LifePoint, Valeant revise loans; Applied Systems firms terms; multiple deals come to market

By Sara Rosenberg

New York, Nov. 13 – In the primary market on Tuesday, LifePoint Health Inc. raised the spread on its term loan, extended the call protection and made some documentation changes, Valeant Pharmaceuticals International (Bausch Health Cos. Inc.) increased the size of its incremental term loan B and canceled plans for a potential bond offering, and Applied Systems Inc. finalized the original issue discount on its incremental first-lien term loan at the tight end of guidance.

Also, Sorenson Holdings LLC, Avantor, LegalZoom.com Inc., Perimeter Solutions LP, MRO Holdings Inc., ADT Inc. (Prime Security Services Borrower LLC), Hyperion Insurance Group Ltd., Safe Fleet Holdings LLC and Alera Group set price talk with launch, and Hunterstown Generation (Kestrel Acquisition LLC) joined this week’s primary calendar.

LifePoint reworked

LifePoint Health lifted pricing on its $3.4 billion seven-year senior secured covenant-light term loan (B1/B+) to Libor plus 450 basis points from Libor plus 400 bps and extended the 101 soft call protection to one year from six months, according to a market source. The loan is still talked with a 0% Libor floor and an original issue discount of 99 to 99.5.

Additionally, the MFN was revised to 50 bps for life from 75 bps for 12 months, all MFN exceptions and inside maturity date basket were removed and MFN was made applicable to pari term loans, the source said.

Furthermore, general and ratio baskets were reduced under restricted payments, baskets were reduced under investments, the loan maturity has a 91 day springer against $150 of existing senior unsecured notes due 2024, and quarterly calls with quarterly management discussion and analysis are required.

And, under asset sales, de minimis is $15 million individually/no annual basket, real property was removed from securitization assets, asset sweep step-downs were removed and asset-sweep reinvestment was set at 12 months plus 6 months reinvestment period, the source continued.

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

LifePoint lead banks

Citigroup Global Markets Inc., Barclays, RBC Capital Markets, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and UBS Investment Bank are leading LifePoint’s term loan.

Proceeds will be used to help fund the company’s merger with RCCH HealthCare Partners, which is owned by Apollo Global Management LLC. LifePoint shareholders will receive $65.00 per share in cash, resulting in an enterprise value of about $5.6 billion, including $2.9 billion of net debt and minority interest.

The transaction is also expected to be funded with an up to $1 billion equity contribution from funds managed by Apollo and $1,575,000,000 of senior notes.

Along with the term loan, the company is anticipated to get an $800 million asset-based revolver as part of its new credit facilities.

LifePoint and RegionalCare Hospital Partners Holdings Inc. are the co-borrowers of the term loan.

Closing is expected on Friday.

LifePoint and RCCH are both Brentwood, Tenn.-based health care providers. The combined company will operate under the LifePoint Health name.

Valeant upsizes

Valeant raised its incremental senior secured term loan B (Ba2/BB-/BB-) due June 1, 2025 to $1.5 billion from $750 million and, as a result, is no longer considering a potential secured bond transaction, a market source remarked.

The incremental term loan B is talked at Libor plus 300 bps with a 0% Libor floor and an original issue discount of 99 to 99.5.

Commitments are due at noon ET on Wednesday, moved up from noon ET on Thursday, the source added.

Barclays, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., DNB, Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc. and RBC Capital Markets are leading the loan that will be used with cash on hand to fund a tender offer for 7½% notes due 2021.

Valeant is a Laval, Quebec-based specialty pharmaceutical company.

Applied Systems updated

Applied Systems set the original issue discount on its fungible $210 million incremental first-lien term loan (B2/B-) at 99.75, the tight end of the 99.5 to 99.75 talk, a market source said.

As before, pricing on the incremental first-lien term loan matches existing term loan pricing at Libor plus 300 bps with a 1% Libor floor. Upon the delivery of financials to lenders for the quarter ending Dec. 31, 2018, the spread on the incremental loan will be subject to the same grid as the existing loan, which is Libor plus 300 bps at less than 4.75 times first-lien net leverage and Libor plus 325 bps at more than 4.75 times first-lien net leverage.

Allocations are targeted for Wednesday, the source added.

Nomura, Jefferies LLC and Macquarie Capital (USA) Inc. are leading the deal that will be used with a privately placed incremental second-lien term loan to fund a distribution to shareholders and put cash on the balance sheet.

Closing is expected during the week of Nov. 19.

Applied Systems is a University Park, Ill.-based cloud software provider to the property & casualty and benefits insurance industry.

Sorenson loan talk

In more primary news, Sorenson held its bank meeting on Tuesday and released price talk on its $950 million five-year covenant-light first-lien term loan (B2/B) at Libor plus 600 bps with a 0% Libor floor and an original issue discount of 97, according to a market source.

The term loan has 101 soft call protection for one year.

Commitments are due at 5 p.m. ET on Nov. 28.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance existing debt.

Sorenson is a Salt Lake City-based provider of end-to-end communication technology services for the deaf and hard of hearing.

Avantor guidance

Avantor announced price talk on its $1,938,000,000 term loan B (B2/B/BB) due November 2024 and €993 million term loan B (B2/B/BB) due November 2024 in connection with its morning call, a market source remarked.

The U.S. term loan is talked at Libor plus 350 bps with a 1% Libor floor, and the euro term loan is talked at Euribor plus 375 bps with a 0% floor, the source continued. Both loans are talked with a par issue price and 101 soft call protection for six months.

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

Goldman Sachs Bank USA is leading the deal that will be used to reprice an existing U.S. term loan down from Libor plus 400 bps with a 1% Libor floor and an existing euro term loan down from Euribor plus 425 bps with a 0% floor.

Avantor is a Radnor, Pa.-based provider of integrated, tailored solutions for the life sciences and advanced technology industries.

LegalZoom launches

LegalZoom launched on its call its $530 million six-year first-lien term loan (B) at talk of Libor plus 375 bps to 400 bps with a 25 bps step-down at 0.5 times inside closing net first-lien leverage, a 0% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, according to a market source.

Commitments are due at noon ET on Nov. 20, the source said.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance existing term loans and to fund a dividend.

LegalZoom is a Glendale, Calif.-based provider of online legal products and services.

Perimeter reveals talk

Perimeter Solutions came out with talk of Libor plus 275 bps with a 0% Libor floor, a par issue price and 101 soft call protection for six months on its $542 million first-lien term loan B (B1/B+/BB+) due March 2025 that launched with a morning call, a market source said.

Commitments are due at noon ET on Monday.

Barclays, Goldman Sachs Bank USA and HSBC Securities (USA) Inc. are leading the deal, which will be used to reprice an existing first-lien term loan B down from Libor plus 300 bps with a 0% Libor floor.

Perimeter Solutions, formerly known as Invictus, is a St. Louis-based formulator and manufacturer of fire management chemicals.

MRO holds call

MRO Holdings hosted a lender call at 10 a.m. ET, launching a $223 million term loan B talked at Libor plus 450 bps to 475 bps with a 1% Libor floor, a par issue price and 101 soft call protection for six months, according to a market source.

Commitments are due at 5 p.m. ET on Nov. 20, the source said.

RBC Capital Markets is the lead left arranger and Credit Suisse Securities (USA) LLC is the administrative agent on the deal that will be used to reprice an existing term loan B down from Libor plus 525 bps with a 1% Libor floor.

MRO Holdings is a provider of maintenance, repair and overhaul services to the airline and freight carrier industries.

ADT floats OID

ADT released original issue discount of 99.5 to 99.75 on its fungible $425 million incremental covenant-light term loan B (Ba3/BB-) due May 2, 2022 that launched with a morning call, a market source remarked.

The incremental loan is priced at Libor plus 275 bps with a 1% Libor floor, in line with the existing term loan B.

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

Barclays, Citigroup Global Markets Inc., Citizens Bank, Deutsche Bank Securities Inc. and RBC Capital Markets are leading the deal that will be used to help fund the acquisition of Red Hawk Fire & Security from Comvest Partners for $317.5 million in cash, and for general corporate purposes, which may include the repurchase, repayment or redemption of existing debt.

Closing is expected this quarter, subject to regulatory approvals and other customary conditions.

Pro forma first-lien net leverage is 2.7 times and total net leverage is 3.6 times.

ADT is a Boca Raton, Fla.-based security services company. Red Hawk is a Boca Raton, Fla.-based commercial fire, life safety and security services solutions provider.

Hyperion comes to market

Hyperion Insurance Group hosted a call at 1:30 p.m. ET to launch a $115 million add-on covenant-light term loan B (B2) due Dec. 20, 2024 talked at Libor plus 350 bps with a 1% Libor floor and an original issue discount of 99.5, according to a market source.

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

Morgan Stanley Senior Funding Inc., Barclays, J.P. Morgan Securities LLC, RBC Capital Markets, HSBC Securities (USA) Inc., Lloyds Securities Inc., NatWest Markets plc and ING Capital LLC are leading the deal that will be placed on the balance sheet in a locked box account to fund future acquisitions.

Hyperion is a London-based insurance intermediary group.

Safe Fleet proposed terms

Safe Fleet held a lender call in the afternoon to launch a fungible $65 million add-on senior secured first-lien term loan due Feb. 1, 2025 talked with an original issue discount of 98.6, a market source said.

Like the existing loan, the add-on term loan is priced at Libor plus 300 bps with a step-down to Libor plus 275 bps at 6.25 times net total leverage and a 1% Libor floor.

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

Goldman Sachs Bank USA and UBS Investment Bank are leading the deal that will be used for mergers and acquisitions.

Safe Fleet is a Belton, Mo.-based provider of safety and productivity solutions for fleet vehicles.

Alera seeks add-on

Alera launched with a call a fungible $100 million add-on term loan (B3/B) talked with an original issue discount of 99.75 to par, according to a market source.

The add-on loan is priced at Libor plus 450 bps with a 0% Libor floor.

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

The company is also getting a $50 million delayed-draw term loan (B3/B).

J.P. Morgan Securities LLC is leading the deal that will be used to fund acquisitions under letters of intent and pay down the outstanding revolver balance.

Alera is a Deerfield, Ill.-based insurance brokerage and wealth management firm.

Hunterstown on deck

Hunterstown Generation emerged with plans to hold a lender call at 1 p.m. ET on Wednesday to launch a $150 million incremental term loan B, a market remarked.

Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA and Jefferies LLC are leading the deal that will be used to fund a distribution and pay transaction fees and expenses.

Hunterstown is a natural gas-fired combined cycle power plant located in the PJM-MAAC capacity region in Gettysburg, Pa.

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