Cypress, Strategic Materials, FLY Leasing, Ravago, Nellson, MHS break; J.C. Penney softens

By Sara Rosenberg

New York, Oct. 27 – Cypress Performance Group, Strategic Materials Inc., FLY Leasing, Ravago Holdings America Inc., Nellson Nutraceutical and MHS (Material Handling Systems) all freed up for trading on Friday, and J.C. Penney Co. Inc.’s term loan fell as the company updated its full-year earnings outlook.

Over in the primary market, Lumos Networks Corp. (MTN Infrastructure TopCo Inc.) added an unfunded term loan B to its transaction and lowered the spread on its funded term loan B tranche, and Argon Medical Devices Holdings Inc. cut pricing on its first-and second-lien term loans and modified the issue price on the second-lien debt.

Also, Springer Nature revised the issue price on its add-on term loan B-12 and Davis Vision-Superior Vision accelerated the commitment deadline on its term loans.

In addition, Greatbatch Ltd. (Integer Holdings Corp.) came to market with a repricing of its existing term loan B, and RCN Grand Wave and Ineos Styrolution Group GmbH joined the near-term calendar.

Cypress hits secondary

Cypress Performance Group’s credit facilities began trading on Friday, with the $475 million seven-year covenant-light first-lien term loan quoted at par bid, par ½ offered, and the $135 million eight-year covenant-light second-lien term loan quoted at 99¾ bid, according to a market source.

Pricing on the first-lien term loan is Libor plus 325 basis points with a step-down to Libor plus 300 bps at corporate family ratings of B1/B+ and a 1% Libor floor. The debt has 101 soft call protection for six months and was sold at an original issue discount of 99.75.

The second-lien term loan is priced at Libor plus 750 bps with a 1% Libor floor and was issued at a discount of 99.5. This tranche has call protection of 102 in year one and 101 in year two.

On Thursday, the first-lien term loan was upsized from $460 million, pricing was reduced from talk in the range of Libor plus 375 bps to 400 bps, the step-down was added and the discount was tightened from 99.5. Also, the second-lien term loan was downsized from $150 million, the spread was cut from talk in the range of Libor plus 800 bps to 825 bps and the discount was revised from 99.

Cypress getting revolver

Along with the first-and second-lien term loans, Cypress Performance’s $695 million of credit facilities include an $85 million revolver.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Jefferies LLC, Deutsche Bank Securities Inc. and M&T Bank are leading the deal.

Proceeds will be used to fund the combination of Encapsys LLC and IPS Corp.

Cypress Performance is an advanced materials and diversified products provider.

Strategic Materials frees up

Strategic Materials’ credit facilities also emerged in the secondary market, with the $235 million seven-year first-lien term loan (B2/B) quoted at par ¼ bid, a market source remarked.

The first-lien term loan is priced at Libor plus 375 bps with a 25 bps step-down at 4 times net first-lien leverage and a 1% Libor floor. The debt was issued at a discount of 99.75 and has 101 soft call protection for six months.

The company’s $355 million of senior secured credit facilities also include a $40 million revolver (B2/B) and an $80 million eight-year second-lien term loan (Caa2/CCC+).

Pricing on the second-lien term loan is Libor plus 775 bps with a 1% Libor floor and it was sold at an original issue discount of 99. This tranche has call protection of 102 in year one and 101 in year two.

On Thursday, pricing on the first-lien term loan was cut from Libor plus 400 bps, the step-down was confirmed and the discount was changed from 99.5. In addition, pricing on the second-lien term loan was flexed from Libor plus 800 bps and the discount was revised from 98.5.

Goldman Sachs Bank USA, BMO Capital Markets and Societe Generale are leading the deal that will be used to help fund the buyout of the Houston-based environmental services company by Littlejohn & Co. LLC.

FLY levels emerge

FLY Leasing’s $437 million term loan B due February 2023 freed up, with levels quoted at par 1/8 bid, par ½ offered, according to a trader.

Pricing on the loan is Libor plus 200 bps with no Libor floor and it was issued at par. The debt has 101 soft call protection for six months.

RBC Capital Markets is leading the deal that will be used to reprice an existing term loan from Libor plus 225 bps with no Libor floor.

FLY is a Dublin-based aircraft lessor.

Ravago tops par

Ravago’s $321 million covenant-light term loan B due July 13, 2023 broke for trading too, with levels seen at par 3/8 bid, par ¾ offered, a market source remarked.

Pricing on the term loan is Libor plus 275 bps with no floor and it was issued at par. The debt has 101 soft call protection for six months.

During syndication, the spread on the loan firmed at the high end of the Libor plus 250 bps to 275 bps talk.

Wells Fargo Securities LLC is leading the deal that will be used to reprice an existing term loan B down from Libor plus 325 bps with no floor.

Ravago is a provider of distribution, resale, compounding and recycling services for plastic and elastomeric raw materials markets.

Nellson tweaked, breaks

Nellson Nutraceutical increased its fungible incremental term loan to $92 million from $82 million and modified the original issue discount to 99.875 from 99.5, a market source said.

As before, pricing on the incremental loan, as well as on the repricing of the company’s existing roughly $292 million term loan, is Libor plus 425 bps with a 1% Libor floor, existing lenders will be paid a 12.5 bps amendment fee on existing commitments and all of the term loan debt will be covered by 101 soft call protection for six months.

With terms finalized, the term loan hit the secondary market and levels were quoted at par bid, par ½ offered, another source added.

Antares Capital is the lead on the deal (B1).

The incremental loan will be used to fund an acquisition.

Closing is tentatively scheduled for Nov. 6.

Nellson Nutraceutical, a portfolio company of Kohlberg & Co., is an Anaheim, Calif.-based manufacturer of branded and private-label nutritional bars and functional powder products.

MHS begins trading

Another deal to free to trade was MHS’ fungible $25 million add-on term loan B, with levels seen at par ¼ bid, 101¼ offered, a trader remarked.

Pricing on the add-on term loan matches pricing on the existing $240 million term loan B at Libor plus 500 bps with a 1% Libor floor, and the add-on was issued at par.

With the add-on, the company is replacing the current financial maintenance covenant under the term loan B with a springing financial covenant.

RBC Capital Markets is leading the deal that will be used for acquisitions.

MHS is a Louisville, Ky.-based provider of e-commerce infrastructure.

J.C. Penney drops

In more trading news, J.C. Penney’s term loan fell to 92 bid, 93 offered from 95 bid, 96 offered following the release of revised full-year earnings estimates, according to a trader.

For 2017, the company is now anticipating adjusted earnings per share between $0.02 to $0.08, versus a previous estimate of between $0.40 to $0.65, and comparable store sales between -1% to 0%, compared to prior expectations between -1% to +1%.

The company also revealed that for the third quarter it expects adjusted loss per share to be in the range of $0.40 to $0.45.

J.C. Penney is a Plano, Texas-based apparel and home furnishings retailer.

Lumos reworked

Moving to the primary market, Lumos Networks added a $475 million unfunded term loan B to its deal that will be fungible upon closing, expected in the first quarter of 2018, with the $485 million seven-year covenant-light first-lien funded term loan B, according to a market source.

The $960 million in total term loan B debt is priced at Libor plus 325 bps with a 1% Libor floor and an original issue discount of 99.5, the source said, meaning that the funded term loan B was reverse flexed from talk at launch of Libor plus 350 bps to 375 bps. The term loan B still has 101 soft call protection for six months.

Included in the unfunded term loan B is a ticking fee of half the spread from days 46 to 75 and the full spread thereafter.

The company’s now $1,025,000,000 of senior secured credit facilities also provide for a $65 million five-year revolver.

Morgan Stanley Senior Funding Inc. and Goldman Sachs Bank USA are leading the deal.

Lumos being acquired

Proceeds from Lumos’ funded term loan will be used to help fund its buyout by EQT Infrastructure for $18.00 per share, resulting in an enterprise value of about $950 million.

The unfunded term loan will be used to help fund EQT’s acquisition of a majority stake of Spirit Communications from its founding partners who will retain a significant ownership interest in the company, the source added.

Recommitments were due at 1 p.m. ET on Friday.

Lumos is a Waynesboro, Va.-based fiber-based service provider in the Mid-Atlantic region. Spirit is a Columbia, S.C.-based pure-play provider of fiber based data and broadband services.

Argon revised

Argon Medical Devices reduced pricing on its $310 million seven-year first-lien term loan (B2/B+) to Libor plus 375 bps from Libor plus 425 bps, and left the 1% Libor floor, original issue discount of 99.5 and 101 soft call protection for six months intact, a market source said.

Additionally, pricing on the $110 million eight-year second-lien term loan (Caa2/B-) was trimmed to Libor plus 800 bps from Libor plus 825 bps and the discount was changed to 99.5 from 99, the source continued. This tranche still has a 1% Libor floor and call protection of 102 in year one and 101 in year two.

The company’s $435 million of credit facilities also include a $15 million revolver (B2/B+).

Recommitments were due at noon ET on Friday, the source added.

UBS Investment Bank is leading the deal that will be used to help fund the acquisition of the company by Shandong Weigao.

Argon Medical is a Plano, Texas-based medtech business primarily focused on physician-preferred products, which include biopsy & vascular devices, drainage catheters, guidewires and related accessories.

Springer tweaked

Springer Nature decided to have its fungible €84 million add-on term loan B-12 denominated all in euros and tightened the issue price to par from 99.875, according to a market source. Pricing is still Euribor plus 325 bps with a 0.5% floor.

As before, the company is also seeking an extended $1,292,000,000 term loan B-13 due August 2022 at Libor plus 350 bps with a 1% Libor floor and an original issue discount of 99.875, and an extended €1,895,000,000 term loan B-12 due August 2022 at Euribor plus 325 bps with a 0.5% floor and a discount of 99.875.

All of the term loans have 101 soft call protection for six months.

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

The add-on will be used refinance some debt, and the extended loans would extend/replace and existing U.S. term loan B-9 due August 2020 and an existing euro term loan B-11 due August 2020.

Springer Nature is a Germany-based scientific publishing company.

Davis Vision accelerated

Davis Vision-Superior Vision moved up the commitment deadline on its $660 million seven-year first-lien term loan (B1/B) and $250 million eight-year second-lien term loan (Caa1/CCC+) to 5 p.m. ET on Tuesday from Thursday, a market source remarked.

The first-lien term loan is talked at Libor plus 325 bps to 350 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, and the second-lien term loan is talked at Libor plus 725 bps to 750 bps with a 1% Libor floor, a discount of 98.5 and call protection of 102 in year one and 101 in year two.

The company’s $985 million senior secured deal also provides for a $75 million revolver (B1/B).

Goldman Sachs Bank USA, Barclays, Morgan Stanley Senior Funding Inc., Macquarie Capital (USA) Inc. and BMO Capital Markets are leading the deal that will help fund the acquisition of Davis Vision Inc. by Centerbridge Partners LP from Highmark Inc. and combination with Centerbridge’s existing portfolio company Superior Vision. Highmark will acquire a minority ownership interest in the combined company.

Closing is expected in the fourth quarter, subject to regulatory approval.

Davis Vision-Superior Vision is a managed vision care company.

Greatbatch holds call

Greatbatch emerged early in the morning with plans to hold a lender call at 10:30 a.m. ET on Friday to launch an $873 million term loan B (B2/B) due Oct. 27, 2022, according to a market source.

The term loan is talked at Libor plus 325 bps with a step-down to Libor plus 300 bps upon achieving B2/B corporate family ratings, a 1% Libor floor, a par issue price and 101 soft call protection for six months, the source said.

Current corporate family ratings are B3/B.

Commitments are due on Wednesday, the source added.

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to reprice an existing term loan B down from Libor plus 350 bps with a 1% Libor floor.

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

RCN sets launch

RCN Grand Wave emerged with plans to hold a bank meeting at 10:30 a.m. ET in New York on Tuesday to launch its previously announced $1,425,000,000 of incremental credit facilities, according to a market source.

The debt consists of a $150 million incremental revolver and a fungible $1,275,000,000 incremental term loan.

UBS Investment Bank, Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc. and Nomura are leading the deal that will be used to help fund the acquisition of Wave Broadband, a regional broadband fiber company, from Oak Hill Capital Partners, management and GI Partners.

Closing is expected this year, subject to customary conditions.

RCN is a cable operator.

Ineos Styrolution on deck

Ineos Styrolution scheduled a lender call for Monday to launch a $417 million term loan B due 2024 talked at Libor plus 200 bps to 225 bps with a 0% Libor floor and an original issue discount of 99.75 to par, a market source said.

The company will also launch a €372 million term loan B due 2024 on the call that is talked at Euribor plus 200 bps with a 0.5% to 0.75% floor and a discount of 99.75 to par, the source added.

Commitments are due at 1 p.m. ET on Thursday.

Bank of America Merrill Lynch is the left lead on the U.S. loan and Credit Suisse is the left lead on the euro loan.

Ineos Styrolution, a Frankfurt, Germany-based styrenics supplier, will use the new debt to refinance existing term loans.

Fairmount Santrol allocates

In more happenings, Fairmount Santrol Inc. allocated its $700 million five-year covenant-light first-lien term loan (B3/B-), according to a market source.

Pricing on the loan is Libor plus 600 bps with a 1% Libor floor and it was sold at an original issue discount of 98.5. The debt has soft call protection of 102 in year one and 101 in year two.

During syndication, pricing firmed at the high end of revised talk of Libor plus 575 bps to 600 bps, and up from initial talk of Libor plus 475 bps, the original issue discount was set at the tight end of revised talk of 98 to 98.5, but wide of initial talk of 99.5, the call protection was revised from a 101 soft call for one year and the maturity was shortened from seven years.

Barclays is leading the deal that will be used to refinance existing term loans.

Closing is expected on Tuesday.

Fairmount Santrol is a Chesterfield, Ohio, provider of high-performance sand and sand-based products used by oil and gas exploration and production companies to enhance the productivity of their wells.

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