Dynegy, Cengage fall on earnings; Quikrete, Dayton Superior, Chromaflo changes surface

By Sara Rosenberg

New York, Nov. 2 – Dynegy Inc.’s term loans headed lower in the secondary market on Wednesday on the back of the company’s release of third quarter results that showed a year-over-year decline in net income and revenues, and Cengage Learning Inc.’s term loan softened with its earnings announcement.

Switching to the primary market, Quikrete Co. increased the size of its term loan B, reduced the Libor floor and tightened the issue price, and Dayton Superior Corp. downsized its term loan B, lifted pricing and sweetened the call protection.

Additionally, Chromaflo Technologies LLC set spreads on its first- and second-lien term loans at the low end of guidance and modified original issue discount talk on the tranches, and Tessera Technologies Inc. accelerated the commitment deadline on its term loan B.

Furthermore, ProAmpac, HealthSun, Culligan Holding Inc., AssuredPartners Inc., Terra Millennium Corp. and WME IMG disclosed price talk on their new loan transactions with launch, and Envision Healthcare Corp., RevSpring, Inmar and Lightower Fiber Networks joined the near-term primary calendar.

Dynegy retreats

Dynegy’s term loans were softer in trading on Wednesday due to the release of disappointing third quarter results late in the day on Tuesday, according to a trader.

The term loan B was quoted at 99¼ bid, par offered and the term loan C was quoted at 99 bid, 99½ offered, both down from par bid, 100½ offered, the trader said.

For the quarter, the company reported a net loss of $249 million, or $1.81 per share, compared to a net loss of $24 million, or $0.23 per share, for the 2015 third quarter. Dynegy attributed the larger loss to a $138 million increase in non-cash asset impairment charges and a $74 million increase in non-cash mark-to-market losses associated with hedging transactions.

Revenues for the quarter were $1.18 billion, versus $1.23 billion in the previous year.

And, adjusted EBITDA for the quarter was $350 million, compared to $350 million in the prior year.

Dynegy is a Houston-based energy company.

Cengage weakens

Cengage’s term loan fell to 95¾ bid, 97¼ offered from 96½ bid, 98 offered as the company disclosed results for its fiscal 2017 second quarter that ended Sept. 30, a trader said.

For the quarter, the company reported revenues of $542.9 million, down from $586.1 million in the prior year, and adjusted EBITDA of $237.1 million, versus $265.9 million in the fiscal 2016 second quarter.

Net income for the quarter was $58.9 million, compared to $15.7 million in the previous year.

Cengage is a Boston-based educational content, technology and services company for the higher education and K-12, professional, library and workforce training markets.

Quikrete tweaks loans

Moving to the primary market, Quikrete lifted its seven-year covenant-light term loan B (B1/BB-) to $2.3 billion from $2,245,000,000, trimmed the Libor floor to 0.75% from 1% and modified the original issue discount to 99.5 from 99, a market source remarked.

The term loan B is still priced at Libor plus 325 basis points and still has 101 soft call protection for six months.

With the changes, the commitment deadline for the term loan B was moved up to noon ET on Thursday from Friday, the source added.

The company’s now $2,625,000,000 credit facility also includes a $325 million five-year ABL revolver.

Wells Fargo Securities LLC is leading the deal that will be used to fund the acquisition of Contech and refinance existing debt.

Quikrete is an Atlanta-based manufacturer of packaged concrete and related products.

Dayton reworked

Dayton Superior cut its term loan B to $210 million from $225 million, raised pricing to Libor plus 800 bps from Libor plus 700 bps, revised the hard call protection to 102 in year one and 101 in year two from just 101 for one year and shortened the maturity to five years from six years, a source said.

As before, the term loan B has a 1% Libor floor and an original issue discount of 97.

Commitments are due by 3 p.m. ET on Thursday, the source added.

Deutsche Bank Securities Inc. and Jefferies Finance LLC are leading the deal that will be used to refinance existing debt.

Dayton Superior is a Miamisburg, Ohio-based supplier to the non-residential concrete construction industry.

Chromaflo adjusts talk

Chromaflo Technologies changed price talk on its $345 million seven-year covenant-light first-lien term loan B (B2/B) to Libor plus 400 bps with a 1% Libor floor and an original issue discount of 99 to 99.5, from initial talk of Libor plus 400 bps to 425 bps talk with a 1% Libor floor and a discount of 99, according to a market source.

Also, talk on the company’s $135 million eight-year covenant-light second-lien term loan (Caa2/CCC) was adjusted to Libor plus 800 bps with a 1% Libor floor and a discount of 98.5 to 99 from talk of Libor plus 800 bps to 825 bps with a 1% Libor floor and a discount of 98.5, the source said.

As before, the first-lien term loan has 101 soft call protection for six months, and the second-lien term loan has hard call protection of 102 in year one and 101 in year two.

The company’s $530 million senior secured credit facility also includes a $50 million five-year revolver (B2/B).

Chromaflo shuts early

Along with pricing updates, the commitment deadline for Chromaflo’s credit facility was accelerated to 5 p.m. ET on Wednesday from Thursday, the source added.

Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA, KeyBanc Capital Markets LLC and Jefferies Finance LLC are leading the deal that will be used to help fund the buyout of the company by American Securities.

Chromaflo is an Ashtabula, Ohio-based manufacturer of chemical and pigment dispersions for architectural and industrial coatings.

Tessera revises deadline

Tessera Technologies moved up the commitment deadline on its $600 million seven-year senior secured covenant-light term loan B (Ba3/BB-) to noon ET on Friday from 5 p.m. ET on Nov. 8, a market source said.

Also, comments on the credit agreement will be due by 5 p.m. ET on Friday, the source added.

The term loan B is talked at Libor plus 300 bps to 325 bps with a 0.75% Libor floor, an original issue discount of 99 to 99.5 and 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.

ProAmpac reveals talk

Also in the primary market, ProAmpac held its bank meeting on Wednesday, and with the event, price talk on its first- and second-lien term loans was announced, according to a market source.

Talk on the $830 million seven-year covenant-light first-lien term loan (B) is Libor plus 425 bps to 450 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and the $215 million eight-year second-lien term loan (CCC+) is talked at Libor plus 850 bps to 875 bps with a 1% Libor floor, a discount of 98.5 and hard call protection of 102 in year one and 101 in year two, the source said.

The company’s $1.12 billion credit facility also includes a $75 million five-year revolver (B).

Commitments are due on Nov. 15 with closing aimed for Nov. 18, the source added.

Antares Capital is leading the deal that will be used to help fund the buyout of the company by Pritzker Group Private Capital from Wellspring Capital Management.

ProAmpac is a Cincinnati-based flexible packaging company.

HealthSun launches

HealthSun launched with a bank meeting its $450 million seven-year covenant-light term loan B at talk of Libor plus 450 bps to 475 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, according to a market source.

The company’s $475 million credit facility (B2/BB-) also includes a $25 million revolver.

Commitments are due at noon ET on Nov. 17, the source said.

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to support the buyout of the company by Summit Partners.

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

Culligan guidance emerges

Culligan came out with talk of Libor plus 425 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months on its $275 million seven-year covenant-light first-lien term loan (B2/B) that launched with a late morning lenders’ presentation, a market source remarked.

Also, talk on the $100 million-equivalent euro seven-year covenant-light first-lien term loan (B2/B) surfaced at Euribor plus 400 bps with a 1% floor, a discount of 99 to 99.5 and 101 soft call protection for six months, the source said.

The company’s $600 million senior secured credit facility also includes a $75 million five-year revolver (B2/B) and a $150 million covenant-light second-lien term loan (Caa2/CCC+) that has been privately placed.

Commitments are due on Nov. 16, the source added.

Morgan Stanley Senior Funding Inc., RBC Capital Markets LLC and BMO Capital Markets Corp. are leading the deal that will help fund the buyout of the company by Advent International Corp. and refinance debt.

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

AssuredPartners comes to market

AssuredPartners hosted a call in the afternoon to launch a $60 million incremental first-lien term loan, a $50 million incremental second-lien term loan and a repricing of its existing first-lien term loan debt, according to a market source.

The incremental first-lien term loan and first-lien term loan repricing are talked at Libor plus 400 bps to 425 bps with a 1% Libor floor, the source said. The incremental debt is offered at 99.5 and the repricing is offered at par. Including the incremental loan, the total amount of first-lien term loan debt will be $926 million.

Talk on the incremental second-lien term loan is Libor plus 900 bps with a 1% Libor floor, a discount of 99 and call protection of 102 through October 2017 and 101 for a year thereafter, the source added.

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., RBC Capital Markets LLC, Barclays, Macquarie Capital (USA) Inc. and BMO Capital Markets are leading the deal.

The incremental term loans will be used for acquisition activity and a revolver paydown, and the repricing will take the existing first-lien term loan down from Libor plus 475 bps with a 1% Libor floor.

AssuredPartners is a Lake Mary, Fla.-based provider of property and casualty and employee benefits insurance brokerage services.

Terra holds meeting

Terra Millennium held a bank meeting in the morning, launching a $215 million credit facility (B) that consists of a $40 million revolver and a $175 million term loan, a market source said.

The term loan is talked at Libor plus 550 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, the source continued.

Commitments are due on Nov. 21.

BNP Paribas Securities Corp. is leading the deal that will be used to help fund the buyout of the company by Court Square Capital Partners.

Terra Millennium is a Richmond, Calif.-based Industrial Services business.

WME IMG seeks add-on

WME IMG launched with an afternoon lender call a fungible $100 million add-on term loan (B1) talked at Libor plus 425 bps with a 1% Libor floor and a par issue price, according to a market source.

KKR Capital Markets is leading the deal that will be used for acquisitions and other corporate purposes, the source added.

WME IMG is an entertainment, sports and fashion company.

Envision coming soon

Envision Healthcare emerged with plans to hold a lender call on Friday to launch a $3,295,000,000 term loan B that is talked at Libor plus 275 bps to 300 bps with a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, according to a market source.

J.P. Morgan Securities LLC and Barclays are leading the deal.

Proceeds will be used to help fund the merger of Envision Healthcare Holdings Inc. and Amsurg Corp. in an all-stock transaction at a fixed exchange ratio of 0.334 Amsurg shares per Envision share. Envision shareholders will own about 53% percent and Amsurg shareholders will own around 47% percent of the combined company on a fully diluted basis, including preferred shares.

Closing is expected by year-end, subject to approval by Envision and Amsurg shareholders and other customary conditions.

Envision Healthcare is a healthcare company with co-headquarters in Nashville, Tenn., and Greenwood Village, Colo.

RevSpring readies deal

RevSpring scheduled a lender meeting for 10:30 a.m. ET on Monday to launch a $227 million credit facility, split between a $20 million revolver and a $207 million first-lien term loan, a market source said.

The company is also getting an $83 million second-lien term loan that was pre-placed, the source continued.

Jefferies Finance LLC and Madison Capital are leading the debt that will be used to help fund the buyout of the company by GTCR.

Pro forma first-lien leverage is 4.5 times, and second-lien leverage is 6.3 times, the source added.

RevSpring is a Wixom, Mich.-based billing and consumer communication platform that allows for the receipt of payments faster with more connection options.

Inmar on deck

Inmar set a lender meeting for Thursday to launch a fungible $125 million add-on term loan, according to a market source.

BNP Paribas Securities Corp. and Credit Suisse Securities (USA) LLC are leading the deal that will be used to fund an acquisition.

Inmar is a Winston-Salem, N.C.-based provider of tech enabled promotion and inventory, logistics and settlement services.

Lightower joins calendar

Lightower intends to hold a lender call on Thursday to launch a $290 million add-on first-lien term loan (B) talked at Libor plus 325 bps with a 0.75% Libor floor, an original issue discount of 99.25 to 99.5 and 101 soft call protection for six months, a source remarked.

J.P. Morgan Securities LLC is the left lead on the deal that will be used to repay an existing second-lien term loan and add cash to the balance sheet.

Lightower is a Boxborough, Mass.-based provider of custom, high-capacity network services.

Harsco closes

In other news, Harsco Corp. said in a news release that it closed on its $950 million senior secured credit facility (Ba1/BB/BB+) that includes a $400 million five-year revolver and a $550 million seven-year term loan B.

Pricing on the term loan B is Libor plus 500 bps with a step-down to Libor plus 475 bps at net total leverage of less than 2 times and a 1% Libor floor. The debt was issued at a discount of 99 and has 101 soft call protection for one year.

During syndication, pricing on the term B was cut from Libor plus 550 bps, the step-down was added, and the discount was revised from 98. Also, the revolver size basket was increased to $425 million from $400 million, the non-credit parties debt was lifted to $75 million from $50 million, the capital lease basket was raised to $35 million from $25 million, and the asset sale reinvestment carve-out was increased to $150 million from $100 million.

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 led the deal that was 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.

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