months.

RBC Capital Markets and BMO Capital Markets are leading the deal that will be used to help fund the acquisition of DTS Inc. in an all-cash transaction valued at about $850 million.

Closing is expected late in the fourth-quarter 2016 or early in the first quarter of 2017.

Tessera is a San Jose, Calif.-based licenser of technologies and intellectual property for mobile computing and communications. DTS is a Calabasas, Calif.-based audio technology company.

Western Generation timing

Western Generation Partners scheduled a bank meeting for Tuesday to launch its $305 million credit facility, according to a market source. Previously, the deal was described as this month’s business with either Oct. 25 or Oct. 26 being the targeted bank meeting dates.

The facility consists of a $15 million revolver, a $45 million letter-of-credit facility and a $245 million term loan B.

Macquarie Capital (USA) Inc. and MUFG are leading the deal that will be used to help fund the acquisition of certain projects from First Reserve’s North American Power I portfolio and Trinity Power.

Harbert Capital and UBS Infrastructure are the sponsors.

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