Nautilus frees to trade; Sirva sets changes; Quality Distribution, MW Industries float talk

By Sara Rosenberg

New York, July 20 – Nautilus Power LLC’s add-on term loan B made its way into the secondary market on Friday and was seen trading above its original issue discount.

Moving to the primary market, Sirva Worldwide Inc. increased the size of its first-lien term loan, widened spreads and original issue discounts on its first-and second-lien tranches, sweetened the first-lien call protection and made a number of documentation changes.

Also, Quality Distribution (Gruden Acquisition Inc.) and MW Industries Inc. released price talk with launch, and Electro Rent Corp. surfaced with new deal plans.

Nautilus starts trading

Nautilus Power’s fungible $85 million add-on term loan B due May 16, 2024 broke for trading on Friday, and levels were quoted at par ¼ bid, par ¾ offered, according to a trader.

The add-on term loan is priced at Libor plus 425 basis points with a 1% Libor floor and was sold at an original issue discount of 99.875. The debt has a ticking fee of half the margin from days 46 to 75 and the full margin thereafter.

On Thursday, the discount on the add-on loan was tightened from 99.5.

Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC and Goldman Sachs Bank USA are leading the deal that will be used with new cash equity from sponsor Carlyle Power Partners to fund the $115 million acquisition of Rock Springs units 1 and 2 from Old Dominion Electric Cooperative.

Closing is expected in late August.

Nautilus is a Massachusetts-based wholesale power generation and marketing company.

Sirva reworked

Switching to the primary market, Sirva Worldwide lifted its seven-year first-lien term loan to $415 million from $410 million, raised pricing to Libor plus 550 bps from Libor plus 500 bps, modified the original issue discount to 98.5 from talk in the range of 99 to 99.5 and extended the 101 soft call protection to one year from six months, a market source said. This tranche still has a 0% Libor floor.

Additionally, the company increased pricing on its $135 million eight-year second-lien term loan to Libor plus 925 bps from talk in the range of Libor plus 875 bps to 900 bps and moved the discount to 97.5 from talk in the range of 98 to 98.5, the source continued. The loan’s 0% Libor floor and call protection of 102 in year one and 101 in year two were unchanged.

Also, the company removed the 12-month sunset and carve-outs from the 50 bps MFN, revised amortization on the first-lien loan to 2.5% per annum from 1% per annum, increased the excess cash flow sweep on both term loans to 75% with steps from 50% with steps, and trimmed the incremental free and clear to $85 million, with no grower component and no ability to redesignate debt incurrences, from $110 million and 100% EBITDA.

Furthermore, the available amount starter basket was trimmed to $30 million, with no grower, from $35 million and 33% EBITDA, and use is now subject to 4.75 net leverage instead of 5 times net leverage, and a 25% cap for cost savings and 18 months look-forward were added to EBITDA add-backs, versus unlimited previously.

Sirva getting revolver

Along with the first-and second-lien term loans, Sirva’s now $610 million of credit facilities include a $60 million five-year revolver.

Final commitments are due at 5 p.m. ET on Monday, the source added.

Barclays, Deutsche Bank Securities Inc. and Bank of America Merrill Lynch are leading the deal that will be used to help fund the buyout of the company by Madison Dearborn Partners from Aurora Resurgence and Equity Group Investments and Sirva’s concurrent acquisition of Team Relocation.

Closing is expected this summer, subject to regulatory approvals.

Sirva is an Oakbrook Terrace, Ill.-based relocation and moving service provider.

Quality Distribution talk

Quality Distribution held its lender call on Friday morning and announced original issue discount talk of 99.5 on its fungible $60 million incremental first-lien term loan (B-) due Aug. 18, 2022, according to a market source.

Like the existing term loan, the incremental term loan is priced at Libor plus 550 bps with a 1% Libor floor.

The incremental term loan has 101 soft call protection for six months.

Jefferies LLC is leading the deal that will be used to fund the acquisition of an intermodal company and to repay ABL revolver borrowings.

The company is also seeking an amendment to its existing credit facility and lenders are being offered a 10 bps consent fee.

Amendment consents are due at noon ET on Tuesday and commitments for the incremental loan are due at noon ET on Thursday, the source added.

Quality Distribution is a Tampa, Fla.-based operator of a dedicated bulk tank network.

MW Industries guidance

MW Industries came out with original issue discount talk of 99.75 on its fungible $30 million add-on first-lien term loan in connection with its lender call during the session, a market source said.

The add-on first-lien term loan is priced in line with the existing $457 million term loan at Libor plus 350 bps with a 0% Libor floor.

Commitments are due on Thursday, the source added.

RBC Capital Markets is leading the deal that will be used to fund an acquisition and to repay revolver borrowings.

MW Industries is a Rosemont, Ind.-based designer and manufacturer of springs and other specialty engineered metal components for diverse end markets.

Electro Rent joins calendar

Electro Rent set a lender call for 4 p.m. ET on Monday to launch a $34 million incremental covenant-light first-lien term loan due January 2024, according to a market source.

Deutsche Bank Securities Inc. is the bookrunner on the deal.

Pricing on the incremental first-lien term loan is Libor plus 500 bps with a 1% Libor floor, which matches existing first-lien term loan pricing, and all of the debt is getting 101 soft call protection for six months, the source said. Original issue discount talk on the incremental loan is not yet available.

Proceeds will be used with an $11 million privately placed incremental second-lien term loan to fund an acquisition.

The company is also seeking a one-time waiver of the ratio test restricting acquisitions to allow for the transaction and lenders are being offered a 15 bps amendment fee, the source added.

Commitments and consents are due by noon ET on Thursday.

Electro Rent, a Platinum Equity portfolio company, is a Van Nuys, Calif.-based provider of specialty testing and measurement equipment services.

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