Promontory frees up; Granite Energy, Simply Good changes emerge; Genesee accelerated

By Sara Rosenberg

New York, Oct. 31 – Promontory Interfinancial Network LLC’s first-lien term loan made its way into the secondary market on Thursday morning, with levels quoted above its original issue discount.

Moving to the primary market, Granite Energy LLC firmed the spread on its term loan B at the wide end of guidance, increased the Libor floor and revised documentation.

Also, Simply Good Foods Co. (Atkins Nutritional Holdings Inc.) trimmed pricing on its incremental first-lien term loan B, tightened the original issue discount, extended the call protection and made the tranche fungible with the existing term loan B.

In addition, Genesee & Wyoming Inc. moved up the commitment deadline for its credit facilities, TransUnion LLC, TRC Cos. Inc. and Tacala Cos. released price talk with launch, and Houghton Mifflin Harcourt surfaced with new deal plans.

Promontory hits secondary

Promontory Interfinancial Network’s $630 million seven-year covenant-lite first-lien term loan freed to trade first thing in the morning, with levels quoted at par bid, par ½ offered, according to a trader.

Pricing on the first-lien term loan is Libor plus 375 basis points with a 0% Libor floor and it was sold at an original issue discount of 99.5. The debt has 101 soft call protection for six months.

On Wednesday, the first-lien term loan was upsized from $620 million, pricing was lowered from talk in the range of Libor plus 400 bps to 425 bps, the discount was changed from 99 and some revisions were made to documentation.

The company’s $960 million of credit facilities also include a $100 million revolver (B1/B) and a $230 million privately placed second-lien term loan.

Morgan Stanley Senior Funding Inc., Nomura, RBC Capital Markets, UBS Investment Bank and Blackstone are leading the deal that will be used to help fund the buyout of the company by the Blackstone Group and, due to the upsizing, to put cash on the balance sheet for working capital.

Closing is expected next week.

Promontory is an Arlington, Va.-based provider of balance sheet management solutions to banks.

Granite Energy tweaked

Switching to the primary market, Granite Energy set pricing on its $1.4 billion seven-year first-lien term loan B at Libor plus 375 bps, the high end of the Libor plus 350 bps to 375 bps talk, and modified the Libor floor to 1% from 0%, according to a market source.

Additionally, the MFN is 50 bps for life and maturity and acquisition carve-outs were removed, the incremental “no worse than prong” was removed and there’s a limitation on reclassification of baskets, the permitted unsecured ratio debt was reduced, there are limitations on investments in unrestricted subsidiaries, the definitions of excess cash flow, consolidated net income, permitted investments and restricted payments were revised, there’s a cap on EBITDA addbacks, there are asset sale limitations and a requirement of ratings reaffirmation, and a requirement for quarterly conference calls, the source continued.

As before, the term loan has an original issue discount of 99 and 101 soft call protection for six months.

The company’s $1.5 billion of senior secured credit facilities also include a $100 million revolver.

Granite lead banks

Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA, BMO Capital Markets, Credit Suisse Securities (USA) LLC, MUFG and RBC Capital Markets are leading Granite Energy’s credit facilities.

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

The credit facilities will be used to refinance existing debt, fund a one-time distribution to shareholders, and pay related fees and expenses.

Granite Energy, which is backed by LS Power, is a power producer with about 4,800 MW of clean, high-quality natural gas-fired generation located in the PJM market.

Simply Good reworked

Simply Good Foods cut pricing on its $460 million incremental first-lien term loan B (B1/B+) due July 7, 2024 to Libor plus 375 bps from Libor plus 400 bps, changed the original issue discount to 99.5 from 99, extended the 101 soft call protection to one year from six months and the debt is now fungible with the existing first-lien term loan, a market source said.

The incremental term loan still has a 1% Libor floor.

As a result of fungibility, the company’s existing $195.5 million first-lien term loan will see pricing lifted to Libor plus 375 bps from the current rate of Libor plus 350 bps, with the 1% Libor floor unchanged. Lenders are being offered the existing term loan at a par issue price and will get 101 soft call protection for one year.

There were also revisions made to MFN and investment basket, the source continued.

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

Simply buying Quest

Simply Good will use the incremental with cash on the balance sheet and equity to fund the acquisition of Quest Nutrition LLC for $1 billion in cash, or about $870 million net of tax benefits, on a cash-free and debt-free basis.

Barclays, Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc., Deutsche Bank Securities Inc. and BMO Capital Markets are leading the debt.

Closing is expected by year-end, subject to customary conditions and regulatory clearance.

Simply Good is a Denver-based developer, marketer and seller of nutritional foods and snacking products. Quest Nutrition is an El Segundo, Calif.-based healthy lifestyle food company.

Genesee moves deadline

Genesee & Wyoming accelerated the commitment deadline for its $3.15 billion of senior secured credit facilities (Ba2/BB+) to noon ET on Monday from 5 p.m. ET on Wednesday, a market source remarked.

The facilities consist of a $600 million revolver, and a $2.55 billion seven-year covenant-lite first-lien term loan talked at Libor plus 250 bps to 275 bps with a 0% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, RBC Capital Markets, Citigroup Global Markets Inc., BMO Capital Markets, Bank of Nova Scotia, TD Securities (USA) LLC, Barclays and MUFG are the lead arrangers on the deal, with Credit Suisse and Wells Fargo the joint left leads.

Proceeds will be used with about $5.53 billion of equity to fund the acquisition of the company by Brookfield Infrastructure and GIC for $112 per share in cash, or about $8.4 billion, including debt.

Closing is expected by year-end, subject to customary closing conditions, such as approval by Genesee & Wyoming stockholders, required regulatory approvals, and some competition and antitrust approvals.

Genesee & Wyoming is a Darien, Conn.-based owner of short line railroads.

TransUnion guidance

Also in the primary market, TransUnion held its lender call on Thursday and announced price talk on its $1.75 billion seven-year covenant-lite term loan B-5 (BB+) at Libor plus 175 bps with an original issue discount of 99.75, according to a market source.

The term loan B-5 has 101 soft call protection for six months.

Commitments are due at noon ET on Nov. 7.

Deutsche Bank Securities Inc. is the left lead on the deal that will be used to prepay a portion of the company’s existing term loan B-3 and B-4 tranches.

A cashless roll option will be available to existing term loan B-3 and B-4 lenders, the source added.

TransUnion is a Chicago-based provider of risk and information solutions to businesses and consumers.

TRC proposed terms

TRC disclosed talk of Libor plus 375 bps to 400 bps with a 1% Libor floor and an original issue discount of 99.5 on its $215 million incremental first-lien term loan that launched with a lender meeting during the session, a market source remarked.

Commitments are due on Nov. 13, the source added.

UBS Investment Bank, Barclays, Citizens Bank and Macquarie Capital (USA) Inc. are leading the deal that will be used to fund an acquisition.

TRC is a Lowell, Mass.-based engineering, environmental consulting and construction management firm.

Tacala sets talk

Tacala held a lender call on Thursday to launch a $75 million add-on first-lien term loan talked at Libor plus 400 bps with a 0% Libor floor and an original issue discount of 99, and a $20 million add-on second-lien term loan talked at Libor plus 775 bps with a 0% Libor floor and a discount of 99, according to a market source.

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

KKR Capital Markets and Wells Fargo Securities LLC are leading the $95 million of add-on term loans that will be used for a dividend recapitalization.

The add-on debt will be fungible with consenting lenders. Consent is needed to get a pricing revision on the existing term loan borrowings, the source explained. Current first-lien term loan pricing is Libor plus 300 bps and current second-lien term loan pricing is Libor plus 700 bps.

Tacala is a Vestavia Hills, Ala.-based franchise operator of Taco Bell restaurants.

Houghton joins calendar

Houghton Mifflin Harcourt will hold a lender call at 11:15 a.m. ET on Friday to launch a new loan deal to existing and prospective lenders, a market source said.

Citigroup Global Markets Inc. is the left lead on the transaction.

Houghton Mifflin is a Boston-based provider of K–12 core curriculum, supplemental and intervention solutions and professional learning services.

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