Horizon update surfaces; McGraw-Hill/Cengage tables loan; Cetera, Nautilus disclose talk

By Sara Rosenberg

New York, May 16 – In the primary market on Thursday, Horizon Therapeutics plc (Horizon Pharma USA Inc.) modified the original issue discount on its term loan B, and McGraw-Hill/Cengage shelved its amended and extended first-lien term loan.

Furthermore, Cetera Financial Group and Nautilus Power LLC released price talk on their proposed term loans with launch.

Horizon tweaks loan

Horizon Therapeutics changed the original issue discount on its $518 million seven-year senior secured covenant-lite term loan B (Ba1) to 99.875 from talk in the range of 99.5 to 99.75, according to a market source.

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

Recommitments were due at 5 p.m. ET on Thursday, the source said.

Citigroup Global Markets Inc. is the left lead on the deal that will be used to reprice and extend an existing term loan B due March 2024 priced at Libor plus 275 bps with a 1% Libor floor.

Closing is expected on May 22.

Horizon Therapeutics is a Dublin-based biopharmaceutical company.

McGraw/Cengage pulled

McGraw-Hill/Cengage withdrew its amended and extended $3,342,000,000 covenant-lite first-lien term loan (B2/B+) due May 2024 proposed because the required 90% minimum consent threshold was not reached, a market source remarked.

Talk on the term loan was Libor plus 500 bps with a 1% Libor floor and 101 soft call protection for six months, and lenders were offered a 25 bps extension fee.

Credit Suisse Securities (USA) LLC was the left lead on the deal that was going to be used to amend and extend McGraw-Hill’s $1,679,000,000 first-lien term loan due May 2022 priced at Libor plus 400 bps with a 1% Libor floor and Cengage’s $1,663,000,000 first-lien term loan due June 2023 priced at Libor plus 425 bps with a 1% Libor floor.

The borrower was going to be McGraw-Hill Global Education Holdings LLC.

Early this month, McGraw-Hill and Cengage announced that they will combine in an all-stock merger that is expected to close by early 2020, subject to customary conditions, including receipt of regulatory approvals.

McGraw-Hill/Cengage is a provider of curated educational content and digital learning solutions.

Cetera sets guidance

Cetera Financial Group announced original issue discount talk of 98.57 on its $105 million incremental first-lien term loan that launched with a lender call on Thursday, according to a market source.

Pricing on the incremental term loan is Libor plus 425 bps with a 0% Libor floor, in line with existing first-lien term loan pricing.

Commitments are due on May 22, the source said.

UBS Investment Bank is leading the deal that will be used to support an acquisition.

Cetera is an El Segundo, Calif.-based network of financial advisers.

Nautilus holds call

Nautilus Power hosted a lender call at 11 a.m. ET to launch a $55 million add-on term loan B due May 16, 2024 that is talked with an original issue discount of 99, a market source said.

The add-on term loan is priced at Libor plus 425 bps with a 1% Libor floor and has 101 soft call protection for six months.

Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC and Goldman Sachs Bank USA are leading the deal, which will be used to fund a distribution to the sponsor.

The company is also seeking an amendment to its existing credit facility, for which lenders are being offered a 50 bps consent fee.

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

The pro forma term loan B tranche size is $659,335,840.

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

Omnia allocates

In other news, Omnia Partners Inc. allocated its $160 million add-on first-lien term loan (B2/B) that is priced at Libor plus 375 bps with a 0% Libor floor and was sold at an original issue discount of 99, according to a market source. The debt has 101 soft call protection for six months.

Barclays, Jefferies LLC and Fifth Third are leading the deal that will be used with a $46 million pre-placed add-on second-lien term loan (Caa2/CCC+) to fund a distribution to shareholders.

During syndication, the company removed the change of control portability from the loan, EBITDA addback for newly signed contracts was capped at 15% of EBITDA and the amendment fee was increased to 25 bps from 15 bps.

TA Associates is the sponsor.

Omnia is a Franklin, Tenn.-based group purchasing organization.

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