BRP frees up; Caesars, VICI levels change with acquisition news; Cypress tweaks deadline

By Sara Rosenberg

New York, June 24 – BRP Inc. finalized the original issue discount on its incremental term loan B-2 at the wide end of guidance and then the debt made its way into the secondary market on Monday.

Also in trading, Caesars Entertainment Corp. and VICI Properties Inc. saw their term loans move around with news that Eldorado Resorts Inc. is buying Caesars and VICI is purchasing some land and real estate assets in connection with that transaction.

Back in the primary market, Cypress Performance Group (Encapsys LLC) accelerated the commitment deadline for its incremental term loan.

Furthermore, PHI Inc. and Red Ventures LLC came to market with term loans, and Anchor Packaging LLC joined this week’s primary calendar.

BRP updated, breaks

BRP set the original issue discount on its non-fungible $335 million incremental term loan B-2 due May 23, 2025 at 99, the wide end of the 99 to 99.5 talk, according to a market source.

As before, the term loan B-2 is priced at Libor plus 250 basis points with a 0% Libor floor and has 101 soft call protection for six months.

With final terms in place, the B-2 loan freed to trade on Monday morning and levels were quoted at 99 bid, 99 3/8 offered, a trader added.

RBC Capital Markets and BMO Capital Markets are leading the deal that will be used to fund a substantial issuer bid to purchase for cancellation up to C$300 million of the company’s subordinate voting shares and for general corporate purposes.

Closing is expected during the week of July 22.

BRP is a Valcourt, Quebec-based designer, manufacturer, distributor and marketer of motorized recreational vehicles and powersports engines.

Caesars, VICI move around

Caesars saw its opco term loan rise to 99¼ bid, par offered from 99 1/8 bid, 99½ offered and its Caesars Resorts term loan soften to 99½ bid, 99 7/8 offered from 99¾ bid, par offered following news that Eldorado Resorts is buying Caesars, a market source remarked.

VICI, meanwhile, saw its term loan retreat to 99 bid, 99½ offered from 99 3/8 bid, 99¾ offered with news that it is purchasing land and real estate assets associated with Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Atlantic City and modifying certain provisions of the existing Caesars Entertainment lease agreements for total consideration of about $3.2 billion in cash, in connection with Eldorado’s acquisition of Caesars.

Eldorado is acquiring all of the outstanding shares of Caesars for a total value of $12.75 per share, consisting of $8.40 per share in cash consideration and 0.0899 of a share of Eldorado common stock for each Caesars share of common stock.

The total consideration is about $17.3 billion, comprised of $7.2 billion in cash, around 77 million Eldorado common shares and the assumption of Caesars’ outstanding net debt, excluding face value of the existing convertible note.

Eldorado, Caesars debt plans

To help fund the Eldorado transaction and refinance some existing debt, Eldorado plans on getting a $1 billion revolver, a $3 billion term loan B due 2027 and $1.8 billion of senior notes due 2028, and Caesars Resorts plans on getting a $2.4 billion term loan B due 2027.

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Macquarie Capital (USA) Inc. provided the Eldorado debt commitment.

Other funds for the transaction will come from the VICI transaction, $385 million from announced asset sales proceeds and cash on hand.

Caesars’ existing $1 billion revolver, $4.6 billion term loan B due 2024 and $1.7 billion senior notes due 2025 are expected to remain in place.

Upon completion of the transaction the combined company will retain the Caesars name and be based in Reno.

VICI expected financing

VICI has received a commitment for $4,763,125,000 of bridge loans to fund its acquisition of the land and real estate assets and revision of certain provisions of the existing Caesars lease agreements, and anticipates replacing the bridge loans with senior unsecured notes, term loans and/or equity securities.

Deutsche Bank Securities Inc. is leading the bridge loans.

Closing on the VICI and Eldorado/Caesars transactions is expected in the first half of 2020, subject to regulatory approvals and customary conditions. The Eldorado/Caesars merger is also subject to approval of the stockholders of both companies.

VICI is a New York-based experiential real estate investment trust that owns a portfolio of gaming, hospitality and entertainment destinations. Caesars is a Las Vegas-based gaming and entertainment company. Eldorado is a Reno, Nev.-based gaming company.

Cypress revises deadline

In other news, Cypress Performance Group accelerated the commitment deadline for its fungible $134 million incremental covenant-lite first-lien term loan (B2/B) due November 2024 to 5 p.m. ET on Tuesday from 5 p.m. ET on Thursday, a market source said.

The incremental term loan is talked at Libor plus 350 bps with a 25 bps step-down at B1/B+ ratings, a 1% Libor floor and an original issue discount of 99.

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to refinance an existing second-lien term loan.

With this transaction, pricing on the company’s existing first-lien term loan will be increased by 25 bps from Libor plus 325 bps to match the incremental term loan pricing.

Cypress Performance is a Baltimore-based company that offers a portfolio of advanced materials and diversified products.

PHI holds meeting

PHI emerged in the morning with plans to host a bank meeting at 3 p.m. ET in New York on Monday to launch a $225 million exit financing five-year term loan B talked at Libor plus 650 bps to 700 bps with a 1% Libor floor and an original issue discount of 98, a market source remarked.

The term loan is non-callable for one year, then at 102 in year two and 101 in year three.

Commitments are due at 5 p.m. ET on July 9, the source added.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance existing debt, for general corporate purposes and to pay transaction fees.

PHI is a Lafayette, La.-based provider of helicopter aviation services to the oil & gas sector and the air medical markets.

Red Ventures seeks add-on

Red Ventures held a lender call during the session, launching a fungible $425 million covenant-lite add-on term loan due November 2024 with original issue discount talk in the 99.25 area, a market source said.

The add-on term loan is priced at Libor plus 300 bps with a 0% Libor floor.

Commitments are due at 5 p.m. ET on Thursday, the source added.

Bank of America Merrill Lynch, Fifth Third, PNC, MUFG, Regions, Capital One, Citigroup Global Markets Inc., Barclays and Citizens are leading the deal that will be used to repay revolver borrowings.

Red Ventures is a Fort Mill, S.C.-based technology-enabled customer acquisition platform.

Anchor on deck

Anchor Packaging set a bank meeting for 1 p.m. ET in New York on Tuesday to launch $450 million of first-lien credit facilities, according to a market source.

The facilities consist of a $60 million revolver, a $320 million seven-year covenant-lite first-lien term loan and a $70 million delayed-draw seven-year covenant-lite first-lien term loan, the source said.

The first-lien term loan is talked with a 0% Libor floor and 101 soft call protection for six months.

Commitments are due on July 11, the source added.

Proceeds will be used with a $95 million privately placed second-lien term loan to help fund the buyout of the company by the Jordan Co.

Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, Nomura, Antares Capital and Neuberger Berman are leading the debt.

Anchor Packaging is a Ballwin, Mo.-based producer of polypropylene rigid takeout containers.

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