Asurion, Sirius, AMC break; TeamHealth down on buyout; Level 3 lower with acquisition

By Sara Rosenberg

New York, Oct. 31 – Asurion LLC’s term loan B-5 freed up for trading on Monday, with levels quoted above its original issue discount, and Sirius Computer Solutions Inc. and AMC Entertainment Holdings Inc. emerged in the secondary market as well.

In more trading happenings, TeamHealth Holdings Inc.’s term loan softened with buyout news, and Level 3 Communications Inc.’s term loans headed lower with word that the company is being acquired by CenturyLink.

Moving to the primary market, Digital Room Inc. downsized its first-lien term loan while widening the spread and original issue discount and slightly upsized its second-lien term loan, and Expera Specialty Solutions LLC firmed pricing on its term loan B at the low end of guidance.

Also, Garda World Security Corp. and PQ Corp. released price talk with launch, and Alliant Holdings Intermediate LLC, HealthSun, Culligan Holding Inc. and Huntsman International LLC joined this week’s new issue calendar.

Asurion frees up

Asurion’s $1.4 billion seven-year covenant-light term loan B-5 (B1/B+) broke for trading on Monday, with levels seen at par bid, 100 3/8 offered, according to a trader.

The term loan is priced at Libor plus 375 basis points with a 1% Libor floor and was sold at an original issue discount of 99.5. The debt has 101 soft call protection for six months.

Last week, the term loan was upsized from $1 billion, pricing was reduced from Libor plus 400 bps, and the discount finalized at the tight end of the 99.25 to 99.5 talk.

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Goldman Sachs Bank USA are leading the deal that will be used to repay some term loan B-1 borrowings.

Asurion is a Nashville-based provider of technology protection services.

Sirius hits secondary

Sirius Computer’s $515 million covenant-light first-lien term loan due Oct. 30, 2022 began trading as well, with levels quoted at 100¼ bid, 101 offered, a market source said.

Pricing on the term loan is Libor plus 425 bps with a 1% Libor floor, and the debt has 101 soft call protection for six months. Of the total amount, $75 million is an incremental tranche that was issued at a discount of 99.75, while the remainder was issued at par.

On Friday, the incremental tranche was upsized from $50 million and the discount tightened from 99.5, and pricing on all of the first-lien term loan debt firmed at the low end of the Libor plus 425 bps to 450 bps talk.

Proceeds will be used to refinance/reprice an existing $440 million term loan that is currently priced at Libor plus 500 bps with a 1% Libor floor, and the incremental debt will be used to fund tuck-in acquisitions.

Credit Suisse Securities (USA) LLC is leading the deal.

Sirius is a San Antonio-based provider of data center-focused technology integration services.

AMC breaks

AMC Entertainment’s bank debt also started trading, with the new $500 million senior secured seven-year covenant-light term loan B and the repriced $871.8 million senior secured covenant-light term loan B due Dec. 15, 2022 quoted at 100¼ bid, 100¾ offered, a trader remarked.

The term loans are priced at Libor plus 275 bps and have 101 soft call protection for six months. The new term loan was sold at an original issue discount of 99.75 and the repriced loan was issued at par.

On Friday, the 0.75% Libor floor was removed from the term loans, and the discount on the new loan was revised from 99.5.

Proceeds from the new term loan, $595 million and £250 million of notes and cash on hand will be used to fund the acquisitions of Odeon & UCI Cinemas Holdings Ltd. and Carmike Cinemas Inc., and the repricing will take the existing 2022 term loan down from Libor plus 325 bps with a 0.75% Libor floor.

The Odeon & UCI acquisition is expected to close in mid-to-late November and the Carmike acquisition is expected to close in mid-December.

AMC lead banks

Citigroup Global Markets Inc., Barclays, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. are leading the AMC’s term loans (Ba1/BB/BB+).

With the transaction, the company is amending its existing credit agreement to revise the revolver net senior secured leverage covenant to 3.5 times from 3.25 times, change the permitted notes basket to permit new notes to be incurred for the Odeon & UCI and Carmike acquisitions and increase the permitted foreign subsidiary basket.

Also, the amendment will increase the senior leverage test to 3.5 times from 3.25 times under the ratio debt basket, increase the first-lien senior secured leverage ratio to 3 times from 2.25 times under the accordion and increase the fixed amount in the shared general restricted payments and investment basket to $250 million from $200 million.

AMC is a Leawood, Kan.-based movie exhibitor. Odeon & UCI is a London-based theater exhibitor. And, Carmike is a Columbus, Ga.-based motion picture exhibitor.

TeamHealth weakens

TeamHealth’s term loan fell to 100 1/8 bid, 100 5/8 offered from 100 3/8 bid, 100 7/8 offered after the company announced that it has entered into an agreement to be acquired by Blackstone for $43.50 per share in cash, or about $6.1 billion, according to a trader.

The company has received a commitment for a $3 billion senior secured credit facility, split between a $400 million revolver and a $2.6 billion term loan, and a $1,015,000,000 senior unsecured bridge loan to help fund the buyout.

JPMorgan Chase Bank, Barclays, Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc. and PSP Investments Credit USA LLC provided the debt commitment.

Other funds for the transaction will come from $2.7 billion of equity.

Closing is expected in the first quarter of 2017, subject to stockholder approval, regulatory approvals and other customary conditions. The transaction is not subject to financing.

TeamHealth is a Knoxville, Tenn.-based physician services organization.

Level 3 levels dip

Level 3’s term loans B-2, B-3 and B-4 were quoted at 100 3/8 bid, 100 5/8 offered, down from 100½ bid, 100¾ offered following news that the company is being purchased by CenturyLink, a trader remarked.

All of Level 3’s existing debt is expected to remain in place at Level 3 following closing of the acquisition, and Level 3 will not incur any incremental debt or guarantee any debt of CenturyLink to finance the transaction.

CenturyLink has received a commitment from Bank of America Merrill Lynch and Morgan Stanley & Co. LLC for about $10.2 billion of new secured debt facilities, including a $2 billion unfunded revolver, to help fund the acquisition, and other funds for the transaction will come from cash on hand.

Under the agreement, Level 3 shareholders will receive $26.50 per share in cash and 1.4286 shares of CenturyLink stock per share. The transaction is valued at about $34 billion, including the assumption of debt.

Closing is expected by the end of third quarter 2017, subject to regulatory approvals, approval of CenturyLink and Level 3 shareholders and other customary conditions.

Level 3 is a Broomfield, Colo.-based provider of communications services to enterprise, government and carrier customers. CenturyLink is a Monroe, La.-based communications, hosting, cloud and IT services company.

SMS bid atop OID

Also in trading, Systems Maintenance Services’ (SMS) $260 million seven-year first-lien term loan (B2/B+) was seen bid at 99¼ on Monday morning after allocating on Friday, a trader remarked.

Pricing on the first-lien term loan is Libor plus 500 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 one year.

During syndication, pricing on the first-lien term loan was lifted from talk of Libor plus 450 bps to 475 bps, and the call protection was extended from six months.

The company’s $415 million credit facility also includes a $40 million six-year revolver (B2/B+) and a $115 million eight-year second-lien term loan (CCC+).

Antares Capital and Citizens Bank are leading the deal that will be used to help fund the buyout of the company by Partners Group from Thomas H. Lee Partners LP and Summit Partners.

Closing is subject to regulatory approval.

Systems Maintenance Services is a Charlotte, N.C.-based provider of IT infrastructure services.

PPD holds steady

Pharmaceutical Product Development LLC (Jaguar Holding Co. II) saw its fungible $460 million add-on first-lien term loan due August 2022 quoted at par bid, 100¼ offered, in line with where it closed out the previous session after breaking earlier that day, according to a market source.

The add-on term loan is priced at Libor plus 325 bps with a 1% Libor floor, in line with the existing term loan, and was issued at an original issue discount of 99.75.

During syndication, the discount on the loan was revised from talk of 99 to 99.5, and the proposed 101 soft call protection for six months was removed.

J.P. Morgan Securities LLC is leading the deal that will be used to fund a dividend. Credit Suisse Securities (USA) LLC is the administrative agent.

Pharmaceutical Product Development is a Wilmington, N.C.-based contract research organization focused on clinical development and laboratory services.

BWIC’s surface

A $78 million Bid Wanted In Competition was announced, with bids due at 10 a.m. ET on Tuesday, and a $153 million BWIC emerged, with bids due at 11 a.m. ET on Tuesday, traders remarked.

Some of the names in the $78 million portfolio are Academy Ltd., BJ’s Wholesale Club Inc., David’s Bridal Inc., iParadigms Holdings LLC, SRS Distribution Inc., Vistra Group Ltd. and XPO Logistics Inc. There are 24 issuers in this BWIC.

The $153 million BWIC includes debt from, among others, Adesa, Capsugel, Emdeon Business Services, First Data Corp., HCA, Immucor Inc., Level 3, Reynolds Group and Wash Multifamily Laundry. There are about 38 issuers in this BWIC, traders added.

Digital Room reworked

Switching to the primary market, Digital Room trimmed its first-lien term loan to $110 million from $125 million, raised pricing to Libor plus 600 bps from Libor plus 550 bps, modified the original issue discount to 98 from 99 and sweetened amortization to 5% per annum from 1% per annum, a market source said.

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

Furthermore, the company increased its second-lien term loan to $47 million from $46.8 million, eliminated the incremental free and clear basket, added a fixed-charge coverage covenant in addition to the total net leverage covenant that was already part of the deal and changed the excess cash flow sweep to 75% stepping down to 25% from 50% stepping down to 0%, the source continued.

The company’s now $167 million credit facility also includes a $10 million revolver.

Digital Room cuts dividend

Due to the first-lien term loan downsizing, Digital Room reduced its planned dividend payment to about $89 million from around $105 million, the source explained.

As before, the company’s credit facility will be used to refinance existing debt in addition to funding the dividend.

BNP Paribas Securities Corp. is leading the deal.

Recommitments are due at 5 p.m. ET on Friday, the source added.

Digital Room is a Van Nuys, Calif.-based owner and operator of online printing brands that produce a wide range of printed products.

Expera sets spread

Expera Specialty Solutions finalized pricing on its $285 million seven-year term loan B at Libor plus 475 bps, the low end of the Libor plus 475 bps to 500 bps talk, according to a market source.

The term loan still has a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

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

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

Closing is expected on Thursday.

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.

Garda discloses talk

Garda World Security held its lender call on Monday, launching its non-fungible $125 million add-on first-lien term loan (B/BB+) with talk of Libor plus 300 bps with a 1% Libor floor, an original issue discount of 98 to 98.5 and 101 soft call protection for six months, a market source remarked.

The spread and floor talk on the add-on term loan matches pricing on the existing first-lien term loan.

Commitments are due on Nov. 7, the source added.

Macquarie Capital (USA) Inc. is leading the deal that will be used to pay down revolver borrowings and increase liquidity.

Garda is a Montreal-based provider of business solutions and security services.

PQ comes to market

PQ Corp. launched a $50 million add-on term loan and a repricing of its existing $900 million and €265 million term loans at talk of Libor/Euribor plus 375 bps with a 1% floor, an issue price of 99.75 to par and 101 soft call protection for six months, according to a market source.

Commitments are de at noon ET on Nov. 7, the source said.

The add-on term loan will be used to add to cash on hand, and the repricing will take the existing term loans down from Libor/Euribor plus 475 bps with a 1% floor.

Upon closing in May, the U.S. term loan was sized at $900 million and the euro term loan was sized at $300 million-equivalent.

J.P. Morgan Securities LLC is leading the deal.

PQ is a Malvern, Pa.-based producer of specialty inorganic performance chemicals and catalysts.

Alliant joins calendar

Alliant Holdings set a lender call for 10:30 a.m. ET on Tuesday to launch a $1,602,550,000 senior secured term loan, according to a market source.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to combine the company’s existing $279.3 million term loan B-2 into its $1,323,250,000 term loan B and reprice the debt.

Alliant Insurance is a Newport Beach, Calif.-based specialty insurance brokerage firm.

HealthSun readies deal

HealthSun emerged with plans to hold a bank meeting at 2 p.m. ET in New York on Wednesday to launch a $475 million credit facility that includes a $25 million revolver and a $450 million term loan B, according to a market source.

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC and SunTrust Robinson Humphrey Inc. are leading the deal.

Proceeds will be used to support the buyout of the company by Summit Partners, the source said.

HealthSun is a Coconut Grove, Fla.-based Medicare Managed Care Organization.

Culligan on deck

Culligan set a lenders’ presentation for 11 a.m. ET on Wednesday to launch a $600 million senior secured credit facility, a market source said.

The facility consists of a $75 million revolver, a $275 million first-lien term loan, a $100 million-equivalent euro first-lien term loan and a $150 million second-lien term loan, the source added.

Morgan Stanley Senior Funding Inc., RBC Capital Markets and BMO Capital Markets are leading the deal that will be used to help fund the acquisition of the company by Advent International Corp.

Culligan is a Rosemont, Ill.-based provider of water treatment products and services.

Huntsman plans loan

Huntsman scheduled a lender call for Thursday to launch a $1.2 billion term loan due 2023 talked at Libor plus 275 basis points with a 0.75% Libor floor, an issue price of 99.75 to par and 101 soft call protection for six months, according to a market source.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance term loan debt due in 2021 and 2023.

Huntsman is a The Woodlands, Texas-based manufacturer and marketer of differentiated chemicals.

American Airlines closes

In other news, American Airlines Inc. closed on its $1 billion senior secured term loan due 2023, according to an 8-K filed with the Securities and Exchange Commission on Monday.

Pricing on the loan is Libor plus 250 bps with a 0.75% Libor floor, and it was issued at par. The debt has 101 soft call protection for six months.

Barclays is the left lead on the deal that repriced the existing 2023 term loan from Libor plus 275 bps with a 0.75% Libor floor.

The company was also seeking a repricing of its $970 million term loan B-1 due 2019, but that portion of the transaction was withdrawn during syndication. The repricing was talked at Libor plus 225 bps with no Libor floor, a par issue price and 101 soft call protection for six months, versus current pricing of Libor plus 275 bps with a 0.75% Libor floor.

American Airlines is a Fort Worth-based airline company.

Quality Care completed

Quality Care Properties Inc. closed on its $1.1 billion credit facility (B2/BB) that provides for a $100 million five-year revolver and a $1 billion six-year term loan B, the company revealed in an 8-K filed with the Securities and Exchange Commission.

Pricing on the revolver is Libor plus 525 bps, and pricing on the term loan is Libor plus 525 bps with a 1% Libor floor, and it was sold at an original issue discount of 98. The term loan includes hard call protection of 102 in year one and 101 in year two.

During syndication, pricing on the term loan was increased from Libor plus 475 bps, the discount widened from 99, the call protection changed from a soft call of 101 for one year, and the minimum debt service coverage ratio was revised to 1.75 times from 1.5 times.

Barclays, Morgan Stanley Senior Funding Inc. and Deutsche Bank Securities Inc. led the deal that was used with $750 million of second-lien notes to fund the spinoff of HCP Inc.’s HCR ManorCare portfolio of skilled nursing and assisted living assets.

Quality Care is an Irvine, Calif.-based health care services provider.

CommScope wraps

CommScope Inc. said in an 8-K filed with the Securities and Exchange Commission that it closed on its $1,237,500,000 term loan B due 2022.

Pricing on the loan is Libor plus 250 bps with a 0.75% Libor floor, and it was sold at an original issue discount of 99.75. The debt has 101 soft call protection for six months.

During syndication, pricing on the term loan firmed at the low end of the Libor plus 250 bps to 275 bps talk.

J.P. Morgan Securities LLC led the deal that was used to refinance an existing loan.

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

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